Page 13 - Apple Supply Chain Co-op Inc. 2016 Annual Report.

Freight Management Produce
CSCS monitors each produce distribution center to ensure all
Our freight management strategy continued to improve freight mandated items sold to Applebee's restaurants are purchased
costs for our Members. Four main initiatives contributed to the from approved suppliers. The primary focus in 2016 was to
overall savings plan by leveraging logistics partners, scrutinizing eliminate non-compliant distributors.
transportation costs, and coordinating lane transitions resulting
in immediate freight benefits to Members. In 2016, CSCS Produce Distribution Optimization Project
delivered $2.7M in annualized savings for the Apple Co-op. starting in 2017 is a three-year plan.
Currently there are 93 produce distributors servicing Applebee’s
3PL RFP Program (Third Party Logistic) and IHOP restaurants. CSCS initiated a project to optimize
The 3PL RFP gained momentum in generating freight savings. the produce distribution network by reducing the number of
Over 1,700 freight lanes were issued to third party partners distribution centers to provide improved economic benefit and
(3PL’s) for bid. By the close of 2016, over 70 lanes were better contracting to Members.
transitioned resulting in annualized savings of $500K.
Optimizing the network will be a regionalized approach and
Shared Savings Programs start dates are listed in the treemap chart. The optimization
CSCS partners with each distributor to maximize the number process will take approximately nine months from start to finish
of backhauls and lanes designated for revenue sharing. These for each region, and Operators will be notified prior to their start
partnerships along with extensive collaboration produced date. Each region will have an Operator Oversight Committee.
$1.1M in annualized savings. Funds generated from this
program are returned to Co-op Members in the form of a
rebate. apple co-op freight savings pancake co-op freight savings
12%
Redistribution pancake co-op distribution 3500000 target vs. actual 3500000 target vs. actual
3500000
3500000
of freight savings
Freight redistribution enables CSCS to consolidate and
redirect slow moving less than truckload (LTL) shipments to a 3000000 Program target 3000000 Program target
Shared savings
3000000
3000000
27%
56% redistributor to move in full truck loads. In 2016, redistribution
3PL RFP
savings reached $900K. Frt Bracket Retarget 2500000 2500000
2500000
2500000
ReD/ITI
Retarget Analysis 2000000 2000000
5%
2000000
2000000
Retargeting allows CSCS to generate freight savings by
1500000
maximizing distributor purchase order size. The retarget 1500000 1500000
1500000
analysis delivered a total of $230K in annualized savings in
1000000
1000000
2016. 1000000 1000000
500000
500000
500000 500000
0 0 0 0
apple co-op distribution
33% 39% of freight savings 3pl rfp red/iti 3pl rfp red/iti
Shared savings 2016 target shared savings 2016 target shared savings
3PL RFP 2016 annualized savings frt bracket retarget frt bracket retarget
Frt Bracket Retarget 2016 annualized savings
9% ReD/ITI
19%

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