Pepsi
SCM Presentation
About Pepsi
• PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American multinational
corporation
• Headquartered in Purchase, NY with interests in manufacturing and
marketing a wide variety of carbonated and non-carbonated beverages, as
well as salty, sweet and grain-based snacks, and other foods.
• PepsiCo founded in 1965 through the merger of Pepsi- Cola and Frito- Lay.
• Revenue: USD 70.37 Billion (2020).
• More than 2,85,000 employees.
About Pepsi-India
• Chairwoman, President & CEO: Indra Krishnamurthy Nooyi
• Available in nearly 200 countries and territories.
• It entered India in 1989
• Owns 43 bottling plants in India, 17 are company owned and 26 are franchisee owned.
• Generates direct employment for more than 4000 people in India and indirect employment for 6,000
people
• Set up 8 Greenfield sites in backward regions of different states. PepsiCo intends to expand its
operations and is planning an investment of approximately USD 250 million in the next two- three
years.
• Annual exports from India are worth over USD 120 million
Supply Chain Management
• Supply chain management (SCM) is the management of a network of interconnected
businesses involved in the ultimate provision of product and service packages required
by end customers.
• Supply Chain Management spans all movement and storage of raw materials, work-in-
process inventory, and finished goods from point of origin to point of consumption.
• Definition an American professional association put forward: “Supply Chain Management
encompasses the planning and management of all activities involved in sourcing,
procurement, conversion, and logistics management activities.”
• It also includes coordination and collaboration with channel partners, which can be
suppliers, intermediaries, third-party service providers, and customers.
• In essence, Supply Chain Management integrates supply and demand management
within and across companies.
A Supply Chain Flow
A Supply Chain Flow
• Cycle View of Supply Chain:
• There are five stages in a supply chain
(Supplier Manufacturer Distributor Retailer
Customer) and four supply chain process
cycles (customer order, replenishment,
manufacturing, procurement cycle).
A Supply Chain Flow
• Push/Pull View of Supply Chain:
• With push process execution is initiated in
anticipation to a customer order. Pepsi has a seasonal
demand. Just in time concept is applicable in non-
seasonal period and not applicable in seasonal
period. All processes that 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 sales order from Sales Team,
distributors through telephone, fax & email one day
before dispatch. The sales are made to base
distributors on advance payment against orders then
shipping manager plans according to the demand of
distributors on daily basis.
The Customer and Supply Chain Uncertainty
Supply Chain Strategy
Demand uncertainty and Uncertainty for the
Identifying customer
implied demand capability of the supply
needs
uncertainty chain
Understanding the Supply Chain Capabilities
Achieving the Strategic Fit
Supply Chain Flow- Pepsi
PEPSI COLA 300ml GLASS BOTTLE
Manufacturing
plants in Maharashtra
Chembur Roha Paithan
One truck carries 9 tonnes which includes 550-700 crates (Primary truck)
Locations Of
Pepsi COBO
& FOBO In
India
COBO
FOBO
FOBO- Franchise
Bottling Operations
are of 2 types
owned bottling
operations
COBO-Company
owned bottling
operations
In India , out of 43 bottling operations 17 are COBO and the rest are FOBO.
Supply Chain Flow- Pepsi
Raw Materials
Used for Pepsi
Carbonated
Sugar Emulsions Citric acid Additives Flavorings
water
Raw Materials
Used for Bottles
Glass Silica Aluminium
Dynamics of Material Flow
Supplier Plant CnF/ Logistics Retailer
Distributor
Flow Of Material
Forward Flow Reverse Flow
Organized Sales Direct Sales
CnF (group of workers namely loaders, de-loaders,
salesmen work per CnF) There are 13 CnFs in Pune
Distributor
Organized
• 70 manpower with distributor
• Distributor supplies to 8000-5500 outlets
• He supplies in 17 routes with the help of 17 vehicles
Sales • 15 vehicles for organized sale
• 2 for direct sale
• Secondary trucks under the supervision of the driver deliver the
material to the retailer
• Distributors have 3 days stock as back up with them in order of
any malfunctioning of the plant or other such external factors.
Retailers
Direct Sales
• From CnF the secondary trucks leave for the semi urban
and rural areas for the direct sales of the materials . For
each day truck consumes 6-7 L of diesel per day. This
kind of selling is not used for demand forecasting but still
generates huge amount of revenue that is why this
practice is being followed despite having various
loopholes.
• One truck carries 3 tonnes which includes 144 crates
• Each crate consists of 24 bottles
• Crate weighs 14.4 kg in case on 200ml full bottle
• Crate weighs 18 kg in case on 300ml full bottle
• Height of 300ml bottle -22cm
• Weight of 300ml bottle-700gms when full
• Weight of 300ml bottle-400gms when empty
Reverse Flow
• The empty bottles are picked by the secondary
trucks from the retailers and brought back to the
CnF.
• The primary trucks carry the empty bottles further
to the bottling plant where the bottles are cleaned
and reused.
Reverse Flow
Customer returns Bottle
Sorting, Testing
Recycle
Bottles can not be
Can the No repaired
bottles be
reused?
Yes
Basic Processing Forward Flow
Conclusion
FORWARD SUPPLY CHAIN REVERSE SUPPLY CHAIN
Forecasting Relatively Certain More difficult
Distribution Points One to Many Many to One
Bottles Quality Uniform Non-uniform
Packaging Uniform Damaged
Pricing Uniform Variable
Distribution Cost Visible Less directly variable
Inventory Management Consistent Inconsistent
Process Visibility Transparent Less visible
Thank You…!
