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Sir Awais
Subject:
Supply Chain
Discipline:
Master of Business Statistics and Management (MBSM-A) Punjab University
Prepared By:
Muhammad Sultan Bhatti Badar Zaman Asim Hameed Hooria (1319-10) (1353-10) (1436-10) (1356-10)
PepsiCo in Europe:
PepsiCo Europe is the leading food and beverage company in Europe employing 43,000 in the region. The company has invested over $3 billion in the region over the last 3 years. Some of the most popular products in the region include: Walkers Crisps, Quaker Oats, Paw Ridge, Pepsi, Diet Pepsi, Pepsi MAX, Pepsi RAW, 7UP, Copella, Doritos, Gatorade, Red Sky, V Water, Planet Lunch, Lays, Cheetos, Smiths, Duyvis, Snack-a-Jacks, Quaker Cruesli, Looza, Twistos, Solinki.
ORGANIZATIONAL STRUCTURE
Pepsi Companys organization is divided into four areas covering Asia, Africa, Europe and America. These four subdivisions are further narrowed among the countries in these continents. The inter- organization structure of the company has different divisions. The manufacturing plant makes the bottles, the distributors deliver to the suppliers, and the suppliers sell it to the retailers and finally to the consumers. These supplychains in different countries are controlled by one main headquarter situated in New York , USA.
At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.
PepsiCo Mission:
Pepsi Co.s mission is to be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
PepsiCo Vision:
"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today." Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
CULTURE
We have a fundamental belief that people hold the key to PepsiCo's success. We are known as an academy company, a place where people grow and business leaders develop
STRATEGIES
Expand the Global Leadership Position of Our Snacks Business Ensure Sustainable, Profitable Growth in Global Beverages Unleash the Power of "Power of One." Rapidly Expand Our "Good-for-You" Portfolio Continue to Deliver on Our Environmental Sustainability Goals and commitment Cherish Our Associates and Develop the Leadership to Sustain Our Growth
Competitive Advantage to PepsiCo. As they operate in the global market place: 1.Big, muscular brands, 2.Proven ability to innovate and create differentiated products 3.Powerful go-to-market systems. 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 providing them the products that are safe, wholesome, economically efficient and environmentally sound; which are 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 particularly focuses its competitive strategy as to producing sufficient variety at reasonable prices and the availability of the product.
Healthy Disposable Halal ingredients More crunch low Moisture Halal Ingredients More Quality of fries Less Oil More Flavors Easily availability Should not Stale Less Lead time Good Quality Quality material Hygienic Air tight packaging
a large variety of products and respond to wide ranges of quantity demanded especially at the retail stage.
Distribution Channels
Direct distribution: Ultimate consumers Indirect distribution: Through Base market distributors Through Outstation distributors Pepsi uses light and heavy vehicles for safe delivery of goods to the distributors for timely delivery. It follows the just in time concept which is applicable in Non-seasonal period and not applicable in the seasonal period. Review and Revise Distribution This is usually done through taking over key revenue areas. If the distributor does not achieve its sales target, the distribution is taken back and an addition of new distributor is done. Therefore Pepsis supply is low supply uncertainty. Some of its supply source capabilities are: Less breakdowns High quality Flexible supply capacity Mature production process
Factors Influencing Distribution Network Design At the highest level, performance of a distribution network should be valuated along two dimensions: 1.Customer needs that are met 2.Cost of meeting customer needs
Response Time For Pepsi is minimal as the direct customers for Pepsi are the retailers and then the consumers. Pepsi try to locate center of gravity in every country , so that it can reach its retailer in less time. Product Variety In Pepsi Product variety is large. They have made their place in the market with their unique product line ranging from chips to water, the product variety includes beverages ranging from the water Aquafina to Mountain Dew, Pepsi, Pepsi Max, 7 Up, Mirinda, Mirinda Apple &Fountain Fresh, Pepsi diet , Pepsi light. Availability Of Pepsi is very high and the product is always available in stock whenever an order arrives. The Distributors have 3 days stock as back up with them in order of any malfunctioning of the plant or other such external factors. Return ability Of Pepsi has always been very strong in a sense that unsatisfactory items can be returned and changed on the spot. This is true for both the consumers and the retailers. Pepsi has laid down a system through which they can effectively manage this requirement. Achieving the Strategic Fit: Making one stage more responsive allows the other stage to focus on being more efficient. The Pepsi supply chain assign different roles to its different stages, the company has to decide either to transfer the responsiveness to the manufacture stage or to the retailer stage. While discussing the Pepsis supply capability it is seen that Pepsi tends to be more responsive in the cities and a bit less in towns. Therefore, transferring the responsiveness to the retailer and distributor, allowing them to face the higher implied demand uncertainty. This in return allows the manufacturer and supplier to be more efficient. At the same time, multiple beverage types contribute to a broader product portfolio causing Pepsi to adjust its strategies accordingly; tailoring the supply chain to best meet the needs of each beverage demand.
Forcasting Method: A combination of three forecasting methods is used. The following methods are used in combination for the purpose of sales and demand forecasting:1.Time-Series Method Historical demand data can be effectively used to forecast future demand. 2.Qualitative Method Using historical data and market intelligence as a guide, PepsiCo management practices their own judgment to determine the demand forecast. A yearly demand plan is forecasted in this way which is then further divided into monthly, weekly and daily plans accordingly. 3.Causal Method Causal forecasting assumes that the demand forecast is highly correlated with certain factors in the environment such as the state of the economy, interest rates, and product pricing that can cause a change in the demand. An example is how by introducing a product variant, such as Pepsi Twist, can influence demand for the original product that is Pepsi.