A Presentation on PepsiCo
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Transcript of A Presentation on PepsiCo
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PepsiCo Inc.
Submitted by:Sanket BhawarkarSarang BanubakdeSaurabh Mhase
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PepsiCo.• Its an American multinational food & beverage
headquarter in Purchase, NY, USA.• It was formed in 1965with merger of Pepsi Cola &
Frito lay Inc.• Acquired Tropicana in 1998 & Quaker oats in 2001.• It has mainly 22 product lines generating $1 billion
revenue each year.• In 2012 it has annual net revenue of $ 43.3 billion.
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Seasonalitysubject to seasonal variations.• Beverage sales are higher during the
warmer months and certain food sales are higher in the cooler months
• Weekly beverage and snack sales are
generally highest in the third quarter due to seasonal and holiday-related patterns, and generally lowest in the first quarter
• However, taken as a whole, seasonality does not have a material impact on our business.
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Focus market
youth
Go getters
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girls
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Focus productionpepsi
Diet pepsi
Pepsi max
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These three together generates a revenue of ……
$ 15 billion in sales from retail.
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Facts and Logos
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PepsiCo
Asia Europe America Africa
New yorkUSA
Organizational Structure
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Raw materials
Raw material for Beverages:• For drink: Water, sugar, color, caffeine• For packaging: Tin, aluminum, PET plastic
Sources:• More than 30% raw material of PET bottle
comes from organic waste• 10% of packaging is done through recycled
products
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Raw materials
Raw material for chips and juices :• Potatoes, oats, apples and milk
Sources :• European organic farms • Pepsi looks after the requirements of
farmers and also trains them to get desired size, color etc.
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Inventory management
Inventory accounting policy: • Inventories are valued at the lower of
cost or market. Cost is determined using the average; first-in, first-out (FIFO) or last-in, first-out (LIFO) methods.
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Inventory management• The Pepsi Bottling Group’s Detroit plant reduced
its number of sensors from 180 to 46• A decrease of 66 percent, by standardizing it
sensors• Reduced downtime and inventory costs.
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Inventory Management
Category
Dec 29, 2012
Dec 31, 2011
Dec 25, 2010
Dec 26, 2009
Dec 27, 2008
Raw materials1,87
5 1,88
3 1,65
4 1,27
4 1,22
8
Work-in-process 173 207 128 165 169
Finished goods1,53
3 1,73
7 1,59
0 1,17
9 1,12
5
Inventories3,58
1 3,82
7 3,37
2 2,61
8 2,52
2
Inventory disclosure:(USD $ in millions)
Source: Based on data from PepsiCo Inc. Annual Reports
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Material handling
• Applying manufacturing principles• Take the work back to where it naturally
belongs— in distribution, Use manufacturing-like systems and technology to create custom orders- Shekar Natranjan ( Director – SCM)
• People, process, technology
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Types of Material handling equipmentused
• Fork lift truck for shipping, production and sugar godown• Chain conveyer• Belt conveyer• Plastic chain conveyer• Pumps- Water treatment• Roller conveyer- PET line• Caser machine- Puts 96 bottles at a
time in crate
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Transportation & Logistics • PepsiCo manages 3
million shipments annually • Private fleets, dedicated carriage, direct store delivery, refrigerated trucks and straight truck load shipments
• Uses various logistic techniquesDirect Store DeliveryBroker Warehouse DistributionVending & Food Service System
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Major Distribution
System
Vending and food Service Systems
Broker warehouse distribution
Direct Store Delivery DSD
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Pepsi
Water
Sugar
Flavorings
sparkling soda
Components of Process
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04/11/2023
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Clarifying the water
Filtering, sterilizing, and dechlorinating the water
Mixing the ingredients
Carbonating the beverage
Filling and packaging
Quality Control
Process Pyramid
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LAY’S
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•plants are certified according to the ISO 9001:2008 and ISO 22000:2005 standards•internal and external inspections, conducted either by PepsiCo-Ivi or by the U.S. headquarters of PEPSICO
Quality Process
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•PLI (Pepsi Lipton International) • EFET, the national Hellenic Food Authority •other state or non-governmental organizations.
Quality Process contd…..
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•Quality is spelled as “Q”UALITY•Pepsi sabotage •Strategy by Indra Nooyi
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Supply Chain Management
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• It is the management of a network of interconnected business
• It spans all movement and storage of raw materials, work-in-process inventory, and finished goods.
• It encompasses the planning and management of all activities involved in sourcing, procurement, conversion and logistics management activities
• It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers
• In essence, Supply Chain Management integrates supply and demand management within and across companies
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A Supply Chain Flow
Raw Materials
Supplier
Manufacturing
DistributionCustomerConsumer
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Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Retailer
Distributor
Manufacturer
Supplier
• Clearly defines processes involved and the owners of each Supply Chain process.
•Specifies the roles and responsibilities of each member and the desired outcome of the each process.
Cycle View of Supply Chain:There are five stages in a supply chain (Supplier Manufacturer Distributor Retailer Customer) and four supply chain process cycles (customer order, replenishment, manufacturing, procurement cycle).
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Supplier Manufacturer
Distributor Retaile
rCustomer
Push-Based Model
Supply to Order
Produce to order
Automatically replenish warehouse
Automatically replenish Stock
Customer Orders
Pull-Based Model
Supply to forecast
Production based on forecasts
Inventory based on forecasts
Stock based on forecasts
Purchase what is on shelves
The difference between push and pull-based model is summarized by the slogan “Make what we sell, not sell what we make”.
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With push process execution is initiated in anticipation to a customer order. Pepsi has a seasonal demand. Just in time concept is applicable in non-seasonal period and not applicable in seasonal period. All processes that are part of the procurement cycle, manufacturing cycle, replenishment cycle, and customer order cycle are push processes.
Pepsi Sales order and processing: The Shipping Manager receives sales order from Sales Team, distributors through telephone, fax & email one day before dispatch. The sales are made to base distributors on advance payment against orders then shipping manager plans according to the demand of distributors on daily basis.
Push/Pull View of Supply Chain:
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Supply Chain Flow-Pepsi
Manufacturing plants in Maharashtra
Chembur Roha Paithan
One truck carries 9 tonnes which includes 550-700 crates (Primary Truck)
Pepsi 300ml GLASS BOTTLE
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Supply Chain Strategy
1. The Customer and Supply Chain Uncertainty
i. Identifying customer needs
ii. Demand uncertainty and implied demand uncertainty
iii. Uncertainty for the capability of the supply chain
2. Understanding the Supply Chain Capabilities
3. Achieving the Strategic Fit
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Organized Sales• CnF (group of workers namely loaders, de-loaders, salesmen work per CnF)
There are 13 CnFs in Pune
• Distributor -70 manpower with distributor
-Distributor supplies to 4000-4500 outlets
i. He supplies in 11 routes with the help of 11 vehicles
ii. 10 vehicles for organized sale
iii. 1 for direct sale
iv. Secondary trucks under the supervision of the driver deliver the material to the retailer
v. Distributors have 3 days stock as back up with them in order of any malfunctioning of the plant or other such external factors.
• Retailers
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Direct Sales
• From CnF the secondary trucks leave for the semi urban and rural areas for the direct sales of the materials . For each day truck consumes 6-7 L of diesel per day. This kind of selling is not used for demand forecasting but still generates huge amount of revenue that is why this practice is being followed despite having various loopholes.
• One truck carries 3 tonnes which includes 144 crates• Each crate consists of 24 bottles• Crate weighs 14.4 kg in case on 200ml full bottle• Crate weighs 18 kg in case on 300ml full bottle• Height of 300ml bottle -22cm• Weight of 300ml bottle-700gms when full• Weight of 300ml bottle-400gms when empty
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Thank you !