Scm in pepsico

SUPPLY CHAIN MANAGEMENT IN PEPSICO
Sibitha K. S.
School of Management Studies,
CUSAT, Kochi – 22
E-mail: sivansibitha@gmail.com
Abstract: Many successful organizations are now following supply chain
management as a benchmark for themselves. In different organizations and
firms the operation of supply chain management varies greatly and it is
complex. Supply chain management is practiced by both servicing and
manufacturing industries. Organizations are now adapting SCM to earn more
profits and provide more customer satisfaction. Knowledge quality of a firm is
the key factor to success in a competitive business environment which is
now admired by all the successful organizations. SCM is the management of
the raw materials, with proper planning, quality manufacturing and correct
distribution. To develop a product it is crucial to know about the customer
demands and expectations. With this knowledge combined with new
technology and marketing a firm creates successful products. Sometimes
companies solely try to improve but most of the time they discuss with their
suppliers to gather knowledge about the customer requirements. This
knowledge exchanging process enables the firms to learn more about their
customers and also about the supplier's awareness about the market. This
is beneficiary to both supplier and buyer firms. It is a common scene that
powerful organizations insist their supplier to adapt their proposed process to
improve the product quality and coordination. This article examines the
recent developments that have been taking place in the supply chain
management as a resultofthe advancementthatis happening in Pepsi Co.
Key words: PepsiCo,SCM.

1.0 INTRODUCTION
Supply Chain Management is the process of planning, implementing, and controlling the
operations of supply chain with the purpose to satisfy customer requirements as efficiently
as possible. Supply chain management spans all movement and storage of raw materials,
work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.
It is a cross functional approach to managing the movement of raw materials into an
organization and the movement of finished goods out of the organization toward the end
consumer.
Supply Chain management is also the combination of art and science of improving the way
company finds the raw components it needs to make a product or service and deliver it to
customers. It seeks to enhance competitive performance by closely integrating the internal
functions within a company and effectively linking them with external operations of
suppliers and channel members. Moreover, this has been a prominent concern for both
large and small companies as they strive for better quality and higher customer
satisfaction.
In a supply chain, a company links to its supplier upstream and to its distributors
downstream in order to serve its customer. The goal of supply chain management is to
provide maximum customer service atthe lowestpossible costs.
Companies now are competing supply chain-to-supply chain rather than enterprise-to-
enterprise requiring for more intimately connected relationships. Customer markets and
supply chains are no longer limited by physical proximity, and businesses are sourcing
from and managing a greater number offar-flung partners and channels.
Success of a company now depends on effective global supply chain management, its
ability to deliver the right product to the right market at the right time. The complexity
involved in managing supply chains that span continents and dominate markets demands
strategies and systems thatare adaptable.
Managing Supply Chain for Global Competitiveness takes a strategic look at all of the core
functions of global supply chain management which includes product design, planning and
forecasting, sourcing, outsourcing, manufacturing, logistics, distribution, and fulfilment. An
example to illustrate this theory on the supplychain managementis the PepsiCo,Inc.
2.0 PEPSICO HISTORY
PepsiCo, a Fortune 500, American Multinational Corporation is under the food consumer
product industry and is the world leader in convenient foods and beverages. The Pepsi
brand and other Pepsi-Cola products account for nearly one-third of the total soft drink
sales in the United States. In order for the company to make sure that their products reach
the customers,the companyneeds an efficient supplychain solution.
It was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was
acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including the
Gatorade in 2001. PepsiCo offers product choices to meet a broad variety of needs and
preference -- from fun-for-you items to product choices that contribute to healthier lifestyles.
PepsiCo owns some of the world's most popular brands, including Pepsi-Cola, Mountain
Dew, Diet Pepsi, Lay's, Doritos, Tropicana, Gatorade, and Quaker. Coca-Cola Company in
market value for the first time in 112 years since both companies began to compete. Other
brands include Caffeine-Free Pepsi, Diet Pepsi/Pepsi Light, Caffeine-Free Diet Pepsi,

Caffeine-Free Pepsi Light, Wild Cherry Pepsi, Pepsi Lime, Pepsi Max, Pepsi Twist and
Pepsi ONE,7 Up ,Aquafina (Flavour Splash, Alive, and Twist/Burst),Propel Fitness Water,
SoBe, Quaker Milk Chillers.
The Frito-Lay brands are : Cheetos,Fritos,Go Snacks, James' Grandma's Cookies,
Hamka's, Lay's, Miss Vickie's, Munchies, Sandora, Santitas, The Smith's Snackfood
Company, Sun Chips, Kurkure, Tostitos and some of the Quaker Oats brands include Aunt
Jemima, Capone Crunch, Chewy Granola bars, Coqueiro, Crisp'ums, Cruesli, FrescAvena,
King Vitaman, Life, Oatso Simple,Quake, Quisp,Rice-A-Roni,and Spudz.
2.1 PEPSICO’S MISSION
 PepsiCo's overall mission is to increase the value ofshareholder's investment. They do
this through sales growth,costcontrols and wise investmentofresources.
 They believe their commercial success depends upon offering quality and value to their
consumers and customers; providing products that are safe, wholesome, economically
efficient and environmentally sound; and providing a fair return to their investors while
adhering to the higheststandards ofintegrity.
 A customer while purchasing a bottle of Pepsi will consider product quality, price and
availability of the product. Thus, Pepsi focuses its competitive strategy as to producing
sufficientvariety, reasonable prices,and the availabilityof the product.
2.2 PEPSICO CEO
Ramon Laguarta (born 1963-1964 in Barcelona, Spain) is the chief executive
officer of PepsiCo. He ascended to the position of CEO as its sixth holder of that position
on October 3, 2018 after his predecessor Indra Nooyi stepped down.
Laguarta graduated from the Thunderbird School of Global Management at Arizona State
University and also received an MBA from ESADE Business School in Barcelona. He
previously worked at Chupa Chups, a candy company based in Spain known for its
lollipops. Lagurta joined the company Pepsi Co in January 1996. He quickly rose through
the ranks. He was president of PepsiCo's Eastern Europe region and worked on sales,
marketing, amid various roles across Europe before becoming appointed to the overall
company president position in 2017, overseeing global operations, corporate strategy,
public policy and government affairs. As a result of the promotion, he moved to the United
States.
On August 6, 2018, it was announced he will ascend to the role of CEO when Indra
Nooyi steps down. In the same time, he was appointed to the board of directors effective
October 3, 2018.
3.0 COMPETITIVE AND SUPPLY CHAIN STRATEGIES
 In its business, diversity and inclusion provide a competitive advantage that drives
business results.

 Its brands appeal to an extraordinarily diverse array of customers and they are sold by
an equallydiverse group of retailers.
 It understands the needs ofour consumers and customers
 Uses diversityin our supplier base and in everything we do.
 Commitment to purchase from a supplier base representative of our employees,
consumers,retail customers and communities.
 Developing partnerships with minority-owned and women-owned suppliers helps us build
the world-class supplier base we need.
 Creates mutually beneficial relationships that expand PepsiCo's sphere of activity. It
helps build community infrastructure by providing employment, training, role models,
buying from other minority and women-owned business and supporting community
organizations.
Figure 1
Thus the major sustainable advantages that give PepsiCo a competitive edge as they operate in
the global marketplace:
1. Big, muscular brands,
2. Proven ability to innovate and create differentiated products and
Powerful go-to-marketsystems.
4.0 PEPSICO’S SUPPLY CHAIN MANAGEMENT
4.1 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, throughputand uptime.

 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 notbeen looking atthe 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 reliabilityand performance of the carriers or transporters.
4.1.2 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 ofquality, promptdelivery 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
managementfor two Pepsi distribution centers in North America.
4.2 I2 Transportation
 I2 Transportation is a part of end to end solution for planning, execution, and
managementofthe entire transportation cycle.
 It is designed to enable an organization to utilize and manage an entire transportation
network, as well as reduce costwhile improving transportperformance.
 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.
4.2.1 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 bestteam 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 ofinterface 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 accomm odate 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 bestrates and services.
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 companyfor it has also reduce transportation cost.
4.3 I2 Supply Chain Visibility
With shorter lifecycles and lead times—to customers demanding faster results and more
responsive service. Globalization and outsourcing have added to the complexity, resulting in
more diversified supply chains. The number of supply chain partners, as well as the amount of
geographic dispersion,has increased dramaticallyas a result.
To ensure that their order-to-delivery performance is not impacted, companies need to have
greater coordination and visibilityinto the material flow across the supplychain.
4.3.1 Increase Global Visibility
With Companies have access to global visibility into all of their critical supply chain
activities and partnerships. It allows organizations to respond more quickly and
effectively to a wide range of unplanned and potentially disruptive supply and
demand events. Supply-related events can include production bottlenecks, fulfillment
delays such as port strikes and customs delays, and supplier shortages. Demand-
side events might include customer orders that are greater than forecasts or changes
to orders that have already been placed.
I2 Supply Chain Visibility is designed to manage these events, assess their impact,
and orchestrate a rapid and practical resolution while providing a unified view of the

supply chain. The solution can also incorporate packaged business process packs
for replenishment, fulfilment, and manufacturing, and these packages can be
configured to meetcustomer-specific requirements.
i2 Supply Chain Visibility also enables companies to close the loop between
traditional planning and execution processes. It enables better understanding of
orders,inventory, and logistics data.
4.3.2 Powerful Functionality
This solution incorporates pre-built workflows that integrate data across order
management, warehouse management, logistics, and inventory applications for the
flow of both domestic and international goods. A series of predefined, extensible
events and exceptions support each workflow and a visual “studio” allows workflows
and events to be extended, configured, and customized to meet specific enterprise
requirements. i2 Supply Chain Visibility delivers a robust technology that is scalable
and extensible,and that operates smoothlyin a distributed computing environment.
4.3.3 Extensive Capabilities
 Inbound and outbound tracking of order, inventory, and logistics flows
 Domestic and international flows that track multi-leg and multi-modal
shipments
 Visibility into exceptions and events across orders, inventory, and
shipments
 Role-based views for buyers,suppliers,analysts,and 3PL vendors
 High degree of permissibilityand privacy controls
 Track-and-trace inventory across multiple locations
 Configurable event detection mechanism and customizable event
management workflows
 Event chaining such as linking of related events, audit trails, context-based
problem prioritization and extensive notification options including e-mail, e-
mail digest, pagers,and cell phones
 Calendars,internationalization (i18n),and multi-time zone supportenabled
 Integration to underlying applications for intelligent resolution and to prevent
event recurrence
 Root-cause,event trend, and performance analysis capabilities
 Rich event library with over 100+ out-of-box events supported
 Fast, web-based supplier enablementand transaction support
4.3.4 Benefits
 Exception-based management
 End-to-end supplychain visibility and event managementtools
 Customer-specific solutions for replenishment, fulfillment, and
manufacturing

 The ability to forecastand respond to supply/demand events
 The option to move from calendar-based to event-driven planning and re-
planning
 Increased employee productivity
 Reduced process,personnel,and expediting costs
 Improved customer,supplier,and partner communications.
 Real-time decision support
4.4 E-solution by Hewlett Packard (HP)
PepsiCo signed a deal with Hewlett Packard in 2006 to help improve its supply chain
management and increase overall efficiency. The seven year deal involved the overhaul of
current IT solutions with PepsiCo and focused on updating server environments as well as
ensuring a new infrastructure which benefitted operations and increased overall cost-saving.
In particular, HP introduced a number of new solutions which helped to encourage stronger
customer relationship management and supply chain management. PepsiCo had also opted
for BT as its network provider to ensure the e-solution is fullyimplemented.
The supply chain management solution reduced costs as well as enhanced current service
provision online and via its communications networking system. By standardizing and
optimizing its server environment, PepsiCo International is better flex to meet its changing
business needs and in turn provide better service to customers anywhere in the world.
4.5 Pepsi Bottling
Pepsi Bottling Group is the world’s largest manufacturer, seller and distributor of Pepsi-Cola
beverages. With annual sales of nearly $11 billion, the company’s fastest growing segment is
non-carbonated beverages, including the number one brand of bottled water in the U.S.,
Aquafina, as well as Tropicana juice drinks and Lipton Ice Tea. As part of a 24/7 production
operation,the company’s Detroitplantships about27 million cases per year.
Production at the plant begins as empty bottles are unloaded from trucks via conveyor and
transported to a depalletizer. From there, they are, rinsed, dried and sent to a filling machine
(filler speeds at the plant vary based on bottle size, ranging from 350 to 1,000 bottles per
minute). The bottles leave the fillers and make their way to a packaging machine, and then to
a palletizer. Each palletis wrapped for distribution and moved to the warehouse for shipping.
4.5.1 The challenge
The plant uses a variety of sensors to monitor bottles as they travel through the sequence
of steps and to manage the flow to the individual stations. Line sensors match the speed
of the conveyor. The company’s inventory of sensors swelled over the years to include
more than 120 different varieties. Many of these included multiple styles of the same
product stocked under different brands. A similar problem was developing with its drives
inventory, which had grown to over 50 differentpart numbers.

The wide variety of sensors made it progressively more complex and time-consuming to
replace a faulty device. Despite its fast, high-performance machinery, the increasingly
lengthy and more frequent downtime was beginning to impact the company’s ability to
meet its productivity goals. In addition, operating costs were on the rise due to the excess
spares inventory. Because of the extensive number of sensors they had in inventory,
including multiple styles and brands, simply finding the right replacement resulted in an
hour of downtime.
A more strategic approach to maintenance was necessary, as even the smallest of delays
could cost the plant thousands of dollars in lost production and overtime. Knowing that
effective parts management and fast, reliable equipment repair lies at the heart of efficient
manufacturing, the company explored ways to get its inventory and maintenance
processes under tighter control. That’s when it decided to turn to Rockwell Automation for
help.
Figure 2.The Pepsi Bottling Group’s Detriot plant reduced its number ofsensors from 180
to 46, a decrease of 66 percent, by standardizing it sensors inventory to Allen-Bradley
products.This reduced downtime and inventory costs.
4.5.2 The Solution
The first task undertaken by Rockwell Automation was to conduct an Installed Base
Evaluation – a plant-wide inventory assessment to determine the exact number of sensors
and drives the plant currently had in stock. Next it needed to figure out what products were
actually needed and which ones could be eliminated. To streamline its operation, Rockwell
Automation recommended that Pepsi standardize its entire sensors inventory on Allen-
Bradley products. The local distributor, McNaughton-McKay Electric Company (Mc&Mc),
helped design a migration plan to help ease the costof this inventory conversion.

Although all the drives employed at the plant were Allen-Bradley brand, many were older
models representing a multitude of drive families. To simplify its drives inventory and
upgrade its technology at the same time, Pepsi converted all of its drives to the Allen-
Bradley PowerFlex family of AC drives. A detailed cross -reference chart developed by
Rockwell Automation now provides technicians with a quick and easy way to identify failed
and replacementparts,as well as installation instructions.
To ensure reliable availability to spare parts, Pepsi set-up a Rockwell Automation Services
Agreement that included parts management. With the agreement, Pepsi pays a fixed
monthly cost for their spare parts, which are owned and managed by Rockwell Automation
but stocked on-site. The agreement allows Pepsi to reduce its upfront expenses, have
immediate access to spares, reduce carrying costs, and update its control technology cost-
effectively. The agreement also includes an in-service warranty, so the parts don’t go out
of warranty until they are actually used for the warranty period.
To help the company better utilize its internal resources and reduce costly troubleshooting
delays, the Rockwell Automation Services Agreement included TechConnect Support.
This remote support service provides the plant with 24/7 access to Rockwell Automation
technical specialists. When a problem occurs, Pepsi technicians can call for immediate
troubleshooting assistance to resolve it as quickly as possible. To help facilitate problem
resolution, Rockwell Automation technical specialists can also perform remote system
diagnostics through an Allen-Bradley modem installed at the Pepsi facility. This helped
Pepsi minimize risk and reducing long term costs.
4.5.3The results
Leveraging Rockwell Automation Services & Support has proved to be a smart decision for
Pepsi Bottling Group. The improved inventory and parts management capabilities helped
reduce downtime and inventory costs, and standardizing on Allen-Bradley products eased
training requirements and minimized the technology learning curve. These benefits have
ultimately enhanced productivity by 8 percent and reduced the overtime required to fill
orders. In addition, the plant was able to reduce the number of sensors it uses from 180 to
46, a decrease of 66 percent. Likewise, it was able to reduce the number of drive styles
from several hundred to 14.
Packaging as a tool for Supply chain management
 GS – 1 standards (bar codes)
 RFID tags for real-time stock replenishments
 Commercial Securityofferings
 Counterfeit& pilferage
 Online supplychain visibility across the chain
 Pack safety for the consumer

Pepsi-Cola Saved $44 million by switching from corrugated to reusable plastic shipping
containers for one litre and 20-ounce bottles, conserving 196million pounds of corrugated
material.
Palletization – costvs. value creator
Key supplychain costoptimizer through an Integrated supplychain approach
• Drive standards – pallets/trucks
• Palletpooling services
5.0 SUPPLY CHAIN MANAGEMENT IN PEPSICO
PepsiCo's supply chain management had been based on the idea of collaboration and
integration. The company took several initiatives to have a more collaborated and
integrated supplychain,which would become a source of competitive advantage.
Procurementofraw materials
The raw materials used in manufacturing PepsiCo's beverage and food products were:
apple, pineapple juice and other fruit juice concentrates, corn, aspartame, corn
sweeteners, flour, flavoring, grapefruits, oats, oranges, rice potatoes, sucralose, sugar,
vegetable and other oils,and wheat.
Raw materials also included packaging material — plastic resins such as polyethylene
terephthalate and polypropylene resin used for plastic beverage bottles, film packaging for
snack foods,aluminum for cans,and also fuels and natural gases.
Manufacturing Operations
PepsiCo employed many technologies at its production facility when it realized that
production flow was not smooth due to the frequent breakdown of machine and
mismanaged inventory. Production at PepsiCo plants began with the unloading of empty
bottles from the trucks via the conveyor and their being moved to the depalletizer.
Distribution Network and Logistics Management
PepsiCo used different distribution strategies to bring its products to market depending
upon product characteristics, local trade practices, and customers’ needs. It delivered
fragile and perishable products which were less likely to be impulse purchases, from its
manufacturing plant and warehouses to customer warehouses and retail stores. PepsiCo
used third party foodservices and vending distributors to distribute its snacks, foods, and
beverage to restaurants,schools,stadiums,businesses,and other locations .
PepsiCo relationship with Retailers
PepsiCo also made its supply chain better by establishing a collaborative relationship with
its retailers. One such example was its relationship with Wegman’s retail. PepsiCo

approached Wegman’s with a proposal for the Frito-Lay line which controlled two fifth of
the world marketfor salty snacks and PepsiCo products.
Road Ahead
As of 2011, PepsiCo was continuing with its efforts in the direction of having a well
managed supply chain and of strengthening its relationship with all its supply chain
partners. In January 2011, PepsiCo changed the distribution system of its Gatorade
products from warehouse delivery to “Direct to store” at convenience stores through both
company-owned independentbottlers in the US and Canada.
6.0 PEPSICO’S FRITO LAY SUPPLY CHAIN
Supply chain in India
Horticulture produce in India is largely marketed through traditional channels. A typical
marketing chain for horticultural produce consists ofseveral players as shown in figure.
PepsiCo is one of the pioneers of contract farming in India since 2001 Their experience in
contract farming has covered many crops – potato, basmati rice, tomato, chili, peanut,
oranges and more recently sea weed. PepsiCo’s operations started in India started in the
region of Punjab in collaboration with state government. PepsiCo India's project with the
Punjab Agro Industries Corporation and Punjab Agriculture University remains one of the
mostambitious contracts farming projects in the country.
7.0 SUPPLY CHAIN AND EFFICIENCY
PepsiCo is one of the biggest Beverage and Snack Companies in the world. Due to that,
many factors have to come into consideration in the production planning, distribution
planning and execution process. Raw materials that are used in manufacturing it’s
beverage and food products are; apple, corn, rice potatoes, oranges, oats, vegetable and
other oils, wheat, fruit juice concentrates, aspartame, corn sweeteners, flour, sucralose,
etc. All these materials come with packaging materials; plastic resin for plastic beverage
bottles, film packaging for snack foods, aluminum for cans and natural gas. After
manufacturing the products are then delivered in bulk. To manage that, PepsiCo’s supply
chain management and product flow has three main components; direct to store delivery
model,and the idea of collaboration and integration.
Disregarding the direct to store delivery model, taking initiative to have a more
collaborated and integrated supply chain becomes a source of competitive advantage.
PepsiCo employed many technologies. Distribution strategies are used to bring products
to the market depending on the product characteristic, local trade practices and
customers’ needs. Fragile and perishable products are delivered from its manufacturing
plant and warehouses to customer warehouses and retail stores. Third parties and food
services and vending distributors are used to distribute its snacks, foods, and beverage to

restaurants, schools, stadiums, businesses and other locations. All of these technologies
are controlled by integrated systems that keep all information such as; delivery dates,
products types and product amounts. Taking initiative to have a collaborated supply
chain, PepsiCo establish a relationship with their retailers and customers by proposing
them better productlines.
Products of PepsiCo are dependable on raw agricultural materials to meet our demands
and consumers' expectations in which they are inexpensive and premium quality. With
new opportunities always rising, the company has to stay on top of greenhouse gas
management and worldwide food supplies. These include an international supply chain
which includes independent farmers, intermediaries and also farms which are company
owned.
The company has their own code of conduct for suppliers called The PepsiCo Global
Procurement Supplier Social Capability Management Program. It is to make sure all their
suppliers understand and abide by the terms of the conduct.
There are four dimensions PepsiCo has for supplier standards:
 Accountability for Supplier Code of Conduct (SCoC)
 Engaging through code training
 Reviewing of CSR risks.
 Improvement through third party audit/corrective management.
To meet the code of conducts, all suppliers are given the Supplier Code of Conduct
(SCoC) in the initial contracts to guarantee accountability. The company also engages
each supplier in proper training so there is no confusion with the SCoC and suppliers
manage to do business properly. This is done through meetings face-to-face, videos or
online. Assessment is also done to make sure suppliers and their sites need more
training. The goal of the company is to keep the PepsiCo brand safe and highly
reputable. PepsiCo has translated the SCoC into more than 25 languages to make it
globallyaccessible for all suppliers.
8.0 LIMITATIONS OF PEPSICO SUPPLY CHAIN OVER COKE
1. PepsiCo has duplicate distribution systems for its beverages. Coca-Cola has for the
mostpartmaintained distribution ofits entire beverage line-up through its bottlers.
2. Pepsi bottling system is more fragmented than Coca-Cola's.
3. In a consolidated system negotiations involve fewer players and therefore take less
time to gain agreement, which may be why the Pepsi system has lagged in system
efficiency efforts. PepsiCo and its bottlers have established a purchasing cooperative
to gain purchasing power in buying raw materials.
4. While PepsiCo has been pursuing international beverage acquisitions,those
investments will take time to produce significantoperating income
5. PepsiCo consolidation puts pressure on the independent system bottlers to more
readily consider agreements for warehouse distribution.

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https://en.wikipedia.org/wiki/Ramon_Laguarta
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https://en.wikipedia.org/wiki/Pepsi
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http://www.pepsico.com/Company
9) Direct-to-Store Model Delivers Top-Line Benefits to Pepsi Beverages
http://www.supplychainbrain.com/content/research-analysis/supply-chain-innovators/single-article-
page/article/direct-to-store-model-delivers-top-line-benefits-to-pepsi-beverages-1/
10) Conserving water at PepsiCo’s Funza, Columbia Facility
https://www.youtube.com/watch?v=FFpyMaVqf5Y
11) Case study chart
http://supplychainindex.com/wp-content/uploads/2012/09/Picture5.jpg
12) Austin Scheid & Chuansu Tan, 2014, "Supply Chain Management of PepsiCo",
http://scm303.blogspot.com/2014/05/supply-chain-management-of-pepsico.html
13) Lucy Dixon,2016, "PepsiCo's sustainable supply chain goals",
https://www.supplychaindigital.com/scm/pepsicos-sustainable-supply-chain-goals
14) Mont B M, Harvard business school, 2017,"Performance with Purpose: PepsiCo’s move to a
sustainable supply chain"
https://rctom.hbs.org/submission/performance-with-purpose-pepsicos-move-to-a-sustainable-
supply-chain/

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