Supply Chain Management

Table of Contents Introduction......................................................................................................................... Pepsi Co History.................................................................................................................. PepsiCo’s Mission............................................................................................................ Competitive and Supply Chain Strategies....................................................................... ......................................................................................................................... PepsiCo’s Supply Chain Management.................................................................................. Difficulties without Just-in-Time ..................................................................................... Improvement with using Just-In-Time (JIT)....................................................................... I2 Transportation ............................................................................................................ Implementation............................................................................................................... I2 Supply Chain Visibility................................................................................................. E-solution by Hewlett Packard (HP) .................................................................................... Pepsi Bottling...................................................................................................................... The challenge.................................................................................................................. The solution..................................................................................................................... The results....................................................................................................................... Packaging as a tool for Supply chain management............................................................. Palletization Roadmap..................................................................................................... PepsiCo’s Frito Lay Supply chain ........................................................................................ Strength........................................................................................................................ From supplier to retailer................................................................................................ Retailers........................................................................................................................ Competitive advantages............................................................................................... Pepsi Tropicana Supply Chain............................................................................................ Background................................................................................................................... Problems....................................................................................................................... Solution......................................................................................................................... Limitations of Pepsi Supply Chain over Coke..................................................................... Introduction Supply Chain Management is the process of planning, implementing, and controlling the operations of supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. It is a cross functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end consumer. Supply Chain management is also the combination of art and science of improving the way company finds the raw components it needs to make a product or service and deliver it to customers. It seeks to enhance competitive performance by closely integrating the internal functions within a company and effectively linking them with external operations of suppliers and channel members. Moreover, this has been a prominent concern for both large and small companies as they strive for better quality and higher customer satisfaction. In a supply chain, a company links to its supplier upstream and to its distributors downstream in order to serve its customer. The goal of supply chain management is to provide maximum customer service at the lowest possible costs. Companies now are competing supply chain-to-supply chain rather than enterprise-to-enterprise requiring for more intimately connected relationships. Customer markets and supply chains are no longer limited by physical proximity, and businesses are sourcing from and managing a greater number of far- flung partners and channels. Success of a company now depends on effective global supply chain management, its ability to deliver the right product to the right market at the right time. The complexity involved in managing supply chains that span continents and dominate markets demands strategies and systems that are adaptable. Managing Supply Chain for Global Competitiveness takes a strategic look at all of the core functions of global supply chain management which includes product design, planning and forecasting, sourcing, outsourcing, manufacturing, logistics, distribution, and fulfilment. An example to illustrate this theory on the supply chain management is the PepsiCo, Inc. 2 Pepsi Co History PepsiCo, a Fortune 500, American Multinational Corporation is under the food consumer product industry and is the world leader in convenient foods and beverages. The Pepsi brand and other Pepsi-Cola products account for nearly one-third of the total soft drink sales in the United States. In order for the company to make sure that their products reach the customers, the company needs a efficient supply chain solutions. It was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including the Gatorade in 2001. PepsiCo offers product choices to meet a broad variety of needs and preference -- from fun-for-you items to product choices that contribute to healthier lifestyles. PepsiCo owns some of the world's most popular brands, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay's, Doritos, Tropicana, Gatorade, and Quaker. Coca- Cola Company in market value for the first time in 112 years since both companies began to compete. Other brands include Caffeine-Free Pepsi, Diet Pepsi/Pepsi Light, Caffeine-Free Diet Pepsi, Caffeine-Free Pepsi Light, Wild Cherry Pepsi, Pepsi Lime, Pepsi Max, Pepsi Twist and Pepsi ONE,7 Up ,Aquafina (Flavour Splash, Alive, and Twist/Burst),Propel Fitness Water, SoBe, Quaker Milk Chillers. The Frito-Lay brands are : Cheetos,Fritos,Go Snacks, James' Grandma's Cookies, Hamka's, Lay's, Miss Vickie's, Munchies, Sandora, Santitas, The Smith's Snackfood Company, Sun Chips, Kurkure, Tostitos and some of the Quaker Oats brands include Aunt Jemima, Capone Crunch, Chewy Granola bars, Coqueiro, Crisp'ums, Cruesli, FrescAvena, King Vitaman, Life, Oatso Simple, Quake, Quisp, Rice-A-Roni, and Spudz PepsiCo’s Mission PepsiCo's overall mission is to increase the value of shareholder's investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity. A customer while purchasing a bottle of Pepsi will consider product quality, price and availability of the product. Thus, Pepsi focuses its competitive strategy as to producing sufficient variety, reasonable prices, and the availability of the product. Pepsi Ceo Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. During her time, healthier snacks have been marketed and the company is striving for a net-zero impact on the environment. This focus on healthier foods and lifestyles is part of Nooyi's "Performance with Purpose" philosophy. In 2007, Nooyi spent $1.3 billion on healthier-alternative brands like Naked Juice, a California maker of soy drinks and organic juice. 3 Today, beverage distribution and bottling is undertaken primarily by associated companies such as The Pepsi Bottling Group and Pepsi Americas. PepsiCo is a SIC 2080 (beverage) company. PepsiCo has also recently acquired a 50% stake in U.S.-based Sabra Dipping Company. PepsiCo also has formed partnerships with several brands it does not own, in order to distribute these or market them with its own brands. Competitive and Supply Chain Strategies In its business, diversity and inclusion provide a competitive advantage that drives business results. Its brands appeal to an extraordinarily diverse array of customers and they are sold by an equally diverse group of retailers. It understands the needs of our consumers and customers Uses diversity in our supplier base and in everything we do. Commitment to purchase from a supplier base representative of our employees, consumers,

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