PROJECT REPORT

ON

A STUDY ON SUPPLY CHAIN MANAGMENT

AT

PEPSICO (INDIA)

Submitted in partial fulfillment of the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

BY

S.NAVEEN REDDY

Hall Ticket No:1100-16-684-051

Under guidance of

Mr.K.Srikanth

Faculty of Department of Business Administration

OSMANIA UNIVERSITY

INDIAN INSTITUTE OF MANAGEMENT AND COMMERCE

KHAIRATABAD, HYDERABAD

2016-2019

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 DECLARATION

I hereby declare that this project titled “ A STUDY ON SUPPLY CHAIN MANAGEMENT ”
submitted my me to the Department of Business Management , O.U , Hyderabad, is a bonafide
work undertaken by me and it is not submitted to any other university or institution for the award
of any degree diploma/certificate or published any time before.

PLACE : Hyderabad SIGNATURE OF THE STUDENT

DATE : S.NAVEEN REDDY

(HT.NO.1100-16-684-051)

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COMPANY CERTIFICATE

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COLLEGE CERTIFICATE

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ABSTRACT

Supply chain management is the management of the flow of goods and services and includes all
processes that transform raw materials into final products. It involves the active streamlining of a
business's supply-side activities to maximize customer value and gain a competitive advantage in
the marketplace. SCM represents an effort by suppliers to develop and implement supply chains
that are as efficient and economical as possible. Supply chains cover everything from
production to product development to the information systems needed to direct these
undertakings. A supply chain is the connected network of individuals, organizations, resources,
activities, and technologies involved in the manufacture and sale of a product or service. A
supply chain starts with the delivery of raw materials from a supplier to a manufacturer and ends
with the delivery of the finished product or service to the end consumer. SCM oversees each
touch point of a company's product or service, from initial creation to the final sale. With so
many places along the supply chain that can add value through efficiencies or lose value through
increased expenses, proper SCM can increase revenues, decrease costs, and impact a company's
bottom line.

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 ACKNOWLEDGEMENT

I have been carrying out the project work by name STUDY OF SUPPLY CHAIN
MANAGEMENT with utmost care and sincerity without any duplication which itself speaks the
authentication. The project would not have been possible without the kind support and help of
many individuals. I would like to extend my sincere thanks to all of them.

Firstly I would like to thank who gave me the opportunity.

It is my immense pleasure to thank Sri K. RAGHUVEER, Principal, Indian Institute of

Management & Commerce, for giving me an opportunity to do a project.

I am highly indebted to SRIKANTH, faculty member of IIMC. His guidance and constant
supervision as well as for providing necessary information regarding the project & also for his
support in completing the project.

I would also like to express my gratitude towards my parents and other faculty members of the
college for their co-operation and encouragement which helped me in completion of project.

S.NAVEEN REDDY

(1100-16-684-051)

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 TABLE OF CONTENTS

CHAPTER NO. CONTENTS PAGE NO.

CHAPTER 1 INTRODUCTION 9

CHAPTER 2 RESEARCH METHODOLGY

NEED OF THE STUDY
OBJECTIVE OF THE STUDY
SCOPE OF THE STUD\ 15

METHODOLOGY OF STUDY
LIMITATIONS OF THE STUDY

CHAPTER 3 REVIEW OF LITERATURE

17

CHAPTER 4 COMPANY PROFILE

INDUSTRY PROFILE
29

CHAPTER 5
DISTRIBUTION CHANNELS
37

FINDINGS 45
CONCLUSIONS
46

BIBLOGRAPHY 47

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 CHAPTER: 1

INTRODUCTION

SUPPLY CHAIN MANAGEMENT

A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Supply chains exist in both
service and manufacturing organizations, although the complexity of the chain may vary greatly
from industry to industry and firm to firm.

Supply chain management is typically viewed to lie between fully vertically integrated
firms, where the entire material flow is owned by a single firm and those where each channel
member operates independently. Therefore coordination between the various players in the chain
is key in its effective management. Cooper and Ellram [1993] compare supply chain
management to a well-balanced and well-practiced relay team. Such a team is more competitive
when each player knows how to be positioned for the hand-off. The relationships are the
strongest between players who directly pass the baton (stick), but the entire team needs to make a
coordinated effort to win the race.

Below is an example of a very simple supply chain for a single product, where raw material is
procured from vendors, transformed into finished goods in a single step, and then transported to
distribution centers, and ultimately, customers. Realistic supply chains have multiple end
products with shared components, facilities and capacities. The flow of materials is not always
along an arbores cent network, various modes of transportation may be considered, and the bill
of materials for the end items may be both deep and large.

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To simplify the concept, supply chain management can be defined as a loop: it starts with the
customer and ends with the customer. All materials, finished products, information, and even all
transactions flow through the loop. However, supply chain management can be a very difficult
task because in the reality, the supply chain is a complex and dynamic network of facilities and
organizations with different, conflicting objectives.

Supply chains exist in both service and manufacturing organizations, although the complexity of
the chain may vary greatly from industry to industry and firm to firm.

Unlike commercial manufacturing supplies, services such as clinical supplies planning are very
dynamic and can often have last minute changes. Availability of patient kit when patient arrives
at investigator site is very important for clinical trial success. This results in overproduction of
drug products to take care of last minute change in demand. R&D manufacturing is very
expensive and overproduction of patient kits adds significant cost to the total cost of clinical
trials. An integrated supply chain can reduce the overproduction of drug products by efficient
demand management, planning, and inventory management.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations

along the supply chain operated independently. These organizations have their own objectives
and these are often conflicting. Marketing's objective of high customer service and maximum
sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations
are designed to maximize throughput and lower costs with little consideration for the impact on
inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very
little information beyond historical buying patterns. The result of these factors is that there is not
a single, integrated plan for the organization---there were as many plans as businesses. Clearly,
there is a need for a mechanism through which these different functions can be integrated
together. Supply chain management is a strategy through which such integration can be
achieved.

In commerce, supply-chain management (SCM), the management of the flow of goods and
services, involves the movement and storage of raw materials, of work-in-process inventory, and
of finished goods from point of origin to point of consumption. Interconnected or interlinked
networks, channels and node businesses combine in the provision of products and required by

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end customers in a supply chain. Supply-chain management has been defined as the "design,
planning, execution, control, and monitoring of supply-chain activities with the objective of
creating net value, building a competitive infrastructure, leveraging worldwide logistics,
synchronizing supply with demand and measuring performance globally.

SCM practice draws heavily from the areas of industrial engineering, systems
engineering, operations management, logistics, procurement, information technology, and
marketing and strives for an integrated approach. Marketing channels play an important role in
supply-chain management. Current research in supply-chain management is concerned with
topics related to sustainability and risk management, among others.
Some suggest that the “people dimension” of SCM, ethical issues, internal integration,
transparency/visibility, and human capital/talent management are topics that have, so far, been
underrepresented on the research agenda

DIFFERENCE BETWEEN LOGISTICS MANAGEMENT AND SCM

Logistics Management Supply Chain Management

Logistics management is primarily Supply Chain Management deals with

concerned with optimizing flows within integration of all the partners in the value
the organization. chain.

Logistics is essentially a framework that Supply chain builds upon this framework
creates a single plan for the flow of and seeks to achieve linkage and
products and information through a coordination between processes -of other
business entities in the pipeline i.e. suppliers and
customers, and the organization itself.

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 INTRODUCTION TO THE COMPANY
(PEPSICO)

I t is a n Amer ic a n mu lt inat io na l fo o d and be ver age co r po r at io n

Headquar t er edin P ur chas e, New Yor k, Unit ed S t at es, wit h int er est s
in t he ma nu fa ct ur ing, mar ket ing and distribution of grain-based
snack foods, beverages, and other products. PepsiCo was formed in
1 9 6 5 wit h t he mer ger o f t he P eps i- Co la Co mpa ny a nd
Fr it o - La y, I nc. P eps iCo has s ince expanded from its namesake product Pepsi to
a broader range of food and beverage brands, the largest of which include
an acquisition of Tropicana in 1998 and a merger with
Quaker Oats in 2001—which added the Gatorade brand to its portfolio.
As of January 2012, 22 of PepsiCo's product lines generated retail sales of more than $1 billion
each, and the company's products were distributed across more than 200 countries,
resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second
largest food & beverage business in the world. Within North America, PepsiCo is ranked (by net
revenue) as the largest food and beverage business.
Ra mo n L aguar t a has be e n t he chie f e xe c ut ive o f P eps iCo s ince 2018,
And t heco mpa ny e mp lo ye d appr o ximat e ly 263, 000 peo p le wo r ldw ide as o f 2 0
1 1 . T he co mpa ny's beverage distribution and bottling is conducted
by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080 (beverage)
company.
PepsiCo, Inc., American food and Beverage Company that is one of the largest in the world. The
first Pepsi-Cola was created by Caleb D.Bradham (1866–1934), a pharmacist in New
Bern, North Carolina. Hoping to duplicate the recent success of Coca-Cola, Bradham named his
sweet cola-flavored carbonated beverage Pepsi-Cola in 1898. The drink proved so popular that in
1902 Bradham incorporated the Pepsi-Cola Company. After many years of moderate prosperity,
the company fell on hard times after World War I and was reorganized and reincorporated on
several occasions in the 1920s.
In 1931 the company’s trademark and assets were picked up by Charles G. Guth (1876–1948),
founder of the modern Pepsi-Cola. He established a new Pepsi-Cola Company, had a chemist

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formulate a better drink, set up new bottling operations, and began merchandising a hugely
successful 12-ounce bottle for five cents. Guth was also president of Loft, Incorporated, a candy
manufacturer and soda-fountain chain (founded 1919), and in legal battles in 1936–39 he lost a
controlling interest in the Pepsi-Cola Company to the new management of Loft. When in 1941
the Pepsi-Cola Company was merged into Loft, the name Loft, Inc., was changed to Pepsi-Cola
Company.

In 1950 Alfred N. Steele (1901–59), a former vice president of Coca-Cola Company, became
chief executive officer. His emphasis on giant advertising campaigns and sales promotions
increased Pepsi-Cola’s net earnings 11-fold during the 1950s and made it the chief competitor of
Coca-Cola. (After Steele’s death, his wife, actress Joan Crawford, became an active director of
the company.) In 1965 Pepsi-Cola merged with Frito-Lay, Inc., the maker of snack foods such as
Fritos, Doritos, Lay’s potato chips, and Rold Gold pretzels. The newly enlarged company
diversified further with the purchase of three restaurant chains—Pizza Hut, Inc. (1977), Taco
Bell Inc. (1978), and Kentucky Fried Chicken Corp. (1986; now called KFC)—and Seven-Up
International (1986), but in 1997 the restaurant chains were spun off into a new, separate
company called Tricon Global Restaurants,. Looking to add more products that were considered
healthier, PepsiCo Inc acquired the Tropicana and Dole juice brands from the Seagram
Company , Quaker in 1998, and in 2001 it merged with the Quaker Oats company to form a new
division Foods and Beverages. With the merger, PepsiCo’s popular brands included Pepsi cola,
Frito-Lay snack products, Lipton Tea, Tropicana juices, Gatorade sports drinks, Quaker Oats
cereals, and Rold Gold pretzels.

In the early 21st century, PepsiCo focused on expanding its operations in other countries, notably
Russia, which was its second largest market. In 2008 it bought a controlling interest in JSC
Lebedyansky, Russia’s largest juice manufacturer, and three years later it completed its
acquisition of Wimm-Bill-Dann Foods. Those investments helped make PepsiCo the largest food
and Beverage Company in Russia.

Ra mo n Laguar t a has bee n t he chie f e xecu t ive o f P eps iCo s ince 2018, a nd t heco
mpa ny e mp lo yed appr o ximat e ly 263, 000 peo ple wo r ldw id e as o f 2011. T he co
mpa ny's beverage distribution and bottling is conducted

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by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080 (beverage)
company.

DIFFERENT PEPSI-COLA PRODUCTS:

Pepsi

Diet Pepsi

Pepsi Aha

Slice

Mirinda

7-Up

Aquafina Mineral Water

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 CHAPTER 2
REASEARCH METHODOLGY

NEED AND IMPORTANCE:

It is well known that supply chain management is an integral part of most businesses and is
essential to company success and customer satisfaction. The main importance of Supply Chain
Management is:-

REDUCE OPERATING COSTS

 Decreases Purchasing Cost – Organizations generally prefer quick distributions of costly
products and raw materials to avoid expensive inventory
 Decrease Production Cost – A reliable supply chain delivers materials to assembly plants
and avoids any costs that may occur due to delays.

IMPROVE CUSTOMER SERVICES

 On-time delivery – Customers expect to receive the correct product mix and quantity to be
delivered on time. A reliable supply chain can help in avoiding any bottlenecks and ensure
customers get their products in the promised time frame
 Services – After sales services is one of the important aspects in any business. If any kind of
problem occurs in the product, customer expects it to be fixed quickly. A right supply chain
ensures that customers get the service they want.
 Right quantity and quality – Customer expects delivery of right quantity and quality of
products.

SCOPE OF SUPPLY CHAIN MANAGEMENT:

This project report is done to know about the supply chain of PepsiCo and to compare
different activities of supply chain management

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 METHODOLGY OF STUDY:
In this project data is collected by only secondary data

SECONDARY DATA
The data is obtained from the different sources they are journals, Wikipedia ,books.

LIMITATIONS OF THE STUDY

1 .In distribution channel “distributor” is the additional person which is not
responsible for the company, because there is no direct link between company and the retailer.

2. Sales person also not feel that they are working for company, they think only for the
distributor .

OBJECTIVES OF THE STUDY

 To know how supply chain management reduce transportation cost and improve
customer service in PepsiCo.

 To analyse efficiency of distribution levels through supply chain management.

 To study production process at PepsiCo.

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 CHAPTER: 3
LITERATURE REVIEW

PepsiCo is one of the oldest ,largest and most successful beverage and snack food companies in
the world . PepsiCo was founded by Caleb Bradha in 1902 in USA. PepsiCo and its affiliates
operate in more than 150 countries in the world and generate revenues in excess of $64 billion .in
its pursuit of never ending growth and expansion PepsiCo entered India in 1989 in a joint venture
with Punjab government .However, PepsiCo India very soon started its beverage operations in
collaboration with the RK Jaipuria group
Soon after entering the beverage segment Pepsio established its dominance in the market owing
to its expertise in sales, marketing, operations and local collaboration.
PepsiCo maintained its market dominance for many more years to come. However, this
advantage slipped and PepsiCo had to concede the market leadership to Coca-Cola India .Several
actors was responsible for this development. But, the most important are;
Distribution channel is having important role in positioning of the product because we know that
distribution channel is tool by which we can make reach our product to the final consumers.
Discontinuation of slums in the distribution network by PepsiCo. This move by PepsiCo
adversely affected its poition of a market leader because while PepsiCo discontinues the use of
slums in its distribution network, Coke continues it and within one year, it was able to snatch
considerable market share from PepsiCo.
Acquisition of well-established and favored brands like Thumps Up and Limica by coca Cola
India .This two brands still constitute a bulk of sales for coca cola India.
To explore the reasons behind these developments this study will analyze the marketing
initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship
management.
The above mentioned objectives can be achieved by carrying a proper and palnned research
involving different type and methods. The data collected for laid to the fulfillment of the
objectives.
The above mentioned objectives can be achieves by carrying proper and planned research
invoving different types and methods. The data collected for laid the foundations for the study
and gave a platform for the analysis and findings whch lead to the fulfillment of the objectives.

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 The data collected for research is primary and secondary. Primary data is collected by
observation, interviews and questionnaires. The data collection and analysis paves way for the
recommendation and conclusion of the study that reveals some important findings regarding the
strategy and corporate structure and strategy of PepsiCo India.
Supply Chain Flow

PepsiCo’s Supply Chain Management

Difficulties without Just-in-Time

 When an operation of the company was not just-in-time based, the demand or production planner strived
to optimize production-oriented goals and objectives such as equipment utilization, labour efficiency,
throughput and uptime.

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  Optimizing these goals often leads to run large batch sizes that are dependent on the availability of raw
materials. This optimizes the equipment and labour utilization but the production planners and managers
had not been looking at the expense of the bigger picture.
 The sourcing or purchasing managers strived towards reducing company’s spending overall. This
manager consolidated suppliers offering products or materials at the lowest per unit costs through buying
in volume.
 They even got the shipping and freight costs included in the purchase price, which led to the increase in
the price of the commodity.
 Purchasing managers focused on getting the best price, not putting into consideration the supplier
performance and reliability.
 The logistics/transportation manager was tacked with getting raw materials in and the finished goods out
of the production process and seek to optimize the transportation and distributing network. This manager
focused on the lowest cost and reliability of the logistics or transportation solutions. But lowest cost
could only be attained if the purchasing team negotiates a delivered cost package deal with the supplier
and the supplier is responsible of the reliability and performance of the carriers or transporters.

Improvement with using Just-In-Time (JIT)

 When it comes to delivering high cost and perishable products to manufacturing sites, just-in-time (JIT)
remains one of the most cost-effective supply chain solutions. In JIT process, on time delivery is an
absolute necessity.
 Just-in-Time (JIT) is a philosophy that defines the manner in which a manufacturing system should be
managed. It enhances customer satisfaction in terms of availability of options, assurance of quality,
prompt delivery times, and value of money.
 The Pepsi brand and other Pepsi-Cola products accounted for nearly one-third of the total soft drink
sales in the United States. In order to ensure that PepsiCo’s concentrates reaches bottlers as needed
during the production had to reach them JIT, they partnered with 3PL provider Penske Logistics to
manage its transportation. Penske also provides warehouse management for two Pepsi distribution
centers in North America.

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I2 Transportation

 I2 Transportation is a part of end to end solution for planning, execution, and management of the entire
transportation cycle.
 It is designed to enable an organization to utilize and manage an entire transportation network, as well as
reduce cost while improving transport performance.
 I2 transportation is designed to employ sophisticated optimization and data techniques to define and
evaluate alternative transportation strategies. It is also designed to provide comprehensive data
management, analytics, and reporting of key transportation cost and service trade-offs.

Implementation

PepsiCo set two objectives for transportation management. One was to achieve an on-time delivery rate at
99.1% and another was to reduce transportation costs.It empowered with optimized processes and technology
that enable the team to perform at the highest possible level. With the application of new technology that
provides greater supply chain visibility, better organized data, and access to higher level of real time or near real
time information, even the best team can improve their performance.

In 2000, Penske converted Pepsi’s transportation management technology from propriety software to i2
transportation optimization solution. I2 transportation platform was enhanced with the addition of interface
between the two companies.

In addition, Penske’s partnership with Business objects provided comprehensive supply chain data from its data
warehouse, analysis and management applications. Penske’s with use of i2 transportation could track
performance at every stage in the process which increased flexibility and provided greater control over the
transportation operation. This increase in visibility made it easier to keep track of shipments, revise routes and
schedules to accommodate unforeseen changes and implement alternative plans to counter delays. By Penske’s
putting a solution in place to track and measure every shipment, Pepsi has been able to provide an on-time
delivery performance of well over 99 percent.

Pepsi’s transportation is consolidated to a central location to reduce costs. Penske also provided a nationwide
carrier rate re-negotiation and service assessment which improved cost structure and achieve on-time delivery
goal. With this centralization, allows negotiation in a large scale to secure the best rates and services.

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Furthermore, Pepsi’s orders are received electronically and optimized to ensure lowest transportation cost.
Advanced technology is deployed to select the lowest cost carrier, find the best routes and consolidate
shipments. Optimal load configuration ensures maximization of each truckload (2003).

In summary, PepsiCo used the JIT process to its supply chain management. To make this
possible, Pepsi partners with Penske that has provide them with i2 transportation optimization
solutions which has satisfies their consumer with the on-time delivery and with the benefit to the
company for it has also reduce transportation cost.

IMPLICATIONS OF SCM ON LOGISTIC MANAGEMENT

The challenge of integrating and coordinating the flow of materials from multitude of suppliers,
including offshore, and similarly managing the distribution of the finished product by way of
multiple intermediaries.

Achieving cost reduction or profit improvement at the expense of their supply chain partners
does not make companies more competitive.

Transferring cost upstream or downstream leads to “logistics myopia” as all costs ultimately will
make way to the final market place to be reflected in the price paid by the end user.

Therefore, the leading edge companies seek to make the supply chain as a hole more competitive
through the value it adds and the cost it reduces overall.

Thus today the real competition is not the companies against the companies but rather supply
chain against supply chain.

SUPPLY CHAIN MANAGEMENT PROBLEMS

Supply chain management must address the following problems:

1.) Distribution Network Configuration:

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 Number and location of suppliers, production facilities, distribution centers, warehouses
and customers.

2.) Distribution Strategy:

Centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third
party logistics.

3.) Information:
Integrate systems and processes through the supply chain to share valuable information,
including demand signals, forecasts, inventory and transportation.

4.) Inventory Management:

Quantity and location of inventory including raw materials, work-in-process and finished goods.

SUPPLY CHAIN DECISIONS

We classify the decisions for supply chain management into two broad categories – Short term &
Long term decisions. As the term implies, short term decisions focus on activities over a day-to-
day basis. On the other hand, long term decisions are made typically over a longer time horizon.
These are closely linked to the corporate strategy and guide supply chain policies from a design
perspective.

There are four major decision areas in supply chain management:

1). Location,
2). Production,
3). Inventory, and
4). Transportation (distribution), and there are both short term and long-term elements in each of
these decision areas.

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1). Location Decisions:
The geographic placement of production facilities, stocking points, and sourcing points is
the natural first step in creating a supply chain. The location of facilities involves a commitment
of resources to a long-term plan. Once the size, number, and location of these are determined, so
are the possible paths by which the product flows through to the final customer. These decisions
are of great significance to a firm since they represent the basic strategy for accessing customer
markets, and will have a considerable impact on revenue, cost, and level of service. These
decisions should be determined by an optimization routine that considers production costs, taxes,
duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc.
Although location decisions are primarily long term they also have implications on short term
level.

2). Production Decisions:

The long term decisions include what products to produce, and which plants to produce them in,
allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before, these
decisions have a big impact on the revenues, costs and customer service levels of the firm. These
decisions assume the existence of the facilities, but determine the exact path(s) through which a
product flows to and from these facilities. Another critical issue is the capacity of the
manufacturing facilities--and this largely depends the degree of vertical integration within the
firm. Short term decisions focus decisions focus on detailed production scheduling. These
decisions include the construction of the master production schedules, scheduling production on
machines, and equipment maintenance. Other considerations include workload balancing, and
quality control measures at a production facility.

3). Inventory Decisions:

These refer to means by which inventories are managed. Inventories exist at every stage of the
supply chain as either raw material, semi-finished or finished goods. They can also be in-process
between locations. Their primary purpose to buffer against any uncertainty that might exist in the
supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their
value, their efficient management is critical in supply chain operations. It is long term in the
sense that top management sets goals. However, most researchers have approached the
management of inventory from short term perspective. These include deployment strategies

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(push versus pull), control policies --- the determination of the optimal levels of order quantities
and reorder points, and setting safety stock levels, at each stocking location. These levels are
critical, since they are primary determinants of customer service levels.

4). Transportation Decisions:

The mode choice aspect of these decisions is the more long term ones. These are closely linked
to the inventory decisions, since the best choice of mode is often found by trading-off the cost of
using the particular mode of transport with the indirect cost of inventory associated with that
mode. While air shipments may be fast, reliable, and warrant lesser safety stocks, they are
expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate holding
relatively large amounts of inventory to buffer against the inherent uncertainty associated with
them. Therefore customer service levels and geographic location play vital roles in such
decisions. Since transportation is more than 30 percent of the logistics costs, operating efficiently
makes good economic sense. Shipment sizes (consolidated bulk shipments versus Lot-for-Lot),
routing and scheduling of equipment are key in effective management of the firm's transport
strategy.

SCM PROCESS INTEGRATION

Successful SCM requires a change from managing individual functions to integrating

activities into key supply chain processes. The purchasing department placed orders as
requirements became appropriate and marketing, responding to customer demand, interfaced
with several distributors and retailers and attempted to satisfy this demand. Shared information
between supply chain partners can only be fully leveraged through process integration. Process
integration means collaborative working between buyers and suppliers, joint product
development, common systems and shared information.

According to Lambert and Cooper (2000), operating an integrated supply chain requires
continuous information flows, which in turn assist to achieve the best product flows. However, in
many companies, such as 3M, management has reached the conclusion that optimizing the
product flows cannot be accomplished without implementing a process approach to the business.

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 The key critical supply business processes stated by Lambert and Cooper are as follows:

1. Customer service management process:

Customer service provides the source of customer information. It also provides the customer
with real-time information on promising dates and product availability through interfaces with
the company production and distribution operations

2. Procurement process:
Strategic plans are developed with suppliers to support the manufacturing flow management
process and development of new products. In firms where operations extend globally, sourcing
should be managed on a global basis. The desired outcome is a win-win relationship, where both
parties benefit, and reduction times in the design cycle and product development is achieved.
Also, the purchasing function develops rapid communication systems, such as electronic data
interchange and Internet linkages to faster transfer possible requirements. Activities related to
obtaining products and materials from outside suppliers requires performing resource planning,
supply sourcing, negotiation, order placement, inbound transportation, storage and handling and
quality assurance Also, includes the responsibility to coordinate with suppliers in scheduling,
supply continuity & research to new programmes.

3. Product development and commercialization:

Here, customers and suppliers must be united into the product development process, thus to
reduce time to market. As product life cycles shorten, the appropriate products must be
developed and successfully launched in ever shorter time-schedules to remain competitive.
According to Lambert and Cooper, managers of the product development and commercialization
process must:

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 a) coordinate with customer relationship management to identify customer-articulated
needs;

b) select materials and suppliers in conjunction with procurement, and

c) develop production technology in manufacturing flow to manufacture and integrate

into the best supply chain flow for the product/market combination

4. Manufacturing flow management process:

The manufacturing process is produced and supplied products to the distribution channels based
on past forecasts. Manufacturing processes must be flexible to respond to market changes, and
must accommodate mass customization. Orders are processes on a just-in-time (JIT) basis in
minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times,
meaning improved responsiveness and efficiency of demand to customers. Activities related to
planning, scheduling and supporting manufacturing operations, such as work-in-process storage,
handling, transportation, and time phasing of components, inventory at manufacturing sites and
maximum flexibility in the coordination of geographic and final assemblies postponement of
physical distribution operations.

5. Physical Distribution:
This concerns movement of a finished product/service to customers. In physical distribution, the
customer is the final destination of a marketing channel, and the availability of the
product/service is a vital part of each channel participant. It is also through the physical
distribution process that the time and space of customer service become an integral part of
marketing, thus it links a marketing channel with its customers (e.g. links manufacturers,
wholesalers, retailers).

6. Outsourcing/ Partnerships:
Not just outsourcing the procurement of materials and components, but also outsourcing of
services that traditionally have been provided in-house. The logic of this trend is that the
company will increasingly focus on those activities in the value chain where it has a distinctive

26
advantage and everything else it will outsource. This movement has been particularly evident in
logistics where the provision of transport, warehousing and inventory control is increasingly
subcontracted to specialists or logistics partners. Also, to manage and control this network of
partners and suppliers requires a blend of both central and local involvement. Hence, strategic
decisions need to be taken centrally with the monitoring and control of supplier performance and
day-to-day liaison with logistics partners being best managed at a local level.
7. Performance Measurement:
By taking advantage of supplier capabilities and emphasizing a long-term supply chain
perspective in customer relationships can be both correlated with firm performance. As logistics
competency becomes a more critical factor in creating and maintaining competitive advantage,
logistics measurement becomes increasingly important because the difference between profitable
and unprofitable operations becomes narrower. As Kearney Consultants (1985) noted that firms
engaging in comprehensive performance measurement realized improvements in overall
productivity. According to internal measures are generally collected and analyzed by the firm
including
1) Cost,
2) Customer Service,
3) Productivity measures,
4) Asset measurement, and
5) Quality…..

Cycle of supply chain management

 Supplier of raw materials

 Manufacturer
 Center decision makers and funders
 Warehouses
 Regional stores
 Clients

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Types of supply chain management
 Full Supply-supply matches demands
 Limited supply- demand exceeds supply
 Integrated supply chain
 Vertical supply chain

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 CHAPTER: 4

INDUSTRY PROFILE

History
In 1893, Caleb Bradham created a drink in his home spicing it with kola nuts and the enzyme
pepsin. At first, he called it “Brad’s Drink” and this was the first name of Pepsi Cola. It was so
delicious that he soon started selling it in his neighborhood. Later, in 1998, this tasty beverage
was renamed to Pepsi Cola and this was when the start of this world brand was put.
The first years Bradham prepared Pepsi in his drugstore, but soon he was not able to supply the
increased quantity that people wanted to buy. In 1903 he rented a building where the bottling of
the drink was moved. The sales in that year reached almost 8000 gallons. Seeing a big potential
in his drink, Caleb started building a brand and actively marketing his product. He developed a
new handy bottle, which could be sold almost anywhere. This simple move more than doubled
the sales, which reached nearly 20 000 gallons in 1904. The next year the first logo of Pepsi was
created. A few years later, Bradham hired the racer Barney Oldfield, who became the first face
of Pepsi Cola, advertising it as a nice refreshing drink, a nice bracer before a race. Everything
went well, Bradham enjoyed increasing sales and people enjoyed more and more his drink. It
was initially branded as delicious, healthy and refreshing, and that had continued for the next two
decades.
The “Roaring Twenties” helped with the fast growth of the company. These years were times of
wealth and excess. But when the crash of 1929 hit the society, things changed dramatically. At
the climax of the Great Depression, “Pepsi Cola Co”. Filed for bankruptcy. Its creditors
liquidated all of the assets of the business to collect their money. A guy named Roy Megargel
bought the trademark “Pepsi Cola” and created a new company, but not for long. A few years
later the business defaulted on its debts once again. This time Charles Guth, a candy
manufacturer, and businessman, bought the assets. He had been recently refused a discount on
the syrup of Coca-Cola, which he wanted to sell at his retail stores. Now he would sell Pepsi
there.
In 1936, Pepsi was sold in a 12-ounce bottle for 10 cents, but the sales at that price were not
going well. At that time Coca-Cola was sold at a higher price, but in smaller bottles of six once,
6 cents each. Pepsi decided to reduce the price 50% in order to increase the revenue and fight

29
against the strong brand of its main competitor. They combined this with some radio
advertisements featuring “Pepsi-Cola hits the spot, Twelve full ounces, that’s a lot, Twice as
much for a nickel, too, Pepsi-Cola is the drink for you”, and in fact, the goal was achieved. The
sales skyrocketed and the profits doubled in 1938. But the real benefit was that Pepsi became
stronger and far more established brand.

Pepsi Logo – 1905

In 1940, a new smart move was made by Pepsi’s new president – Walter Mack. He noticed that
African Americans were ignored in the marketing campaigns of the company. This was a real
gold mine because nobody was directly targeting towards them. This was a great way of
increasing the market share. A “black sales” team was formed, but World War II stopped these
plans. The campaign was resumed in 1947, by Edward Boyd, who was hired for only for this
purpose. A sales team only of blacks was formed to promote the drink across America. The
team faced great resistance caused by racism, but this helped, because they were able to use
discrimination as a weapon against Coca-Cola – they didn’t want to hire African Americans.
That’s why they wouldn’t buy Coke. Pepsi’s market share increased significantly and for the first
time, the sales of the company surpassed the sales of Cola in some areas (Chicago for example).
But the focus on African Americans caused some problems in the company and its bottlers.
There was a fear, that Pepsi would become the “the black drink”, which would hurt the sales to
whites. That’s why in 1950, the “black team” was dismissed.

For the next years, Pepsi didn’t stop its expansion. The company focused on its marketing efforts
and on building a strong brand. With the spread of radio, it was used heavily for advertising
purposes. Later Pepsi switched on to television. Many famous and well-known faces were
attracted to participate in the company’s campaigns.
During the next years, Pepsi launched some very successful marketing campaigns under different
slogans, which you can see at the bottom of this article. After World War II, the company started
its expansion around the world. During these years in America, new social phenomena appeared
– the baby boomers – the postwar generation. This was the new Pepsi generation – “Come alive!
You’re in the Pepsi Generation”. In 1964 a brand new type of the drink was released – the Diet
Pepsi because more and more Americans were paying more and more attention to their weight.

30
The product happened to be successful and two years later a new marketing campaign was
started only for “Diet Pepsi” – “Girlwatchers,”.
Pepsi started an innovative marketing campaign in 1975 – a blind tasting of
Coca-Cola and Pepsi drinks. The people who tried the drinks had to tell which one chose Pepsi
as the better drink. Later the results of these tests were shown on TV and other media, making a
lot of noise and attracting a lot of attention. On the next year, the first woman was employed by
the company.
In 1984 Pepsi’s new generation had become 20 years old. This was the time for the “The Choice
of a New Generation” campaign to be launched. This once again puts Pepsi on the leading edge
of contemporary culture. In its early stages, the New Generation campaign featured the greatest
pop star of that time – Michael Jackson. He and his famous “Billie Jean” starred in a series of
Pepsi-Cola commercials. This was the time of fierce fighting between Pepsi and its main rival –
Coca-Cola which, was really annoyed because of the fast rise of Pepsi. They even changed the
secret recipe of the Coke, but the change was rejected by the customers and these who liked
Coke, quickly switched to Pepsi. Coca-Cola had no choice and returned to the old recipe of their
drink. Pepsi President Roger Enrico declared victory in the so-called cola wars and awarded
Pepsi’s workers on a holiday to celebrate.

In the 80s many other stars were attracted for the advertising campaigns of Pepsi. Some of them
were Tina Turner, David Bowie, Lionel Richie, Gloria Estefan, Glen Frey and many other. Even
Geraldine Ferraro – the first woman vice-presidential candidate in the U.S participated in a
campaign dedicated to “Diet Pepsi”. 1987, the logo was changed slightly to a more rounded one,
which was used to 1991.

During the 90s, Pepsi Co signed a huge trade agreement with The Soviet Union. The company
signed a $3-billion deal to more than double production and sales of soft drinks in the Soviet
Union in exchange for ships and the rights to sell more Soviet vodka in the United States. Pepsi
also increased its investment activities in hot markets as Eastern Europe, Southeast Asia,
Argentina and some other countries. A new great historical advertising campaign was started –
“You Got the Right One Baby, Uh-Huh!” focused on Diet Pepsi, with Ray Charles and “Uh-Huh
Girls”. Cindy Crawford and Shaquille O’Neal also were hired for some great advertisements like

31
“Be Young, Have Fun, Drink Pepsi”. In these years the company introduced many new products.
A partnership established with “Starbucks” gave birth to the brand new drink – “Frappucchino” –
a refreshing drink based on coffee and Pepsi Cola. Frappucchino soon became the most preferred
cold coffee beverage in the US. Pepsi also entered the bottled water market introducing the
“Aquafina” water. In the late 90s (1997) Pepsi started the campaign “GeneratioNext” returning
to the very successful generation theme.

Pepsi Logo – Today

PepsiCo today is a world leader in convenient snacks, foods, and beverages, with more than
280 000 employees and revenue reaching $60 billion of dollars. The company is the owner of
some of the greatest world brands Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay’s, Doritos,
Tropicana, Gatorade, and Quaker. These are well-known all over the world.
SLOGANS

1939–1950: "Twice as Much for a Nickel"

1950: "More Bounce to the Ounce"

1950–1957: "Any Weather is Pepsi Weather"

1957–1958: "Say Pepsi, Please"

1961–1964: "Now It's Pepsi for Those Who Think Young"

1964–1967: "Come Alive, You're in the Pepsi Generation"

1967–1969: "(Taste that beats the others cold) Pepsi Pours It On".

1969–1975: "You've Got a Lot to Live, and Pepsi's Got a Lot to Give"

1977–1980: "Join the Pepsi People (Feeling Free)"

1980–1981: "Catch That Pepsi Spirit"

1981–1983: "Pepsi's got your taste for life"

1983–1984: "Pepsi Now! Take the Challenge!"

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1984–1988 and 1990-1991: "Pepsi. The Choice of a New Generation"

1989: "Pepsi. A Generation Ahead"

1991–1992: "Gotta Have It"/"Chill Out"

1992: "The Choice Is Yours"

1992–1993: "Be Young, Have Fun, Drink Pepsi"

1993–1994: "Right Now"

1994–1995: "Double Dutch Bus"

1995: "Nothing Else is a Pepsi"

1995–1996: "Drink Pepsi. Get Stuff"

1996: "Change The Script"

1997–1998: "Generation Next"

1998–1999: "It's the cola" (100th anniversary commercial)

1999–2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola"

2003: "Its the Cola"/"Dare for More"

2006–2007: "Why You Doggin' Me"/"Taste the one that's forever young"

2007–2008: "More Happy"/"Taste the one that's forever young"

2008: "Pepsi is #1"

2008–present: "Something For Everyone"

2009–present: "Refresh Everything"/"Every Generation Refreshes the World"

2010–present: "Every Pepsi Refreshes The World"

2011–present: "Summer Time is Pepsi Time"

33
2011–present: "Born in the Carolinas"

2012: "Where there's Pepsi, there's music" – used for the 2012 Super Bowl commercial

2012: "Live For Now"

2012: "Change The Game"

2012: "The Best Drink Created Worldwide"

Finances :

For the fiscal year 2017, PepsiCo reported earnings of US$4.857 billion, with an annual revenue
of US$62.525 billion, an increase of 1.2% over the previous fiscal cycle. PepsiCo's shares traded
at over $109 per share, and its market capitalization was valued at over US$155.9 billion in
September 2018. PepsiCo ranked No. 45 on the 2018 Fortune 500 list of the largest United States
corporations by total revenue.

Year Revenue Net income Total Assets Employees

in mil. USD$ in mil. USD$ in mil. USD$

2005 32,562 4,060 31,727

2006 35,137 5,631 29,930

2007 39,474 5,646 34,628

2008 43,251 5,134 35,994

2009 43,232 5,940 39,848

2010 57,838 6,314 68,153

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2011 66,504 6,436 72,882

2012 65,492 6,171 74,638

2013 66,415 6,740 77,478 274,000

2014 66,683 6,503 70,509 271,000

2015 63,056 5,452 69,667 263,000

2016 62,799 6,329 73,490 264,000

2017 63,525 4,857 79,804 263,000

COMPANY PROFILE

TYPE : Public

FOUNDED : August 28, 1898 New Bern, North Carolina, United States

FOUNDER : Caleb Bradham

HEADQUARTERS : Purchase, New York, U.S.

AREA SERVED : Worldwide

KEY PEOPLE : Indra Nooyi (chairman), Ramon Laguarta(CEO)

35
INDUSTRY : Food Non-alcoholic beverage

REVENUE : 64.66 billion

EMPLOYEES : 267000

Mission Statement
“To be the world's premier consumer
Products Company focused on convenient foods and beverages. We seek to produce healthy
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 Statement
“To be the world's best beverage company”
, Being the best means providing outstanding quality, service, cleanliness and value, so that their
every customer is contented and happy with their products.”

“To increase the value of their shareholder’s investment through sales growth, cost control and
wise investment of resources.”

36
 CHAPTER: 5

DISTRIBUTION CHANNELS

INTRODUCTION

Distribution Channel is the chain of businesses or intermediaries through which a good or service
passes until it reaches the end consumer. A distribution channel can include wholesalers,
retailers, distributors and even the internet. Channels are broken into direct and indirect forms,
with a "direct" channel allowing the consumer to buy the good from the manufacturer and an
“indirect" channel allowing the consumer to buy the good from a wholesaler. Direct channels are
considered "shorter" than "indirect" ones.
The Distribution Channel
Distribution is also a very important component of Logistics & Supply chain management.
Distribution in supply chain management refers to the distribution of a good from one business
to another. It can be factory to supplier, supplier to retailer, or retailer to end customer. It is
defined as a chain of intermediaries; each passing the product down the chain to the next
organization, Before it finally reaches the consumer or end-user. This process is known as the'
distribution chain' or the 'channel.' Each of the elements in these chains will have their own
specific needs, Which the producer must take into account, along with those of the all-important
end-user.
 Channels A number of alternate 'channels' of distribution may be available:
 Distributor, who sells to retailers
 Retailer (also called dealer or reseller) ,who sells to end customers
Advertisement typically used for consumption goods Distribution channels may not be restricted
to physical products alice from producer to consumer in certain sectors, since both direct and
indirect channels may be used. Hotels, for example, may sell their services (typically rooms)
directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation

37
systems, etc. process of transfer the products or services from Producer to Customer or end user.
There have also been some innovations in the distribution of services. For example,
There has been an increase in franchising and in rental services - the latter offering
anything from televisions through tools. There has also been some evidence of service
integration, with services linking together, particularly in the travel and tourism sectors. For
example, links now exist between airlines, hotels and car rental services. In addition, there has
been a significant increase in retail outlets for the service sector. Outlets such as estate agencies
and building society offices are crowding out traditional grocers from major shopping areas.
Market factors
An important market factor is "buyer behavior"; how do buyers want to purchase the product? Do
they prefer to buy from retailers, locally, via mail order or perhaps over the Internet?
Another important factor is buyer need for product information, installation and servicing. Which
channels are best served to provide the customer with the information they need before buying?
Does the product need specific technical assistance either to install or service a product?
Intermediaries are often best placed to provide servicing rather than the original producer -
for example in the case of motor cars. The willingness of channel intermediaries to market
product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They
may decide not to support a particular product if it requires too much investment (e.g. training,
display equipment, warehousing).Another important factor is intermediary cost. Intermediaries
typically charge a "mark-up" or "commission" For participating in the channel. This might be
deemed unacceptably high for the ultimate producer business.
Producer factors
A key question is whether the producer have the resources to perform the functions of the
channel? For example a producer may not have the resources to recruit, train and equip a sales
team.
If so, the only option may be to use agents and/or other distributors. Another factor is the extent,
to which producers want to maintain control over how,
to whom and at what price a product is sold. If a manufacturer sells via a retailer, they effective
lose control over the final consumer price, since the retailer sets the price and any relevant
discounts or promotional offers. Similarly, there is no guarantee for a producer that their

38
product/(s) are actually been stocked by the retailer. Direct distribution gives a producer much
more control over these issues.

Objectives

1. Growth in sales by establishing distribution in new markets.

2. Improvements of market share
3. Creation of an efficient channel system

There is however, a misconception that channels are premnent features of a company marketing
activity .But this does not seem to be correct.Along with the shifts in overall strategy of firm
corresponding changes system may be necessary.In other words, existing trade channels are not a
constraint in the design of marketing strategy ;for his reason channel decisions are included as a
part of the marketing organization.

Channel functions

In any developing economy there is an increasing emphasis on spciliazation and the divison of
labour.

As a result of this gap gets developed between producers and users.The primary purpose of a
distributive channel is to bridge this gap by;resolving spatial and temporal discrepancies is
supply and demand .For this irrespective of the extent of these discrepancies certain essential
functions need to be performed.these are

1 trasfer of title to the goods involved

2 physical movements from the point of production to the point of consumption

3 storage function

Distribution Channel Strategies

Distribution channel strategies are designed to maximize the sales of products as they enter a
market. The strategies are most commonly discussed and planned by the end retailer, who is
selling direct to the consumer.

39
 Understanding Demand
Moving inventory and purchasing through distribution channels is an investment for retailers.
Managing inventory requires that retailers purchase in bulk and make estimates about sales. If
they over purchase and do not sell, then margins take a major hit. If they under purchase and
misjudge the demand, then earning opportunity is diminished. Knowing that demand exists
liberates businesses to use a purchasing strategy, which involves ongoing marketing cycles.
Demand drives marketing at phase. A business that does not know demand, will market ahead of
purchasing to test the market and safeguard purchases.

Marketing in Advance
Pushing marketing activities ahead of orders is a strategic distribution channel strategy used to
test demand, while preventing mismanagement of orders. Pre-orders are on strategy that's used to
know the exact production and order quantity used to meet demand. Drop-shipping distribution
models also have a strategic advantage. The model not only has a reduced margin but also has
less risk and overhead. The drop shipper markets and sells products from wholesaler catalogs,
and has the wholesaler or a logistics channel manage and deliver the inventory. They never touch
the product and are completely sales focused.

Multiple Channel Strategies

A multiple distribution channel strategy works for retailers with diverse product lines.
Diversifying distribution channels reduces the risk associated with an single channel, by ensuring
sourcing is running smoothly across several alternative channels. It also leverages pricing
flexibility, as products are sourced and moved to market, using different methods. The retailer
can price shop, using each strategy, and ultimately capitalize on the lowest cost option.
Alternatively, the retailer can leverage the channel with the least amount of lag time to quickly
source and meet demand.

Sales and Distribution Channels

Sales models and distribution channels are interconnected. The ability to source and sell will
always be tied together. High-ticket items are often divided into sales regions or territories,
where dealers are guaranteed access to their markets without same-brand competition. This
model has moves from the manufacturer to the distributor. The distributor manages dealers and
delivers inventory. The dealers focus on consumer sales.

40
Three distribution channels of Pepsico

Direct store delivery

Under the DSD framework, PepsiCo conveys items straightforwardly to retail locations. Of the
three channels, DSD empowers PepsiCo to stock with greatest perceivability. It’s more
reasonable for items that are restocked regularly and are touchy to advancements and
showcasing.

Customer Warehouse
The client stockroom framework is a less costly distribution channel. It’s optimal for items that
are less delicate and perishable, have lower turnover, and are not acquired imprudently.

Third-party distributor systems

PepsiCo appropriates nourishment and drink items to eateries, organizations, schools, and
stadiums through outsider sustenance administration and distributing merchants and
administrators.

Utilizing its prevailing position

PepsiCo is the second-biggest non-alcoholic drink producer in the United States with an
extensive size of operations. The organization’s predominant position helps it to enjoy fruitful
relationship with its retailers, who permit the organization to have real shelf space. This helps
PepsiCo to make a note of customer preferences and trends which helps in making amendments
in its marketing strategies.

Pepsi has a tremendous circulation system in India and China. It must be gigantic on the grounds
that the brand should be available in each niche and corner of the nation to build its deals. The
essential method of circulation is through merchants who thus offer it to retailers, eateries, and
accommodation stores. The optional method of dispersion is specifically through the
organization to mass purchasers and real retailers who purchase straightforwardly from the
organization.

Therefore conveyance channel is as per the following

41
1.

Company > Distributor > Small retailers/Small purchasers > Customers

42
 SALES AND DISTRIBUTION NETWORK OF PEPSICO INDIA

Initially the focus of the Company remains on reaching all the markets and then the Company
shifts its focus on increasing the frequency of sales in the respective markets so that the sales
and profitability of the Company can be increased. Company (PepsiCo): PepsiCo India provides
the salt to all the bottling plants in the Country that carry out the bottling operations.
COBO: These are Company owned bottling operations operating directly under the Company.
Out of 32 bottling plants, PepsiCo owns 15.
FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the
franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants
for Pepsi.

43
Warehouses: These are Company or franchisee owned warehouses spread over various locations
that cover the respective territories and come under the purview of their respective Area
or Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where
they are sent to the C& F centers and Distributor Points.
C & F Centers: These are the biggest centers in the distribution network and receive
proper assistance from the Company (either COBO or FOBO). The C& F center is owned by
aprivate player and not by the Company. The vehicles (Delivery Vans) are owned by the
Company, and the Salesmen at the C& F points are on the Company Payroll.
Distributors: These are small, compared to C& F centers. Everything at the Distributor
pointowned and managed by the distributor , even the salespersons are on the Distributors
payroll.
Wholesalers: These are smaller than C& F centers and Distributor points and get the
stock directly from the Company or Franchisee. They get their stock directly from the Company
and thus get special rates and extra discounts from the Company.
Slums: They are generally smaller than the Wholesalers are. However ,they get special discounts
from the C& F centers and Distributor points. All the different players in the distribution

44
 FINDINNGS AND CONCLUSIONS

FINDINGS

 From the study it was found that PepsiCo supply chain management works in
efficient way.
 PepsiCo predicts 3% transport cost savings and 2,000 tonnes less of CO2 in one
year.
 PepsiCo provides information to customers time to time about the new product is
going to launch.
 Strategic plans are developed with suppliers to support the manufacturing flow
management process and development of new products.
 Marinating good relationship with the retailers as well distributors is very
important for having a strong distribution channel Visi cooler have an important
role in enhancing the distribution channel and policy.
 Retailers are not happy with the MDC(Marketing Development Coordinator)
of PepsiCo.
 Distributers are not satisfied with the services like margins product availability
credit facility.
 Inventory exits every stage of supply of products.
 They use very efficient and better transport system for the supply of products.

45
 CONCLUSION

PepsiCo is a business which has its wings spread all over the globe. Also it owns a wide spread
global supply chain which had been analysed in this report. According to the analysis, there are three
main strategies of PepsiCo identified, from procurement, production and distribution areas of
the supply chain. Minimizing the cost variant in procurement is one of the key aspects. Since PepsiCo is into
a variant of FMCG business, constant sales prices are a key to success. PepsiCo looks into long
term price contracts/agreements with suppliers, diversity of suppliers and PepsiCo Supplier Code of Conduct to
gain superiority in procurement. PepsiCo follows lean and six sigma strategies along with OEE strategies
for high quality end products. These pave the way to reduce waste, cost reduction and efficiency
in the production plants.
Speak to the market is another strategy followed by PepsiCo operations. Making the Right product available
in Right Place, at Right Price, for the Right Customer, in Right Condition, at Right Time, in the Right Quantity
are the seven Rs of logistics. PepsiCo achieves these by their three delivery methods,
Direct Store Delivery (DSD) Customer Warehouse and Third-party Distributor Network . Also
PepsiCo follows a very efficient Dynamic routing system which enables seven Rs in logistics in a
very efficient way. PepsiCo is very concerned about sustainability aspect throughout the supply chain.
With sustainable sourcing, production and delivery company can achieve high quality finished goods and also
will be gaining brand value for ethical business. PepsiCo should look more into 100% water neutrality as the
competitor Coca-Cola company since its main business's main raw material is water. By now
PepsiCo has achieved five billion litres of water in making of water harvesting.

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 BIBLOGRAPHY

Ballou, R.H., Gilbert, S.M. and Mukherjee, A. (2000), “New Managerial Challenges from
Supply Chain Opportunities,” Industrial Marketing Management, 29, 7–18.

Bell, S.J., Whitewall, G.J. and Lukas, B.A. (2002), “Schools of Thought in Organizational
Learning,” Academy of Marketing Science, 30(1), 70–86.

Booz & Company (2007), Keeping Inventory—and Profits—Off the Discount Rack:
Merchandise Strategies to Improve Apparel Margins, Unpublished Report, San Francisco, CA:
Booz Allen and Hamilton.

Bowersox, D.J. and Closs, D.J. (1996), Logistical Management: The Integrated Supply Chain
Process, New York, NY: The McGraw-Hill Company, Inc.

Braithwaite, A. & Hall, D. (1999), Risky Business: Critical Decisions in Supply Chain
Management, Logistics Consulting Partners, Hertfordshire, United Kingdom: LCP Ltd.

Bovet (1999), “Value Webs: The Next Business Revolution,” Unpublished Report on Logistics,
3–9, Boston, MA: Mercer Management Consulting.

REFERENCES

http://www.pepsicoindia.co.in/

https://www.bartleby.com/essay/Pepsi-Supply-Chain-P3S6DZEK6YYS

https://en.wikipedia.org/wiki/PepsiCo

https://www.pepsico.com/

http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html
https://www.academia.edu/31128635/International_Trade_and_Supply_Chain_Analysis_of_Pep
siCo_Global_Business_Practice

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