Page 223 - Board Member Onboardin August 2019

wide problem by using a wide variety of both tactical and strategic measures. There will certainly be more challenges in
this space while macro-economic forces find an equilibrium, and in the meantime our challenge is to position the IHOP

system (and Applebee’s) as a preferred customer in the industry.

Thank you to the other Pancake Co-op and CSCS Board Members for devoting their time and talents to providing
the right levels of governance and direction to the CSCS management team. And thank you to all CSCS Members

for engaging in system excellence through the supply chain. CSCS is here to help us drive the right changes for our
businesses, and your participation in that process makes us all better.

MIKE LEIKAM
President & CEO, Centralized Supply Chain Services, LLC

" we need to do everything we can to

continue to foster partnerships with

our distributors that are both fair and
transparent, and that position us as a

customer of choice. "

The theme of this annual report, “Driving Change” reflects one of our six Core Values, Continuous Improvement, and
represents the approach we took to delivering value to our Members in 2018. There are no better examples than our
implementation of the new Restaurant Profitability Management program (RPM) with IHOP and how we are working
collaboratively with our distributor partners and Members to mitigate the challenges faced across today’s distribution
landscape.

Working with IHOP, we engaged the consulting firm, PricewaterhouseCoopers (PwC), and launched the RPM project with
three objectives. First, we needed to find different ways to help improve your margins while maintaining product quality
and the customer experience. This was not to be a “slash and burn” exercise to simply save money. The new cross-
functional process with IHOP includes safe guards to ensure that does not happen.

Second, we established a governance structure to oversee this work in the form of a steering committee. The RPM
SteerCo is comprised of IHOP leadership, CSCS leadership and Peter DeGast, Dan Campbell, and Mark Justice, as
franchisee representatives. This group prioritizes the opportunities and aligns on the appropriate testing required for each
savings or product improvement idea.

Finally, PwC provided suggestions to help us improve our capabilities, from how IHOP develops new products to how we
source them. Most importantly, PwC helped IHOP and CSCS implement processes for working better cross-functionally to

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