This document provides a summary and analysis of PepsiCo's supply chain and recommendations for improvement. It discusses PepsiCo's strategic overview, organizational structure, supply chain processes, key performance indicators, and comparisons to its main competitor Coca-Cola. The document recommends improving distribution, sourcing more suppliers, and increasing manufacturing capacity through hiring more staff and purchasing advanced machines. Implementing these changes could help enhance customer satisfaction and expand PepsiCo's competitive advantage.

1. Running head: SUPPLY CHAIN IMPROVEMENT
SUPPLY CHAIN IMPROVEMENT
13
Supply chain improvement
Student’s name:
Course title:
Institution;
Date:
Introduction
This paper will focus on the Pepsi Company. The main point of
the paper will be an analysis of the supply chain and the
elements which need to be improved in the supply chain to
ensure the success of the organization. The essay contains the
subheadings of the major points of discussion which include the
overview of the company under consideration. The
manufacturing and procurement department is the primary focus
of the analysis since it is significantly involved with supply
chain management.
Strategic overview
The company under analysis will be the PepsiCo, Inc. It is a
food, beverage and snack corporation and has its headquarters

2. in New York. The organization has interests in marketing,
manufacturing and the distribution of the snack foods which are
grain based and beverages among other products. The company
was formed in 1965 whereby it started as a merger of Frito–Lay
Inc. and Pepsi –Cola Company. The current products of this
company include energy drinks, soft drinks, cereal, snacks, rice
snacks, breakfast bars, side dishes, bottled water and sports
nutrition. The company has various brands. Some of the brands
include Pepsi, Diet Pepsi, Tropicana, Sobe, Sabre, Starbucks,
Fritos and Pepsi Max amongst others. Each brand has been
manufactured to target a particular group of people (Company.
& Company., 2012).
The target market of the Pepsi Company is everyone. It aims at
making sure that its product reaches everyone in the world
wherever they are. It has however laid its focus in targeting the
youth who have not made their decisions between choosing its
brand, or that of Coke. One can tell this from the images that
they place on most of their brands. The source of competitive
differentiation of Pepsi is distribution. It is clear that in most of
the restaurants it is more stocked as compared to its rival Coca-
Cola. PepsiCo is the second largest in the beverage and food
industry with Coca-Cola its leading rival. The mission statement
of the company is a performance with purpose whereby it is
closely related to the strategic decision which the company
takes. The changing market structure has always resulted in a
change of the organization chart (Gonzalez, 2011).
The organization chart has three key features. The features
include global hierarchy, functional corporate groups and
offices and market decisions. Market divisions are the most
prominent organizational structure. It is based on two variables
which include geography and business. Regarding the
geography group, Pepsi Company has units for Europe,

3. Americans, and other regions. The market units in the
organizational structure include Frito–Lay, Quaker foods, Pepsi
Europe, PepsiCo Asia, PepsiCo Americas Beverages and Latin
America Foods. The characteristics of the functional corporate
groups and offices entail to the core functions of the
organization. The company has corporate offices for these
features. A senior vice president or executive vice president is
the head of these groups’ .the groups have original features. The
features include global research and development, global
categories and operations, government and legal affairs, human
resources, communications and talent, development and training
amongst others. Global hierarchy is the last characteristic. The
authority controls the governance at the corporate or the global
level. It has considerable hierarchy from top to bottom. The
administration has helped to minimize the deviations from the
company’s policies and strategies (Gonzalez, 2011).
Analysis of the supply chain
The supply chain is made up of several stages. The steps
include the suppliers, whole sellers, and retailers,
manufacturers, assemblers, distributors, customers, product
assembly and the sales. The consumers are the end users. To
ensure a proper supply chain, Pepsi plans two years in advance.
The company is also determining when the plants need to be
placed. Sixty-five percent of the production process is usually
automated. One of the primary inputs of the supply chain is
transport. The company typically organizes for the carriage of
the products. The organization has a shipping department which
handles orders, on the other hand, the transport unit ensures that
safe vehicles are used for the delivery of these products.
Sourcing and material supply are also carried out by the
company. The company identifies the sources of local and
foreign raw materials whereby the terms and the conditions are
negotiated. At this stage, capacity planning is also done. The

4. size of the organization determines sales forecasting and
production planning. Depending on past performance the
company determines the distributors to be considered.
In regards to supply chain planning, the company starts the
planning phase by planning for the forthcoming year of demand.
Pepsi does sales forecasting for the local demand the sales
target of the year are conveyed to the supply chain department
whereby planning is carried out on a daily, weekly and monthly
basis. On the other side, the supply chain operation makes the
decisions by the orders which the customers make. The main
aim of the supply chain operations is handling the incoming
customer order in the best ways possible. The firm allocates
production or inventory to individual requests in this stage
(Firm, 2012).
The human resource is also another key input in the supply
chain. However, the primary party, in this case, is the shipping
manager. He or she manages the sales order and processing. The
ship managers always receive the sales orders from the
distributors and the sales team through email or fax one day
before the dispatch. The sales are then made to the base dealers
through an advance payment against the orders. The shipping
manager plans by the demand of the distributors daily. The
supply chain contributes to a competitive advantage to the
company as they operate in a global market. Some of the
competitive factors include the presence of other big brands and
the existence of go to market systems which are powerful. The
raw materials and their suppliers are also key factors of the
supply chain. Proper and timely supply of the raw materials
ensures that manufacturing of the products is done promptly. On
the other hand, it hence ensures that the products reach the
customers at the required time.

5. There are various critical resources which add value to the
supply chain. One of them is the availability of excellent and
coordinated shipment services. The process of delivery results
in the faster selling of the products. The load manager ensures
that the orders are made before disbursement. There is a proper
coordination between the sources and the distributors in all the
channels. Another essential resource which adds value is the
friendly price. The prices of their products are very reasonable
and affordable to all, the consumers. The critical resources
amongst others are the close price and the coordinated
distribution. When people are purchasing such a product, they
consider the availability of the products and the pieces if they
are available and pocket-friendly then they are likely to sell
faster and so is the case. The value added during the shipment
process is that the proper coordination has always helped to
meet and retain the customers since they have gained trust with
the brand. On the other hand in the case of the being price
friendly, it has contributed to reaching the youths since they are
one of the target markets for the Pepsi brand. The teens who
have not yet identified and tied themselves to a specific
beverage brand is the primary target.
Information and e-commerce play a significant role in serving
the customers in the company. From what was mentioned earlier
information technology was identified as one of the key areas in
the sales process. The salespeople and the distributors use
emails, faxes and telephone calls to make orders. It is one part
of technology which is very helpful to the company. On the
other hand, the use of computers has also been beneficial in
keeping records for all the sales and the ones which are pending
and thus there is a proper recording of the sales made to the
customers and the expected income from them. E-commerce has
also been of great benefit. Online advertising has helped most

6. of the people learn about the brand. Advertising through the
online platforms such as the television or Twitter has been one
of the major ways of making the brands and the products known
to most of the customers. E-commerce has helped reach out to
more customers across different platforms. It has helped the
customers learn the products better and what the company
entails in general (Firm, 2012).
There are various key performance measures when evaluating
the supply chain of the company. One of them is listening to the
customer's feedback. In the supply chain the customers come
last, and thus their feedback is always essential. Many
complaints will indicate that the supply chain is not efficient
and thus some of the products need to be improved or even the
way in which things are done. There are various things which
customer usually require. Some of them include a variety of
products to choose from, availability of good returns, original
taste, and color of the products, airtight packaging, hygienic
products, timely delivery of the products and low moisture
contents among others. The consumer is always the end user,
and the information they give is always right.
Another performance measure of the supply chain is assessing
the profits. Profits come if the customers are satisfied with what
is sold to them. More profits indicate increased demand for the
product meaning that it is highly selling. If there are profits,
then it will be clear the organization of the supply chain is
functioning. Losses indicate that there is some problem and the
sales process is not as efficient as required. Another
performance measure is checking if the company can meet the
demand of the suppliers and the customers. Is the company able
to pay the providers of the raw materials? Good results in the
request management will indicate that the supply chain is
appropriate.

7. The major competitor of Pepsi is Coca-Cola. The performance
of Coca-Cola is one of the best. The supply chains of this
company are quite satisfied and have minimal challenges as
compared to that of Pepsi. Coca-Cola has been in a position to
have a significant competitive advantage in the market as a
result of its brand. Its name is known to many, and most of the
people use their products. Most of the customers are satisfied
with what they offer since they give a variety of the goods to
the customers, unlike Pepsi. However in the case of
distribution, like the Pepsi product Coca-Cola also has two
central distribution systems, the two companies use both the
direct and the indirect distribution.Pepsi does direct delivery
through the ultimate consumers while indirect distribution is
done through the base market distributors. Coca-Cola has a
wider market as compared to that of Pepsi. The ABC system in
the supply chain of the Coca-Cola company has always made
the company successful. It is applied in warehousing and
inventory. The whole sellers also outdo those of the Pepsi
Company (Amatil, 2015).
Improving operation processes.
There are three elements of the supply chain which can be
recommended as the targets of the supply chain .one of the
items is to enhance the distribution of the products.
Apportionment in some areas needs to be reviewed. It was
realized during the analysis that at times there are meager
supplies in some regions. It could stand out as a loophole as to
why they always run the second other than the first. One
believes there has been a problem with proper recording of the
amount of stock required by the customers and especially the
whole sellers. The distribution manager needs to ensure that
there is a close follow-up of the distribution channels. There

8. need to be fewer breakdowns of the vehicles, flexible supply
capacity, and they should always ensure that the production
process mature. From the analysis of the information given, it
was realized that the company does not deal with distributors
who have less than twenty-five cars. Maybe they could increase
the number of cars which a distributor should have so that they
can ensure that their products reach their consumers and within
the required period. Unavailability of good machines to capture
these areas could also be a major problem and thus good
machines to record the distribution channels should be
innovated.
The other element of the supply chain which needs to be
improved is that of the suppliers. The company has very few
providers of the raw materials. Pepsi needs to invest in looking
for more suppliers who can supply a wide variety of raw
products so that they can be in a position to make many brands
as their competitor Coca-Cola does. The company needs to
come up with people who will supply them with good machines
which are up to date to solve the current problem of the
complex systems.
Similarly, it is important that the manufacturing industries
personnel be added. The more people, the more ideas, and
skills. It will also enable them to come up with more brands and
products so that they can be in a position to meet the needs of
all their consumers. The addition of more machines in the
manufacturing plants will also ensure that more products are
manufactured at a time, and thus there will be more distribution,
as mentioned earlier it was clear that the customers frequently
require a full range of products from which they can choose.
Each of the three elements mentioned has a performance
improvement opportunity. For instance, for the case of

9. distribution, it is entirely possible to review the requirements
that the supplier and the distributors need to meet. With this, it
will be possible to improve on this element. For instance, the
management would decide that the number of cars as a
requirement for each distributor should be fifty. Twenty-five
heavy tracks, while the other twenty-five, are on the small
tracks. On the other hand the case of manufacturing, it is
possible for the human resources to add to the number of people
working in the department. The human resources need to ensure
that there is the employment of individuals with skills in this
department. It will in turn help to improve the manufacture of
products. The company should also purchase more
manufacturing machines to ensure that more products are
produced. More products will result in customer satisfaction
(Kumar, 2013).
The specific action recommended for the distribution element is
the increase of more vehicles to help in the delivery of more
products in some of the unreachable areas. For the case of the
supplier, the company needs to come up with more suppliers of
raw materials; it could be through referrals from the already
existing suppliers. Finally, for the case of manufacturing more
advanced machines need to be purchased to ensure efficiency
during the production process. There is a likelihood that if the
specific actions are taken up immediately and seriously by the
company, then there will be some considerable change and
improvement in the supply chain, supply chain management is
essential, and it contributes to the success or the failure of any
organization. One of the reasons why Coca-Cola has retained
the top position is having the best supply chain management
hence there are no issues which can result in its failure.
Results of the performance improvement

10. With the new improvements of the distribution channels, it will
be possible for all the customers to get the products promptly.
One way of ensuring customer satisfaction is by making sure
that they get the products they require in a timely fashion, it
will, in the long run, result in customer satisfaction. The
improvement of the distribution is a significant improvement of
the transport services. The enhancement of the manufacturing
machines will also be an improvement of the products offered
by the company. With the proper tools, there will be a
likelihood of producing even better products. Increase in supply
of the raw materials will also help improve the brand and the
products which the company offers. The features of the products
will not be altered there will only be an improvement and an
addition of the products that the firm has been offering.
The specific changes are necessary to the customers since they
will ensure that the customers are satisfied. Good brands,
delivering the products to the clients promptly enhance
customer satisfaction and thus the growth of the brand. The
increase of the brand as a result of satisfaction will, in turn,
lead to the growth in the competitive advantage of the company.
It will help the company in a way almost to outperform its
competitors. One ofhow the ways companies expand on their
competitive advantage is by improving on their brand. The
lasting capabilities and improvements which are being
introduced to the company through the introduction of these
changes are ensuring that the customers are fully satisfied by
the products being offered. It will also ensure that the client's
complaints are reduced when it comes to distribution in these
areas which are remote and unreachable. In this case, the key
performance indicators are through the measurement of the
customer's feedback. The feedback of the customers will
indicate if there has been an improvement on either of the
elements (Rothwell, Hohne, & King, 2014).

11. Impact on the human resources
The organization has a proper structure as discussed earlier. It
will thus be possible to implement the changes in the few areas
mentioned. For the case of the distribution, it will be the role of
the shipping manager to check if everything is put in place, the
finance manager will also come in ensuring that there is the
authorization of funds to purchase more manufacturing
machines. The investment manager will also ensure that there
are enough finances before the authorization of employment of
new staff in the production department. Above all the chief
executive officer will be tasked to authorize all the changes
which have been proposed after the subordinates approve the
signatures. The job roles of some of the individuals are likely to
change with some of them having some additional tasks to
handle. For instance, for the shipment manager, there will be
more work for him with the increase in the number of vehicles
which each of the distributors will be handling. There is no
decision-making authority to be assigned so that the changes
mentioned can be implemented. All the respective managers
will approve the decisions made, and overall the CEO will give
total approval.
Changes
Several steps need to be considered to satisfy the employees,
customers and the supplier's needs. Employee's compensation
and motivation are quite essential as a way of appreciating
them. It will help them work as required and with vigor hence
leading to the success of the company. On the other hand, the
customers can be motivated by giving them offers such as
cutting of the prices once in a while. It will also be important to
provide the offers of buying one get one free once in a while it
will help encourage the customers to consume the products

12. more. The company should also ensure that the suppliers are
paid in due course and with the right amount of money. It will
make sure that the vendor demand is met. All these
recommendations will enhance improvements in the
organization.
References
(Firm), D. (2012). PepsiCo, Inc. New York, NY: Datamonitor.
Amatil, C.-C. (2015). Coca-Cola Beverages. Sydney, N.S.W.:
Coca-Cola Amatil.
Company., P.-C., & Company., P. (2012). Pepsi Cola's beverage
book: recipe ideas for easy party drinks for any occasion--
holidays, groups, happy hour. Minneapolis, Minnesota:
Pillsbury Company.
Gonzalez, J. G. (2011). Pepsi Cola bottling company. New
York: Gale Ecco, U S Supreme C,
Kumar, N. (2013). Brand Breakout: How Emerging Market
Brands Will Go Global. Basingstoke: Palgrave Macmillan.
Rothwell, W. J., Hohne, C. K., & King, S. B. (2014).
Performance improvement. Brock University. : Faculty of
Education.