Supply Chain Management

@
Varun beverages Pepsi

Presented By
Ravi Khandelwal
 Pepsi Introduction
• PepsiCo is a world leader in snacks, foods and
beverages
• Revenues more than $39 billion and over
185,000 employees
• PepsiCo was founded in 1965 through the
merger of Pepsi-Cola and Frito-Lay
 Competitive Edge
• Three major sustainable advantages that give
PepsiCo a competitive edge.

1. Big, muscular brands,

2. Proven ability to innovate
and create differentiated
products and
3. Powerful go-to-market
systems.
 Varun Beverages – Pepsi
• Varun Beverages (RKJ Group) is a Private Sector
Organization that offers services in Food Processing/
Beverages.
• Annual Total Turnover of 800 Crs
• Employee Strength of 2500
• It manages the supply for several wholesalers, retailers,
restaurants, hotels and other such food outlets.
• Manufacturing and storage plant in Bhivadi, Jodhpur
Rajasthan, Noida UP with multiple production units and
huge production capacity
 Business Cycle of Pepsi Varun Beverages

1. Pepsi Concentrate
2. Sugar
3. Carbonated Water
4. Glass Bottles
5. PET bottles
6. Plastic in Raw Form
7. Packaging material
8. Crates
9. Cans
10. Bottle caps
Product and Categorization by value and
Criticality
 Supply Chain Planning

Goal of Supply Chain -Handle incoming customer orders in

best ways

Inventory or production
allocation to individual
orders

Set a date that an order is

to be filled

Generate pick lists at a

warehouse

Allocate to shipping & Set

delivery
 SCM System for Pepsi Varun
1. Demand Management
2. Supply Chain Analytics
3. Vendor Managed Inventory
4. Inventory Management
5. Transportation Management
6. Supplier Relationship Management
7. Facility Management
8. Sourcing
9. Sales and Customer Support
10. Financial Management
 Supply Chain Strategy
@ Pepsi
Step 1: The Customer and Supply Chain Uncertainty
a) Identifying Customer Needs
b) Demand Uncertainty and Implied Demand
Uncertainty

Step 2: Understanding the Supply Chain Capabilities

Step 3: Achieving the Strategic Fit

 Step 1: The Customer and Supply Chain Uncertainty

a) Identifying Customer Needs

• Fast moving consumer good Demand varies e.g. Season ,
Festivals
• Urban And Rural
• Small response time, high service level, reasonable price and some
variety
b)Demand Uncertainty and Implied Demand Uncertainty
• Demand for Pepsi varies by product. e.g. Greater demand for “Pepsi
"as compared to “Mirinda Apple,”
• Greater lead time , the customer may purchase its competitor’s
product
• New products have higher supply uncertainty.
 Step 2: Understanding the Supply Chain Capabilities

• Rural areas - demand is certain, focus on cost

reduction, uses slow and inexpensive modes
of transportation.
• Cities - being highly responsive, short lead
time, High service level, Large variety of
products and respond to wide ranges of
quantity demanded.
 Step 3: Achieving the Strategic Fit

Responsive Cities
Supply chain Retailers & Distributors

Towns
Manufactures it
c F
&
te gi
suppliers tra
fs
neo
Zo
Efficient
Supply chain

Certain Implied Uncertain

Demand Uncertainty Demand
Spectrum
 Distribution Channels
• Direct distribution -national key accounts
e.g. wholesalers, restaurants and hotels like
Pizza Hut, KFC, Metro, Export Parties

• Indirect distribution -Through Base market

distributors ,Through Outstation distributors
 Factors Influencing Distribution Network
Design
• Response Time
• Product Variety
• Customers Desire
• Availability
• Customer Experience
• Order Visibility
• Return ability
Distributor Storage with Carrier Delivery
method
 Transportation Network

Modes of Transportation
• Land
• Water
• Air

Design Options for a Transportation Network

• Shipment via central DC with inventory storage using milk-
runs
• Direct Shipping
• Direct Shipping with Milk-Runs
 Sourcing Decisions in Supply Chain

• Raw material for production and packaging

• Inbound and outbound transportation

The basic considerations of Varun in this regard are:

• Pointing out sources of supply and negotiate with
suppliers
• Sourcing of raw material from local and foreign suppliers
• Deciding terms and conditions with supplier
• Coordinating activities and documentation with suppliers
 Future Recommendations
1. Expansion of supply chain management
system to customers i.e. sales through data
2. Point of Sale system for distributors
3. Distributed database approach
QUERIES Please ……..