Page 17 - Apple Supply Chain Co-op Inc. 2016 Annual Report.

administration

The Administration team is responsible Price Index (“MPPI”). The Apple market basket is comprised
for support functions at the Co-op, including of a group of key products from different categories that
cost management reporting, information technology, represent approximately 75% of the total spend in an
data analytics, process improvement, communications, Applebee’s restaurant, while the MPPI is made of PPI sub-
membership services, accounting, finance, auditing, indices that resemble those same products with the same
compliance, and human resources. The team also manages mix. Comparing the relative change in both indexes creates a
third-party vendors who provide additional services in these more comprehensive view of the impact of contract savings,
areas. increases, cost avoidances, and underlying commodity market
movements. Combined with performance measurements for
A cross-functional team in the department delivered new inventory management and the cost savings pipeline, CSCS
functionality in 2016 that ensures Members are being charged achieved 100% of its overall Apple Co-op company goals for
the correct prices in real time, also known as the “price 2016.
variance analysis” process or “PVA”. PVA has traditionally
been done manually and in arrears, sometimes up to six Co-op membership and active participation are foundational to
months, which resulted in refund checks for our Members. building the volume and credibility required to unlock savings
The new process compares invoice pricing to contracted that only large-scale systems can realize. At the end of 2016,

Combined with performance measurements for
inventory management and the cost savings pipeline,

CSCS achieved 100% of its overall Apple Co-op
company goals for 2016.

costs on a near real-time basis, and automatically alerts the 100% of the Applebee’s restaurants in the U.S. and Puerto
appropriate distribution center when discrepancies exist. The Rico were Members in the Apple Supply Chain Co-op. The
new automated approach not only reduces the headcount Apple Supply Chain Co-op Board of Directors and the Board
required to perform PVA, it also significantly improves pricing committees met throughout the year to provide oversight and
accuracy so you are paying the correct price at all times and guidance on the Co-op’s activities to ensure proper alignment
not waiting on the distributor to “true up” with you at the end with Member interests. Membership was kept informed
of a period. through weekly Co-op newsletters and special news blasts.

The Co-op relies on system-wide supplier, distributor, and In addition, in 2016 we administered a Member financing
restaurant data to achieve our vision of end-to-end supply program that was put in place in 2015, maintained several
chain visibility. Co-op activities such as contract negotiations, distributor programs to ensure balanced pricing was realized
inventory management, and pricing compliance all depend on across all Members, received clean audit opinions for
timely and accurate information. Strides were made again this the eighth year in a row, tackled hundreds of information
year to realize additional pieces of this vision. Improvements technology requests, conducted our fourth annual employee
were implemented in the CSCS vendor portal to increase engagement survey, conducted our fifth annual Member
user adoption. Increased levels of supplier inventory data now Maniac week, completed planning for a Supply Chain Partner
complement distributor inventories with nearly fifty suppliers Summit to be held in January 2017, and the list goes on. In
providing real-time visibility, and another 20-30 on the addition to the team’s daily responsibilities, we are looking
docket. The team also developed and rolled out a customer forward to 2017 and the opportunities to continuously improve
relationship management tool to better organize Member data. our processes and programs resulting in increased value for
our Members.
This year was the Administration department’s second year
tracking overall performance against a Modified Producer

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