SUPPLY CHAIN MANAGEMENT
Trina Bhagat(05), Meghrag Gawande(09), Rohini Mukhopadhyay(19), Rishika Mittal(30), Susrita Sen(36), Swati Randhawa(42) Randhawa(42)
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, salty, sweet and grain-based snacks, and other foods.
PepsiCo founded in 1965 through the merger m erger of PepsiCola and FritoFrito- Lay. Lay.
Revenue: USD 43.25 Billion.
More than 1,85,000 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 60,000 people
Set up 8 Greenfield sites in i n backward regions of different states. PepsiCo intends to expand its operations and is planning an investment of approximately USD 150 million in the next twothree years.
Annual exports from India are worth over USD 60 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, inventory, and finished f inished goods from point of origin to point of consumption.
Definition an American professional association put forward: ³Supply Chain Management encompasses the planning and management of all activities involved in sourcing, sourcin g, 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 View of
Supply Chain:
±
With
push process execution is initiated in anticipation to a customer custo mer order. order. Pepsi has a seasonal demand. Just in time concept is applicable app licable in non-seasonal period and not applicable in seasonal period. All processes that are part of the th e procurement cycle, manufacturing cycle, cycle, replenishment cycle, and customer order cycle are push processes.
±
Pepsi Sales order and processing: p rocessing: The Shipping Manager receives sales order from Sales Team, Team, distributors d istributors 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.
Supply Chain Strategy
1.
The 1.
2. 3.
Customer and Supply Chain Uncertainty
Identifying
customer needs Demand uncerta uncertainty inty and and implied implied demand demand uncertainty Uncertainty for the capability of the supply chain
Understanding the the Supply Chain Capabilities
Achieving the Strategic Fit
Suppl Supply y Chain Chain FlowFlow- Pepsi Pepsi OUR PRODUCT IS PEPSI COLA 300ml GLASS BOTTLE
Manufacturing plants in Maharashtra
Chembur One
Roha
Paithan
truck carries 9 tonnes which includes 550-700 crates (Primary truck)
LOCATIONS LOCATIONS OF PEPSI COBO & FOBO IN INDIA I NDIA
COBO FOBO
Bottling Operations are of 2 types
FOBO FOBO-- Fran Franch chis ise e owned bottling operations
COBO-Company owned bottling operations
In India , out of 43 bottling operations 17 are COBO and the rest are FOBO.
Suppl Supply y Chain Chain FlowFlow- Pepsi Pepsi Raw Materials Used for Pepsi
Carbonated water
Sugar
Citric acid
Emulsions
Additives
Raw Materials Used for Bottles
Glass
Silica
Aluminium
Flavorings
Dynamics
Supplier
of Material Flow
Plant
CnF/ Distributor
Logistics
Retailer
FLOW OF MATERIAL
Forward Flow
Organized Sales
Reverse Flow
Direct Sales
Organized Sales CnF (group (group of of worker workerss namel namely y loader loaders, s, de-load de-loaders ers,, sale salesm smen en work per CnF) There are 13 CnFs in Pune Distributor ±
70 manpower with distributor
±
Distributor supplies to 4000-4500 outlets He suppli supplies es in in 11 routes routes with with the the help of of 11 vehic vehicles les 10 veh vehic icle less for org organi anize zed d sale sale 1 for for dir direct ect sal salee Secondary Secondary trucks under the the supervision supervision of the driver driver deliver deliver the material material to the retailer Distributors Distributors have 3 days days stock as as back up with them in in order 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 tonn es which includes 144 crates
Each ach cr crate ate con consi sist stss of of 24 24 bot bottl tles es
Crat Cratee wei weigh ghss 14.4 14.4 kg in case case on 200m 200mll ful fulll bott bottle le
Crat Cratee wei weigh ghss 18 18 kg kg in in cas casee on on 300m 300mll full full bottl bottlee
Heigh eightt of 300m 300mll bott bottle le -22cm 22cm
Weight
of 300ml bottle-700gms when full
Weight
of 300ml bottle-400gms when empty empty
Reverse Flow
The empty bottles are picked by the secondary secon dary trucks from the retailers and brought back to the CnF. CnF. The primary trucks carry the empty bottles further to the bottling plant where the bottles b ottles are cleaned and reused.
Information Flow
Supplier
Plant
Money Flow
CnF/ Distributor
Logistics
Retailer
FLOW OF MONEY
Organized Sales
A Pre Pre Sales Representative Represen tative (PSR) takes the order from the retailer thrice a week. Direct sales representative (DSR) delivers the order the very next day. The money is paid by the retailer to the DSR at the time of delivery. delivery. All
expenses are borne by distributor but are later reimbursed by company m l bottles Rs 170 for each crate of 200 ml Rs 218 for each crate of 300ml Empty bottle costs Rs.3-6 each
Direct Sales
The money is paid by the retailer to the Driver at the time of delivery. delivery. The payment is made in cash.
The
retailer gets a margin of Re 1
FLOW OF INFORMATION Pre Sales Representative Direct Sales Representative
Customer Executive Territory Development Manager
Sales Manager
FLOW OF INFORMATION contd
The custome customers rs of the the Comp Company any are divided divided into into diffe different rent categories and different routes, and every salesman is assigned to one particular route which is to be followed by him on a daily basis. 11 PSRPSR- 2-3 2-3 extr extraa- they they reac reach h out out to to 30-3 30-32 2 outl outlet etss a day 11 DSR- 2-3 extra Monthl Monthly y target target for PSR PSR is 2500-350 2500-3500(i 0(in n season) season),, 150015001800(off season) ± Incentives ± ±
are based n these targets They should achieve an annual growth of minimum 20% For every 20% growth, an increase of Rs.3000 in salary
FLOW OF INFORMATION contd
K ey ey Accounts:
The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, restaurants, hotels, Corporate houses
P epsi products, Future Consumption: This route consists of outlets of Pepsi wherein a considerable considerable amount of stock is kept in order to use for future consumption. consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product. Examples: Departmental stores, Super markets etc.
Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace.
Examples: Small sized bars and restaurants, educational institutions etc.
General: Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route.
Immediate
Source of Information- Pashankar Beverages Beverages
Haris Harish h Chand Chandra ra,, CE( CE(Cus Custo tome merr Exec Execut utiv ive) e) Viran iran Talwa alwarr, DS DSR Nile Nilesh sh Kat Katarna arnavr vre, e, DSR DSR
Thank You«