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11 Key Points in Pepsi-Cola Supply Chain Management

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11. Key Points in the Pepsi-Cola Supply Chain Management System

The PepsiCo supply chain management system is a complex, multi-layered process that aims to ensure the company’s customers have access to their products at all times. The system provides visibility into inventory levels and production numbers to prevent shortages or overproduction. It also guarantees that PepsiCo maintains its competitive edge by keeping up with current trends in consumption patterns.

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01.

Getting a glimpse on PepsiCo Management

PepsiCo is known worldwide for its second-largest leading snack and beverage food company. The backbone of PepsiCo company’s success comes from its supply chain management. Responding to the changes in the market and shifting consumer demands, this company continues to evolve and grow simultaneously. And this evolvement factor plays a significant role in increasing their supply chain. If we look at the statistics of some past years, we can see the demands of consumers getting healthier and more nutritious. It is where PepsiCo defeats most of the competitors. PepsiCo came up with a new strategy to reduce the number of saturated fats and sugar in their products. It sounds cool but what made this thing successful is that PepsiCo has implemented this strategy without even sacrificing their actual taste.

02.

Importance of Beverage Production Management

Beverages and food manufacturers, who are leading above all others, have realized that they have to keep their demands on asset management. They need to update their strategic thinking to manage their maintenance with modern practices. They are closing all the gaps in their maintenance processes and optimizing their workflow to gain a subsequent place in the market list. Most of them have realized the need for continuous improvement and evolution with their proposed solutions, strategies, and technologies.

PepsiCo, on the other hand continuously expanding its product line to include coconut water and juices. Carbonated beverage manufacturing is challenging due to its high asset reliability, and availability can be a factor for the competitive advantage. On the other hand, noncarbonated products have high demands and more complicated supply chains. Due to this, maintenance management needs to excel to succeed in the profitability and operations of carbonated beverage production

03.

How Maintenance Management excel PepsiCo strategies

1 – Food Safety Standards

Each company needs to qualify its food handling principles; you want to follow a portion of the designated spots rigorously. The different food affiliations check the nature of the food you will propose to clients. They guarantee that your item doesn’t hurt anybody in any sense. All drinks and food ventures need to follow different affiliation designated spots. Whether it’s the Food & Drug Administration (FDA) in the USA, the Food Standards Authority (FSA) in the UK, or the European Food Safety Authority (EFSA) in Europe. The food handling principles expect to bring down the frequency of foodborne ailment. 

They put commitments on food organizations to deliver food that is protected and appropriate to eat and put wellbeing and cleanliness commitments on food handlers. Those who neglect to control cleanliness, tidiness, bother, side-effects, consistent records, security information sheets, and considerably more will foul the guidelines. On the off chance that you don’t deal with your upkeep, then, at that point, item reviews, client objections, and a terrible press can and will eradicate your business. So stay on top of supporting the executives and sanitation to remain alive in business.

2 – Maintenance Strategy can become your business’s differentiating factor

It is always seen in the history of most successful corporations that a maintenance strategy can significantly increase your ranking in the market. A proper and adequate maintenance strategy is always concerned with fully maximizing equipment uptime and providing you with an excellent facility performance. A superb maintenance strategy will balance the associated resources and, ultimately, the cost. We all know that beverage and food manufacturers must need a plan and process if they eventually want to win the battle with optimizing those essential cycle costs associated with operations and maintenance.

There are lots of benefits to optimizing your maintenance strategy. Some reduce asset failures, extend asset life, improve health and safety, and minimize repair costs.

You can start by identifying strengths and weaknesses. It can give your maintenance strategy an extra edge over other businesses. Next, assign a maintenance strategy to each asset you have based on its criticality level. By having senior management agree on maintenance objectives, the maintenance management function can develop asset life plans, create tasks in the CMMS or EAM, and deploy the resources on the shop floor to achieve those objectives.

3 – Asset Health Monitoring brings more movement

Time becomes one of the crucial things on the off chance that we look with compelled asset development and accessibility. Observing and anticipating the expected disappointment of a resource from a distance works in support of practical, controlled, and reasonable preventive activities and staying away from breakdowns of resources, like backup generators, not performing when unexpectedly expected to do so. 

Indeed, this isn’t just the save of high edge manufacturers. Your digitalization methodology and innovation guide connect the executive’s procedure and resource care plans to your resource. Food and Beverage producers additionally need to have condition checking techniques set up. Decreasing receptive upkeep and spontaneous vacation further develops resource accessibility.

Maintenance availability is additionally crucial, thinking about an entire lifecycle resource the board approach. Dexterity is additionally our capacity to think and see rapidly. We should handle all the data we are assaulted with as fast as expected and critically remove what will increase the value of our separate associations or organizations.

04.

The efficient operation of equipment is the basis of production management

Production management, also called operations management, arranges and control current cycles to guarantee that they move flawlessly at the necessary level. In addition, strategies of creation the executives are utilized in assistance and assembling enterprises. 

The outcome of the creation of the executives is connected with legitimate gauging, creation arranging, and control. Logical preparation of creation capacity will bring about improved efficiency. An expansion in efficiency will help all gatherings associated with the business. An all-around arranged creation capacity will prompt great quality items, a higher creation rate, and a lower cost for each unit. The accessibility of merchandise will likewise be good, and the buyers will be saved from a great deal of botheration which may somehow be brought about by a shortage of items.

It is an obligation comparative in level and extension to different claims to fame like advertising or human asset and monetary administration.

 ProcessesInventoryInspectionCosts
Observationmeasuring rate of output; recording idle time or downtimerecording stock levelsinspecting materials and partscollecting cost data
Analysiscomparing progress with the plananalyzing demand for stocks in different uses and at different timesestimating process capabilitiescomputing costs in relation to estimates
Corrective actionexpeditingissuing production and procurement ordersinitiating full inspection; adjusting processesadjusting selling price of product
Evaluationestimating production capacity and maintenance schedulesdrawing up replenishment policies and inventory systemsreassessing specifications; improving processes and proceduresevaluating production economics; improving data

What equipment included for carbonated production

The carbonated beverage filling machine is suitable for 200ml – 3L PET bottles for filling carbonated beverages. After the initial liquid is formed by mixing sugar and other methods, the oxygen in the drink is degassed first, and a soda mixer proportions the original syrup and water. After mixing, the mixed material is sprayed to expand the area by a water pump to thoroughly mix it with carbon dioxide to form a saturated carbonated beverage. 

Typical beverages include Coca-Cola, Seven-up, old soda, sparkling soda and other drinks.

The related equipment with carbonated beverage filling machine for carbonated beverage production includes:

You can visit our carbonated beverage filling machine for more details

05.

The secret of PepsiCo's supply chain management

Below we will go into a more in-depth interpretation of PepsiCo’s supply chaincarbonated production

PepsiCo's supply chain management system key points table

PepsiCo’s supply chain management system has 11 key points 
1Coordinated forecasting
2Coordinated distribution
3Information transparency
4Supply chain visibility
5 Customer relationship management
6Collaborative planning, forecasting, and replenishment
7 Product lifecycle management
8Integrated business planning
9Strategic sourcing
10Quality management
11Performance measurement analysis.

Coordinated Forecasting

PepsiCo’s supply chain management system begins with coordinated forecasting.

What is coordinated forecasting?

PepsiCo uses market intelligence to forecast the total amount of product needed in all channels and markets where it is sold, to determine its requirements for raw materials.

The forecasts are done monthly and take into account the current inventory levels, current demand, and expected changes in each channel. Pepsi-Cola then works with the food and beverage factories (carbonated soft drink bottlers) to determine its requirements for raw materials.

This includes packaging and ingredients such as corn syrup, sugar, and bananas.
The results of this process are shared throughout the entire supply chain management system so that people outside Pepsi-Cola can plan for their own production needs.

Coordinated Distribution

After forecasting is completed, PepsiCo begins the distribution phase of the supply chain management process. In this stage, products are delivered from 20 distribution centres to retailers and wholesalers worldwide. Each distribution centre is responsible for a specific zone within North America or a specific zone within Europe, depending on which location they service. PepsiCo works with retail customers to develop joint distribution programs that coordinate the delivery of products from different third-party suppliers at specific times of the day to meet customer needs.

Information transparency

For a supply chain management system to work correctly, all members of the process must have access to current and accurate information about product availability and pricing. PepsiCo’s supply chain management system uses a centralized information technology platform called Enterprise Information Portfolio that provides real-time access to relevant data. The supply chain incorporates electronic data interchange (EDI), point of sale (POS) systems, and automated clearing house (ACH) technologies to communicate with each other. Based on the forecasting process, Pepsi-Cola knows what products will be in demand in each region. It can then send that information via EDI to retail customers to set price and product advertising strategies on a regional basis. PepsiCo’s IT system also helps store owners with inventory management by keeping a record of what products are selling, which ones need to be replenished, and how quickly they move through the store.

Supply chain visibility

Once products arrive at stores and customers begin buying them, PepsiCo’s supply chain management system maintains visibility into the location and condition of those items at all times. This is done through point-of-sale technologies that tell vendors which products were sold and how quickly they moved off the shelves. When a store sells a product, it uses a POS system to send the information electronically to PepsiCo. The data tells Pepsi-Cola how much of each item was sold, where that item is located within the store, and what price the item was sold. This data then moves on through the supply chain management process until everyone can see how quickly things are selling and what the customer demand really is. This helps PepsiCo better manage inventory levels and product lifecycles to know when to refresh its items with new designs or flavours.

Customer relationship management

Supply chain management is all about customer service. PepsiCo’s system helps maintain strong relationships with customers, both large and small. The company uses feedback surveys of thousands of customers each year to learn what they like, don’t like, and want to see more of. This information is gathered through personal contact with the retailers and through focus groups and online surveys. PepsiCo uses the information to improve its products and services while also working with retailers through a unique customer focus group called Retailer Advisory Councils. These councils consist of 12 different retail customers who come together every year to discuss their needs and issues regarding product delivery, pricing policy, merchandising programs, and more.

Collaborative planning, forecasting, and replenishment

PepsiCo has established an integrated planning and forecasting process closely linked with its IT system so that the entire supply chain management system works in concert. All members of PepsiCo’s supply chain management team, from regional distributors to store owners, use the same data, so they all have the same information on hand at any given time. This collaboration helps PepsiCo to save money and plan more effectively. For example, by analyzing the data from POS systems and EDI technology combined with external market data, PepsiCo can predict when products will be sold out and how quickly they will need to be replaced. The company can then work with distributors in advance to ensure that their orders are placed at just the right time so that products arrive before demand disappears.

Product lifecycle management

Product lifecycle management is a vital part of the supply chain management process. It involves a constant effort to evaluate and manage products to move efficiently through total distribution, from production to retail sales. Suppose products have a long lifecycle before being sold out. In that case, PepsiCo can change the product mix or replenish it more often, so there are always newer products available. This helps drive demand for overall product categories and also cycle in new products when appropriate. This is done with the help of POS data, which allows for tracking of products through all aspects of the supply chain management system. It also helps to streamline some operations and inventory controls while raising efficiency levels in others.

If PepsiCo identifies a mature or dying product category, it can eliminate that product’s distribution channels altogether. This allows for more efficient distribution of Pepsi-Cola products and the product’s packaging, which can save money.

Integrated business planning and execution

Effective supply chain management involves a close working relationship between business units. PepsiCo has established a process that ensures this happens. The company spends time each year reviewing current performance and projecting forward to see what different business opportunities there are for the coming year. This information is used to create strategic plans that detail how resources will be used and to set performance objectives and metrics for the coming year. These plans are then reviewed by management and modified as needed.

A business can’t meet its objectives without proper execution. To execute, the organization needs clear goals and roles established for all employees involved in supply chain management. PepsiCo works on this each year by holding a strategy development session to create objectives and a role clarification process where management defines what is needed from all employees.

This is then communicated throughout the organization via cross-company meetings, newsletters, and policy initiatives. This helps ensure that the correct information gets to the right people at the right time and in a valid format.

11. Key Points in the Pepsi-Cola Supply Chain Management System2

Strategic sourcing

PepsiCo uses strategic sourcing to make the best use of its resources and keep costs down. This involves analyzing how each supply partner contributes to overall supply chain management before choosing which partners will be managed via collaborative processes. When evaluating potential business partners, PepsiCo looks at several factors, including price, service levels, responsiveness, performance history, innovation capabilities, and environmental performance.

Once a business partner is chosen, PepsiCo sets up a master agreement that outlines all requirements and expectations. The master agreements are then broken down into individual contracts that outline the specifics of each arrangement to keep costs low while meeting customer service levels.

Supply chain management at PepsiCo works closely with the procurement team to evaluate the best sourcing options. This allows PepsiCo to find new opportunities for cost reduction while working with its supply partners to meet customer needs.

Quality management and continuous improvement

Quality assurance is an essential part of supply chain management at PepsiCo. It works with suppliers to develop quality focuses and requirements, which can help improve their overall efficiency and create consistency across the supply chain. This consistency allows PepsiCo to maintain product integrity and high-quality service levels for its customers.

PepsiCo uses a variety of tools to ensure the highest quality product is delivered to customers. These include:

Supplier certification programs such as its Deming Award for Supply Chain Partner Excellence; PepsiCo’s supplier code of conduct; and An evaluation program that includes both internal and external audits, which are all performed by an independent third party.

Performance measurement analysis.

PepsiCo uses a variety of tools to monitor its supply chain management performance, including:

Internal metrics that show what is happening throughout the PepsiCo system; include sales measurements, throughput, and inventory turnover.

External metrics are reported to customers and used for benchmarking purposes; These include service level agreements (SLAs) and on-time delivery performance.

Financial metrics that show how supply chain management impacts the company’s financial performance; include ROI, ROA, and net income.

Measuring and analyzing performance is the only way to accurately picture how effective supply chain management is. PepsiCo uses multiple metrics to get the most precise performance evaluation. This allows management to make changes where necessary to meet customer needs while controlling as much as possible and keep operations cost-efficient and sustainable.

06.

Conclusion

I hope this overview article helped you understand the beverage market trend. If you feel this article can help others and fulfill their wishes, please share.

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