Parle and PepsiCo both have extensive distribution networks to get their products to customers. Parle uses a 4-level distribution network including depots, wholesalers, carry forward agents, and retailers to distribute its biscuits and confectionaries throughout India. It selects channel members based on factors like infrastructure, sales capabilities, and market coverage. PepsiCo distributes its beverages and snacks through direct store delivery where it delivers directly to retailers, as well as through vending/food service systems and broker warehouses. Both companies aim to maximize availability and coverage of their products through intensive distribution networks.

1. OPERATIONS MANAGEMENT-1
ASSIGNMENT 1 (TRIM 2)
Topic: Study On Unique Operation Management Strategies Of
PepsiCo. And Parle Agro Co.
Submitted by:
Ankit Bhardwaj
Nishchaya Sadhwani
Radhika Agrawal

2. Contents
................................................................................ 4
EXECUTIVE SUMMARY: ........................................................................................................... 4
Company Profile: ........................................................................................................................ 4
Business Statement:..................................................................................................................... 5
Vision:......................................................................................................................................... 5
Mission:....................................................................................................................................... 5
THE DISTRIBUTION NETWORK OF PARLE G:...................................................................... 6
Intensive Distribution:................................................................................................................. 6
The Channel Members of the Distribution Network of Parle:.................................................... 6
The Channel Members and Logistics:......................................................................................... 7
Channel Dynamics: ..................................................................................................................... 7
THE PARLE DISTRIBUTION NETWORK LOGISTICS............................................................ 7
Selection of Channel Members for Parle .................................................................................... 7
CHANNEL MEMBERS OF THE PARLE DISTRIBUTION NETWORK .................................. 8
EVALUATION OF CHANNEL MEMBERS:- ........................................................................... 10
THE DISTRIBUTION CHANNEL AND PARLE:- .................................................................... 10
SUGGESTIONS FOR DISTRIBUTION CHANNEL ................................................................. 11
............................................ 12
Introduction:- ................................................................................................................................ 12
Mission:- ....................................................................................................................................... 12
Vision:-.......................................................................................................................................... 12
Distribution Operations:- .............................................................................................................. 13
1. Direct store Delivery:-........................................................................................................... 14

3. 2. Vending and food service systems:-...................................................................................... 14
3. Broker warehouse distribution:-............................................................................................ 14
PepsiCo’s Logistics Operations .................................................................................................... 14
PepsiCo’s Logistics Two Main Phases Were: .............................................................................. 15
Benefits:- ....................................................................................................................................... 16

4. EXECUTIVE SUMMARY:
Over the years, Parle has grown to become a multi-million US Dollar company. Many of the Parle
products - biscuits or confectionaries, are market leaders in their category and have won acclaim
at the Monde Selection, since 1971. Today, Parle enjoys a 40% share of the total biscuit market
and a 15% share of the total confectionary market, in India. The Parle Biscuit brands, such as,
Parle-G, Monaco and Krackjack and confectionery
brands, such as, Melody, Poppins, Mangobite and Kismi,
enjoy a strong imagery and appeal amongst consumers.
Be it a big city or a remote village of India, the Parle name
symbolizes quality, health and great taste! And yet, we
know that this reputation has been built, by constantly
innovating and catering to new tastes. This can be seen
by the success of new brands, such as, Hide & Seek, or
the single twist wrapping of Mango bite.
Parle-G grew bigger by the minute. Be it the packs sold,
the areas covered or the number of consumers. It became
a part of the daily lives of many Indians. It wasn't a biscuit
any more. It had become an ICON. The next level of
communication associated the brand with the positive
values of life like honesty, sharing and caring.
Company Profile:
In 1929 a small company by the name of Parle products emerged in British dominated
India. The intent was to spread joy and cheer to children and adults alike, all over the country with
its sweets and candies. The company knew that it wouldn’t be an easy task, but they decided to
take the brave step. A small factory was set up in the suburbs of Mumbai, to manufacture sweets
and toffees.
At Parle Agro, it's not just about the business. It's how they go about it. It's about the people. It's
about the culture and ethics. It's also about sustainability and social responsibility. Their
philosophy is built around the need to lead, the need to innovate, and the need to make the world
a better place with a little contribution.

5. Business Statement:
"We are in the business of refreshing India with our products, refreshing the market with new
categories and refreshing ourselves through innovation."
Vision:
"To be the leaders in our business, we will stand apart from the competition by being the first in
the market to innovate."
Mission:
"We will be the leaders in our business by - maintaining high quality, introducing new and
innovative products, reaching every part of India, remaining customer-centric, constantly
upgrading our knowledge and skills.
Figure 1 Timeline overview of Parle
1959
Operationsstarted asBarodaBottling Company for carbonated beverages
1985
Launched India'sfirst fruit baseddrink -Frootiin auniqueTetraPak Format
1986
Launched India'sfirst AppleNectar -Appy
2005
Launched India'sfirst sparkling Appledrink - Appy Fizzavailable in achampagne
shaped PETbottle
2012
Diversified into thesnack food category withthe launch ofHippo, amove that
took the company closer towardsitsvisionofbecoming aleader in thefoodsand
beveragesindustry.

6. THE DISTRIBUTION NETWORK OFPARLE G:
Intensive Distribution:
Parle uses Intensive Distribution for Parle G. This is the ideal strategy for the market leader as
intensive distribution has the following advantages:
 Increases coverage and sales
 Increases product availability
 Encourages retailers to compete aggressive .Higher competition leads to narrower margins for
the retails hence, increases the ultimate margin for the manufacturer.
The Channel Members of the Distribution Network of Parle:
The Parle distribution network for biscuits has essentially four levels as enlisted below:
 Parle Depots
 Wholesalers and Distributers
 Carry Forward Agents (if required)
 Retailers
Manufacturing unit of
parle at various locations
Parle depots
Wholesalers and
distributors
Retailers
Procurement: Customers

7. The Channel Members and Logistics:
Parle has nearly 1500 wholesalers, catering to 425000 retail outlets directly or indirectly. A two
hundred strong dedicated field force services these wholesalers and retailers. Additionally, there
are 31 depots and Carry and Forward agents supplying goods to the wide distribution network.
Parle has level 1, level 2, level 3 distribution channels levels.
Level 1 Level 2 Level 3
Availability of Parle G biscuits at
all departmental stores across the
length and breadth of the
country.
Since it’s an FMCG product this
channel exists for customers
scattered throughout the country.
Mass consumption and suitable
for National and International
coverage.
For e.g. Parle’s international
operations consist of serving
markets in the Middle East,
Africa, South America, Sri
Lanka, Australia and North
America for which the3 level
distribution channel exists
Channel Dynamics:
Parle has a multi-channel marketing system since it uses more than two marketing channels to
reach all its customer segments.
THE PARLE DISTRIBUTION NETWORK LOGISTICS
Selection of Channel Members for Parle
Parle takes into consideration a host of factors while selecting the channel members. This is
because it believes that selection of channel members is a long run decision and the rest of the
decision regarding the supply chain depends upon the efficiency and coverage by the channel
members.
The following are the host of factors considered by the company in selecting the channel members:
 Authentication
 Proof of solvency which requires name and address of the channel member’s bankers
 Safety of the inventory
 Inventory or the perishable goods kept by the distributor/ dealer should be in good
condition which means a detail of storage space and Refrigeration facility is to be provided.
# Details of the delivery vehicle, which includes the following:
# Light Commercial Vehicles,

8. # Matador,
# 3 Wheeler Van,
# Tricycle Van and Hand/Push cart.
# The number and model of each of the vehicle needs to be furnished to the company
 Company acknowledges the fact that it needs to be sensitive to the market demands. For
this it requires that a number of salesmen needs to be present on the field.
 The salesmen too are divided into various categories like
# The Field salesmen
# Counter salesmen
 The details of Clerical Staff and labor are to be provided. The technical competence of the
salesmen needs to be mentioned.
 Details of the various products of other companies that the channel member keeps have to
be provided. The following also need to be furnished with the above:
# The annual sales of these products have to be mentioned.
# Details of complementary products and product lines need to be mentioned.
 Dealers of the company must carry a good reputation. This is due to the fact that Parle
believes that the reputation of the dealer affects the clientele in the long run.
 Market coverage by the distributors needs to be defined which includes details of
Geographic coverage and Outlets per market area.
 The company also requires the dealers to furnish any Advertising and Sales initiative
undertaken by them on behalf of the company.
CHANNELMEMBERS OF THE PARLE DISTRIBUTION NETWORK
1. The Distributors:
 One of the main factors, which keep the distributors motivated, is the margin.
Usually the margins offered by Parle are 8%. Now-a-days it has been raised to
8.5%.
 Volume wise this comes out to be a big figure since Parle’s product has a good
demand in the market. However compared to the other companies the margins are
still lower since the new players in the market offer a much higher margin. But the
very fact that Parle’s products have good demand in the market motivates the
distributors to stock it.
 Parle Products being a cooperative cannot afford to give heavy monetary
incentives. Parle’s products are considered to be value for money since the
company does not believe in charging high margins. In fact all monetary incentives
are just the short run means to promote the company’s product.
2. The Retailers:
 Trade schemes: these are undertaken by the company only for the hard selling items

9.  Glow boards: the company puts up glow boards at the retailer and pays the major
portion of the cost.
 Schedule of the salesmen: they provide the retails with this schedule so the retailers
can pre-estimate the quantities of the various products needed.
 Infrastructure facilitation: the company facilitates the retailers to buy beautiful
stalls by formulating an easy payment program and a commitment to buy back the
equipment at a reasonable price when the value of the equipment has depreciated.

10. EVALUATION OF CHANNEL MEMBERS:-
Evaluation of the Channel Members at Parle is a three step process:-
 Beat plan: This plan is generated for the various product categories. A weekly
schedule is prepared for various markets and the retailers the turnover for each of
the product is calculated for the wholesale dealers.
 Cumulative performance: the performance of the dealers is averaged out over a
period of three years where a comparison is made of the present performance vis-
à-visthe previous ones.
 Target versus achievement: the performance and the targets are compared and
therefore the gaps are identified which help in evaluating the wholesalers and the
distributors and planning for the next year as well. This is done for each of the
product category.
THE DISTRIBUTION CHANNEL AND PARLE:-
The company’s strength is in the procurement of raw materials and essentially not the distribution
of its product. Even though Parle is the market leader in biscuits. But, distribution logistics is the
industry’s main problem. While the other companies fail to replenish demand due to lack in
procurement of raw material, Parle’s inventory management is sound.
Parle has loyal cooperatives that provide products only to them, over time the relationship of trust
has built up with these people that Parle leverages now.
The transport channel is another strong point for Parle. As these transporters have grown with the
company overtime; the bonding with them enables the company to give least margins when it
comes to the distributors in the industry, lowering the costs.
Beat plan
Cumilative performance
Target achievement

11. Parle believes that there is an ongoing demand in the market and therefore no promotions are
needed to increase the sales, also the fact this would affect the cost of the product the company
doesn‟t undertake many promotion schemes.
Parle is able to provide products at the least price in the industry, and is able to give least channel
margins as the channel members earn through volumes and not through high margins. Because of
the strong relationship that Parle shares with the constituent channel members, it forces the channel
members to carry all its new products.
SUGGESTIONS FOR DISTRIBUTIONCHANNEL
The following are the suggestions that Parle can implement to better its distribution channels:
Increase the margins: In order to motivate the channel members it is also very essential for the
company to increase the margins for the hard selling items.
Pushcarts: These should be increased in number in order to increase the market reach(especially
the rural market). This can provide with a very effective channel.
Parle should also go in for ‘Parle’ Zones: It is primarily for big city retail outlets. Here all the Parle
products can be stalked. This can be an effective mode of umbrella marketing. This strategy can
be implemented in regions where the footfalls are large in number.

12. Introduction:-
PepsiCo, Inc. was established through the merger of Pepsi-Cola and Frito-Lay. Pepsi-Cola was
created in the late 1890s by Caleb Bradham, a New Bern, N.C. pharmacist. Frito-Lay, Inc. was
formed by the 1961 merger of the Frito Company, founded by Elmer Doolin in 1932, and the H.
W. Lay Company, founded by Herman W. Lay, also in 1932. Herman Lay, former chairman and
CEO of Frito-Lay, was chairman of the board of directors of the new company; Donald M.
Kendall, former president and CEO of Pepsi-Cola, was president and chief executive officer. The
new company reports sales of $510 million and has 19,000 employees.
Mission:-
The mission of PepsiCo is to be the world's premier consumer product 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.
Vision:-
“Performance with Purpose”
The vision of PepsiCo 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.
Companies under PepsiCo:-
1) Frito- lay North America
2) Frito- lay International
3) Pepsi-Cola North America
4) Pepsi Beverage International
5) Gatorade/ Tropicana North America

13. 6) Quaker Foods North America
Distribution Operations:-
Since its inception, PepsiCo attached a lot of importance to its distribution operations. Each day,
the company's products such as snack foods and beverages, were distributed through various retail
channels in the US and across the world. PepsiCo's distribution system was aimed at making
available all or most of the products in its portfolio within a distance easily reachable by
consumers. PepsiCo was conscious of the need to adapt its distribution systems according to the
needs and preferences of global customers. Based on its experience, PepsiCo had developed
various distribution models to offer its products and services to customers in the US.
1) Direct store delivery
2) Vending and food service systems
3) Broker warehouse distribution
Distributoion
operations
Direct store
delvery (DSD)
Vending and
food service
systems
(V and FS) Broker
warehouse
distrubtion
(BWD)

14. 1. Direct store Delivery:-
DSD is an alternative distribution model to centralized distribution and tends to be used
extensively in the food industry for fresh products such as milk and bread where minimizing the
number of days in the supply chain is a key concern. It is the oldest method adopted by PepsiCo.
In this method employees take direct orders and deliver the previous ones. Orders are taken
manually and timely delivery and shelf management are ensured. It also ensures maximum
visibility of the product to the customers.
2. Vending and food service systems:-
PepsiCo’s sales personnel distributes through third party Vending and distribution. Through this
system goods are made available to the schools, colleges, offices, stadiums, restaurants etc. Huge
potential of distribution channel is developed the largest vending and food services sales in the
US.
3. Broker warehouse distribution:-
It is applicable for less duplicate and perishable goods. PepsiCo employs third party distributors
for such kind of distribution. Employees handle the products at stores and place them on the
shelves. This type of distribution is used for cold drinks and juices. The advantages of such type
of distribution is:-
i) It is economical
ii) It involves less number of employees.
PepsiCo’s Logistics Operations
In order to manage its distribution systems effectively, PepsiCo had put in place advanced logistics
systems. PepsiCo sold beverage concentrate to bottlers, who added carbon dioxide, sweetener and
water to make beverages and beverage syrup. Syrup was either sold directly to the fountain
accounts or was combined with carbonated water for bottling. Bottling companies were (with a
few exceptions) owned and operated by local companies in the countries where PepsiCo operated...
PepsiCo is the 2011 JDA Real Results Award winner for Best in Transportation & Logistics
Management. PepsiCo uses JDA solutions to plan and manage over 3 million shipments annually
in the U.S. and Canada. PepsiCo's internal 3PL subsidiary also uses JDA FreightMatrix to plan
and manage over 40,000 shipments annually for its joint ventures and suppliers. With broad
transportation and logistics visibility, PepsiCo can integrate its rolling assets, predict and manage
transportation issues, track-and-trace shipments and collaborate with customers at a much deeper
level than ever before.

15. PepsiCo’s Logistics Two MainPhases Were:
1. Giving syrup to the bottlers
2. Distribution of bottles/cans to retail outlets
• Product quality and uniformity standards should be maintained.
• Timely delivery
Beverage Manufacturing Unit to Bottlers
Pepsi-Cola North America (PCNA) produces and sells beverages & concentrate to bottling units
in the US and Canada. Syrup is either sold directly to the bottlers or is combined with carbonated
water for bottling.
PCNA’S objectives are:-
1. Timely delivery
2. Reduce transportation cost
PCNA in association with “Penske logistics” takes care of the transporting and warehousing of the
beverages. It uses - i2 transportation optimization system (TOS) software. It monitors movement
of products and makes necessary changes in routes and schedule to tackle unexpected situations.
Pepsi Cola
concentrate
(2 plants)
Bottling and
distribution plants
(company owned)
Retail stores Food service Vending
Bottling and
distribution plants
(Franchise)
Retail Stores Food service Vending

16. Thus PCNA achieves more than 99.1% accuracy. PCNA has centralized transportation to single
location. It also employs six sigma quality process.
Benefits:-
 Order optimization,
 Load configuration,
 Lowest shipping cost,
 Quick routes