Page 12 - 2018 Apple Annual Report

LOGISTICS
LOGISTICS

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DISTRIBUTION MANAGEMENT
CSCS has been in discussion with distributors and other
DISTRIBUTION MANAGEMENT concessions, distributors are reducing their exposure
industry associates to address the current and future
to chain restaurants which in turn is reducing total
business landscape, assist distributors in maintaining
Distributor Service
Distributor Service capacity.
Continuing challenges in the distribution landscape
Continuing challenges for distributors have resulted in continuity of supply, and reduce disruption to restaurant
operations.
have resulted in significant service issues for
significant service issues across the restaurant industry, To ensure long-term continuity of supply, CSCS’ priority
Applebee’s restaurants in certain regions. The
and in certain regions of the country, Applebee's has is to become a Customer of Choice for our strategic
The Logistics team formed a Distribution Task Force
distributors’ ability to make deliveries within the
not been immune to the impacts. The well-publicized distribution partners. We have conducted top-to-top
comprised of CSCS Member associates to examine
scheduled window has steadily declined since 2016,
shortage of CDL drivers and warehouse personnel is meetings with each of our distributors to strengthen our
distribution expectations and develop strategies for our
primarily attributed to a continual decrease in the
transforming industry dynamics. Chain distributors relationships and to understand what we must do as a
number of available qualified drivers. The slight decline approach to improved distribution service.
are demanding higher distribution fees to offset higher system to ensure future service.
in fill rate over the past three years reflects distributors’
costs, along with other changes that will assist them
Distribution Agreements and Transitions
inability to hire and retain warehouse associates.
in attracting and retaining drivers. Even with these In addition to these meetings, CSCS has formed a nine-
Sysco Atlanta and Sygma Carolina agreements expired
part plan to address both short-term service issues and
November 1, 2018. CSCS transitioned 201 Applebee’s
Applebee’s Distributor Annual Service Performance the long-term threat to your businesses.
restaurants to two new Southeast distribution centers.
100% At the same time, CSCS managed three additional
99% Distribution Strategy Assessment - with assistance
98% transition projects for restaurants located in targeted
97% from an industry consultant, reshaping our 10-year
areas to existing Dine Brands distributors with capacity
96% distribution strategy to plan for the new industry realities
95% Fill rate to improve service.
94% On time delivery
93% Distribution Agreements and Transitions –
92%
91% transitioning Members to alternate distribution centers
90%
2014 2015 2016 2017 2018 for economic, service, or strategic reasons
The decline in on time deliveries over the past year Regional Distribution Committees – restructured
12 reflects distributors’ inability to hire and retain drivers these committees to include one per distributor in order
and warehouse associates to levels required to guarantee
8
consistent service. to get direct Member involvement for issues directly
Applebee’s — 2018
Lettuce Iceberg 24 ct impacting their restaurants
$614,269 Annual Savings to Market
12 $50.00
$40.00
??? Source $30.00 CSCS System Price
Church Brothers (CA)
Taylor Farms (CA)
$20.00
USDA Price
$10.00

$0.00
01/07/18 02/11/18 02/1?/18 04/22/18 05/27/18 07/??/18 08/01/18 09/0?/18 10/1?/18 11/1?/18 12/??/18
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Applebee’s — 2018
Lettuce Romaine 24 ct
$410,368 Annual Savings to Market
$30.00

$20.00 CSCS System Price
??? Source Church Brothers (CA)
Taylor Farms (CA)
$10.00 USDA Price

$0.00
01/07/18 02/11/18 02/1?/18 04/22/18 05/27/18 07/??/18 08/01/18 09/0?/18 10/1?/18 11/1?/18 12/??/18
Beginning of Week Date