13-DavidParsley With INTRO

7/29/2019 13-DavidParsley With INTRO

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AberdeenGroup 2009

The Journey fromCPO to CEO

Andrew BartoliniVice President,

Global Supply Mgmt. Research


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2 AberdeenGroup 2009

We intend to operate with strict financialdiscipline, maintaining a maniacal focuson cash. We're also closely managing all

of our costs, renegotiating contractsaround the world, localizing oursourcing

~ Indra Nooyi, CEO, Pepsi

CPO CEO Alignment


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The CFOs View Cash is King

When asked what his top priority was for 2009,one CFO replied, Survival.

CFOs Survival Guide (Top Priorities):

Cost Reductions 73%

Working Capital Optimization 70%

The CPO is also aligned with the CFO


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We have been driving a payment terms initiative that

has extended our usual terms from 20 days to 60days, resulting in an estimated annual cash benefit ofbetween $50 and $60 million.

~ CPO, Fortune 500 Company

We're very focused on the working capital impact ofthe contracts we negotiate, how inventory is

managed, and our payment terms.~ CPO, Manufacturing

Smart Strategies


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Aberdeen recommendations:

Engage the CFO to optimize workingcapital

Demand management

Asset utilization improvement programs

Smart Strategies Cash Management


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AberdeenGroup 2009

The Journey from

CPO to CEODavid Parsley

President/CEOCentralized Supply Chain Services, LLC

November 18, 2009


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Session Agenda

Steps to ensure success

Leadership was critical

CSCS is formed

Opportunity

IHOP Corp. acquires Applebees

What is Centralized Supply Chain Services?

David R. Parsley


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Centralized Supply Chain Services (CSCS)

Purchasing cooperative owned by the Member restaurantoperators of the Applebees and IHOP systems

CSCS is an independent company from DineEquity or itsBrands

Exclusive buying agent for the Applebees and IHOPsystems

$1.8B in spend under management 44 team members

Offices in Lenexa, Kansas (HQ) and Glendale, California


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Where the Journey Began

IHOP Acquires Applebees


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The Opportunity

Leveraging the combined purchasing power of the systems

could save MILLIONS

$1.8B combined annual spend

3,300 restaurants

77% of suppliers shared across brands


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The Challenge The Supply Chains Were Different

Transparency and system wide leverageNumerous side-deals and sheltered

income

Leveraged scaleDilution of buying power

Data visibility and system supportLimited technology support and/oraccess to data

Approved products and suppliersProliferation of unapprovedproducts/suppliers

Staffed appropriately for the systemMinimal staff

Category ExpertiseGeneralists

ContractsPrice focused: verbal & priceagreements

Process focusedActivity focusedStrategically focusedTactically focused

FacilitationFacilitation ManagementManagement

Today Today

Transparency and system wide leverageNumerous side-deals and sheltered

income

Leveraged scaleDilution of buying power

Data visibility and system supportLimited technology support and/oraccess to data

Approved products and suppliersProliferation of unapprovedproducts/suppliers

Staffed appropriately for the systemMinimal staff

Generalists

ContractsPrice focused: verbal & priceagreements

Process focusedActivity focusedStrategically focusedTactically focused

Facilitation (IHOP) Management (Applebees)


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The ChallengeThe business model was changing

IHOP Corp. (now DineEquity) began applying the IHOPbusiness model to Applebees

Re-franchise a majority of company-owned Applebeesrestaurants

Less company-owned restaurants requires less corporatesupport

Downsize administrative functions including Supply Chain

How could we still capture the combined systemspurchasing power when Supply Chain was being

downsized?


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Successful Co-op Models

This was not a new idea in foodservice


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Sizing the Prize

IHOP Corp. commissioned the Size the Prize study

Project team established to develop a business case

Third-party consultants

Applebees franchisee leadership

IHOP franchisee leadership

Brand representatives

Supply chain leadership Business case confirmed MILLIONS in savings

opportunities over time


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Road Show to sell the value of a Co-op

US Map with road show cities

Newport Beach

Houston

Philadelphia

Boca Raton

Glendale

Kansas City

Various Franchisee Meetings

San Francisco

Hawaii

Las Vegas

Chicago

Dallas

TampaJacksonville

AtlantaGreenville

LouisvilleWashington DC

New York City

Buffalo


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The Result

CSCS was formed


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The Supply Chain Team was critical in this transition

Formation of the Co-op was not guaranteed

Risk of staff job loss

Only one resignation

Majority of staff from Applebees SCM team

Demonstrated results

Confidence of the franchisees

Leadership was critical

Had to sell the idea

Continued to deliver results


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My Foundational Components of Leadership

Philosophical Foundation

PEOPLE ARE PARAMOUNT

Continuous improvement

Change management

Education, resources & tools

Create a Safe environment

Accountability, Responsibility, Authority

The Renaissance Manager

David R. Parsley


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The Renaissance Man

MichelangeloMichelangeloLeonardoLeonardo

da Vincida Vinci

Pa in t e r Scu lp t o r A rch i t ect Poe t Eng ineer

Mat hem at i ci an Eng ineer I nv en t o r Pa in t e r Scu lp t o r

Bo tan i s t Mus i c i an Wr i t e r

.Ver sa t i le in Mu l t ip le D iscip l in es.


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The New Supply Chain Professional

Supply-chain managers used to have one mainjob: purchasing stuff cheaply. They need a whole

new skill set now.

- The Wall Street Journal, March 10, 2008


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The New Supply Chain Professional

Knowledge discipline

Relationship discipline

Process discipline

Technology discipline

Other skills and attributes

David R. Parsley

The "Renaissance Manager"


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The Result is this Ideology

Every position is critical or it shouldnt exist

Therefore, every person adds value

Therefore, every person has the right and responsibilityto

Speak up, challenge the status quo

Advocate their ideas

Contribute

Continuously improve


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The Result is this Ideology

Consistently good performance can lead to greatness

Find something you like and become good at it

We are all here to serve


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Three Golden Rules for SCM Executives

Surround yourself with great people

Make sure those people are given all the support,resources and training that you can possibly provide

Make your goals and objectives absolutely clear, sotheres no confusion and everyone is aligned andfunctioning as a team


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Steps Were Taking to Ensure Success

Continuing to develop "Renaissance Manager"

professionals Implementing technology, process & tools

Applying key leadership principles and change

management / continuous improvement

Prioritizing opportunities and EXECUTING

David R. Parsley


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Thank you

David Parsley

President / CEOCentralized Supply Chain Services, LLC

913.890.0111

[email protected]


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Stacked Column Chart


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28 AberdeenGroup 2009 Proprietary and Confidential Information of Genesis Management, LLC

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Behind Their Supply Chain OverhaulDave Dawson, Former VP, Procurement, Dell

Documents

13-DavidParsley With INTRO