Everything about PepsiCo. It's history, intro., products, mission, vission, supply chain etc.

1. Presented to:
Sir Awais
Subject:
Supply Chain
Discipline:
Master of Business Statistics and Management (MBSM-A)
Punjab University
Prepared By:
Muhammad Sultan Bhatti (1319-10)
BadarZaman (1353-10)
AsimHameed (1436-10)
Hooria (1356-10)

2. HISTORY AND BRANDS:
PepsiCo Americas Beverages:
Pepsi was founded in 1898 by Caleb Bradham;
a New Bern, North Carolina, druggist, who first
formulated Pepsi-Cola. Today, PepsiCo
Americas Beverages (PAB) has well known
brands such as Mountain Dew, Diet Pepsi,
Gatorade, Tropicana Pure Premium, Aquafina
water, Sierra Mist, Mug, Tropicana juice
drinks, Propel, SoBe, Slice, Dole, Tropicana
Twister and Tropicana Season's Best.
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.
PepsiCo in Asia middle eastAfrica:
PepsiCo Asia, Middle East & Africa (“AMEA”) makes,
markets and sells a number of leading snack food brands
including Lay’s, Kurkure, Chipsy, Doritos, Smith’s, Cheetos,
Red Rock Deli and Ruffles, Quaker-brand cereals and snacks.
AMEA also makes, markets and sells beverage concentrates,
fountain syrups and finished goods, under various beverage
brands including Pepsi, Mirinda, 7UP and Mountain Dew.

3. FACTS AND VARIATIONS IN LOGOS

4. ORGANIZATIONAL STRUCTURE
Pepsi Company’s 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 supply–chains in different countries are controlled by one main headquarter situated in
New York , USA.
OUR MISSION AND VISSION
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.

5. 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

6. Supply Chain of PepsiCo. And Supply Chain Strategy
In order to ensure a good supply chain strategy, Pepsi co. plans twoyears in advance. It
has several contracts with manufacturers andreceives raw material on a convenient
basis. The company alsodecides where production plants are to be placed. The
productionprocess is 65% automated. The company has to provide and managetransport
for the delivery of products as well as the arrangement of third party services for the
procurement of products. The shipping department handles orders and the transport
department decides thevehicles for safe delivery.Material planning and sourcing is
carried out as well. Sources of supplyof raw material both local and foreign are
identified and terms andconditions are negotiated. Capacity planning is also done at this
stage.Sales forecasting and production planning depends upon the capacity of the
organization. Distributors are also decided by the company, keepingin mind past
performances.
Supply Chain Planning
Companies start the planning phase with a forecast forthe coming year of demand. Pepsi
carries out sales forecasting for localdemand. The annual sales target is conveyed to the
supply chaindepartment, planning is carried out on a monthly, weekly and dailybasis.
Supply Chain Operation
Company makes decision regarding individual customer orders. Thegoal of supply
chain operations is to handle incoming customer ordersin the best possible manner.
During this phase, firms allocate inventoryor production to individual orders.
Process Views of a Supply Chain
Pepsi has a seasonal demand. Just in time concept is applicable in non-seasonal period
and not applicable in seasonal period. All processesthat 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 salesorder
from Sales Team, distributors through telephone, fax & email oneday before dispatch.
The sales are made to base distributors onadvance payment against orders then shipping
manager plansaccording to the demand of distributors on daily basis.

7. Competitive Advantage to PepsiCo.
As they operate in the global marketplace:
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 thevalue of shareholder'sinvestment. They do
this through sales growth,cost controlsand wiseinvestment of resources. They believe
their commercial successdepends upon offeringquality and valueto their consumers
andproviding them the products that aresafe, wholesome, economically efficient and
environmentally sound; which are providing a fair return to theirinvestors while
adhering to the highest standards of integrity. Acustomer while purchasing a bottle of
Pepsi will consider productquality, price and availability of the product. Thus, Pepsi
particularlyfocuses its competitive strategy as to producing sufficient variety at
reasonable prices andthe availability of the product.
Identifying Customer’sneeds
Pepsi needs to understand the customer needs for each targetedsegment and the
uncertainty the supply chain faces in satisfying theseneeds. Pepsi deals with beverages,
which are a fast moving consumergood, it knows the requirements of consumers. Pepsi
is considered as adrink which is refreshing during summer, and taken regularly
duringwinter, with demand hiking around festivals like New Year, Halloweenoccasions
such as weddings. Pepsi caters to both cities and rural areas.It understands the needs of
both. As demand for beverages isseasonal, the quantity of product needed for each lot is
taken care ofwith past demand in mind.
Consumers require a:
Smallresponse time
High service level
Reasonable price
Variety products,
Availability of goods
Return ability
Less Response time
Home delivery
Collateral offers
Original color and taste

8. 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
Demand Uncertainty andImplied Demand Uncertainty
Demand for Pepsi varies by product. For example there is a greaterdemand for “Pepsi”
as compared to “Mirinda Apple,” which is new.Hence, Pepsi has a low demand
uncertainty as compared to “MirindaApple.” The product “Pepsi” is approaching its
maturity stage in thePLC whereas “Mirinda Apple” is in the introductory stage.Pepsi’s
implied demand uncertainty varies with the product type aswell as the customer needs.
Due to decreased lead time (the customermay purchase its competitor’s product if Pepsi
is not available at thattime), need for greater variety and higher level of service,
implieddemand uncertainty increases.
Supply Chain Capabilities
The efficiency and responsiveness varies according to the consumer needs, implied
demand uncertainty, product type and marketsegments. In remote areas the company
focuses on being somewhatefficient as other modes of transportation could turn the
product to behighly expensive. According to the company it does not deal
withdistributors who do not have 20 to 25 vehicles, therefore as thecompany has focus
on cost reduction, uses slow and inexpensivemodes of transportation, the demand is
certain, and uses economies of scale in production, the product Pepsi is more inclined
towards beingsomewhat efficient. In cities, the company focuses its attention onbeing
highly responsive as Pepsi has to meet short lead time, meet ahigh service level, handle

9. a large variety of products and respond towide ranges of quantity demanded especially
at theretail stage.
Distribution Channels
Direct distribution:
Ultimate consumers
Indirect distribution:
Through Base market distributors
Through Outstation distributorsPepsi uses light and heavy vehicles for safe delivery of
goods to thedistributors for timely delivery. It follows the just in time concept whichis
applicable in Non-seasonal period and not applicable in the seasonalperiod.
Review and Revise Distribution
This is usually done through taking over key revenue areas. If thedistributor does not
achieve its sales target, the distribution is takenback and an addition of new distributor
is done. Therefore Pepsi’ssupply is low supply uncertainty. Some of its supply source
capabilitiesare:
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 bevaluated along two
dimensions:
1.Customer needs that are met
2.Cost of meeting customer needs

10. Response Time
For Pepsi is minimal as the direct customers for Pepsiare 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 themarket with their
unique product line ranging from chips to water, theproduct variety includes beverages
ranging from the water Aquafina toMountain 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 availablein stock whenever an order
arrives. The Distributors have 3 days stock as back up with them in order of any
malfunctioning of the plant orother such external factors.
Return ability
Of Pepsi has always been very strong in a sense thatunsatisfactory items can be returned
and changed on the spot. This istrue for both the consumers and the retailers. Pepsi has
laid down asystem through which they can effectively manage this requirement.
Achieving the Strategic Fit:
Making one stage more responsive allows the other stage to focus onbeing more
efficient. The Pepsi supply chain assign different roles to itsdifferent stages, the
company has to decide either to transfer theresponsiveness to the manufacture stage or
to the retailer stage. Whilediscussing the Pepsi’s supply capability it is seen that Pepsi
tends to bemore responsive in the cities and a bit less in towns. Therefore, transferring
the responsiveness to the retailer and distributor, allowingthem to face the higher
implied demand uncertainty. This in returnallows the manufacturer and supplier to be
more efficient. At the sametime, multiple beverage types contribute to a broader product
portfoliocausing Pepsi to adjust its strategies accordingly; tailoring the supplychain to
best meet the needs of each beverage demand.

11. Forcasting Method:

12. A combination of three forecasting methods is used. The followingmethods are used in
combination for the purpose of sales and demandforecasting:-
1.Time-Series Method
Historical demand data can be effectively used to forecast futuredemand.
2.Qualitative Method
Using historical data and market intelligence as a guide, PepsiComanagement practices
their own judgment to determine thedemand forecast. A yearly demand plan is
forecasted in this waywhich is then further divided into monthly, weekly and dailyplans
accordingly.
3.Causal Method
Causal forecasting assumes that the demand forecast is highlycorrelated with certain
factors in the environment such as thestate of the economy, interest rates, and product
pricing that cancause a change in the demand. An example is how byintroducing a
product variant, such as Pepsi Twist, can influencedemand for the original product that
is Pepsi.

13. Product Life Cycle of