Restaurant chain creates supply co-op

The principles of supply chain management don't just work in the manufacturing sector. The restaurant industry also is putting them to good use.

This month, DineEquity, Inc., the parent company of Applebee's and IHOP, announced that it is forming Centralized Supply Chain Services, LLC, a purchasing co-op which will purchase supplies for nearly 3,400 restaurants.

The goal is to streamline operations and leverage the restaurants' buying power. And when you buy 100 million pounds of chicken and nearly six million gallons of soda each year, as Applebee's and IHOP do, that creates substantial savings. The co-op is expected to save restaurant owners 3 to 5 percent on their purchases of food and other commodities.