INDUS INSTITUTE OF HIGHER EDUCATION
S/O
:
MUHAMMAD ANWAR
STUDENT ID
:
786-10E
CLASS
:
MBA (EVENING)
SUBJECT
:
M.I.S
TABLE OF CONTENTS
ACKNOWLEDGEMENT .................................. ....................................................................... .....................................
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ABOUT PEPSI CO .............................................................................. ................................................................................ 5 EXECUTIVE SUMMARY .............................................................. .............................................................. 7 Introduction to Information Systems .................................. ............................................... ............. 8 How MIS obtain data from Organization¶s TPS ............................ 99 Decision Support Systems (DSS) ....................................................................................................... 10 Executive Information Systems (EIS) ............................................................................................... 100 Relationship of Systems to one-another one-another .............................................................................................. 11
ERP SYSTEMS .................................................................... ............................................................................ ........122 Enterprise Resource Planning ............................................................................................................. 13 ERP systems automate business processes pr ocesses ......................................................................................... 13 ERP ± bringing the organization together ........................................................................................... 14
Management Information System In PepsiCo ............................... 15 Status of MIS ..................................................................................................................................... 15 Strategic Business Units ..................................................................................................................... 15 Business Process ................................................................................................................................ 16
Current Enterprise Application ..................................................... ..................................................... 16 Current
Enterprise Resource Planning Systems (ERP) .................................................................... 16
Current
Supply Chain Management (S CM) .................................................................................... 16
Current Customer
Relationship Management System ( CRM) .............................. ...................... ..... 17
Proposed Enterprise Applications.................................................. .................................................. 18 Proposed ERP System ........................................................................................................................ 18 Proposed SCM System....................................................................................................................... 18 Proposed CRM System ...................................................................................................................... 18
Electronic Business Application in Pepsi Co .................................. .................................. 19
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Information systems in PepsiCo ..................................................... ..................................................... 23 Softwares Used by PepsiCo ............................................................ ............................................................ 25 Conclusion ..................................................................... ..................................................................................... ................ 27 Recommandation .................................. ....................................................................... ......................................... .... 28 References ............................................................. ...................................................................................... ......................... 29
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ACKNOWLEDGEMENT
I am highly Grateful to Almighty Allah who gave me Power to complete co mplete this report and I am a m also highly thankful to my honorable teacher Sir SAAD for his support and guidance.
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ABOUT PEPSI CO
MISSION
To be the world's world's premier emier consume onsumerr product roductss company, mpany, f ocuse used on conve onvenien ient f oods oods and bev beverages ages. We seek to to produce roduce heal healthy thy fin financial cial rewards ewards to inve nvestors as we prov proviide oppor pporttunitie unitiess f or or growth rowth and and enrichme nrichmen nt to to our employ employee ees, s, our busi usiness par partners and the co commun mmunitie itiess in which we oper perate. And And in everythi rythin ng we do, we strive f or or hone onesty, fairn fairne ess and integr tegrity ity..
VISION "To
build Pakistan¶s leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people."
SUSTAINABILITY 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" Tomorrow better than Today
HISTORY AND PROFILE
PepsiCo entered Pakistan and has grown to become the country¶s largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in Paksitan. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo India¶s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks ± Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands ± Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands.
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PepsiCo¶s foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay¶s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched µAliva¶ savoury crackers. The company¶s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay¶s core products, Lay¶s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The
group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCo¶s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo¶s business is based on its sustainability vision of making tomorrow better than today. PepsiCo¶s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.
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EXECUTIVE SUMMARY Introduction
PepsiCo is a world leader in convenient snacks, foods & beverages, with revenue of more than $39 billion & more than 1, 85,000 employees. The company consists of PepsiCo American Foods (PAF), PepsiCo Americas Beverages (PAB) & PepsiCo International (PI). PAF includes Frito-lay North America, Quaker foods North America & all Latin America food & snack businesses. PAB includes PepsiCo Beverages North America & all Latin America beverage businesses. PI includes all PepsiCo businesses in UK, Europe, Asia, Middle East & Africa. PepsiCo brands are available in nearly 200 countries & generate sales at the retail level of more than $98 billion. Some of PepsiCo¶s brands names are more than 100 years old, but the corporation is relatively young. PepsiCo was founded in 1965 through a merger of Pepsi-Cola & Frito-Lay. Tropicana was acquired in 1998 & PepsiCo merged with Quaker Oats Company, including Gatorade, in 2001. PepsiCo offers product choices to meet a broad variety of needs & preferences ± from fun-foryou items to product choices that contribute to healthier lifestyles. PepsiCo¶s mission is ³To be the world¶s premiere consumer ³Products Company´ focused on convenient foods & beverages. We seek to produce healthy financial rewards to investors as we provide oppo rtunities for growth & enrichment to our employees, our business partners & the communities in which we operate. And in everything we do, do , we strive for honesty, fairness & integrity.´
PepsiCo Headquarters PepsiCo World Headquarters is located in Purchase, New York. The 7 building headquarters complex was designed by Edward Durrell Stone, one of America¶s foremost architects.
Haidiri Beverages Private Limited, Pakistan The
Haidiri Beverage Group was set up in 1979 and is Pepsi¶s sole selling agent for District Rawalpindi and Islamabad It is based in the CDA industrial Triangle, Kahuta Road, Islamabad. It manages the supply for several whole sellers, retailers, restaurants, hotels and other such food outlets .In order to achieve the projected sales target effectively, the organization ensures a comprehensive strategic alignment with the overall PepsiCo¶s business strategy. The unit¶s
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primary functions are to conduct a systematic manufacturing & supply of the product without any tactical flaws. Pepsi products are safe, Pepsi analyze water, sugar & flavorings in accordance with the best international guidelines. Pepsi products comply with most stringent international regulations, including the new regulations regulat ions for carbonated soft-drinks. soft-drinks.
Introduction to Information Systems
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Role of Information Systems in a business: Firms invest in information systems in order to: y y y y y y
Achieve operational excellence. Develop new products & services. Attain customer intimacy & service. Improve decision making. Promote competitive advantage. Ensure survival.
How MIS obtain data from Organization¶s Organization¶s TPS
In the system illustrated by this diagram, 3 TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provide pro vide them with appropriate reports.
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Decision Support Systems (DSS) y
y y y
It supports non-routine decision making for middle level management. For e.g. what would impact on production schedules be if the sales doubled in any previous month? It uses information from TPS, MIS & external sources. The system uses various modules to analyze the data. It focuses on extracting, analyzing informat information ion from large amounts of data.
Executive Information Systems (EIS)
y y
y y
y y
This
type of information serves senior managers. managers. It addresses strategic issues & long term trends for e.g. what types of products should we make in next 5 years? The system addresses non-routine decision making. It provides generalized computing capacity that can be applied to changing set of problems. The system draw summarized information from MIS, DSS & data from external events. It typically uses web portal interface to present the content.
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Relationship of Systems to one-another TPS: it is the major source of data for other systems.
o f data from lower level systems. EIS: it is primarily a recipient of Exchange of data between functional areas for e.g. sales order transmitted to manufacturing system.
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ERP SYSTEMS ERP systems integrate business processes & information from entire enterprise. The system helps in coordinating the operation of business functions. ERP systems are software packages that can be used for the core systems necessary to support enterprise systems.
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Enterprise Resource Planning At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately & automatically updated t hroughout the entire system.
ERP systems automate automate business processes
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ERP ± bringing the organization together
After implementing ERP
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Management Information System In PepsiCo The
microcomputers are linked up to PepsiCo¶s central computer system daily to update inventory information system. Management estimates that over $25,000 (Rs. 12,50,000) per year may be saved because of the system. system. 1. In PepsiCo it helps to recognize market trends: MIS helps helps PepsiCo¶s managers to
recognize market trends, in respect of price, designs of products, fashions etc. timely information of the market trend enable the t he firm to follow follow the right course of action. 2. It facilitates marketing planning & control: effective marketing planning is required in terms of product planning, pricing, promotion & distribution. Such planning will be possible only if the company is possessing adequate & relevant information. This is also possible through MIS. 3. Quick supply of information in PepsiCo: today a form has to take quick decisions, for this purpose it requires fast flow of information which is facilitated by a properly designed MIS. 4. Improves quality of decision making: properly designed MIS supplies reliable & relevant information. With the help of co mputers & other data processing equipments, the marketing managers over there can make effective decisions at the right time. t ime.
Status of MIS Computer Based Information Systems:
Electronic Data Interchange (EDI) Information exchange between companies. co mpanies. Direct Exchange (DEX) hand-he ld computer & store¶s delivery system. Information exchange between hand-held
Strategic Business Units 1. A distinct mission & specific target market. 2. Control over their resources. 3. Their own competitors.
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4.
Plans independent of o f other businesses.
Business Process There
are so many products, operations centers, & offices required for massive co-ordination of each department, activity, geographic location & employees. PepsiCo uses MySAP Business Suite applications in the management of their enterprise resource management. The systems help to standardize the internal software & systems through the elimination of legacy systems, thus reducing the redundancy & error that are common in nature of legacy systems. The system is built with the industry best practices that allow Pepsi to be at the forefront of the industry in each area of the business.
Current Enterprise Applications: Current Enterprise Resource Planning Systems (ERP) The
ERP Corporate portion of MySAP serves to streamline streamline the processes pro cesses of everyday business to reduce costs. It has reduced the number of steps needed to accomplish a single activity by not sending it through as many departments. Also included is a tool related to reducing travel expenses. There is, of course, a portion of software devoted to financial & management accounting. These programs are linked to the production lines & the sales software in order to account for certain expenditures & sales. The
Enterprise Performance Management portion of the software is used to measure how management objectives are being met by profits. This then allows managers to plan & strategize for operations, profit & growth. It allows for the integration of information from, for e.g., both human resources & operations, in order to budget personnel for a specific production line. The entire company can be consolidated into representation in single budget. Individual employees at all levels of the organization are able to access information documenting their own contributions & the progress made within their department. depart ment.
Another important part of the ERM at Pepsi is the Enterprise Human Capital Management. This system has processes that help managers place employees, provide rewards for performance & promote valuable employees.
Current Supply Chain Management (SCM) PepsiCo is in charge of managing the suppliers of many of its smaller subsidiaries. Right now PepsiCo has many bottling plants situated all over the globe. PepsiCo must make sure that all of
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its suppliers (water, corn syrup, food colorings, carbonation, plastics, aluminum & paints etc.) come into an appropriate plant so as to keep customers satisfied with no shortages, yet not make too much additional inventory in stock which hangs up extra resources & cash flows. As stated earlier, PepsiCo uses the help of MySAP Business Suites applications for its business solutions. MySAP helps communicate with its suppliers & generate forecast of demand so than an overabundance of inventory does not happen. MySAP helps PepsiCo generate a forecast in order to keep up with demand. Forecast takes into account past sales plus additional information about sales right now, seasonal changes, economic turns, diet habits, health changes & environmental e nvironmental changes. PepsiCo also has been trying to broaden their supplier base. They have a program in place to encourage minority & women in their business program. In fact, in October 2004 both PepsiCo & Toyota received a ³Corporation of the Year´ award from the National Minority Supplier Development Council. The encouragement will encourage suppliers to take part in PepsiCo¶s functions & hopefully broaden their customer & market base.
Current Customer Relationship Management System (CRM) Businesses use customer relationship management system to ³capture & integrate customer data from all over the organization, consolidate the data, analyze the data & then distribute the results to various systems & customer touch points across the enterprise.´ These systems are useful in improving sales, marketing & customer service in a business. Through the use of CRM system, PepsiCo has been able to deliver top-line growth & superior customer cu stomer service. Pepsi¶s current CRM application has allowed for conversion of former disparate sales systems into an integrated internet application solution, a 360 degree view of the entire customer base, simplification of the resolution process, accurate & timely deliveries & reduction of product inventory close time by 1-2 days. Through the use of real time customer information, the managers are able to have up-to-date information on any issue of needs of the customer through their account, allowing a clear picture of their customers & their relationships with the company. This also allows workers to uncover potential sales opportunities with their customers. The real time information system is also used to improve customer interaction & satisfaction through the use of help desks, customer service representatives & allowing customers themselves to access the real time information system. Pepsi uses CRM applications to determine profitable customers, uncover potential sales opportunities, improve customer interaction & relations & provide the enterprise with up-to-date information.
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Proposed Enterprise Applications Proposed ERP system
Something that PepsiCo could do to improve their ERP is to take the advantage of Business Process Outsourcing. ³for a growing number of organizations, outsourcing peripheral activities ± Business Process Outsourcing (BPO) ± to external providers is becoming becoming an attractive, cost effective alternative to handle them initially. By outsourcing non-core business processes, such as human resources & procurement, companies can focus more on core competencies & free up valuable resources to drive growth & innovation, which is essential in today¶s tough markets.´ MySAP does not provide BPO services, but SAP supports BPO providers in setting up services that generate sustainable business benefits by reducing costs, lowering risks & improving process quality. Proposed SCM system
We would like to propose to do things as they are doing it right now, because they are doing a good job, but like any business, they can never be too careful, especially if PepsiCo continues to encourage more suppliers to enter their domain. PepsiCo needs to keep an information system like MySAP that will integrate all their suppliers to the main needs. PepsiCo needs to also make sure that whatever information they use in future can accurately predict changing consumer demand. Proposed CRM system
Overall, Pepsi¶s CRM applications seemed to have greatly improved after trying a new variety of software systems. Currently, PepsiCo is using MySAP enterprise applications, where they had previously used other applications including Oracle¶s PeopleSoft. We see the current CRM application as being very beneficial to the company. One proposition that would more likely improve the system is the integration of a CRM application across all subsidiaries under PepsiCo. This will allow for further interaction between the company & the customers to see where the improvements in the interactions can be made, as well as to determine overall profitability of the customer. We also feel the CRM application can be used to develop future marketing campaigns to meet the t he needs & desires of customers in specific areas. Other than t hese minor changes, we feel that the t he present CRM application is very promising for PepsiCo.
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Predictabl ictable
supp supply ly &
demand emand
Predictabl ictable
supp supply ly &
unce uncerrtain tain demand emand
Highly Highly unce uncerrtain tain supp supply ly & demand emand
or unce uncerrtain tain in supp supply ly & pr predictabl ictable in demand emand
PEPSICO
Electronic Business Applications in PepsiCo PepsiCo & Pepsi Bottling Group (PBG) select MEDSTAT Advantage Suite System to manage Employee Benefits. This
multi year license agreement provides PepsiCo & PBG with a Decision Support System (DSS) & reporting applications for proactively managing individual & organizational health in order to improve productivi pro ductivity ty & profitability. ³The MEDSTAT decision support system integrates all our health benefits information into a single, central source.´ ³It will enable us to understand the potential impact of benefit plan design changes & evaluate the clinical effectiveness of our benefit programs.´ Greg Heaslip, director of benefits at PBG added, ³We plan to use the system to help us identify the drivers of rising healthcare expenditures & ensure all employees are receiving the highest quality care available.´ PepsiCo provides health benefits for more than 1,16,000 employees & the retirees while PBG covers some 83,000 empl e mployees oyees & retirees. ret irees. MEDSTAT advantage suite seamlessly integrates data warehousing capabilities, advanced healthcare analytic methodologies & business intelligence applications to provide a powerful decision support solution.
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F M Finance Resource Resour ce Man Ma nageme agemen nt
M
SCM
Manufact Manu factur uriing Resour Re source ce Plann nniing
E system
Supp pply ly Chai Chain n Manageme Man agemen nt
C M
H M
Cus usttome merr Relati Rel ations onship hip Man Ma nageme agemen nt
Huma man n Resource Resour ce Man Ma nageme agemen nt
Supply chain strategy or design
During this phase a company decides how to structure the supply chain over the next several years. The company makes long term decisions in regards to location & capacities of production & warehousing facilities, the products to be manufactured or stored at various locations, the models of transportation to be made & information systems & so on. The supply chain design is very expensive to alter on short notice & supports the company¶s strategic objectives. In order to ensure a good supply chain strategy, planning is to be made years in advance. The unit has several contracts with manufacturers & receives raw materials on a convenient basis. The company also decides where production plants are to be placed. The company has to provide & manage transport for the delivery of the products as well as the arrangement of 3 rd party services for the procurement of the products. The shipping department handles orders & the transport department decides the vehicles for safe sa fe delivery. Material planning & sourcing is carried out as well. Sources of supply of raw material both local & foreign are identified & terms & conditions are negotiated. Capacity planning is also done at this stage. Sales forecasting & production planning depends upon the capacity of the organization with respect to: 1. Production. 2. Storage: raw & packing.
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3. Storage: finished goods. The
unit has a procurement budget of approximately Rs. 3 billion. Approved suppliers can¶t go beyond this budget the supplier is audited by the most efficient quality control department. Distributors are also decided by the company, co mpany, keeping in mind past performances. Supply chain planning
As the above configurations have been set, planning must be done within the above stated constraints. Planning establishes parameters within which a supply chain will function over a period of time. Companies start the planning phase with a forecast for the coming year of demand. Pepsi carries out sales forecasting for local demand as well as for export purposes to countries such as Nepal, Bhutan & Bangladesh. The annual sales target is conveyed to the supply chain department of the unit. Planning is carried out on a monthly, weekly & daily basis. Supply chain operation Company
makes decision regarding individual customer orders. The goal of supply chain operations is to handle incoming customer orders in the best possible manner. During this phase, firms allocate inventory or production to individual orders, set a date that an order is to be filled, generate pick lists at a warehouse, allocate to shipping, set delivery & so on. There is less uncertainty about demand. At this unit, sales & supply chain departments get together to decide the inventory usually on a weekly basis. Achieving the strategic fit
Making one stage more responsive allows the other stage to focus on being more efficient. The Pepsi supply chain assign different roles to its different stages, the company has to decide either to transfer the responsiveness to manufacturing stage or the retailer stage. While discussing Pepsi¶s supply capability it is seen that Pepsi tends to be more responsive in cities & a bit less in towns. Therefore, transferring the responsiveness to the retailer & distributor, allowing them to face the higher implied demand uncertainty. This in returns allows the manufacturer & supplier to be more effective. At the same time, multiple beverages type contributes to a broader product portfolio causing the unit to adjust its strategies accordingly; tailoring the supply chain to best meet the needs of each beverage demand.
Expanding strategic scope of Pepsi
In Pepsi the agile inter-company scope of strategic fit is essential because the competitive playing field has shifted from company-versus-company to supply chain-versus-supply chain. Strategic scope must cover all these boxes, at least at the supply chain end. The agile intercompany scope of strategic fit requires the company to evaluate very action in the context of the
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entire supply chain. As competition increases, Pepsi is expanding their strategic scope as they are increasing their product line by adding ³Pepsi Max´, ³Mountain Dew´ & ³Mirinda Apple´ to their beverage line. Human resource management
In PepsiCo the goal of HRM is the effective & efficient use of the human resources of a company: Human resource information systems are designed to support:
Planning to meet the personnel perso nnel needs of the businesses. Development of employees to their t heir full potential. potential. po licies & programs. Control of all personnel policies
Accounting information systems
In PepsiCo computer based accounting information systems record & report the flow of funds through an organization on a historical basis & produce important financial statements such as balance sheets & income statements. Also emphasizes on Cost Accounting reports, Development of Financial budgets & Projected Financial statements, Analytical reports comparing actual to forecasted performance.
Technological factors in PepsiCo
Development of additives such as sugarless sweeteners, caffeine free products & new flavoring enables PepsiCo to provide products that meet changing customer tastes & preferences. In addition, computerized manufacturing technologies are great contributions to higher efficiency & quality in bottling operations. For Pepsi, a critical business challenge is ensuring the distribution processes can deliver the right products to the right customers at the right place & at the right time. According to Jerry Gregoire, Vice President, Information Services, ³the competitive advantage will go to the company that can apply technology to areas such as logistics, getting costs out of the distribution pipeline & getting products into the stores less expensively while increasing the availability of sales information.´ Pepsi North America¶s data communication network is an important element in the company¶s efforts to address sales & distribution challenges with technology. Sales data also helps Pepsi¶s managers make decisions about products before they reach the t he freshness date & must be pulled from the shelf & d iscarded. Strategic alternatives
Out of the many strategic alternatives that PepsiCo could choose to follow, we have chosen to endorse one that fosters continued growth & diversification. Although their over-satisfied
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portfolio has hindered their international growth, these strategies strengthen their overall corporate worth & make presence do mestically. mestically. Pepsi should focus on increasing sales globally to compete effectively with been beaten badly in some markets & need to focus more on un-tapped areas. They y
y
y
Coke. They
have
should: Continue
to diversify their beverage selection through acquisitions. This will enable PepsiCo to combat the decreased interest in Cola. Going along with this, PepsiCo needs to ensure that they can properly manage all of these acquired companies & should divest that show limited potential. po tential. Increase the use of exclusivity agreements to boost their sales in key markets. This may make it harder to keep costs low but will ensure added revenues. Another reason why Coke has continued to beat Pepsi is through its exclusivity agreements with restaurant chains, sports & entertainment complexes & college campuses. More attention in this area will help to battle Coke¶s dominance. Capitalize on their aggressive corporate culture in overseas dealing. This can help to combat the weakness of their the ir current international strategies.
Information systems in PepsiCo In responding to market demands for efficient 24 hour ³order-to-delivery´ process for customer orders, PepsiCo has installed a computer system that links an effective wide area network that allows immediate transmission of customer orders. ord ers. The
outcome has been to integrate with a wide area network, transmit accurate, complete customer data, allowing the company to more efficiently loads trucks, schedule deliveries & save labor hours. Information systems link the vendor partners, who share relevant work, personal, & health related information about employees.
Logistics
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 & water to make beverages & beverage syrup. Syrup was sold either directly to the
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fountain accounts or was combined with carbonated water for bottling. Bottling companies were owned & operated by local companies in the countries where PepsiCo operates. The
transportation network has been designed with a view to ensure responsiveness & boost the availability of the product. For the unit we visited, using fast mode of transport increases responsiveness as well as the transportation cost but lowers the inventory holding cost. The unit decides different mode of transportations having different characteristics with respect to speed & size of shipment. Electronic commerce in PepsiCo Pepsi takes the plunge with an online campaign
PepsiCo¶s recent announcement that it would conduct a joint promotion of its products with Yahoo, one of o f the most popular sites on the t he internet, is promising news for website operators that have struggled to persuade p ersuade the richest advertisers to spend their money online. Even as the internet achieved mass market audience levels, consumer goods advertisers like Coca-cola, Nabisco & until now Pepsi, have kept their wallets shut, spending mere pocket change on the web. They have argued that the medium may be great for direct marketing, but it does little to advance their primary pr imary advertising goal: increasing brand awareness. SAP announced global brand leader PepsiCo has selected MySAP Business Suite
SAP has announced that global brand leader PepsiCo has selected MySAP Business Suite as the primary business platform for unifying its operations, standardizing business processes & increasing efficiency across its divisions. The USD 27 billion convenience food & beverage company produces Frito-Lays snacks, Pepsi-cola beverages, Gatorade sports drinks, Tropicana juices & Quaker foods. SAP spokespeople declined to comment the value of the deal in monetary terms. John Grozier, SAP¶s Vice-President of CRM product marketing, told CRM buyer in an interview that PepsiCo selected MySAP to kick off a major business transformation for the company. Information Technology improvements
Executive Support System (ESS) ± ability to closely monitor sales/market share. Decision Support System (DSS) ± reduces costs of raw materials & supplies. Packaging Application Expert (PAX) ± automates production & logistical processes. Transaction Processing System (TPS) ± saves 30-50 thousand man hours weekly. Management Reporting System (MRS) ± eliminated ³stales´, improved product quality, less waste & encompasses profit-vision. profit-vision.
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Marketing & Sales strategies
PepsiCo has developed the national marketing, promotion & advertising programs that support its many brands & brand image; oversees the quality of the products; develops new products & packaging, & coordinates coo rdinates selling efforts. efforts. Competitive advantages of Information Technology y y y y y
Inter-relates with strategic strategy. Creates barrier for new competition. Makes switching bands difficul d ifficultt for retailers. Gains efficiency through value chain cha in analysis. Provides centralized data.
Competitive disadvantages of Information T echnology y y
Creates
claims of unfair un fair competition. Shelf space issues.
Softwares Used by PepsiCo MySAP Business Suite
PepsiCo Inc. has selected SAP¶s full MySAP Business Suite to streamline its distribution & delivery processes, improve planning & forecasting & give better visibility to its global supply chain. PepsiCo, which manufactures, distributes & markets Frito-Lays snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices & Quaker foods, food s, is aiming to better link its supply chain & inventory data with its customer data. PepsiCo software¶s costs
PepsiCo capitalize certain computer software & software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed & it is probable that the software will be used as intended. Capitalized software costs include only:
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1. External direct costs of materials & services utilized in developing or obtaining computer software. 2. Compensation & related benefits for employees who are directly associated with the software project. 3. Interest costs incurred while developing internal-use computer software. Capitalized
software costs are included in property, plant & equipment on the balance sheets & amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximates 5-10 years. Software amortization totaled $119 million in 2009, $58 million in 2008 & $30 million in year 2007. Net capitalized software & development costs were $1.1 billion as of December 26, 2009 & $940 million as of December 27, 2008.
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Conclusion:
Management information system involves the information system and
the organization. PEPSI system helps the PEPSI
CO benefits a lot from the management information system. The
CO Company create strategies that will help the PEPSI CO Company
conquer any problems and threats from competitors. Company
PEPSI
The
system also assists the PEPSI
CO
in processing the needed information. Management Information Systems also helps a
CO company to create or update its inventory & products control system.
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Recommendations y
Continue
developing new Information Technology.
y
Enhance & upgrade DEX system.
y
Develop & implement training programs like shared incentive programs, shared purpose top-to-bottom implementation programs. prog rams.
y
Implement new processes & Mindsets Company wide.
y
Since the MIS of a company is a vital part of its operations and its survival in the modern world, it must be well updated and it must compete well with MIS¶s competitors.
The
MIS of a company should be created from high high standards so that it can be of stiff competition against its counterparts.
The
MIS system should help the company to
achieve its goals and assist the company co mpany in reaching its potential.
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References: www.pepsico.com www.answer.yahoo.com www.answer.com www.wikipedia.com www.wikipedi a.com www.slideshare.net www.mamma.com
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