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CONTENTS
Introduction Background Product Line Raw Material of Pepsi Distribution Models PepsiCos Logistics Operations Problems Alternate Solutions
INTODUCTION
PepsiCo is the US based worlds leading beverage and snacks food companies. Headquartered in New York, in its 2002 annual report company claimed to have the largest share in US beverage markets. PepsiCo served diverse market with its six group companies such as: Frito-Lay North America Frito-Lay International Pepsi-Cola North America Pepsi Beverage International Gatorade/Tropicana North America Quaker Foods North America
CONTINUED.
PepsiCo choose various efficient distribution methods. PepsiCos bottlers employed wireless technologies to strengthen their distribution system and effectively serve the customers in the market.
BACKGROUND
In 1898, Caleb Bradham invented Pepsi-Cola in his pharmacy in North Carolina, U.S. Bradham started bottling his drink in 1904 By 1909, Bradham had established a network of 250 bottlers for Pepsi-Cola with operations in 24 states in the US. By 1910, the network had increased to about 300 Pepsi-Cola Bottlers. In 1963, Donald Kendall become President of Pepsi Two Years later, in 1965 Pepsi-Cola was merged with Frito-Lay International (FLI) with its operations in 42 countries.
PRODUCT LINE
Pepsi Diet Pepsi Miranda Mug Root Beer Mountain Dew Aquafina(Bottled water) Lipton Ice Teas Frito-Lay Quacker Tropicana
SPARKLING SODA
PEPSI
SUGAR
FLAVORING
DISTRIBUTION MODELS
DSD (Direct Store Delivery) Oldest method used by Pepsi Pepsi employees take orders directly from grocery and convenience stores Arrange the products on store shelves and ensure on time delivery ADVANTAGES of DSD Direct link between company and retailer Maximum visibility of products Launch of new products in quick time No intermediary cost
LIMITATIONS of DSD Higher transportation costs Orders are small but credit period is longer BWD (Broker Warehouse Distribution) This method is used for less delicate and perishable goods Effective and economical than DSD Third party distributors act as intermediary Store employees handles the products and place them on the shelves ADVANTAGES of BWD Lower cost of transportation Intermediary take the product in bulk Higher profit margin
LIMITATIONS of BWD Less visibility of products Delay in delivery of products No link with the retailer V&FS (Vending and Food Services) Sales personnel distributed its products through third party V&FS and bottling companies. To make goods available in schools, colleges, office, premises, stadiums, restaurants etc. Largest V&FS Salesforce in US and this channel contributes huge revenue.
PROBLEMS
Inventory management Handhelds Computers Taking orders manually Delivering quantity available in the truck neglecting retailers requirement.
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