19653663 Project Document Supply Chain PEPSI

169
5/30/2009  Kiran Afshan, Huma Naz | MBA ITM 13 ERP SYSTEMS PROJECT SUPPLY CHAIN MANAGEMENT SYSTEMS FOR PEPSI HAIDRI BEVERAGES(PVT.) LTD. 

Transcript of 19653663 Project Document Supply Chain PEPSI

Page 1: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 1/169

Page 2: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 2/169

Page 3: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 3/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 3

Chapter 1

Organization Portfolio

Page 4: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 4/169

&KDSWHU

2UJDQL]DWLRQ3RUWIROLR

+DLGLUL%HYHUDJHV3ULYDWH/LPLWHG3DNLVWDQ

7KH+DLGLUL%HYHUDJHV*URXSZDVVHWXSLQDQGLV3HSVLVVROHVHOOLQJDJHQWIRU'LVWULFW

5DZDOSLQGL DQG ,VODPDEDG ,W LV EDVHG LQ WKH &'$ ,QGXVWULDO 7ULDQJOH .DKXWD 5RDG

,VODPDEDG,WPDQDJHVWKHVXSSO\IRUVHYHUDOZKROHVDOHUVUHWDLOHUVUHVWDXUDQWVKRWHOVDQG

RWKHU VXFK IRRG RXWOHWV ,Q RUGHU WR DFKLHYH WKH SURMHFWHG VDOHV WDUJHWV HIIHFWLYHO\ WKH

RUJDQL]DWLRQ HQVXUHV D FRPSUHKHQVLYH VWUDWHJLF DOLJQPHQW ZLWK WKH RYHUDOO 3HSVL &RODV

EXVLQHVV VWUDWHJ\ +DLGLUL %HYHUDJHV SULPDU\ IXQFWLRQV DUH WR FRQGXFW D V\VWHPDWLF

PDQXIDFWXULQJDQGVXSSO\RIWKHSURGXFWZLWKRXWDQ\WDFWLFDOIODZV%DFNHGE\DSRZHUIXO

FRPSHWLWLYHVWUDWHJ\DQGHPSRZHUHGE\VRPHHIIHFWLYHVXSSO\FKDLQVWUDWHJLHVWKHJURXSKDV EHHQ PDQDJLQJ DQ HIIHFWLYH VXSSO\ FKDLQ WKURXJKRXW WKH UHJLRQ ,W KDV VHW XS D

VRSKLVWLFDWHGPDQXIDFWXULQJDQGVWRUDJHSODQWLQ5DZDOSLQGLZLWKPXOWLSOHSURGXFWLRQXQLWV

DQG KXJH SURGXFWLRQ FDSDFLW\+DLGLUL %HYHUDJHV KDV GLIIHUHQW PDQDJHPHQW GHSDUWPHQWV

GHDOLQJZLWKVSHFLDOL]HG0DUNHWLQJ+XPDQ5HVRXUFH,QIRUPDWLRQ7HFKQRORJ\DQG6XSSO\

&KDLQ 3URFHVVHV ,Q WKLV VHFWLRQ ZH FRQGXFW D EULHI DQDO\VLV RI WKH EDVLF VXSSO\ FKDLQ

PDQDJHPHQWIXQFWLRQVRI+DLGULEHYHUDJHV

+LVWRU\RI3HSVL&R

3HSVL&R LV DZRUOG OHDGHU LQ FRQYHQLHQW VQDFNV IRRGVDQG EHYHUDJHV ZLWK UHYHQXHV RI

PRUH WKDQ ELOOLRQ DQG RYHU HPSOR\HHV 7KH FRPSDQ\ FRQVLVWV RI 3HSVL&R

$PHULFDV)RRGV3$)3HSVL&R$PHULFDV%HYHUDJHV3$%DQG3HSVL&R,QWHUQDWLRQDO3,

3$)LQFOXGHV)ULWR/D\1RUWK$PHULFD4XDNHU)RRGV1RUWK$PHULFDDQGDOO/DWLQ$PHULFD

IRRG DQG VQDFN EXVLQHVVHV LQFOXGLQJ 6DEULWDV DQG *DPHVD EXVLQHVVHV LQ0H[LFR 3$%

LQFOXGHV3HSVL&R%HYHUDJHV1RUWK$PHULFDDQGDOO/DWLQ$PHULFDQEHYHUDJHEXVLQHVVHV3,

LQFOXGHV DOO3HSVL&R EXVLQHVVHV LQ WKH 8QLWHG .LQJGRP (XURSH$VLD 0LGGOH (DVW DQG

$IULFD3HSVL&REUDQGVDUHDYDLODEOHLQQHDUO\FRXQWULHVDQGJHQHUDWHVDOHVDWWKHUHWDLO

OHYHORIPRUH WKDQELOOLRQ6RPHRI3HSVL&RVEUDQGQDPHVDUHPRUHWKDQ\HDUV

ROG EXW WKH FRUSRUDWLRQ LV UHODWLYHO\ \RXQJ 3HSVL&R ZDV IRXQGHG LQ WKURXJK WKH

PHUJHURI3HSVL&RODDQG)ULWR/D\7URSLFDQDZDVDFTXLUHGLQDQG3HSVL&RPHUJHG

ZLWK7KH4XDNHU2DWV&RPSDQ\LQFOXGLQJ*DWRUDGHLQ

3HSVL&RRIIHUVSURGXFWFKRLFHVWRPHHWDEURDGYDULHW\RIQHHGVDQGSUHIHUHQFHIURPIXQ

IRU\RXLWHPVWRSURGXFWFKRLFHVWKDWFRQWULEXWHWRKHDOWKLHUOLIHVW\OHV3HSVL&RVPLVVLRQLV

7REHWKHZRUOGVSUHPLHUFRQVXPHU3URGXFWV&RPSDQ\IRFXVHGRQFRQYHQLHQWIRRGVDQG

EHYHUDJHV :H VHHN WR SURGXFH KHDOWK\ ILQDQFLDO UHZDUGV WR LQYHVWRUV DV ZH SURYLGH

RSSRUWXQLWLHVIRU JURZWKDQGHQULFKPHQWWR RXUHPSOR\HHVRXUEXVLQHVVSDUWQHUV DQGWKH

Page 5: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 5/169

Page 6: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 6/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 6

%XVLQHVV&\FOHRI3HSVL+DLGUL%HYHUDJHV

 

Figure 1 Business Cycle of Haidri Beverages [Source: Haidri Beverages Management]

7KHEXVLQHVVF\FOHVWDUWVIURPIRUHFDVWLQJFXVWRPHUGHPDQGIRUHDFKSURGXFWRI3HSVL&R

LQGLYLGXDOO\$FFRUGLQJWRWKHGHPDQGIRUHFDVWHGE\WKHVDOHVDQGGLVWULEXWLRQGHSDUWPHQW

WKHDQQXDOSODQLVSUHSDUHGIRUWKHUXQQLQJ\HDUZKLFKLVWKHQIXUWKHUGLYLGHGLQWRTXDUWHUO\PRQWKO\ ZHHNO\ DQG GDLO\EDVLV DQGSURGXFWLRQ SODQ LV FUHDWHG )RU WKH SURGXFWLRQ WKH

FRPSDQ\QHHGVUDZPDWHULDOVWKHVHUDZPDWHULDOVLQFOXGHWKHIROORZLQJ

  3HSVL&RQFHQWUDWH  6XJDU  &DUERQDWHG:DWHU

  *ODVV%RWWOHV  3(7ERWWOHV  3ODVWLFLQ5DZ)RUP

  3DFNDJLQJPDWHULDO

  &UDWHV

Page 7: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 7/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 7

  &DQV %RWWOHFDSV DQGPDQ\RWKHUV

0XFK RI WKH UDZ PDWHULDOV DUH DFTXLUHG E\ ORFDO PDQXIDFWXUHUV +RZHYHU FDQV 3HSVLFRQFHQWUDWHJODVVERWWOHVHWFDUHSXUFKDVHGIURPPDQXIDFWXUHVWKDWDUH

  'RPHVWLFEXWDWGLVWDQWORFDWLRQ

  /RFDWHGLQ)RUHLJQFRXQWULHV1HZ<RUN'XEDL7KHSXUFKDVHGUDZPDWHULDOLVVKLIWHGLPPHGLDWHO\WRVWRUHLQKRXVHUDZPDWHULDOLQYHQWRU\

IURPZKHUHLW LVSHULRGLFDOO\LVVXHGWR WKHSURGXFWLRQGHSDUWPHQWIRUSURFHVVLQJLQRUGHUWR

FRQYHUW LW LQWR ILQDO SURGXFW $V LQ FRPSDQ\ SROLF\ WKH ILQLVKHG SURGXFW LV LPPHGLDWHO\

VKLIWHG WRGLVWULEXWRUVDQG LV VWRUHG WKHUH 2QO\ VDIHW\ OHYHO ILQLVKHGSURGXFW LQYHQWRU\ LV

PDLQWDLQHG E\WKH FRPSDQ\VR DV WRFRPSO\ZLWK ODZVHQIRUFHGE\*RYHUQPHQW WR NHHSPLQLPXPOHYHOVDIHW\LQYHQWRU\

$ 7HUULWRU\ 'HYHORSPHQW0DQDJHU RI WKH FRPSDQ\ LV GHVLJQDWHG IRU HDFK GLVWULEXWRU IRU

PRQLWRULQJIXUWKHUVDOHVWRUHWDLOHUVDQGFRQVXPHUV7KLVLVDSODFHZKHUHWKHH[DFWGHPDQG

DQGVXSSO\UDWLRLVPHDVXUHGDQGWDUJHWVDUHGHILQHG7KHGLVWULEXWRUSURGXFHVLQIRUPDWLRQ

RI DFWXDO VDOHV VXSSO\ WR WKH FXVWRPHU ZKLFK LV DQ LQSXW WR WKH FRPSDQ\ DV GHPDQG

IRUHFDVWZKLFKFRPSOHWHVWKHEXVLQHVVF\FOHRI+DLGUL%HYHUDJHV

2UJDQL]DWLRQDO:RUNIORZ

7KH ZRUNIORZ RI 3HSVL +DLGUL %HYHUDJHV VWDUWV IURP SUHSDULQJ WKH DQQXDO VDOHV DQGSURFXUHPHQWVWUDWHJ\7KLVVDOHVVWUDWHJ\LVWKHQGLYLGHGLQWRTXDUWHUVPRQWKVZHHNVDQG

GD\V2QWKHEDVLVRQPRQWKO\VDOHVD WDUJHWLVGHILQHGIRUHDFKGLVWULEXWRUDQG WKH\DUH

PDGH DZDUH RI WKDW WDUJHW 7KH GLVWULEXWRUV DFFRPSOLVKLQJ WKLV WDUJHW JHW GLVFRXQWV DQG

ERQXVHV+DLGUL%HYHUDJHVGRHVQWQHHGWRFRQWDFWGLVWULEXWRUVRUUHWDLOHUVWKHPVHOYHVVLQFH

WKH\KDYHDSUHGHILQHGQXPEHURIGLVWULEXWRUVDQGWKHQHWZRUNQHHGVQRH[SDQVLRQ(DFK

GLVWULEXWRU LV UHVSRQVLEOH IRUD VSHFLILF DUHDDQG WKH RWKHUGLVWULEXWRUVDUH QRW DOORZHG WR

HQWHULQWKLVGRPDLQ

$FFRUGLQJWRWKHGHILQHGVDOHVVWUDWHJ\WKHSURGXFWLRQSODQLVSUHSDUHGIRUWKH\HDUGLYLGHG

IXUWKHU LQWR TXDUWHUV PRQWKV ZHHNV DQG GD\V 7KH GDLO\ RU ZHHNO\ SURGXFWLRQ SODQ LV

IRUZDUGHG WR SURGXFWLRQ GHSDUWPHQW $FFRUGLQJ WR WKH SURGXFWLRQ SODQ WKH SURGXFWLRQ

GHSDUWPHQW PDNHV D SURGXFWLRQ VFKHGXOH ZKLFK LV GRQH RQ GDLO\ EDVLV 7KH SURGXFWLRQ

GHSDUWPHQW PDNHV D FRPSOHWH VNHWFK RI SURGXFWV WR EH SURGXFHG DQG WKH UHTXLUHG UDZ

PDWHULDOV DQG WKHLU TXDQWLW\ 7KHVH UDZ PDWHULDOV DUH UHTXLVLWLRQHG IURP WKH LQYHQWRU\

VWRUH7KHLQYHQWRU\FRQWUROGHSDUWPHQWLVGLYLGHGLQWRWZRDUHDVVWRUHPDQDJHPHQWDQG

ZDUHKRXVHPDQDJHPHQW 7KHVWRUHPDLQO\FRQWDLQV WKHUDZPDWHULDOZKLFK LV UHTXLUHGWR

SURGXFH WKH SURGXFW DV ZHOO DV DOO WKH RWKHU UDZ PDWHULDOV UHTXLUHG IRU RSHUDWLRQV

Page 8: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 8/169

Page 9: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 9/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 9

&XUUHQW,7,QIUDVWUXFWXUH

7KHFRPSDQ\KDVSDUWLDOO\DXWRPDWHGLWVIRXUPDMRUEXVLQHVVSURFHVVHV

  6DOHV3URFHVV  $FFRXQWLQJDQG)LQDQFH  +XPDQ5HVRXUFH

  6WRUHDQGZDUHKRXVHPDQDJHPHQW

Start

Liquidation of Sugar 

Start

PEPSI Concentrate

Carbonated Filtering Syrup Tank

Put Into the FillingMachine

Filing Process

Capping and

Coding Process

Put Bottles in Cratesthrough Machine

Filling of crates with

24 bottles

Figure 2 Production process of beverages [Source: Pepsi Haidri Beverages Production Department]

Page 10: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 10/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 10

7KHGHWDLOVRI WKHVHPRGXOHVDQGKRZWKH\KHOSLQ WKHEXVLQHVVSURFHVVHVLV SURYLGHGDV

XQGHU

  6DOHVRU6KLSPHQW0RGXOH

7KH VDOHV PRGXOH HQFDSVXODWHV DOO LQIRUPDWLRQ UHJDUGLQJ GLVWULEXWRU GDWD

PDQDJHPHQWNH\DFFRXQWVPDQDJHPHQW VDOH FDVK LQIORZDQGVKLSPHQWHWF7KH

GLVWULEXWRULQIRUPDWLRQLVFDSWXUHGZLWKUHJDUGVWRWKHDUHDLW LVFRYHULQJLQWKHORFDO

PDUNHWWKHORFDWLRQRIWKHGLVWULEXWRUQDPHFRQWDFWQXPEHUVFRQWDFWSHUVRQVHWF

.H\ DFFRXQWV DUH WKRVH UHWDLOHUV WR ZKLFK WKH FRPSDQ\ GLVWULEXWHV WKH SURGXFW

GLUHFWO\ 7KLV KDSSHQV LQ WKH FDVH RI IRXQWDLQ IUHVK 3HSVL SURGXFWV ZKLFK DUH

GHOLYHUHGWRWKHFXVWRPHUXVLQJWKHSRVWPL[F\OLQGHUVGHOLYHUHGE\FRPSDQ\RZQHG

YHKLFOHV6XFKFXVWRPHUVLQFOXGH.)&3L]]D+XW6DYRXU)RRGVDQGRWKHUV6DOHV

DUHGRQHRQFDVKSD\PHQWVZKLFKDUHGHSRVLWHGLQDGYDQFHE\WKHGLVWULEXWRU7KH

SURGXFWVDUHWKHQVKLSSHGWKHGLVWULEXWRU8VXDOO\WKHGLVWULEXWRUVEULQJDORQJWKHLURZQYHKLFOHVWRORDGWKHVKLSPHQW$WWKHWLPHRIVDOHWKHGDWDLVVDYHGLQ(53VDOHV

PRGXOHWKHILQDQFHGDWDFDVKLQIORZLVXSGDWHGDQGDUHFHLSWLVJHQHUDWHGE\WKH

V\VWHPFDOOHGVDOHVLQYRLFH

7KH V\VWHP NHHSV WUDFN RI ZKLFK GLVWULEXWRU SXUFKDVHG ZKDW TXDQWLW\ DQG WKH

IUHTXHQF\RIVDOHV FDQ DOVR EH FDSWXUHG$ GDLO\ VDOHV UHSRUW LVJHQHUDWHG E\ WKH

V\VWHPZKLFKVKRZVWKHGLVWULEXWRUXQLWVRISURGXFWSXUFKDVHGGDWHRISXUFKDVHWKH

WRWDODPRXQWDQGRWKHUNH\LQIRUPDWLRQ7KHFRPSDQ\GHILQHVDWDUJHWVDOHIRUHDFK

GLVWULEXWRUDWWKHEHJLQQLQJRIPRQWK7KLVWDUJHWLVGHILQHGRQWKHEDVLVRISUHYLRXV

VDOHV KLVWRU\ RI WKH GLVWULEXWRU ZKLFK LV PDQDJHG E\ WKH VRIWZDUH 7KH UHSRUWV

JHQHUDWHG E\ WKH V\VWHP DOVR SURYLGH WKH XVHU ZLWK WKH LQIRUPDWLRQ RI ZKDW

SHUFHQWDJHRIWKHWDUJHWKDVEHHQDFKLHYHGE\WKHGLVWULEXWRUDV\HW7KHGLVWULEXWRU

FDQEHMXGJHGRQWKLVEDVLVLIKHZLOOEHDEOHRDFKLHYHWKHVHWWDUJHWRUQRW

7KH(53V\VWHPQRWRQO\NHHSVWUDFNRIWKHSULPDU\VDOHVGRQHWRWKHGLVWULEXWRULW

DOVRFDSWXUHVWKHVHFRQGDU\VDOHGDWDSURYLGHGE\7HUULWRU\'HYHORSPHQW0DQDJHUV

7'0VWKHSHUVRQQHOGHVLJQDWHGE\WKHFRPSDQ\WRPRQLWRUWKHGLVWULEXWRUVDOHVDW

GLVWULEXWRUHQGDQGWRNHHSDFKHFNWKDWDGLVWULEXWRUGRHVQRWHQWHUWKHGRPDLQRI

DQRWKHU GLVWULEXWRU 7KH VHFRQGDU\ VDOHV GDWD FRQWDLQV LQIRUPDWLRQ UHJDUGLQJ

GLVWULEXWRUVVDOHWRUHWDLOHUVZKLFKLVUHFRUGHGLQXQLWVSHUGD\DQGGRHVQRWDFWXDOO\

FRQWDLQLQIRUPDWLRQDVWRZKLFKUHWDLOHUWKHSURGXFWZDVVROG

  )LQDQFLDO$FFRXQWLQJPRGXOH

)LQDQFLDODFFRXQWLQJPRGXOHKDVDEDVLFDQGOLPLWHGIXQFWLRQDOLW\,WKDVWZRWRWKUHH

PDLQ HQWU\ IRUPV UHJDUGLQJ LQVHUWLRQGHOHWLRQ RI DFFRXQWV FKDUW RI DFFRXQWV DQG

WUDQVDFWLRQHQWU\$Q\WUDQVDFWLRQWDNLQJSODFHLQWKHFRPSDQ\ZLOOEHUHFRUGHGKHUH

7KH LQYRLFHV SD\PHQW RU UHFHLSW LV DOVR FUHDWHG LQ WKH VDPH IRUP 7KH IRUP

Page 11: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 11/169

Page 12: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 12/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 12

,Q RUGHU WR VXSSRUW WKH (53 V\VWHP DQG QHWZRUN DV D ZKROH WKH IROORZLQJ KDUGZDUH

FRQILJXUDWLRQKDVEHHQDGRSWHGE\WKH0,6GHSDUWPHQW

y  )XOO /$1 VXSSRUW XVLQJ GRPDLQ VHUYHU VZLWFKHV ERRVWHUV DQG RWKHU QHWZRUN

HTXLSPHQW

y  ,QWHUQHWIDFLOLW\LVSURYLGHGWRDOOXVHUV

y  RUDFOH GDWDEDVH VHUYHU DSSOLFDWLRQ VHUYHU /LQX[ VHUYHU IRU QHWZRUN

PDQDJHPHQWDQGDSULQWVHUYHU

y  5HTXLVLWLRQIRUDEDFNXSGDWDEDVHVHUYHUKDVDOUHDG\EHHQSODFHG

y  7KHQHWZRUNIDFLOLWDWHVDOPRVWXVHUVDURXQGWKHRUJDQL]DWLRQ

7KHV\VWHPFROOHFWLYHO\KDVSURYHGWREHYHU\EHQHILFLDOIRUWKHHPSOR\HHVDQGPDQDJHUV

DW+DLGUL%HYHUDJHVDQGWKHHPSOR\HHVVHHPWREHVDWLVILHGRYHUWKHV\VWHPVSHUIRUPDQFH

)XUWKHU HQKDQFHPHQWV DUH GRQH DW IUHTXHQW EDVLV LQ RUGHU WR IDFLOLWDWH WKH FRPSDQ\V

PDQDJHPHQWDQGKXPDQUHVRXUFHWRSHUIRUPWKHLUWDVNVLQDPXFKEHWWHUZD\

Page 13: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 13/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 13

Chapter 2

Literature Survey

Page 14: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 14/169

Page 15: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 15/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 15

$VWKHSURGXFWEHFRPHREVROHWHPRUHLQQRYDWLRQDQGFUHDWLYLW\LVUHTXLUHGLQRUGHUWRVDWLVI\

FXVWRPHU QHHG %XW WRPHHW LQQRYDWLRQ SURILWDELOLW\ UHTXLUHVHQJLQHHULQJ7KHUH LV DJDS

EHWZHHQDFWXDODQGGHVLUHGDQGWKLVJDSZLOOOHDGWRWKHSURILWOHDNV

 

Figure 4 Product leaks [Source: Sree Hameed, 2007]

3URILWOHDNVDOVRSURYLGHWKHRSSRUWXQLW\IRUSURGXFWDQGSURFHVVLQQRYDWLRQ

3URFHVVWKHKRZ

6HYHQFRUHSURFHVVHVDUHGHVLJQVRXUFHPDNHPRYHVWRUHVHOODQGVHUYLFH0DQDJHPHQW

WDNHV GHFLVLRQ UHJDUGLQJ WR SURFHVV 7KH GHFLVLRQ EDVHG RQ WKUHH JURXSV LH VWUDWHJLF

WDFWLFDOH[HFXWLRQ

3HRSOH3DUWQHUWKHZKR

&XVWRPHUGHPDQGLQJEHWWHUIDVWHUDQGFKHDSHUZKLFKLQFUHDVHWKHSURGXFWFRPSOH[LW\DQG

WKLV OHDGV WR FRPSOH[LW\ LQ VXSSO\ FKDLQ &RPSDQLHV WU\ WR DFKLHYH IOH[LELOLW\ DQG

UHVSRQVLYHQHVV 2XWVRXUFH VRPH SURFHVV RU IXQFWLRQ WR WKH SDUWQHUV ZKR KDYH PRUH

FRPSHWHQFLHV LQ VSHFLILF DUHD3URFHVVHVDUHVKDUHGDQGFROODERUDWH DQG FRRUGLQDWHZLWK

SDUWQHUV:KHQHQYLURQPHQWLVYHU\G\QDPLFLWLVYHU\GLIILFXOWWRJRDORQH/LIHF\FOHVRI

SURGXFWV DUH VKULQNLQJ IDVWHU DV FRPSDUH WR OLIHF\FOH RI WKH DVVHWV XVHG WR SURGXFH WKH

SURGXFWWKLVZLOOOHDGWKHRUJDQL]DWLRQZKHUHWKH\KDYHYHU\OLWWOHFKRLFHDQGWKH\DUHOHVV

DGDSWLYHWRDVVHWV

Page 16: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 16/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 16

$UWLFOH6XSSO\&KDLQ0DQDJHPHQW

$XWKRU0(ULF-RKQVRQ

6&0 LV IORZ RI LQIRUPDWLRQ IXQGV DQG PDWHULDO IURP VXSSOLHU WR SURGXFHU DQG WKHQ WR

GLVWULEXWRUDQGXOWLPDWHO\WRFRQVXPHUEXWLWDOVRLQFOXGHVDIWHUVDOHVHUYLFH6&0LQYROYHVWKH FRRUGLQDWLRQ RI PDWHULDO DQG LQIRUPDWLRQ EHWZHHQ ILUPV EXW LQYHQWRU\ PDQDJHPHQW

FRRUGLQDWHVZLWKLQYHQWRULHVDWGLIIHUHQWORFDWLRQV

6&0LVIDPRXVLQUHFHQW\HDUVIRUDQXPEHURIUHDVRQV$FWLRQWDNHQE\RQHSHUVRQRIWKH

ILUPFDQLQIOXHQFHRWKHUVSURILWDELOLW\LQWKHFKDLQ%XWQRZDGD\VILUPVFRPSHWHZLWKRWKHU

VXSSO\FKDLQDVDSDUWRIVXSSO\FKDLQ6RDVDILUPVXFFHVVIXOO\VWUHDPOLQHVLWVRSHUDWLRQ

WKHQH[WVWHSIRULPSURYHPHQWLVFRRUGLQDWLRQZLWKWKHLUVXSSOLHUVDQGFXVWRPHUV

,Q WKH ,WDOLDQ SDVWD LQGXVWU\ WKH GHPDQG RI FRQVXPHU ZDV VWDEOH WKURXJKRXW WKH \HDU

KRZHYHUEHFDXVHRIWUDGHSURPRWLRQVYROXPHGLVFRXQWVORQJOHDGWLPHVDQGHQGRITXDUWHU

VDOHVLQFHQWLYHVWKHRUGHUVHHQDWWKHPDQXIDFWXUHUVDUHKLJKO\YDULDEOH+DPPRQG6RLWOHDGWKDWWRD%XOO:KLSHIIHFW

6RPHPDQDJHUVDUHPRUHLQWHUHVWHGLQLQWHJUDWLRQEXWLWLVLPSRVVLEOHWRLPSOHPHQWDV\VWHP

RULHQWHGDSSURDFK ZLWKRXW LQIRUPDWLRQ WHFKQRORJ\6XSSO\ FKDLQ VKRXOGEHYLHZHGDV DQ

LQWHJUDWHG V\VWHP)RUUHVWHU )RUUHVWHU &KDQJH LQ PDQDJHPHQW WKHRU\ DQG

WHFKQRORJ\ VHW WKH VWDJHRI VXSSO\ FKDLQPDQDJHPHQW 2QH RI WKH UHDVRQV RIFKDQJH LQ

PJPWWKHRU\PHDQVWKHVKLIWRISRZHUIURPPDQXIDFWXUHUVWRUHWDLOHUV

,QIRUPDWLRQWHFKQRORJ\DQGUHWDLOSRZHUDUHWKHNH\FDWDO\VWVLQ6&(EXVLQHVVLVSOD\LQJ

DQLPSRUWDQWUROHDQGLVIDFLOLWDWLQJWKHYLUWXDOVXSSO\FKDLQ

Page 17: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 17/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 17

Figure 5 Supply Chain Process [Source: M. Eric. Johnson (1999), Supply Chain Management]

.H\FRPSRQHQWVRIVXSSO\FKDLQPDQDJHPHQW

$FFRUGLQJWRWKHDXWKRUWKHUHDUHWZHOYHNH\FRPSRQHQWVRIDVXSSO\FKDLQPDQDJHPHQW

V\VWHP

  /RFDWLRQ  7UDQVSRUWDWLRQDQG/RJLVWLFV  ,QYHQWRU\DQGIRUHFDVWLQJ  0DUNHWLQJDQGFKDQQHOUHVWUXFWXULQJ

  6RXUFLQJDQGVXSSOLHUPDQDJHPHQW

  ,QIRUPDWLRQDQGHOHFWURQLFPHGLDWHGHQYLURQPHQWV

  3URGXFWGHVLJQDQGQHZSURGXFWLQWURGXFWLRQ  6HUYLFHDQGDIWHUVDOHVVXSSRUW  5HYHUVHORJLVWLFVDQGJUHHQLVVXHV

Page 18: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 18/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 18

 2XWVRXUFLQJDQGVWUDWHJLFDOOLDQFHV 0HWULFVDQGLQFHQWLYHV

 *OREDOLVVXHV/RFDWLRQLQFOXGHVERWKTXDOLWDWLYHDQGTXDQWLWDWLYHIDFLOLW\ORFDWLRQ7KLVLQFOXGHVPRGHOVRIIDFLOLW\ORFDWLRQJHRJUDSKLFLQIRUPDWLRQV\VWHPV*,6FRXQWU\GLIIHUHQFHVWD[HVDQGGXWLHV

WUDQVSRUWDWLRQ FRVWV DVVRFLDWHG ZLWK FHUWDLQ ORFDWLRQV DQG JRYHUQPHQW LQFHQWLYHV

+DPPRQG.HOO\ 7UDQVSRUWDWLRQDQG ORJLVWLFV LQFOXGHV DOO WKHLVVXHVZKLFK DUH

UHODWHGWRWKHIORZRIJRRGVWKURXJKWKHVXSSO\FKDLQLQFOXGLQJWUDQVSRUWDWLRQZDUHKRXVLQJ

DQG PDWHULDO KDQGOLQJ ,QYHQWRU\ DQG IRUHFDVWLQJ LQFOXGHV WUDGLWLRQDO LQYHQWRU\ DQG

IRUHFDVWLQJPRGHOV0DUNHWLQJ DQG UHVWUXFWXULQJLQFOXGHVWKHEDVLF WKLQNLQJRQWKHRQ 6&

VWUXFWXUH )LVKHUDQGLW LQFOXGHV WKHLQWHUIDFHVZLWKPDUNHWLQJ%XOOZKLSHIIHFWKDV

UHFHLYHG PDQ\ DWWHQWLRQV LQ WKH UHVHDUFK OLWHUDWXUH %XW LQFUHDVHG LQ FRQVXPHU GHPDQG

WKURXJKWKH(',DQGWKHLQWHUQHWFDQGHFUHDVHWKH%XOOZKLSHIIHFW2WKHULQLWLDWLYHVFDQDOVR

PLWLJDWHWKHEXOOZKLSHIIHFW)RUH[DPSOHFKDQJHVLQSULFLQJDQGWUDGHSURPRWLRQV%X]]HOO4XHOFK6DOPRQDQGFKDQQHOLQLWLDWLYHVVXFKDVYHQGRUPDQDJHGLQYHQWRU\90,

FRRUGLQDWHG IRUHFDVWLQJ DQG UHSOHQLVKPHQW &)$5 DQG FRQWLQXRXV UHSOHQLVKPHQW )LWHV

9HULW\:DOOHU-RKQVRQ'DYLVFDQVLJQLILFDQWO\UHGXFHGHPDQG

YDULDQFH

 

Figure 6 Typical VMI impplmentation [Source: M. Eric Jonhson (1999), Supply Chain Management]

0DUNHWLQJ IRFXVHV GRZQVWUHDP LQ WKH VXSSO\ FKDLQ ZKHUHDV VRXUFLQJ DQG VXSSO\

PDQDJHPHQW IRFXVHV RQ XSVWUHDP WR VXSSOLHUV ,QIRUPDWLRQ DQG HOHFWURQLF PHGLDWHG

Page 19: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 19/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 19

HQYLURQPHQWV IRFXVHV RQ DSSOLFDWLRQ RI ,7 WR UHGXFH LQYHQWRU\ :RROOH\ DQG WKH

H[SDQGLQJDUHDRIHFRPPHUFH%HQMDPLQ:LJDQGDQG6FKRQIHOG

7KH VDOH DQG DIWHU VDOH VXSSRUW DGGUHVVHV WKH FULWLFDO SUREOHP RI SURYLGLQJ VHUYLFH DQG

VHUYLFH SDUWV &RKHQ DQG /HH 5HYHUVH ORJLVWLFV DQG JUHHQ LVVXHV DUH HPHUJLQJ

GLPHQVLRQVRIVXSSO\FKDLQPDQDJHPHQW0DULHQ

 

Figure 7 Product recovery options [Source: M. Eric Johnson (1999), Supply Chain Management]

2XWVRXUFLQJ DQG VWUDWHJLF DOOLDQFHV VHHV WKH 6& LPSDFW RI RXWVRXUFLQJ :LWK WKH UDSLG

JURZWK LQ WKLUG SDUW\ ORJLVWLFV SURYLGHUV WKHUH LV D ODUJH DQG H[SDQGLQJ JURXS RI

WHFKQRORJLHV DQG VHUYLFHV WR EH H[DPLQHG 7KHVH LQFOXGH IDVFLQDWLQJ LQLWLDWLYHV VXFK DV

VXSSOLHUKXEVPDQDJHGE\WKLUGSDUWLHV0HWULFVDQG LQFHQWLYHV LQFOXGHRUJDQL]DWLRQDODQG

HFRQRPLFLVVXHV7KLVFDWHJRU\LQFOXGHVERWKPHDVXUHPHQWZLWKLQWKHVXSSO\FKDLQ0H\HU DQG LQGXVWU\ EHQFKPDUNLQJ )LQDO RQH LV JOREDO LVVXH ZKHQ D

FRPSDQ\RSHUDWHVLQIRUHLJQPXOWLSOHFRXQWU\:KHQDFRPSDQ\RSHUDWHVLQIRUHLJQFRXQWU\

WKHQWD[UDWHGXWLHVDQGFXUUHQF\H[FKDQJHUDWHDQGJRYWLVVXHVPDWWHUVDORW

Page 20: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 20/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 20

$UWLFOH$UWLILFLDO,QWHOOLJHQFHLQ6XSSO\&KDLQ0DQDJHPHQW7KHRU\DQG

$SSOLFDWLRQV

$XWKRU+RNH\0LQ

3XUSRVH

7KH SXUSRVH RI WKLV DUWLFOH LV WR SURPRWH WKH $, IRU LPSURYLQJ KXPDQ GHFLVLRQPDNLQJ

SURFHVVHVLQVXSSO\FKDLQPDQDJHPHQWDQGWKHRUJDQL]DWLRQSURGXFWLYLW\LQYDULRXVEXVLQHVV

DUHDV GXH WR LWV DELOLW\ IRU UHFRJQL]LQJ EXVLQHVV SRWHQWLDO DQG SDWWHUQ XVLQJ UHOHYDQW

LQIRUPDWLRQDQGDQDO\VHVGDWDDFFXUDWHO\

'HVLJQ0HWKRGRORJ\$SSURDFK

7KLV SDSHU FRYHUV WKH H[SODQDWLRQRI WKH$,EDVHG 6&0 V\VWHP 'HVSLWH LWV ZLGHVSUHDG

DFFHSWDQFH DV D GHFLVLRQ PDNLQJ WRRO $, KDV VHHQ OLPLWHG DSSOLFDWLRQ LQ VXSSO\ FKDLQ

PDQDJHPHQW 6&0 7R IXOO\ H[SODLQ WKH SRWHQWLDO EHQHILWV RI $, IRU 6&0 WKLV SDSHU

H[SORUHV YDULRXV VXEILHOGV RI $, WKDW DUH PRVW VXLWDEOH IRU VROYLQJ SUDFWLFDO SUREOHPV

UHOHYDQWWR6&07KLVDUWLFOHUHYLHZVWKHSDVWUHFRUGRIVXFFHVVLQ$,DSSOLFDWLRQVWR6&0

DQGLGHQWLILHVWKHPRVWVXLWDEOHDUHDVRI6&0LQZKLFKWRDSSO\$,

)LQGLQJV2EMHFWLYHV

7KHPDLQREMHFWLYHVRIWKLVDUWLFOHDUHWRLGHQWLI\WKHVXEILHOGVRI$,WKDWDUHPRVWVXLWDEOH

IRU 6&0 DSSOLFDWLRQV DQG WKHLU XVHIXOQHVV IRU LPSURYLQJ 6& HIILFLHQF\ DQDO\]LQJ WKH

H[LVWLQJOLWHUDWXUHGHDOLQJZLWKWKHDSSOLFDWLRQVRI$,WR6&0WRGHYHORSDWD[RQRP\IRUWKH

H[LVWLQJ $, OLWHUDWXUH DQG FDWHJRULHV LW DFFRUGLQJ WR LWV 6&0 DSSOLFDWLRQ DUHDV SUREOHPVFRSHDQGPHWKRGRORJ\WRLGHQWLI\WKHSRWHQWLDO6&0DSSOLFDWLRQDUHDVWKDWKDYHQRWEHHQ

H[SORUHGDQGGLVFXVVWKHIXWXUHWUHQGVIRU$,LQ6&0

5HYLHZ

+RNH\ 0LQ GHVFULEHG DERXW WKH UROH RI DUWLILFLDO LQWHOOLJHQFH LQ VXSSO\ FKDLQ

PDQDJHPHQWV\VWHP$,XVHFRPSXWHUVIRUUHDVRQLQJLGHQWLI\LQJEXVLQHVVSDWWHUQXVHSDVW

H[SHULHQFH IRU IRUHFDVWLQJ DQGPDNLQJ GHFLVLRQ IRU SUHVHQW SUREOHPV +RFNH\ 0LQ XVH

H[LVWLQJ OLWHUDWXUH IRU H[SODLQLQJ $, DQG LWV DSSOLFDWLRQV WKDW DUH XVHG LQ PDQ\ ILHOGV

$OWKRXJK$,LVXVHGLQPDQ\ILHOGVRIGHFLVLRQPDNLQJEXW6&0LVQRWIXOO\XVHGWKHEHQHILWV

RI$,+HFDWHJRUL]HGWKHH[LVWLQJOLWHUDWXUHLQWRWKUHHFODVVHVSUREOHPVFRSHPHWKRGRORJ\

DQGWKHLPSOHPHQWDWLRQVWDWXV+HGHVFULEHGWKHUROHRI$,LQVXEXQLWVRIVXSSO\FKDLQOLNH

,QYHQWRU\ FRQWURO DQG SODQQLQJ WUDQVSRUWDWLRQ QHWZRUN GHVLJQ 3XUFKDVLQJ DQG VXSSO\

PDQDJHPHQW 'HPDQG SODQQLQJ DQG IRUHFDVWLQJ 2UGHUSLFNLQJ SUREOHPV &XVWRPHU

UHODWLRQVKLSPDQDJHPHQW DQG HV\QFKURQL]HG6&0 6R LW LVFRQFOXGHG WKDW$, WRROVKDV

JUHDWSRWHQWLDOIRUVROYLQJPDQ\VWUDWHJLFLVVXHVLQYROYLQJ&50RXWVRXUFLQJUHODWLRQVKLSV

VWUDWHJLFDOOLDQFHVDPRQJ6&SDUWQHUV6&FRRUGLQDWLRQFROODERUDWLYHGHPDQGSODQQLQJDQG

Page 21: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 21/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 21

EXVLQHVVWREXVLQHVV QHJRWLDWLRQV $QRWKHU ILQGLQJ LV WKDW DQ DJHQWEDVHG V\VWHP KDV

HPHUJHGDVRQHRIWKHPRVWSRSXODU$,WRROVIRUWDFNOLQJYDULRXVDVSHFWVRI6&SUREOHPV

+RZHYHU $, KDV VRPH OLPLWDWLRQV OLNH $, GRHV QRW KDYH IUHH ZLOO DQG GHSHQGV RQ WKH

FRPSXWHUVRIWZDUHZKLFKPD\EHSURJUDPPHGLQFRUUHFWO\DQG$,VROXWLRQVPD\QRWEHHDV\

WRLPSOHPHQW

5HIHUHQFH

$XWKRU+RNH\0LQ

$IILOLDWLRQ 0DQDJHPHQW &ROOHJH RI %XVLQHVV $GPLQLVWUDWLRQ %RZOLQJ *UHHQ 6WDWH

8QLYHUVLW\%RZOLQJ*UHHQ2+86$

3XEOLFDWLRQ)UHTXHQF\LVVXHVSHU\HDU

3XEOLVKHGLQ,QWHUQDWLRQDO-RXUQDORI/RJLVWLFV5HVHDUFKDQG$SSOLFDWLRQV

)LUVW3XEOLVKHGRQ 0DUFK

$UWLFOH$&ROODERUDWLYH6XSSO\&KDLQ0DQDJHPHQW

3DUWWKHK\EULG.%JDSDQDO\VLVV\VWHPIRUSODQQLQJVWDJH7KH$XWKRUV

=XONLIOL 0RKDPHG8GLQ )DFXOW\ RI 7HFKQRORJ\0DQDJHPHQW8QLYHUVLWL\8WDUD0DOD\VLD.HGDK

'DUXO$PDQ0DOD\VLD

0RKDPPDG . .KDQ 6FKRRO RI (QJLQHHULQJ 'HVLJQ DQG 7HFKQRORJ\ 8QLYHUVLW\ RI %UDGIRUG

%UDGIRUG8.

0RKDPHG=DLUL6FKRRORI0DQDJHPHQW8QLYHUVLW\RI%UDGIRUG%UDGIRUG8.

3XUSRVH7KHSXUSRVH RIWKLVSDSHU LVWRSURPRWH WKHPRGHORI NQRZOHGJHEDVHG

FROODERUDWLYHVXSSO\FKDLQPDQDJHPHQW .%&6&0V\VWHPDVDQDOWHUQDWLYH VWUDWHJ\ IRU

RUJDQL]DWLRQVWRUHVROYHWKHSUREOHPVLQWKHLUFXUUHQWVXSSO\FKDLQPDQDJHPHQW6&0LQWKHHUDRIFROODERUDWLYHFRPPHUFH

'HVLJQPHWKRGRORJ\DSSURDFK7KLVSDSHUFRYHUVWKHH[SODQDWLRQRIWKH.%&6&0

V\VWHP DQG WKH XWLOL]DWLRQ RI WKH *$3 DQDO\VLV WHFKQLTXH ZKLFK LV LQWHJUDWHG LQ WKH

NQRZOHGJHEDVHG V\VWHP .%6 7KURXJK WKLV WHFKQLTXH WKH FXUUHQW SRVLWLRQ RI

RUJDQL]DWLRQVFDQEHLGHQWLILHGEHIRUHLPSOHPHQWDWLRQRIVRPHLPSURYHPHQWSURJUDPV

)LQGLQJV7KLVSDSHU KDVGHVFULEHGDK\EULG.%*$3DQDO\VLV&6&0V\VWHP IRU

DSSOLFDWLRQLQRUJDQL]DWLRQVVSHFLILFDOO\IRUPDQXIDFWXULQJHQYLURQPHQW7KHYDOLGSUDFWLFDO

DQGFRQVLVWHQWVROXWLRQVWKDWDUHSURYLGHGE\.%&6&0V\VWHPZRXOGDVVLVWRUJDQL]DWLRQVLQ

LPSOHPHQWLQJ&6&0DVDVWUDWHJ\

2ULJLQDOLW\YDOXH 7KLV SDSHU GHVFULEH WKH XVH RI .% DSSURDFK LQ WKH 6&0

HQYLURQPHQW $ V\VWHPDWLF SODQQLQJ RI &6&0 KDV QRW EHHQ GHYHORSHG EHIRUH DQG WKH

GHYHORSPHQW RI WKH .%&6&0 V\VWHP LV EHOLHYHG WR EH FUXFLDO LQ RUGHU WR LPSURYH WKH

FRPSHWLWLYHQHVVRIWKHRUJDQL]DWLRQV6&06RWKDWXVHUVFDQEHDEOHWRHDVLO\XQGHUVWDQG

WKHSRVLWLRQRIWKHLURUJDQL]DWLRQ

Page 22: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 22/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 22

5HYLHZ

8GLQNKDQ=DLULGHVFULEHVLQWKLVSDSHUWKHK\EULG.%*$3DQDO\VLV&ROODERUDWLYH6XSSO\

FKDLQPDQDJHPHQWV\VWHP IRUPDQXIDFWXULQJRUJDQL]DWLRQ.QRZOHGJHEDVHV\VWHP LVWKH

LQIRUPDWLRQV\VWHPDSSOLFDWLRQ WKRVHVXSSRUWRUJDQL]DWLRQ LQGHFLVLRQPDNLQJ7KHXVHRI

.%6 DSSOLFDWLRQ LQ WKH 6&0 LVPRVWO\ XVH LQ DUHD RI SURFXUHPHQW SXUFKDVLQJ VXSSOLHUVHOHFWLRQ DQG HYDOXDWLQJ VXSSOLHU SHUIRUPDQFH 7KH XVH RI NQRZOHGJH EDVH DSSURDFK LQ

6&0 DQG V\VWHPLF SODQQLQJ DQG GHVLJQ RI &6&0 LPSURYH WKH FRPSHWLWLYHQHVV RI

RUJDQL]DWLRQ 7KLV SDSHU SUHVHQWV WKH LGHD WR GHYHORS FROODERUDWLYH VXSSO\ FKDLQ

PDQDJHPHQW 7KLV SDSHU SURPRWHV &6&0 DV D VWUDWHJ\DQG HOLPLQDWHV GLVLQWHJUDWLRQ LQ

6XSSO\ FKDLQ &6&0 EDVHG RQ *$3 DQDO\VLV HQDEOH PDQDJHPHQW WR LGHQWLI\ ILUP

SHUIRUPDQFH,QWKLVSDSHUWKHSURGXFWLRQUXOHEDVHGW\SHRI.%6LVXVHGWRVWUXFWXUHWKH

LQIRUPDWLRQ WKDW LV JDWKHUHG IURP OLWHUDWXUH DQG IURP XVHUV $OO PRGXOHV DUH GHYHORSHG

VHSDUDWHO\ DQG LQWHJUDWHG XVLQJ SKDVH WHFKQLTXH 7UXVW DPRQJ SDUWLHV LQ 6&0

FRPPXQLFDWLRQ UHVRXUFHV VKDULQJ UHVSRQVLELOLW\ SURILW DQG ULVN VKDULQJ WHFKQRORJ\

EXVLQHVVSURFHVVHVDGMXVWPHQWDQGRWKHULVVXHVDUHWDNHQDVDEDVLFJXLGHOLQHWRGHYHORS&6&0V\VWHPLQWKLVSDSHU7KLVV\VWHPHQDEOHVXVHUVWRXVHWKHNQRZOHGJHWKDWUHVLGHLQ

WKHV\VWHP7KH*$3DQDO\VLVWHFKQLTXHXVHGLQUXOHEDVHGVWUXFWXUHVKRZWKHRUJDQL]DWLRQ

SRVLWLRQ

,QWKLVSDSHUWKHSURWRW\SHRI.%&6&0V\VWHPIRUWKHSODQQLQJVWDJHKDVEHHQGHYHORSHG

DQG WHVWHGXVLQJ DUWLILFLDO GDWD 7KUHHPRGXOHV RI SODQQLQJDUHRUJDQL]DWLRQHQYLURQPHQW

SHUVSHFWLYHPRGXOH&ROODERUDWLYHEXVLQHVVSHUFHSWLYHPRGXOHDQGH[WHUQDOLQWHUQDOFKDLQ

SHUVSHFWLYH PRGXOH ,Q RUJDQL]DWLRQ HQYLURQPHQW SHUFHSWLYH PRGXOH JDWKHU WKH JHQHUDO

LQIRUPDWLRQ OLNH FRPSDQ\ EDFNJURXQG QXPEHU RI HPSOR\HHV W\SH RI LQGXVWU\ 6&0

LQYHVWPHQW DFWLYLWLHV HWF 3XUSRVH RI WKLV PRGXOH LV WR LGHQWLI\ WKH FXUUHQW FRQGLWLRQ RI

RUJDQL]DWLRQ DQG LWV HQYLURQPHQW 7KH SXUSRVH RI FROODERUDWLYH VXSSO\ FKDLQ SHUVSHFWLYHPRGXOH LV WR VKRZ FXUUHQW PDUNHW SRVLWLRQ DQG LW KDV WUHH VXE PRGXOHV ILQDQFLDO

SHUIRUPDQFH PDUNHW DQDO\VLV DQG SURGXFW GHYHORSPHQW 3URGXFW GHYHORSPHQW SKDVH

PHDVXUHWKHLQWHUHVWRIVXSSOLHUVDQGFXVWRPHUVLQSURGXFWGHYHORSPHQWDFWLYLWLHV,QWHUQDO

H[WHUQDOFKDLQSHUVSHFWLYHPRGXOHFRQVLVW WZRVXEPRGXOHVLQWHUQDOIXQFWLRQVWUDWHJ\DQG

VXSSOLHUFXVWRPHUVWUDWHJ\7KHIXQFWLRQRIWKLVPRGXOHLVWRXQGHUVWDQGWKHFXUUHQWPDUNHW

SRVLWLRQ EDVHG RQ LQWHUQDOH[WHUQDO UHODWLRQVKLS EDVHG RQ VRPH YDULDEOHV VXFK DV

FRPPLWPHQW LQWHJUDWLRQ WUXVW GHYHORSPHQW UHODWLRQVKLS PDQDJHPHQW LQIRUPDWLRQ DQG

FRPPXQLFDWLRQDQGHWF

8GLQ=0.KDQ 0N=DLUL0 $ FROODERUDWLYH VXSSO\FKDLQPDQDJHPHQW7KH

K\EULG.%*$3DQDO\VLVV\VWHPIRUSODQQLQJVWDJH%XVLQHVV3URFHVV0DQDJHPHQWMRXUQDO9RO1R

$UWLFOH7KH,QWHUQHW(QDEOHG6XSSO\&KDLQ)URPWKH)LUVW&OLFNWRWKH

/DVW0LOH

$XWKRU'U'DYLG/$QGHUVRQ$QGHUVRQ&RQVXOWLQJ

'U+DX//HH6WDQIRUG8QLYHUVLW\

Page 23: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 23/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 23

3XUSRVH

7KHSXUSRVHRIWKLVDUWLFOHLVWRVWXG\KRZWKHLQWHUQHWKDVFKDQJHGWKHZD\LQZKLFKVXSSO\

FKDLQV DUH PDQDJHG SODQQHG DQG FRQWUROOHG 7KH DXWKRUV VWDWH WKDW WKH ZHE RIIHUV WKH

VXSSO\ FKDLQ HQRUPRXV SRWHQWLDO DQG HQWLUHO\ QHZPHWKRGV IRU VWUHDPOLQHG FRRUGLQDWLRQ

EHWZHHQ EXVLQHVV SDUWQHUV LQFOXGLQJ WKLUG DQG HYHQ IRXUWKSDUW\ SURYLGHUV 7KH DXWKRUV

IXUWKHUVWDWH WKDW FRPSDQLHVZKRZDQW WR VXFFHHG LQ WKH QHZHFRQRP\ QHHG WR HQKDQFH

FRPPXQLFDWLRQVZLWKWKHLUSDUWQHUVDQGSURYLGHUV

5HYLHZ

7KHLQWHUQHWKDVSURYLGHGFRPSDQLHVDZLGHUDQJHRIRSSRUWXQLWLHVWRFUHDWHYDOXH8VLQJ

WKHLQWHUQHWWRFRQQHFWWKHVXSSO\FKDLQV\VWHPVWRDOOWKHRWKHUVXSSO\FKDLQSDUWLFLSDQWV

EHFRPHVWKHPHGLXPWKURXJKZKLFKWKHHVVHQWLDOSURFHVVHVRIPDQDJLQJDQGV\QFKURQL]LQJ

VXSSO\FKDLQVDUHFDUULHGRXW7KHUHDVRQZK\WKHFKDQJHLQVXSSO\FKDLQVE\VKLIWLQJWKHP

RYHUWRLQWHUQHWLVVRFHUWDLQLVILUVWO\WKDWWKHFXVWRPHUVDUHORRNLQJEH\RQGFRVWDVWKH

VROHDUELWHURIYDOXH7KH\GHPDQGLQQRYDWLRQDQGSHUVRQDOL]DWLRQRIQRWRQO\WKHSURGXFWVEXWRIWKHDVVRFLDWHGYHORFLW\RIWKHVXSSO\FKDLQLVVXHVH[SRQHQWLDOO\DQG\HWDWWKHVDPH

WLPHUHTXLUHVJUHDWHUIOH[LELOLW\

+RZZLOO WKH,QWHUQHWHQDEOHGVXSSO\FKDLQEH GLIIHUHQW IURPWKHWUDGLWLRQDOVXSSO\FKDLQ"

7KH DXWKRUV EHOLHYH WKHUH DUH VRPH NH\ DUHDV WKDW GLVWLQJXLVK WKH QHZ ,QWHUQHWHQDEOHG

VXSSO\FKDLQIURPWKHWUDGLWLRQDOVXSSO\FKDLQ7KHVHDUHDVDQGLVVXHVDUHGLVFXVVHGE\WKH

DXWKRUVDVIROORZV

H'HVLJQ3URGXFW,QQRYDWLRQRQWKH:HE

7KHDXWKRUVKDYHLGHQWLILHGWKHIROORZLQJNH\EHQHILWVRIDQH6&0

y  6KRUWHUWLPHWRPDUNHWHQDEOHGE\FROODERUDWLYHGHVLJQ  

y  ,QWHUQHWHQDEOHG WHFKQRORJ\ SURYLGHV UHDOWLPH OLQNDJHV EHWZHHQ NH\ VXSSOLHUV

PDQXIDFWXUHUVHQJLQHHUVDQGPDUNHWHUV  

y  7KHDELOLW\WRFRQGXFWFROODERUDWLYHGHVLJQPHDQVWKDWFRPSDQLHVFDQLWHUDWHPDQ\

PRUHGHVLJQDOWHUQDWLYHVZLWKVXSSOLHUV 

y  3URGXFWXSJUDGHV FDQ DOVR EHDFKLHYHGPRUHHIIRUWOHVVO\ DQG LQ D WLPHO\PDQQHU

HQDEOLQJFRPSDQLHVWRVWD\DKHDGRIWKHLUFRPSHWLWLRQ 

y  7KHUHYHQXHDQGSURILWLPSDFWVDUHHQRUPRXV  

y  (QKDQFHG FRPPXQLFDWLRQ DQG FROODERUDWLYH SURFHVVHV RYHUFRPH PDQ\ RI WKH

RUJDQL]DWLRQVLORLVVXHVIDFHGLQWUDGLWLRQDOVHTXHQWLDOO\RULHQWHGGHVLJQDFWLYLW\ 

y  3URGXFWVFDQEHUROOHGRXWIDVWHU  

y  7KHULVNVRIFXVWRPHUQHHGVVKLIWLQJGXULQJGHYHORSPHQWDUHPLWLJDWHG 

y  ,QFUHDVHG FROODERUDWLRQ WKURXJKRXW WKH GHVLJQ SURFHVV FDQ PLQLPL]H SURGXFW

FRPSOH[LWLHV WKDW ODWHU GULYH VXSSO\ FKDLQ LQHIILFLHQFLHV DQG FRVWV LQ SURGXFWLRQ

ORJLVWLFVDQGVHUYLFHSDUWV 

Page 24: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 24/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 24

Figure 8 E-Design of SCM [Source: D.L. Anderson, 2000] 

H0HGLDULHVDQG([FKDQJHV8VLQJ2QOLQH0DUNHWVWR5HYROXWLRQL]H%X\LQJDQG

6HOOLQJ

7KHPDUNHWSODFH DFFRUGLQJ WR WKHDXWKRUV LVEHLQJ UHLQYHQWHG&RPSDQLHVFDQQRZ EX\

DQGVHOODFURVVDZLGHVSHFWUXPRIHPHUJLQJ,QWHUQHWHQDEOHGPDUNHWSODFHV/LNHWUDGLWLRQDO

PDUNHWSODFHV WUDGLQJQHWZRUNVPD\ WDNHPDQ\ IRUPV ,Q WKHVXSSOLHUFHQWULFPRGHO OLNH

:: *UDLQJHU VHOOHUV SURYLGH WKHLU FDWDORJV RQOLQH IRU DOO EX\HUV WR DFFHVV *OREDO

FRPSDQLHVOLNH%3$PRFRDUHXWLOL]LQJWKHEX\HUFHQWULFPRGHOWRGLVSOD\WKHLUQHHGVRQOLQH

DQGDOORZYHQGRUVWRPDNHELGV

7KH ODWHVW GHYHORSPHQW LV RQOLQH PDUNHWSODFHV WKH EXVLQHVVWREXVLQHVV HTXLYDOHQW RI

H%D\7KHVHPDUNHWSODFHVDUHOLNHRQOLQHED]DDUVZKHUHDQ\RQHFDQEX\RUVHOODOOW\SHVRIJRRGV DQG VHUYLFHV (DFK RI WKHVH YDULRXV H[FKDQJHV SURYLGHV FRPSDQLHV ZLWK XQLTXH

RSSRUWXQLWLHV WR WDS LQWR SHUIRUPDQFH DQG FRVW EHQHILWV XQDYDLODEOH SULRU WR WKH ,QWHUQHW

5HJDUGOHVV RI WKH W\SH RI PDUNHWSODFH WKH EHQHILWV DUH PDQ\ ORZHU SURGXFW DFTXLVLWLRQ

FRVWV ORZHUSURFXUHPHQWWUDQVDFWLRQFRVWVWKHDELOLW\ WR WDSLQWR DOPRVWXQOLPLWHGVXSSO\

VRXUFHVWRUHVSRQGWRFKDQJLQJPDUNHWQHHGVDQGDPHDQVWRSURILWDEO\GLVSRVHRIXQXVHG

H[FHVVLQYHQWRU\

5HIHUHQFHV

$QGHUVRQ'//HH+/,QWHUQHW(QDEOHG6XSSO\&KDLQ)URPWKH)LUVW&OLFNWR

WKH/DVW0LOH$FVHWYRO>RQOLQH@$YDLODEOHDWKWWSZZZDVFHWFRPGRFXPHQWVDVS"GB,'

Page 25: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 25/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 25

Chapter 3

An Introduction to Supply

Chain & Supply Chain

Management

Page 26: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 26/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 26

&KDSWHU

$Q,QWURGXFWLRQWR6XSSO\&KDLQ

6XSSO\&KDLQ0DQDJHPHQW

8SWLOOUHFHQWO\FRPSDQLHVGLGQRWWKLQN LQWHUPVRIVXSSO\FKDLQVEXWYLHZHGWKHPVHOYHV

DQGWKHLUWUDGLQJSDUWQHUVDVLQGHSHQGHQWLVODQGV6HOOHUVDWWLPHVVWUXJJOHGWRNHHSXSZLWK

GHPDQGZKLOH EX\HUVSXUFKDVHGJRRGV IRUZKLFKWKH\ FRXOGSD\EDUWHURUREWDLQFUHGLW

(FRQRPLF DQG FRPSHWLWLYH SUHVVXUHV HYHQWXDOO\ IRUFHG FRPSDQLHV WR WKLQN LQ WHUPV RI

VXSSO\ FKDLQV IRU WKH SURGXFWLRQ DQG GHOLYHU\ RI JRRGV )RU WKLV UHDVRQ WKH PDWHULDO RUSK\VLFDOVXSSO\FKDLQZDVERUQ

:LWK WKH DGYDQFHPHQW RI EXVLQHVV SURFHVVHV VXSSO\ FKDLQ JDLQHG PRUH DQG PRUH

LPSRUWDQFH IRU HDFK PHPEHU RI EXVLQHVV FRPPXQLW\ LQFOXGLQJ PDQXIDFWXUHUV UHWDLOHUV

VXSSOLHUV VXSSOLHUV VXSSOLHUV DQG HYHQ FRQVXPHU6WUDWHJLHVZHUH GHYHORSHG LQRUGHU WR

DFFHOHUDWHSURGXFWVDOHVDQGGLVWULEXWLRQ:LWKWKHH[SDQVLRQRIVDOHVIURPDUHDVWRFLWLHV

DQGFLWLHVWRFRXQWULHVWKHQHHGDURVHIRUSURSHUWUDFNLQJRIGHPDQGDQGVXSSO\DVZHOODV

IRUHFDVWLQJRIPDWHULDOVVXSSOLHVVDOHV DQG GLVWULEXWLRQVFKHPDV$IWHU WKHHPHUJHQFHRI

,QIRUPDWLRQ7HFKQRORJ\DQGEXVLQHVVJOREDOL]DWLRQWKHFRQFHSWRILQWHJUDWHGVXSSO\FKDLQ

PDQDJHPHQWZDVUHYROXWLRQL]HG ,QIRUPDWLRQWHFKQRORJ\FRQVLVWVRI WKHWRROVXVHGWRJDLQ

DZDUHQHVV RI LQIRUPDWLRQ DQDO\]H WKLV LQIRUPDWLRQ DQG H[HFXWH RQ LW WR LQFUHDVH WKHSHUIRUPDQFHRIWKHVXSSO\FKDLQ

:KDW,VD6XSSO\&KDLQ"

$VXSSO\FKDLQFRQVLVWVRIDOOSDUWLHVLQYROYHGGLUHFWO\RULQGLUHFWO\LQIXOILOOLQJDFXVWRPHU

UHTXHVW 7KH VXSSO\ FKDLQ LQFOXGHV QRW RQO\ WKH PDQXIDFWXUHU DQG VXSSOLHUV EXW DOVR

WUDQVSRUWHUV ZDUHKRXVHV UHWDLOHUV DQG HYHQ FXVWRPHUV WKHPVHOYHV :LWKLQ HDFK

RUJDQL]DWLRQ VXFK D PDQXIDFWXUHU WKH VXSSO\ FKDLQ LQFOXGHV DOO IXQFWLRQV LQYROYHG LQ

UHFHLYLQJDQGIXOILOOLQJDFXVWRPHUUHTXHVW7KHVHIXQFWLRQVLQFOXGHEXWDUHQRW OLPLWHGWR

QHZSURGXFWGHYHORSPHQWPDUNHWLQJRSHUDWLRQVGLVWULEXWLRQILQDQFHDQGFXVWRPHUVHUYLFH

6XSSO\ FKDLQ DFWLYLWLHV WUDQVIRUPQDWXUDO UHVRXUFHV UDZPDWHULDOV DQG FRPSRQHQWV LQWRD

ILQLVKHG SURGXFW WKDW LV GHOLYHUHG WR WKH HQG FXVWRPHU ,Q VRSKLVWLFDWHG VXSSO\ FKDLQ

V\VWHPVXVHGSURGXFWVPD\UHHQWHUWKHVXSSO\FKDLQDWDQ\SRLQWZKHUHUHVLGXDOYDOXH LV

UHF\FODEOH$W\SLFDOVXSSO\FKDLQEHJLQVZLWKHFRORJLFDODQGELRORJLFDOUHJXODWLRQRIQDWXUDO

UHVRXUFHVIROORZHGE\WKHKXPDQH[WUDFWLRQRIUDZPDWHULDODQGLQFOXGHVVHYHUDOSURGXFWLRQ

OLQNV IRU LQVWDQFH FRPSRQHQW FRQVWUXFWLRQ DVVHPEO\ DQG PHUJLQJ EHIRUH PRYLQJ RQWR

Page 27: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 27/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 27

VHYHUDO OD\HUV RI VWRUDJH IDFLOLWLHV RI HYHU GHFUHDVLQJ VL]H DQG HYHU PRUH UHPRWH

JHRJUDSKLFDOORFDWLRQVDQGILQDOO\UHDFKLQJWKHFRQVXPHU

 

Figure 9 Information, Funds, and Product flow in SCM [Source:

http://dspace.mit.edu/bitstream/handle/1721.1/39816/ESD-260JFall2003/OcwWeb/Engineering-Systems-

Division/ESD-260JFall2003/CourseHome/index.htm]

&RQVLGHUDFXVWRPHUZDONLQJLQWRD:DO0DUWVWRUHWRSXUFKDVHGHWHUJHQW7KHVXSSO\FKDLQ

EHJLQVZLWKWKHFXVWRPHUDQGKLVRUKHUQHHGIRUGHWHUJHQW7KHQH[WVWDJHRIWKLVVXSSO\

FKDLQLVWKH:DO0DUWUHWDLOVWRUHWKDWWKHFXVWRPHUYLVLWV:DO0DUWVWRFNVLWVVKHOYHVXVLQJ

LQYHQWRU\ WKDWPD\ KDYH EHHQVXSSOLHG IURPD ILQLVKHGJRRGVZDUHKRXVHRUD GLVWULEXWRU

XVLQJWUXFNVVXSSOLHGE\DWKLUGSDUW\7KHGLVWULEXWRULQWXUQLVVWRFNHGE\WKHPDQXIDFWXUHUVD\3URFWRU*DPEOH >3*@ LQ WKLVFDVH 7KH 3*PDQXIDFWXULQJ SODQW UHFHLYHV UDZ

PDWHULDOIURPDYDULHW\RIVXSSOLHUVZKRPD\WKHPVHOYHVKDYHEHHQVXSSOLHGE\ORZHUWLHU

VXSSOLHUV )RU H[DPSOH SDFNDJLQJ PDWHULDO PD\ FRPH IURP 7HQQHFR SDFNDJLQJ ZKLOH

7HQQHFR UHFHLYHV UDZ PDWHULDO WR PDQXIDFWXUH WKH SDFNDJLQJ IURP RWKHU VXSSOLHU 7KLV

VXSSO\FKDLQLVLOOXVWUDWHGDVIROORZV

Page 28: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 28/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 28

Figure 10 Wal-Mart SCM Process [Source: Supply Chain Management System by Sunil Chopra &Pete

Meindl]

$VXSSO\FKDLQLVG\QDPLFDQGLQYROYHVWKHFRQVWDQWIORZRILQIRUPDWLRQSURGXFWDQGIXQGV

EHWZHHQGLIIHUHQWVWDJHV,QWKHDERYHH[DPSOH:DO0DUWSURYLGHVWKHSURGXFWDVZHOODV

SULFLQJDQGDYDLODELOLW\ LQIRUPDWLRQ WRWKHFXVWRPHU7KHFXVWRPHUWUDQVIHUVIXQGVWR:DO

0DUW :DO0DUW FRQYH\V SRLQWRIVDOHV GDWD DV ZHOO DV UHSOHQLVKPHQW RUGHUV WR WKH

ZDUHKRXVHRUGLVWULEXWRUZKRWUDQVIHUVWKHUHSOHQLVKPHQWRUGHUYLDWUXFNVEDFNWRWKHVWRUH

:DO0DUW WUDQVIHUV IXQGV WR WKH GLVWULEXWRU DIWHU WKH UHSOHQLVKPHQW 7KH GLVWULEXWRU DOVR

SURYLGHVSULFLQJLQIRUPDWLRQDQGVHQGVGHOLYHU\VFKHGXOHWR:DO0DUW:DO0DUWPD\VHQG

EDFNSDFNDJLQJPDWHULDOWREHUHF\FOHG6LPLODULQIRUPDWLRQPDWHULDODQGIXQGIORZVWDNHSODFHDFURVVWKHHQWLUHVXSSO\FKDLQ

$W\SLFDOVXSSO\FKDLQPD\LQYROYHDYDULHW\RIVWDJHV7KHVHVXSSO\FKDLQVWDJHVLQFOXGH

-  &XVWRPHUV

-  5HWDLOHUV

-  :KROHVDOHUGLVWULEXWRUV

-  0DQXIDFWXUHUV

-  &RPSRQHQWUDZPDWHULDOVXSSOLHUV

(DFK VWDJH LQDVXSSO\FKDLQ LVFRQQHFWHG WKURXJK WKHIORZRISURGXFWV LQIRUPDWLRQ DQG

IXQGV7KHVHIORZVRIWHQRFFXULQERWKGLUHFWLRQVDQGPD\EHPDQDJHGE\RQHRIWKHVWDJHV

RU DQ LQWHUPHGLDU\ (DFK VWDJH QHHG QRW EH SUHVHQW LQ D VXSSO\ FKDLQ 7KH DSSURSULDWH

Page 29: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 29/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 29

GHVLJQRI VXSSO\ FKDLQGHSHQGV RQ WKH FXVWRPHUVQHHGVDQG WKH UROHV SOD\HGE\ VWDJHV

LQYROYHG

7KH2EMHFWLYHRID6XSSO\&KDLQ

7KHREMHFWLYHRIHYHU\VXSSO\FKDLQVKRXOGEHWRPD[LPL]HWKHRYHUDOOYDOXHJHQHUDWHG7KHYDOXHDVXSSO\FKDLQJHQHUDWHGLVWKHGLIIHUHQFHEHWZHHQZKDWWKHILQDOSURGXFWLVZRUWKWR

WKH FXVWRPHU DQG WKH FRVWV WKH VXSSO\ FKDLQ LQFXUV LQ ILOOLQJ WKH FXVWRPHUV UHTXHVW )RU

PRVW FRPPHUFLDO VXSSO\ FKDLQV YDOXH ZLOO EH VWURQJO\ FRUUHODWHG ZLWK VXSSO\ FKDLQ

SURILWDELOLW\ DOVR NQRZQ DV VXSSO\ FKDLQ VXUSOXV WKH GLIIHUHQFH EHWZHHQ WKH UHYHQXH

JHQHUDWHG IURP WKH FXVWRPHUDQG WKH RYHUDOO FRVW DFURVV WKH VXSSO\ FKDLQ 6XSSO\ FKDLQ

SURILWDELOLW\ RU VXUSOXV LV WKH WRWDO SURILW WREH VKDUHGDFURVV DOO VXSSO\ FKDLQ VWDJHV DQG

LQWHUPHGLDULHV7KHKLJKHUWKHVXSSO\FKDLQSURILWDELOLW\WKHPRUHVXFFHVVIXOLV WKHVXSSO\

FKDLQ6XSSO\FKDLQVXFFHVVVKRXOGEHPHDVXUHGLQ WHUPVRIVXSSO\FKDLQSURILWDELOLW\DQG

QRWLQWHUPVRISURILWVDWDQLQGLYLGXDOVWDJH

0DQ\RIWKHH[FKDQJHVHQFRXQWHUHGLQWKHVXSSO\FKDLQZLOOWKHUHIRUHEHEHWZHHQGLIIHUHQW

FRPSDQLHVZKRZLOOVHHNWRPD[LPL]HWKHLUUHYHQXHZLWKLQWKHLUVSKHUHRILQWHUHVWEXWPD\

KDYHOLWWOHRUQRNQRZOHGJHRULQWHUHVWLQWKHUHPDLQLQJSOD\HUVLQWKHVXSSO\FKDLQ0RUH

UHFHQWO\ WKH ORRVHO\ FRXSOHG VHOIRUJDQL]LQJ QHWZRUN RI EXVLQHVVHV WKDW FRRSHUDWHV WR

SURYLGHSURGXFWDQGVHUYLFHRIIHULQJVKDVEHHQFDOOHGWKH([WHQGHG(QWHUSULVH

6XSSO\&KDLQ0DQDJHPHQW6&0

6XSSO\ &KDLQ 0DQDJHPHQW 6&0 LV WKH PDQDJHPHQW RI D QHWZRUN RI LQWHUFRQQHFWHG

EXVLQHVVHVLQYROYHGLQ WKHXOWLPDWHSURYLVLRQRISURGXFWDQGVHUYLFHSDFNDJHVUHTXLUHGE\

HQG FXVWRPHUV 6XSSO\ &KDLQ 0DQDJHPHQW VSDQV DOO PRYHPHQW DQG VWRUDJH RI UDZPDWHULDOV ZRUNLQSURFHVV LQYHQWRU\ DQG ILQLVKHG JRRGV IURP SRLQWRIRULJLQ WR SRLQWRI

FRQVXPSWLRQ ,QRWKHUZRUGV6&0LVD FURVVIXQFWLRQDO LQWHUHQWHUSULVHV\VWHPWKDW XVHV

LQIRUPDWLRQWHFKQRORJ\WRKHOSVXSSRUWDQGPDQDJHOLQNVEHWZHHQVRPHRIDFRPSDQ\VNH\

EXVLQHVVSURFHVVHVDQGWKRVHRILWVVXSSOLHUVFXVWRPHUVDQGEXVLQHVVSDUWQHUV

6XSSO\ FKDLQPDQDJHPHQW KDV JHQHUDWHGPXFK LQWHUHVW LQ UHFHQW \HDUV IRU D QXPEHU RI

UHDVRQV0DQ\PDQDJHUVQRZ UHDOL]H WKDW DFWLRQV WDNHQE\RQHPHPEHURI WKHFKDLQFDQ

LQIOXHQFHWKHSURILWDELOLW\RIDOORWKHUVLQWKHFKDLQ)LUPVDUHLQFUHDVLQJO\WKLQNLQJLQWHUPV

RIFRPSHWLQJDVSDUWRIDVXSSO\FKDLQDJDLQVWRWKHUVXSSO\FKDLQVUDWKHUWKDQDVLQJOHILUP

DJDLQVWRWKHU LQGLYLGXDO ILUPV$OVR DV ILUPV VXFFHVVIXOO\ VWUHDPOLQH WKHLU RSHUDWLRQV WKHQH[W RSSRUWXQLW\ IRU LPSURYHPHQW LV WKURXJK EHWWHU FRRUGLQDWLRQZLWK WKHLU VXSSOLHUV DQG

FXVWRPHUV7KHFRVWRISRRUFRRUGLQDWLRQFDQEHUHDOO\KLJK7KHILJXUHEHORZLOOXVWUDWHVDQ

H[DPSOHRIDVXSSO\FKDLQQHWZRUNDQGKRZFORVHO\HDFKSDUWQHULVOLQNHGWRRQHDQRWKHULQ

RUGHUWRIXOILOOWKHGHPDQGDQGVXSSO\SURFHVV

Page 30: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 30/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 30

Figure 11 An example of SCM Process

*RDORI6XSSO\&KDLQ0DQDJHPHQW

*RDO RI6&0 LV WRHIILFLHQWO\PDQDJH SURFHVV ELIXUFDWLQJ GHPDQG FRQWUROOLQJ LQYHQWRU\

HQKDQFLQJWKHQHWZRUNRI EXVLQHVV UHODWLRQVKLSVDFRPSDQ\KDVZLWKFXVWRPHUVXSSOLHUV

GLVWULEXWRUVDQG RWKHUV DQG UHFHLYLQJ IHHGEDFNRQ WKH VWDWXV RIHYHU\ OLQN LQ WKH VXSSO\FKDLQ 7KH JRDO RI 6&0 LV WR FUHDWH D IDVW HIILFLHQW DQG ORZ FRVW QHWZRUN RI EXVLQHVV

UHODWLRQVKLSVRUVXSSO\FKDLQWRJHWDFRPSDQ\VSURGXFWVIURPFRQFHSWWRPDUNHW

6XSSO\&KDLQ0DQDJHPHQWLVRQHRIWKHPRVWLPSRUWDQWVWUDWHJLFDVSHFWVRIDQ\EXVLQHVV

HQWHUSULVH'HFLVLRQVPXVWEHPDGHDERXWKRZWRFRRUGLQDWHWKHSURGXFWLRQRIJRRGVDQG

VHUYLFHV KRZ DQG ZKHUH WR VWRUH LQYHQWRU\ ZKRP WR EX\ PDWHULDOV IURP DQG KRZ WR

GLVWULEXWHWKHPLQWKHPRVWFRVWHIIHFWLYHWLPHO\PDQQHU

7KH%XOOZKLS(IIHFW

,Q WKH ,WDOLDQ SDVWD LQGXVWU\ FRQVXPHU GHPDQG LV TXLWH VWHDG\ WKURXJKRXW WKH \HDU

+RZHYHUEHFDXVHRI WUDGHSURPRWLRQVYROXPHGLVFRXQWV ORQJOHDGWLPHV IXOO\WUXFNORDG

GLVFRXQWV DQG HQGRITXDUWHU VDOHV LQFHQWLYHV WKH RUGHUV VHHQ DW WKH PDQXIDFWXUHUV DUH

KLJKO\ YDULDEOH ,Q IDFW WKH YDULDELOLW\ LQFUHDVHV LQ PRYLQJ XS WKH VXSSO\ FKDLQ IURP

Page 31: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 31/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 31

FRQVXPHU WR JURFHU\ VWRUH WR GLVWULEXWLRQ FHQWHU WR FHQWUDO ZDUHKRXVH WR IDFWRU\ D

SKHQRPHQRQWKDWLVRIWHQFDOOHGEXOOZKLSHIIHFW

 

Figure 12Bullwhip Effect in Supply Chain [Source: http://knowscm.blogspot.com/2008/02/bullwhip-effect-in-

supply-chain.html]

7KH FRVWV RI WKLV YDULDELOLW\ DUH KLJK LQHIILFLHQW XVH RI SURGXFWLRQ DQG ZDUHKRXVH

UHVRXUFHV KLJK WUDQVSRUWDWLRQ FRVWV KLJK LQYHQWRU\ FRVWV WR QDPH D IHZ $FHU ,QF

VDFULILFHGPLOOLRQLQSURILWVE\SD\LQJPLOOLRQIRUDLUIUHLJKWWRNHHSXSZLWKVXUJLQJ

GHPDQGDQGWKHQSD\LQJPLOOLRQPRUHODWHUZKHQWKDWLQYHQWRU\EHFDPHREVROHWH7KH

EXOOZKLS HIIHFW SKHQRPHQRQ KDV EHHQ REVHUYHG LQPDQ\ GLIIHUHQW LQGXVWULHV DQG RFFXUV

ZKHQHYHUGHPDQGXQFHUWDLQWLHVDQGYDULDELOLW\EHFRPHPDJQLILHGDWHDFKOLQNLQWKHVXSSO\

FKDLQ,WVRQHRIWKHPRVWLPSRUWDQWFDXVHVRILQHIILFLHQF\LQDVXSSO\FKDLQ

 

Figure 13 Bullwhip Effect in supply chain [Source: http://knowscm.blogspot.com/2008/02/bullwhip-effect-in-

supply-chain.html]

Order Quantity

Manufacturers Orders to Supplier Wholesalers Orders

to Manufacturer

Retailers Orders to Wholesaler

Page 32: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 32/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 32

6XSSO\&KDLQ,QIUDVWUXFWXUH

7KHVXSSO\FKDLQLQYROYHVERWKLQWHUQDODQGH[WHUQDOVXSSO\FKDLQRSHUDWLRQV7KHVXSSOLHUV

DQGFXVWRPHUVERWKDUH LQWHUOLQNHGWR WKHPDQXIDFWXULQJRUJDQL]DWLRQ7KHLQWHUQDOVXSSO\

FKDLQ LQYROYHVVHTXHQWLDO OLQNVRI WKHSXUFKDVLQJSURGXFWLRQ DQGGLVWULEXWLRQGHSDUWPHQW

7KHSXUFKDVHVGHSDUWPHQWRIDFRPSDQ\LVGLUHFWO\OLQNHGWRWKHVXSSOLHUVRIWKDWFRPSDQ\WR SXUFKDVH PDWHULDOV LV UDZ VHPLILQLVKHG RU ILQLVKHG IRUP $IWHU WKHVH PDWHULDOV DUH

SXUFKDVHG WKH\ DUH SDVVHG RQ WR WKH SURGXFWLRQ GHSDUWPHQW WR FRYHUW WKLVPDWHULDO LQWR

ILQLVKHG SURGXFW 7KLV ILQLVKHG SURGXFW LV IRUZDUGHG WR GLVWULEXWLRQ GHSDUWPHQW IRU WKH

GLVWULEXWLRQRIILQLVKHGJRRGVWRUHWDLOHUVDQGXOWLPDWHO\WRWKHFXVWRPHUV

 

Figure 14 Supply Chain Process [Source:

http://en.wikipedia.org/wiki/File:A_company%27s_supply_chain_(en).png]

([WHQGHG6XSSO\&KDLQ

7KH H[WHQGHG VXSSO\ FKDLQ LV D FOHYHUZD\ RI GHVFULELQJ HYHU\RQHZKR FRQWULEXWHV WR D

SURGXFW 6R LI \RXPDNH WH[W ERRNV WKHQ \RXU H[WHQGHG VXSSO\ FKDLQZRXOG LQFOXGH WKH

IDFWRULHVZKHUHWKHERRNVDUHSULQWHGDQGERXQGEXWDOVRWKHFRPSDQ\WKDWVHOOV\RXWKH

SDSHUWKHPLOOZKHUHWKDWVXSSOLHUEX\VWKHLUVWRFNDQGVRRQ,WLVLPSRUWDQWWRNHHSWUDFN

RIZKDWLVKDSSHQLQJLQ\RXUH[WHQGHGVXSSO\FKDLQEHFDXVHZLWKDVXSSOLHURUDVXSSOLHUV

VXSSOLHUFRXOGHQGXSKDYLQJDQ LPSDFWRQ\RXDV WKHROGVD\LQJJRHVD FKDLQLVRQO\D

VWURQJDV LWVZHDNHVW OLQN)RUH[DPSOHD ILUHLQ DSDSHUPLOOPLJKWFDXVH WKH WH[WERRN

PDQXIDFWXUHUVSDSHUVXSSOLHUWRUXQRXWRILQYHQWRU\,IWKHWH[WERRNFRPSDQ\NQRZVZKDW

LVKDSSHQLQJLQLWVH[WHQGHGVXSSO\FKDLQLWFDQILQGDQRWKHUSDSHUYHQGRU

&RQVLGHUDW\SLFDOPDQXIDFWXUHU7KHVXSSO\FKDLQLVPDGHXSRIPDQ\LQWHUUHODWHGILUPVDV

VKRZQLQWKHILJXUHEHORZ7KHUHDUHSDUWVXSSOLHUVFRPSRQHQWVXSSOLHUVDQGVXEDVVHPEO\

VXSSOLHUV)XUWKHUXS WKHFKDLQDUHWKHVXSSOLHUV VXSSOLHUV ILQDOO\ UHDFKLQJ UDZPDWHULDOV

VXSSOLHUVDWWKHWRSRIWKHFKDLQ*RLQJGRZQVWUHDPEDFNWKURXJKWKHSURGXFLQJILUPWKH

Page 33: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 33/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 33

VXSSO\FKDLQFRQWLQXHVWKURXJKWKHZDUHKRXVLQJDQGGLVWULEXWLRQFKDQQHOVDQGWKHQWKURXJK

WKHUHWDLOFKDQQHOVHQGLQJZLWKWKHFRQVXPHU

 

Figure 15 A Systematic diagram of extended supply chain

7KHVXSSO\FKDLQHQFRPSDVVHVDOODFWLYLWLHVDVVRFLDWHGZLWKWKHIORZDQGWUDQVIRUPDWLRQRI

JRRGVDQGVHUYLFHVIURPWKHUDZPDWHULDOVWDJHDWRQHHQGRIWKHVXSSO\FKDLQWKURXJKWRWKHFRQVXPHUDWWKHRWKHUHQGRIWKHFKDLQLQFOXGLQJDOODVVRFLDWHGLQIRUPDWLRQIORZV

%DVLF&RPSRQHQWVRI6XSSO\&KDLQ0DQDJHPHQW

7KHIROORZLQJDUHILYHEDVLFFRPSRQHQWVRI6&0

Page 34: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 34/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 34

  3ODQ7KLVLVWKHVWUDWHJLFSRUWLRQRI6&0<RXQHHGDVWUDWHJ\IRUPDQDJLQJDOOWKH

UHVRXUFHVWKDWJRWRZDUGPHHWLQJFXVWRPHUGHPDQGIRU\RXUSURGXFWRUVHUYLFH$ELJ

SLHFHRISODQQLQJLVGHYHORSLQJDVHWRIPHWULFVWRPRQLWRUWKHVXSSO\FKDLQVRWKDWLWLV

HIILFLHQWFRVWVOHVVDQGGHOLYHUVKLJKTXDOLW\DQGYDOXHWRFXVWRPHUV

  6RXUFH &KRRVHWKH VXSSOLHUVWKDWZLOOGHOLYHU WKHJRRGVDQGVHUYLFHV \RXQHHGWRFUHDWH \RXUSURGXFW'HYHORS D VHW RI SULFLQJ GHOLYHU\DQGSD\PHQW SURFHVVHVZLWK

VXSSOLHUVDQGFUHDWHPHWULFVIRUPRQLWRULQJDQGLPSURYLQJWKHUHODWLRQVKLSV$QGSXW

WRJHWKHUSURFHVVHVIRUPDQDJLQJWKHLQYHQWRU\RIJRRGVDQGVHUYLFHV\RXUHFHLYHIURP

VXSSOLHUV LQFOXGLQJ UHFHLYLQJ VKLSPHQWV YHULI\LQJ WKHP WUDQVIHUULQJ WKHP WR \RXU

PDQXIDFWXULQJIDFLOLWLHVDQGDXWKRUL]LQJVXSSOLHUSD\PHQWV

 

Figure 16 The Five Components of Supply Chain Process

  0DNH 7KLV LV WKH PDQXIDFWXULQJ VWHS 6FKHGXOH WKH DFWLYLWLHV QHFHVVDU\ IRU

SURGXFWLRQ WHVWLQJ SDFNDJLQJ DQG SUHSDUDWLRQ IRU GHOLYHU\ $V WKH PRVW PHWULF

LQWHQVLYH SRUWLRQRI WKHVXSSO\ FKDLQPHDVXUHTXDOLW\ OHYHOV SURGXFWLRQRXWSXW DQG

ZRUNHUSURGXFWLYLW\

  'HOLYHU7KLVLVWKHSDUWWKDWPDQ\LQVLGHUVUHIHUWRDVORJLVWLFV&RRUGLQDWHWKHUHFHLSW

RI RUGHUV IURP FXVWRPHUV GHYHORS D QHWZRUN RI ZDUHKRXVHV SLFN FDUULHUV WR JHW

SURGXFWVWRFXVWRPHUVDQGVHWXSDQLQYRLFLQJV\VWHPWRUHFHLYHSD\PHQWV

  5HWXUQ 7KH SUREOHP SDUW RI WKH VXSSO\ FKDLQ &UHDWH D QHWZRUN IRU UHFHLYLQJ

GHIHFWLYH DQG H[FHVVSURGXFWV EDFN IURPFXVWRPHUV DQG VXSSRUWLQJ FXVWRPHUV ZKR

KDYHSUREOHPVZLWKGHOLYHUHGSURGXFWV

Page 35: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 35/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 35

6&0)ORZV

6XSSO\FKDLQPDQDJHPHQWIORZVFDQEHGLYLGHGLQWRWKUHHPDLQIORZV

  7KH3URGXFW)ORZ

,W LQFOXGHV WKH PRYHPHQW RI JRRGV IURP D VXSSOLHU WR D FXVWRPHU DV ZHOO DV DQ\FXVWRPHUUHWXUQVRUVHUYLFHQHHGV

  7KH,QIRUPDWLRQ)ORZ

,WLQYROYHVWUDQVPLWWLQJRUGHUVDQGXSGDWLQJWKHVWDWXVRIGHOLYHU\

  7KH)LQDQFHV)ORZ

,W FRQVLVWV RI FUHGLW WHUPV SD\PHQW VFKHGXOHV DQG FRQVLJQPHQW DQG WLWOH RZQHUVKLS

DUUDQJHPHQWV

,I WKH JRDO RI 6&0 LV WR SURYLGH KLJK SURGXFW DYDLODELOLW\ WKURXJK HIILFLHQW DQG WLPHO\IXOILOOPHQWRIFXVWRPHUGHPDQGWKHQKRZLVWKHJRDODFFRPSOLVKHG"

 

Figure 17 A view of different flows in a supply chain [Source: http://www.careersinsupplychain.org/what-is-

scm/flows.asp]

2EYLRXVO\ \RX QHHGHIIHFWLYH IORZV RI SURGXFWV IURP WKH SRLQW RI RULJLQ WR WKH SRLQW RI

FRQVXPSWLRQ%XWWKHUHVPRUHWRLW&RQVLGHUWKHGLDJUDPRIWKHIUHVKIRRGVXSSO\FKDLQ$

WZRZD\IORZRILQIRUPDWLRQDQGGDWDEHWZHHQWKHVXSSO\FKDLQSDUWLFLSDQWVFUHDWHVYLVLELOLW\

Page 36: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 36/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 36

RIGHPDQGDQGIDVWGHWHFWLRQRISUREOHPV%RWKDUHQHHGHGE\VXSSO\FKDLQPDQDJHUVWR

PDNHJRRGGHFLVLRQVUHJDUGLQJZKDWWREX\PDNHDQGPRYH

2WKHUIORZVDUHDOVRLPSRUWDQW,QWKHLUUROHVDVVXSSOLHUVFRPSDQLHVKDYHDYHVWHGLQWHUHVW

LQILQDQFLDOIORZV$V\RXFDQXQGHUVWDQGVXSSOLHUVZDQWWRJHWSDLGIRUWKHLUSURGXFWVDQG

VHUYLFHVDVVRRQDVSRVVLEOHDQGZLWKPLQLPDOKDVVOH6RPHWLPHV LW LVDOVRQHFHVVDU\ WRPRYHSURGXFWVEDFNWKURXJKWKHVXSSO\FKDLQIRUUHWXUQVUHSDLUVUHF\FOLQJRUGLVSRVDO

7KH,PSRUWDQFHRI6XSSO\&KDLQ'HFLVLRQV

7KHUH LV D FORVH FRQQHFWLRQ EHWZHHQ WKH GHVLJQ DQGPDQDJHPHQW RI VXSSO\ FKDLQ IORZV

SURGXFW LQIRUPDWLRQ DQG IXQGV DQG WKH VXFFHVV RI D VXSSO\ FKDLQ :DO0DUW 'HOO

&RPSXWHUDQG6HYHQ(OHYHQ-DSDQDUHH[DPSOHVRIFRPSDQLHVWKDWKDYHEXLOWWKHLUVXFFHVV

RQVXSHULRUGHVLJQSODQQLQJDQGRSHUDWLRQRIWKHLUVXSSO\FKDLQ,QFRQWUDVWWKHIDLOXUHRI

PDQ\HEXVLQHVVHVVXFKDV:HEYDQFDQEHDWWULEXWHGLQZHDNQHVVHV LQWKHLUVXSSO\FKDLQ

GHVLJQDQGSODQQLQJ

:DO0DUWKDVEHHQDOHDGHUDWXVLQJVXSSO\FKDLQGHVLJQSODQQLQJDQGRSHUDWLRQWRDFKLHYH

VXFFHVV)URPLWVEHJLQQLQJWKHFRPSDQ\LQYHVWHGKHDYLO\LQWUDQVSRUWDWLRQDQGLQIRUPDWLRQ

LQIUDVWUXFWXUHWRIDFLOLWDWHWKHHIIHFWLYHIORZRIJRRGVDQGLQIRUPDWLRQ:DO0DUWGHVLJQHGLWV

VXSSO\ FKDLQ ZLWK FOXVWHUV RI VWRUHV DURXQG GLVWULEXWLRQ FHQWHUV WR IDFLOLWDWH IUHTXHQW

UHSOHQLVKPHQWDWLWVUHWDLOVWRUHVLQDFRVWHIIHFWLYHPDQQHU)UHTXHQWUHSOHQLVKPHQWDOORZV

VWRUHV WRPDWFK VXSSO\ DQGGHPDQGPRUHHIIHFWLYHO\ WKDQ WKHFRPSHWLWLRQ:DO0DUWKDV

EHHQD OHDGHULQVKDULQJLQIRUPDWLRQDQGFROODERUDWLQJZLWK VXSSOLHUVWREULQJGRZQFRVWV

DQGLPSURYHSURGXFWDYDLODELOLW\7KHUHVXOWVDUHLPSUHVVLYH,QWKHLUDQQXDOUHSRUWWKH

FRPSDQ\UHSRUWHGDQHWLQFRPHRIPRUHWKDQELOOLRQRQUHYHQXHVRIDERXWELOOLRQ

7KHVH DUH GUDPDWLFUHVXOWV IRU DFRPSDQ\ WKDW UHDFKHGDQQXDO VDOHV RIRQO\ ELOOLRQ LQ

7KHJURZWKLQVDOHVUHSUHVHQWVDQDQQXDOFRPSRXQGHGJURZWKUDWHRISHUFHQW

'HFLVLRQ3KDVHVLQD6XSSO\&KDLQ

6XFFHVVIXO VXSSO\ FKDLQ PDQDJHPHQW UHTXLUHV PDQ\ GHFLVLRQV UHODWLQJ WR WKH IORZ RI

LQIRUPDWLRQ SURGXFW DQG IXQGV(DFK GHFLVLRQVKRXOGEHPDGH WR UDLVH WKHVXSSO\FKDLQ

SURILWDELOLW\ 7KHVH GHFLVLRQV IDOO LQWR WKUHH FDWHJRULHV RI SKDVHV GHSHQGLQJ RQ WKH

IUHTXHQF\RIHDFKGHFLVLRQDQGWKHWLPHIUDPHGXULQJZKLFKDGHFLVLRQSKDVHKDVDQLPSDFW$VDUHVXOWHDFKFDWHJRU\RIGHFLVLRQVPXVWFRQVLGHUXQFHUWDLQW\RYHUWKHGHFLVLRQKRUL]RQ

  6XSSO\&KDLQ6WUDWHJ\RU'HVLJQ

'XULQJWKLVSKDVHJLYHQWKHPDUNHWLQJDQGSULFLQJSODQVIRUDSURGXFWDFRPSDQ\

GHFLGHVKRZWRVWUXFWXUHWKHVXSSO\FKDLQRYHUWKHQH[WVHYHUDO\HDUV,WGHFLGHVZKDW

Page 37: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 37/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 37

WKHFKDLQVFRQILJXUDWLRQZLOOEHKRZUHVRXUFHVZLOOEHDOORFDWHGDQGZKDWSURFHVVHV

HDFKVWDJHZLOOSHUIRUP

6WUDWHJLFGHFLVLRQVPDGHE\FRPSDQLHV LQFOXGHZKHWKHU WRRXWVRXUFHRUSHUIRUP D

VXSSO\ FKDLQ IXQFWLRQ LQKRXVH WKH ORFDWLRQ DQG FDSDFLWLHV RI SURGXFWLRQ DQG

ZDUHKRXVLQJ IDFLOLWLHV WKH SURGXFWV WR EH PDQXIDFWXUHG RU VWRUHG DW YDULRXVORFDWLRQV DQG WKH PRGHV RI WUDQVSRUWDWLRQ WR EH PDGH DYDLODEOH DORQJ GLIIHUHQW

VKLSSLQJOHJVDQGWKHW\SHRILQIRUPDWLRQV\VWHPWREHXWLOL]HG

$ ILUP PXVW HQVXUH WKDW WKH VXSSO\ FKDLQ FRQILJXUDWLRQ VXSSRUWV LWV VWUDWHJLF

REMHFWLYHVDQGLQFUHDVHVVXSSO\FKDLQSURILWDELOLW\GXULQJWKLVSKDVH)RUH[DPSOHD

FRPSDQ\VGHFLVLRQVUHJDUGLQJLWVFKRLFHRIVXSSO\VRXUFHVIRUFRPSRQHQWVFRQWUDFW

PDQXIDFWXUHUV IRUPDQXIDFWXULQJDQG WKHORFDWLRQDQGFDSDFLW\RI LWVZDUHKRXVHV

DUHDOOVXSSO\FKDLQGHVLJQRUVWUDWHJLFGHFLVLRQV6XSSO\FKDLQGHVLJQGHFLVLRQVDUH

W\SLFDOO\ PDGH IRU ORQJWHUP DQG DUH YHU\ H[SHQVLYH WR DOWHU RQ VKRUW QRWLFH

&RQVHTXHQWO\ZKHQFRPSDQLHVPDGHWKHVHGHFLVLRQV WKH\PXVW WDNH LQWRDFFRXQWWKHXQFHUWDLQW\LQDQWLFLSDWHGPDUNHWFRQGLWLRQVRYHUWKHQH[WIHZ\HDUV

'HFLVLRQVPDGHGXULQJWKLVSKDVHLQFOXGH

-  6WUDWHJLF QHWZRUN RSWLPL]DWLRQ LQFOXGLQJ WKH QXPEHU ORFDWLRQ DQG VL]H RI

ZDUHKRXVHVGLVWULEXWLRQFHQWHUVDQGIDFLOLWLHV

-  6WUDWHJLF SDUWQHUVKLS ZLWK VXSSOLHUV GLVWULEXWRUV DQG FXVWRPHUV FUHDWLQJ

FRPPXQLFDWLRQ FKDQQHOV IRU FULWLFDO LQIRUPDWLRQ DQG RSHUDWLRQDO LPSURYHPHQWV

VXFKDVFURVVGRFNLQJGLUHFWVKLSSLQJDQGWKLUGSDUW\ORJLVWLFV

-  3URGXFWGHVLJQFRRUGLQDWLRQVRWKDWQHZDQGH[LVWLQJSURGXFWVFDQEHRSWLPDOO\

LQWHJUDWHGLQWRWKHVXSSO\FKDLQORDGPDQDJHPHQW

-  ,QIRUPDWLRQ7HFKQRORJ\LQIUDVWUXFWXUHWRVXSSRUWVXSSO\FKDLQRSHUDWLRQV

-  :KHUHWRPDNHDQGZKDWWRPDNHRUEX\GHFLVLRQV

-  $OLJQLQJRYHUDOORUJDQL]DWLRQDOVWUDWHJ\ZLWKVXSSO\VWUDWHJ\

Page 38: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 38/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 38

 

Figure 18 Hierarchy of Supply Chain Decisions [Source: http://www.eil.utoronto.ca/profiles/rune/node5.html]

  6XSSO\&KDLQ3ODQQLQJ

)RUGHFLVLRQVPDGH GXULQJ WKLVSKDVH WKH WLPH IUDPH FRQVLGHUHG LVD TXDUWHU WRD

\HDU7KHUHIRUHWKHVXSSO\FKDLQVFRQILJXUDWLRQGHWHUPLQHGLQWKHVWUDWHJLFSKDVHLV

IL[HG7KLVFRQILJXUDWLRQHVWDEOLVKHVFRQVWUDLQWVZLWKLQZKLFKSODQQLQJPXVWEHGRQH

7KH JRDO RI SODQQLQJ LV WR PD[LPL]H WKH VXSSO\ FKDLQ SURILWDELOLW\ WKDW FDQ EH

JHQHUDWHG RYHU WKH SODQQLQJ KRUL]RQ JLYHQ WKH FRQVWUDLQWV HVWDEOLVKHV GXULQJ WKH

VWUDWHJLFRUGHVLJQSKDVH&RPSDQLHVVWDUWWKHSODQQLQJSKDVHZLWKDIRUHFDVWIRUWKH

FRPLQJ\HDURUDFRPSDUDEOHWLPHIUDPHRIGHPDQGLQGLIIHUHQWPDUNHWV

3ODQQLQJ LQFOXGHVPDNLQJGHFLVLRQVUHJDUGLQJZKLFKPDUNHWVZLOOEHVXSSOLHGIURPZKLFK ORFDWLRQV WKH VXEFRQWUDFWLQJ RI PDQXIDFWXULQJ WKH LQYHQWRU\ SROLFLHV WREH

IROORZHG DQG WKH WLPLQJ DQG VL]H RI PDUNHWLQJ DQG SULFH SURPRWLRQV 3ODQQLQJ

HVWDEOLVKHV SDUDPHWHUVZLWKLQ ZKLFK D VXSSO\ FKDLQZLOO IXQFWLRQ RYHU D VSHFLILHG

SHULRGRIWLH

,Q WKH SODQQLQJ SKDVH FRPSDQLHVPXVW LQFOXGH XQFHUWDLQW\ LQ GHPDQG H[FKDQJH

UDWHVDQGFRPSHWLWLRQRYHUWKLVWLPHKRUL]RQLQWKHLUGHFLVLRQV*LYHQDVKRUWHUWLPH

IUDPHDQGEHWWHUIRUHFDVWVWKDQWKHGHVLJQSKDVHFRPSDQLHVLQ WKHSODQQLQJSKDVH

WU\WRLQFRUSRUDWHDQ\IOH[LELOLW\EXLOWLQWRWKHVXSSO\FKDLQLQWKHGHVLJQSKDVHDQG

H[SORLW LW WRRSWLPL]H SHUIRUPDQFH$V D UHVXOW RI WKH SODQQLQJ SKDVH FRPSDQLHVGHILQHDVHWRIRSHUDWLQJSROLFLHVWKDWJRYHUQVKRUWWHUPRSHUDWLRQV

'HFLVLRQVPDGHGXULQJWKLVSKDVHLQFOXGH

-  6RXUFLQJFRQWUDFWVDQGRWKHUSXUFKDVLQJGHFLVLRQV

-  3URGXFWLRQ GHFLVLRQV LQFOXGLQJ FRQWUDFWLQJ VFKHGXOLQJ DQG SODQQLQJ SURFHVV

GHILQLWLRQ

Page 39: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 39/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 39

-  ,QYHQWRU\GHFLVLRQVLQFOXGLQJTXDQWLW\ORFDWLRQDQGTXDOLW\RILQYHQWRU\

-  7UDQVSRUWDWLRQVWUDWHJ\LQFOXGLQJIUHTXHQF\URXWHVDQGFRQWUDFWLQJ

-  %HQFKPDUNLQJ RIDOO RSHUDWLRQVDJDLQVWFRPSHWLWRUVDQG LPSOHPHQWDWLRQRIEHVW

SUDFWLFHVWKURXJKRXWWKHHQWHUSULVH

-  0LOHVWRQHSD\PHQWV

-  )RFXVRQFXVWRPHUGHPDQG

  6XSSO\&KDLQ2SHUDWLRQV

7KH WLPHKRUL]RQ KHUH LVZHHNO\RUGDLO\ DQG GXULQJ WKLVSKDVH FRPSDQLHVPDNH

GHFLVLRQV UHJDUGLQJ FXVWRPHU RUGHUV $W WKH RSHUDWLRQDO OHYHO VXSSO\ FKDLQ

FRQILJXUDWLRQLVFRQVLGHUHGIL[HGDQGSODQQLQJSROLFLHVDUHDOUHDG\GHILQHG7KHJRDO

RIVXSSO\FKDLQRSHUDWLRQVLVWRKDQGOHLQFRPLQJFXVWRPHURUGHUVLQWKHEHVWSRVVLEOH

PDQQHU 'XULQJ WKLV SKDVH ILUPV DOORFDWH LQYHQWRU\ RU SURGXFWLRQ WR LQGLYLGXDO

FXVWRPHU RUGHUV VHW D GDWH WKDW DQ RUGHU LV WR EH ILOOHG JHQHUDWH SLFN OLVWV DW D

ZDUHKRXVH DOORFDWH DQ RUGHU WR D SDUWLFXODU VKLSSLQJ PRGH DQG VKLSPHQW VHWGHOLYHU\VFKHGXOHVRI WUXFNVDQG SODFH UHSOHQLVKPHQWRUGHUV%HFDXVH RSHUDWLRQDO

GHFLVLRQVDUHEHLQJPDGHLQWKHVKRUWWHUPPLQXWHVKRXUVRUGD\VWKHUHLVDOHVV

XQFHUWDLQW\ DERXW GHPDQG LQIRUPDWLRQ JLYHQ WKH FRQVWUDLQWV HVWDEOLVKHG E\ WKH

FRQILJXUDWLRQ DQG SODQQLQJ SROLFLHV WKH JRDO GXULQJ WKH RSHUDWLRQDO SKDVH LV WR

H[SORLWWKHUHGXFWLRQRIXQFHUWDLQW\DQGRSWLPL]HSHUIRUPDQFH

'HFLVLRQVPDGHGXULQJWKLVSKDVHLQFOXGH

-  'DLO\SURGXFWLRQDQGGLVWULEXWLRQSODQQLQJLQFOXGLQJDOOQRGHVLQWKHVXSSO\FKDLQ

- 3URGXFWLRQVFKHGXOLQJIRUHDFKPDQXIDFWXULQJIDFLOLW\LQWKHVXSSO\FKDLQPLQXWHE\PLQXWH

-  'HPDQG SODQQLQJ DQG IRUHFDVWLQJ FRRUGLQDWLQJ WKH GHPDQG IRUHFDVW RI DOO

FXVWRPHUVDQGVKDULQJWKHIRUHFDVWZLWKDOOVXSSOLHUV

-  6RXUFLQJ SODQQLQJ LQFOXGLQJ FXUUHQW LQYHQWRU\ DQG IRUHFDVW GHPDQG LQ

FROODERUDWLRQZLWKDOOVXSSOLHUV

-  ,QERXQG RSHUDWLRQV LQFOXGLQJ WUDQVSRUWDWLRQ IURP VXSSOLHUV DQG UHFHLYLQJ

LQYHQWRU\

-  3URGXFWLRQ RSHUDWLRQV LQFOXGLQJ WKH FRQVXPSWLRQ RI PDWHULDOV DQG IORZ RI

ILQLVKHGJRRGV

- 2XWERXQG RSHUDWLRQV LQFOXGLQJ DOO IXOILOOPHQW DFWLYLWLHV DQG WUDQVSRUWDWLRQ WRFXVWRPHUV

-  2UGHUSURPLVLQJDFFRXQWLQJIRUDOOFRQVWUDLQWVLQ WKHVXSSO\FKDLQLQFOXGLQJDOO

VXSSOLHUVPDQXIDFWXULQJIDFLOLWLHVGLVWULEXWLRQFHQWHUVDQGRWKHUFXVWRPHUV

7KH GHVLJQ SODQQLQJ DQG RSHUDWLRQ RI D VXSSO\ FKDLQ KDYH D VWURQJ LPSDFW RQ RYHUDOO

SURILWDELOLW\DQGVXFFHVV,WLVIDLUWKDWDODUJHSDUWRIWKHVXFFHVVRIDILUPFDQEHDWWULEXWHG

WRWKHLUHIIHFWLYHVXSSO\FKDLQGHVLJQSODQQLQJDQGRSHUDWLRQ

Page 40: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 40/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 40

3URFHVV9LHZVRID6XSSO\&KDLQ

$VXSSO\FKDLQLV DVHTXHQFHRI SURFHVVHVDQG IORZV WKDW WDNHSODFHZLWKLQDQGEHWZHHQ

GLIIHUHQWVWDJHVDQGFRPELQHWRILOO DFXVWRPHUQHHGIRUD SURGXFW7KHUHDUHILYHGLIIHUHQW

VWDJHVZKLFKDUHWKHSDUWLFLSDQWVRID VXSSO\FKDLQ WKDW LVFXVWRPHUUHWDLOHUGLVWULEXWRU

PDQXIDFWXUHUDQGVXSSOLHU7KHUHDUHWZRGLIIHUHQWZD\VWRYLHZWKHSURFHVVHVSHUIRUPHGLQDVXSSO\FKDLQ

  &\FOH9LHZ7KHSURFHVVHVLQDVXSSO\FKDLQDUHGLYLGHGLQWRDVHULHVRIF\FOHVHDFKSHUIRUPHGDW WKHLQWHUIDFHEHWZHHQWZRVXFFHVVLYHVWDJHVRIDVXSSO\FKDLQ*LYHQ

WKHILYHVWDJHVRIDVXSSO\FKDLQDOOVXSSO\FKDLQSURFHVVHVFDQEHEURNHQGRZQLQWR

WKHIROORZLQJIRXUSURFHVVF\FOHV

D  &XVWRPHURUGHUF\FOH

E  5HSOHQLVKPHQWF\FOH

F  0DQXIDFWXULQJF\FOH

G  3URFXUHPHQWF\FOH

(DFK F\FOH RFFXUV DW WKH LQWHUIDFH EHWZHHQ WZR VXFFHVVLYH VWDJHV RI WKH VXSSO\FKDLQ7KHILYHVWDJHVWKXVUHVXOWLQIRXUVXSSO\FKDLQSURFHVVF\FOHV)RUH[DPSOH

ZKHQFXVWRPHUVVKRSRQOLQHDW$PD]RQWKH\DUHSDUWRIWKHFXVWRPHURUGHUF\FOH

ZLWK WKH FXVWRPHU DV WKH EX\HU DQG $PD]RQ DV WKH VXSSOLHU ,Q FRQWUDVW ZKHQ

$PD]RQRUGHUV ERRNV IURPDGLVWULEXWRUWR UHSOHQLVK LWV LQYHQWRU\ LW LVSDUWRI WKH

UHSOHQLVKPHQWF\FOHZLWK$PD]RQDVWKHEX\HUDQGWKHGLVWULEXWRUDVWKHVXSSOLHU

 

Manufacturing Cycle

Replenishment Cycle

Procurement Cycle

Customer Order Cycle

Customer

Retailer

Distributor

Manufacturer

Supplier

Page 41: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 41/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 41

:LWKLQ HDFK F\FOH WKH JRDO RI WKH EX\HU LV WR HQVXUH SURGXFW DYDLODELOLW\ DQG WR

DFKLHYHHFRQRPLHVRIVFDOH LQRUGHULQJ7KHVXSSOLHUDWWHPSWVWRIRUHFDVWFXVWRPHU

RUGHUVDQGUHGXFHWKHFRVWRIUHFHLYLQJWKHRUGHU7KHVXSSOLHUWKHQZRUNVWRILOOWKH

RUGHURQWLPHDQGLPSURYHHIILFLHQF\DQGDFFXUDF\RIWKHRUGHUIXOILOOPHQWSURFHVV

7KHEX\HUWKHQZRUNVWRUHGXFHWKHFRVWRIWKHUHFHLYLQJSURFHVV5HYHUVHIORZVDUH

PDQDJHGWRUHGXFHFRVWDQGPHHWHQYLURQPHQWDOREMHFWLYHV

$F\FOHYLHZRIWKHVXSSO\FKDLQFOHDUO\GHILQHVWKHSURFHVVHVLQYROYHGDQGRZQHUV

RIHDFK SURFHVV 7KLV YLHZ LV YHU\ XVHIXO ZKHQ FRQVLGHULQJRSHUDWLRQDO GHFLVLRQV

EHFDXVHLWVSHFLILHVWKHUROHVDQGUHVSRQVLELOLWLHVRIHDFKPHPEHURIWKHVXSSO\FKDLQ

DQGWKHGHVLUHGRXWFRPHIRUHDFKSURFHVV

  3XVK3XOO9LHZ

$OOSURFHVVHVLQDVXSSO\FKDLQIDOOLQWRRQHRIWKHWZRFDWHJRULHVGHSHQGLQJXSRQWKH

WLPLQJ RI WKHLU H[HFXWLRQ UHODWLYH WR HQG FXVWRPHU GHPDQG :LWK SXOO SURFHVVHV

H[HFXWLRQLVLQLWLDWHGLQUHVSRQVHWRDFXVWRPHURUGHU:LWKSXVKSURFHVVHVH[HFXWLRQLVLQLWLDWHG LQDQWLFLSDWLRQRIFXVWRPHURUGHUV 7KHUHIRUHDW WKHWLPHRIH[HFXWLRQ RISXOO

SURFHVVFXVWRPHUGHPDQGLVNQRZQZLWKFHUWDLQW\ZKHUHDVDWWKHWLPHRIH[HFXWLRQRID

SXVKSURFHVVGHPDQGLVQRWNQRZQDQGPXVWEHIRUHFDVWHG3XOOSURFHVVHVPD\DOVREH

UHIHUUHG WR DV UHDFWLYH SURFHVVHV EHFDXVH WKH\ UHDFW WR FXVWRPHU GHPDQG 3XVK

SURFHVVHVPD\ DOVR EH UHIHUUHG WRDV VSHFXODWLYH SURFHVVHV EHFDXVH WKH\ UHVSRQG WR

VSHFXODWHGIRUHFDVWHGUDWKHUWKDQDFWXDOGHPDQG7KHSXVKSXOOYLHZLVYHU\LPSRUWDQW

ZKHQFRQVLGHULQJVWUDWHJLFGHFLVLRQVUHODWLQJWRVXSSO\FKDLQGHVLJQ

6XSSO\&KDLQ0DFUR3URFHVVHVLQD)LUP

$OO VXSSO\FKDLQSURFHVVHVGLVFXVVHG LQ WKH WZRSURFHVVYLHZV FDQ EH FODVVLILHG LQWR WKH

IROORZLQJWKUHHPDFURSURFHVVHV

  &XVWRPHU 5HODWLRQVKLS 0DQDJHPHQW &50 $OO SURFHVVHV WKDW IRFXV RQ WKH

LQWHUIDFHEHWZHHQWKHILUPDQGLWVFXVWRPHUV

  ,QWHUQDO6XSSO\ &KDLQ0DQDJHPHQW ,6&0$OOSURFHVVHV WKDW DUH LQWHUQDO WR WKH

ILUP

  6XSSOLHU5HODWLRQVKLS0DQDJHPHQW650$OOSURFHVVHVWKDWIRFXVRQWKHLQWHUIDFH

EHWZHHQWKHILUPDQGLWVVXSSOLHUV7KHWKUHHPDFURSURFHVVHVPDQDJHWKHIORZRILQIRUPDWLRQSURGXFWDQGIXQGVUHTXLUHGWR

JHQHUDWHUHFHLYHDQGIXOILOODFXVWRPHUUHTXHVW

&500DFUR3URFHVV

Page 42: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 42/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 42

7KH&50PDFURSURFHVVDLPVWRJHQHUDWHFXVWRPHUGHPDQGDQGIDFLOLWDWHWKHSODFHPHQW

DQG WUDFNLQJ RI RUGHUV ,W LQFOXGHV SURFHVVHV VXFK DV PDUNHWLQJ SULFLQJ VDOHV RUGHU

PDQDJHPHQW DQG FDOO FHQWHU PDQDJHPHQW $W DQ LQGXVWULDO GLVWULEXWRU &50 SURFHVVHV

LQFOXGHWKHSUHSDUDWLRQRIFDWDORJVDQGRWKHUPDUNHWLQJPDWHULDOVPDQDJHPHQWRIWKH:HE

VLWHDQGPDQDJHPHQWRIWKHFDOOFHQWHUWKDWWDNHVRUGHUDQGSURYLGHVVHUYLFHV

,6&00DFURSURFHVV

7KH,6&0PDFURSURFHVVDLPVWRIXOILOOGHPDQGJHQHUDWHGE\WKH&50SURFHVVLQDWLPHO\

PDQQHU DQG DW ORZHVW SRVVLEOH FRVW ,6&0 SURFHVVHV LQFOXGH WKH SODQQLQJ RI LQWHUQDO

SURGXFWLRQDQGVWRUDJHFDSDFLW\SUHSDUDWLRQRIGHPDQGDQGVXSSO\SODQVDQGIXOILOOPHQWRI

DFWXDORUGHUV

6500DFUR3URFHVV

7KH650PDFURSURFHVVDLPWRDUUDQJHDQGPDQDJHVXSSO\VRXUFHVIRUYDULRXVJRRGVDQG

VHUYLFHV650SURFHVVHV LQFOXGH WKHHYDOXDWLRQDQGVHOHFWLRQRI VXSSOLHUV QHJRWLDWLRQRI

VXSSO\WHUPVDQGFRPPXQLFDWLRQUHJDUGLQJQHZSURGXFWVDQGRUGHUVZLWKVXSSOLHUV

$OO WKUHHVXSSO\FKDLQPDFURSURFHVVHVDQGWKHLUFRPSRQHQWSURFHVVHVDUHVKRZQ LQ WKH

ILJXUHEHORZ

 

Figure 19 SCM Macro Processes [Source: Copra S., Meindl P., Supply Chain Management]

)RU DVXSSO\FKDLQ WREH VXFFHVVIXO LW LVFUXFLDO WKDW WKH WKUHHPDFUR SURFHVVHVDUHZHOO

LQWHJUDWHG7KHRUJDQL]DWLRQDOVWUXFWXUHRIWKHILUPKDVDVWURQJLQIOXHQFHRQWKHVXFFHVVRU

IDLOXUHRIWKH LQWHJUDWLRQHIIRUW ,QPDQ\ ILUPVPDUNHWLQJ LVLQ FKDUJHRIWKH&50PDFUR

SURFHVV PDQXIDFWXULQJ KDQGOHV WKH ,6&0 PDFUR SURFHVV DQG SXUFKDVLQJ RYHUVHHV WKH

650PDFUR SURFHVV ZLWK YHU\ OLWWOH FRPPXQLFDWLRQ DPRQJ WKHP ,W LV QRW XQXVXDO IRU

6XSSOLHU &RPSDQ\ &XVWRPHU

Page 43: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 43/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 43

PDUNHWLQJDQGPDQXIDFWXULQJWRKDYHWZRGLIIHUHQWIRUHFDVWVZKHQPDNLQJWKHLUSODQV7KLV

ODFNRILQWHJUDWLRQKXUWVWKHVXSSO\FKDLQVDELOLW\WRPDWFKVXSSO\DQGGHPDQGHIIHFWLYHO\

OHDGLQJ WR GLVVDWLVILHG FXVWRPHUV DQG KLJK FRVWV )LUPV VKRXOG VWUXFWXUH D VXSSO\ FKDLQ

RUJDQL]DWLRQ WKDW PLUURUV WKH PDFUR SURFHVVHV DQG HQVXUHV JRRG FRPPXQLFDWLRQ DQG

FRRUGLQDWLRQDPRQJWKHRZQHUVRISURFHVVHVWKDWLQWHUDFWZLWKHDFKRWKHU

'ULYHUVRI6XSSO\&KDLQSHUIRUPDQFH

6XFFHVVDQGSURILWDELOLW\LQDVXSSO\FKDLQUHTXLUHVWKDWDFRPSDQ\VVXSSO\FKDLQDFKLHYH

WKH EDODQFH EHWZHHQ UHVSRQVLYHQHVV DQG HIILFLHQF\ WKDW EHVW PHHWV WKH QHHGV RI WKH

FRPSDQ\VFRPSHWLWLYHVWUDWHJ\7RXQGHUVWDQGKRZDFRPSDQ\FDQLPSURYHVXSSO\FKDLQ

SHUIRUPDQFHLQWHUPVRIUHVSRQVLYHQHVVDQGHIILFLHQF\ZHPXVWH[DPLQHWKHORJLVWLFDODQG

FURVVIXQFWLRQDO GULYHUV RI VXSSO\ FKDLQ SHUIRUPDQFH IDFLOLWLHV LQYHQWRU\ WUDQVSRUWDWLRQ

LQIRUPDWLRQ VRXUFLQJ DQGSULFLQJ7KHVHGULYHUV LQWHUDFWZLWKHDFKRWKHU WRGHWHUPLQH WKH

VXSSO\ FKDLQ SHUIRUPDQFH LQ WHUPV RI UHVSRQVLYHQHVV DQG HIILFLHQF\ $V D UHVXOW WKH

VWUXFWXUHRIWKHVHGULYHUVGHWHUPLQHVLIDQGKRZVWUDWHJLFILWLVDFKLHYHGDFURVVWKHVXSSO\FKDLQ

)DFLOLWLHV

)DFLOLWLHV DUH WKH DFWXDO SK\VLFDO ORFDWLRQ LQ WKH VXSSO\ FKDLQ QHWZRUNZKHUH SURGXFW LV

VWRUHGDVVHPEOHGRUIDEULFDWHG7KHWZRPDMRUW\SHVRIIDFLOLWLHVDUHSURGXFWLRQVLWHVDQG

VWRUDJHVLWHV'HFLVLRQUHJDUGLQJWKHUROHVORFDWLRQFDSDFLW\DQGIOH[LELOLW\RIIDFLOLWLHVKDYH

DVLJQLILFDQWLPSDFWRQWKHVXSSO\FKDLQSHUIRUPDQFH)RULQVWDQFHDQDXWRSDUWVGLVWULEXWRU

VWULYLQJ IRU UHVSRQVLYHQHVV FRXOG KDYH PDQ\ ZDUHKRXVLQJ IDFLOLWLHV ORFDWHG FORVH WR

FXVWRPHUV HYHQ WKRXJK WKLV SUDFWLFH UHGXFHV HIILFLHQF\ DOWHUQDWLYHO\ D KLJK HIILFLHQF\

GLVWULEXWRUZRXOG KDYH IHZHUZDUHKRXVHV WR LQFUHDVH HIILFLHQF\ GHVSLWH WKH IDFW WKDW WKLVSUDFWLFHZLOOUHGXFHUHVSRQVLYHQHVV

,QYHQWRU\

,QYHQWRU\ HQFRPSDVVHV DOO UDZ PDWHULDOV ZRUN LQ SURFHVV DQG ILQLVKHG JRRGVZLWKLQ D

VXSSO\ FKDLQ &KDQJLQJ LQYHQWRU\ SROLFLHV FDQ GUDPDWLFDOO\ DOWHU WKH VXSSO\ FKDLQV

HIILFLHQF\ DQG UHVSRQVLYHQHVV )RU H[DPSOH D FORWKLQJ UHWDLOHU FDQ PDNH LWVHOI PRUH

UHVSRQVLYHE\VWRFNLQJ ODUJH DPRXQWV RI LQYHQWRU\DQG VDWLVI\LQJ FXVWRPHU GHPDQG IURP

VWRFN $ ODUJH LQYHQWRU\ KRZHYHU LQFUHDVHV WKH UHWDLOHUV FRVW WKHUHE\ PDNLQJ LW OHVV

HIILFLHQW5HGXFLQJLQYHQWRU\PDNHVWKHUHWDLOHUPRUHHIILFLHQWEXWKXUWVLWVUHVSRQVLYHQHVV

7UDQVSRUWDWLRQ

7UDQVSRUWDWLRQ HQWDLOV PRYLQJ LQYHQWRU\ IURP SRLQW WR SRLQW LQ WKH VXSSO\ FKDLQ

7UDQVSRUWDWLRQFDQWDNHWKHIRUPRIPDQ\FRPELQDWLRQVRIPRGHVDQGURXWHVHDFKZLWKLWV

RZQ SHUIRUPDQFH FKDUDFWHULVWLFV 7UDQVSRUWDWLRQ FKRLFHV KDYH D ODUJH LPSDFW RQ VXSSO\

FKDLQUHVSRQVLYHQHVVDQGHIILFLHQF\)RUH[DPSOHDPDLORUGHUFDWDORJFRPSDQ\FDQXVHD

IDVWHUPRGHRIWUDQVSRUWDWLRQVXFKDV)HG([WRVKLSSURGXFWVWKXVPDNLQJLWVVXSSO\FKDLQ

Page 44: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 44/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 44

PRUHUHVSRQVLYHEXWDOVROHVVHIILFLHQWJLYHQWKHKLJKFRVWVDVVRFLDWHGZLWKXVLQJ)HG([2U

WKHFRPSDQ\FDQXVHVORZHUEXWFKHDSHUJURXQGWUDQVSRUWDWLRQWRVKLSWKHSURGXFWPDNLQJ

WKHVXSSO\FKDLQHIILFLHQWEXWOLPLWLQJLWVUHVSRQVLYHQHVV

,QIRUPDWLRQ

,QIRUPDWLRQ FRQVLVWV RI GDWD DQG DQDO\VLV FRQFHUQLQJ IDFLOLWLHV LQYHQWRU\ WUDQVSRUWDWLRQ

FRVWV SULFHV DQG FXVWRPHUV WKURXJKRXW WKH VXSSO\ FKDLQ ,QIRUPDWLRQ LV SRWHQWLDOO\ WKH

ELJJHVWGULYHURISHUIRUPDQFHLQWKHVXSSO\FKDLQEHFDXVHLWGLUHFWO\DIIHFWVHDFKRIWKHRWKHU

GULYHUV,QIRUPDWLRQSUHVHQWVPDQDJHPHQWZLWKWKHRSSRUWXQLW\WRPDNHVXSSO\FKDLQVPRUH

UHVSRQVLYHDQGPRUHHIILFLHQW)RUH[DPSOHZLWKLQIRUPDWLRQRQFXVWRPHUGHPDQGSDWWHUQV

D SKDUPDFHXWLFDO FRPSDQ\ FDQ SURGXFH DQG VWRFN GUXJV LQ DQWLFLSDWLRQ RI FXVWRPHU

GHPDQGZKLFKPDNHV WKH VXSSO\ FKDLQYHU\ UHVSRQVLYHEHFDXVHFXVWRPHUVZLOO ILQG WKH

GUXJVWKH\QHHGZKHQWKH\QHHGWKHP7KLVGHPDQGLQIRUPDWLRQFDQDOVRPDNHWKHVXSSO\FKDLQPRUHHIILFLHQWEHFDXVHWKHSKDUPDFHXWLFDOILUPLVEHWWHUDEOHWRIRUHFDVWGHPDQGDQG

SURGXFH RQO\ WKH UHTXLUHG DPRXQW ,QIRUPDWLRQ FDQ DOVR PDNH WKLV VXSSO\ FKDLQ PRUH

HIILFLHQW E\ SURYLGLQJ PDQDJHUV ZLWK VKLSSLQJ RSWLRQV IRU LQVWDQFH WKDW DOORZ WKHP WR

FKRRVHWKHORZHVWFRVWDOWHUQDWLYHZKLOHVWLOOPHHWLQJWKHQHFHVVDU\VHUYLFHUHTXLUHPHQWV

6RXUFLQJ

6RXUFLQJ LV WKH FKRLFH RI ZKR ZLOO SHUIRUP D SDUWLFXODU VXSSO\ FKDLQ DFWLYLW\ VXFK DV

SURGXFWLRQVWRUDJHWUDQVSRUWDWLRQRUWKHPDQDJHPHQWRILQIRUPDWLRQ$WWKHVWUDWHJLFOHYHO

WKHVH GHFLVLRQV GHWHUPLQH ZKDW IXQFWLRQV D ILUP SHUIRUPV DQG ZKDW IXQFWLRQV WKH ILUP

RXWVRXUFHV6RXUFLQJGHFLVLRQV DIIHFW ERWKWKH UHVSRQVLYHQHVVDQGHIILFLHQF\RID VXSSO\FKDLQ$IWHU0RWRURODRXWVRXUFHGPXFKRILWVSURGXFWLRQWRFRQWUDFWPDQXIDFWXUHUVLQ&KLQD

LWVDZLWVHIILFLHQF\LPSURYHEXWLWVUHVSRQVLYHQHVVVXIIHUEHFDXVHRIWKHORQJGLVWDQFHV7R

PDNHXSIRUWKHGURSLQ UHVSRQVLYHQHVV0RWRURODVWDUWHGIO\LQJLQVRPHRI LWVFHOOSKRQHV

IURP&KLQDHYHQWKRXJKLWVFKRLFHLQFUHDVHGWUDQVSRUWDWLRQFRVW)OH[WURQLFVDQHOHFWURQLFV

FRQWUDFWPDQXIDFWXUHULVKRSLQJWRRIIHUERWKUHVSRQVLYHDQGHIILFLHQWVRXUFLQJRSWLRQVWRLWV

FXVWRPHUV,WLVWU\LQJWRPDNHLWVSURGXFWLRQIDFLOLWLHVLQ8QLWHG6WDWHVYHU\UHVSRQVLYHZKLOH

NHHSLQJLWVIDFLOLWLHVLQORZFRVWFRXQWULHVHIILFLHQW)OH[WURQLFVKRSHVWREHFRPHDQHIIHFWLYH

VRXUFHIRUDOOFXVWRPHUVXVLQJWKLVFRPELQDWLRQRIIDFLOLWLHV

3ULFHV

3ULFLQJ GHWHUPLQHV KRZ PXFK D ILUP ZLOO FKDUJH IRU JRRGV DQG VHUYLFHV WKDW LW PDNHV

DYDLODEOHLQVXSSO\FKDLQ3ULFLQJDIIHFWVWKHEHKDYLRURIWKHEX\HURIWKHJRRGRUVHUYLFH

WKXVDIIHFWLQJVXSSO\FKDLQSHUIRUPDQFH)RUH[DPSOHLIDWUDQVSRUWDWLRQFRPSDQ\YDULHVLWV

FKDUJHVEDVHGRQWKHOHDGWLPHSURYLGHGE\WKHFXVWRPHUVZKRYDOXHUHVSRQVLYHQHVVZLOOEH

ZLOOLQJWRZDLWDQGRUGHUMXVWEHIRUHWKH\QHHGDSURGXFWWUDQVSRUWHG(DUO\RUGHUVDUHOHVV

OLNHO\LISULFHVGRQRWYDU\ZLWKOHDGWLPH

Page 45: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 45/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 45

)UDPHZRUNIRU6WUXFWXULQJ'ULYHUV

7KHYLVXDOIUDPHZRUNIRUVXSSO\FKDLQGHFLVLRQPDNLQJLVVKRZQLQILJXUHEHORZ

0RVWFRPSDQLHVEHJLQZLWKDFRPSHWLWLYHVWUDWHJ\DQGWKHQGHFLGHZKDWWKHLUVXSSO\FKDLQ

VWUDWHJ\ RXJKW WREH 7KH VXSSO\ FKDLQVWUDWHJ\GHWHUPLQHVKRZWKH VXSSO\ FKDLQVKRXOGSHUIRUPZLWKUHVSHFWWRHIILFLHQF\DQGUHVSRQVLYHQHVV7KHVXSSO\FKDLQPXVWWKHQXVHWKH

WKUHHORJLVWLFDODQGWKUHHFURVVIXQFWLRQDOGULYHUVWRUHDFKWKHSHUIRUPDQFHOHYHOWKLVVXSSO\

FKDLQVWUDWHJ\GLFWDWHVDQGPD[LPL]HWKHVXSSO\FKDLQSURILWV$OWKRXJKWKLVIUDPHZRUNLV

JHQHUDOO\YLHZHGIURPWKHWRSGRZQLQPDQ\LQVWDQFHVDVWXG\RIVL[GULYHUVPD\LQGLFDWH

WKHQHHGWRFKDQJHWKHVXSSO\FKDLQDQGSRWHQWLDOO\HYHQWKHFRPSHWLWLYHVWUDWHJ\

&RPSRQHQWVRI'HFLVLRQLQ6XSSO\&KDLQ'ULYHUV

)DFLOLWLHV

'HFLVLRQV UHJDUGLQJ IDFLOLWLHVDUHDFUXFLDO SDUW RIVXSSO\FKDLQ GHVLJQ)ROORZLQJDUHWKHFRPSRQHQWVRIIDFLOLWLHVGHFLVLRQVWKDWFRPSDQLHVPXVWDQDO\]H

5ROH

)RU SURGXFWLRQ IDFLOLWLHV ILUPVPXVWGHFLGHZKHWKHU WKH\ZLOO EHIOH[LEOH GHGLFDWHGRUD

FRPELQDWLRQ RI WKH WZR)OH[LEOHFDSDFLW\ FDQ EH XVHG IRUPDQ\ W\SHV RI SURGXFWV EXW LV

RIWHQ OHVV HIILFLHQWZKHUHDVGHGLFDWHG FDSDFLW\FDQ EHXVHG IRURQO\ D OLPLWHGQXPEHURI

SURGXFWV EXW LVPRUHHIILFLHQW)LUPVPXVWDOVRGHFLGHZKHWKHUWRGHVLJQD IDFLOLW\ZLWKD

SURGXFW IRFXV RU D IXQFWLRQDO IRFXV $ SURGXFWIRFXVHG IDFLOLW\ SHUIRUPV PDQ\ GLIIHUHQW

IXQFWLRQV HJ IDEULFDWLRQ DQG DVVHPEO\ LQ SURGXFLQJ D VLQJOH W\SH RI SURGXFW $

IXQFWLRQDOIRFXVHG IDFLOLW\SHUIRUPV IHZ IXQFWLRQV HJRQO\ IDEULFDWLRQRURQO\DVVHPEO\RQ PDQ\ W\SHV RI SURGXFWV $ SURGXFW IRFXV WHQGV WR UHVXOW LQ PRUH H[SHUWLVH DERXW D

SDUWLFXODU W\SH RI SURGXFW DW WKH H[SHQVH RI WKH IXQFWLRQDO H[SHUWLVH WKDW FRPHV IURP D

IXQFWLRQDOPHWKRGRORJ\

)RU ZDUHKRXVHV DQG '&V ILUPV PXVW GHFLGH ZKHWKHU WKH\ ZLOO SULPDULO\ FURVVGRFNLQJ

IDFLOLWLHVRUVWRUDJHIDFLOLWLHV$WFURVVGRFNLQJIDFLOLWLHVLQERXQGWUXFNVIURPVXSSOLHUVDUH

XQORDGHG WKHSURGXFW LVEURNHQ LQWRVPDOOHU ORWVDQGLVTXLFNO\ ORDGHGRQWRVWRUHERXQG

WUXFNV(DFKVWRUHERXQGWUXFNFDUULHVDYDULHW\RISURGXFWVVRPHIURPHDFKLQERXQGWUXFN

)RUVWRUDJHIDFLOLWLHVILUPVPXVWGHFLGHRQWKHSURGXFWVWREHVWRUHGDWHDFKIDFLOLW\

/RFDWLRQ

'HFLGLQJZKHUHDFRPSDQ\ZLOOORFDWHLWVIDFLOLWLHVFRQVWLWXWHVDODUJHSDUWRIWKHGHVLQJRID

VXSSO\FKDLQ$EDVLF WUDGHRIIKHUH LVZKWKHUWRFHQWUDOL]H LQRUGHU WRJDLQ HFRQRPLHVRI

VFDOH RU WR GHFHQWUDOL]H WR EHFRPH PRUH UHVSRQVLYH E\ EHLQJ FORVHU WR WKH FXVWRPHU

&RPSDQLHVPXVWDOVRFRQVLGHUDKRVWRILVVXHVUHODWHGWRWKHYDULRXVFKDUDFWHULVWLFVRIWKH

ORFDODUHDLQZKLFKWKHIDFLOLW\LVVLWXDWHG7KHVHLQFOXGHPDFURHFRQRPLFIDFWRUVTXDOLW\RI

Page 46: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 46/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 46

ZRUNHUV FRVW RI ZRUNHUV FRVW RI IDFLOLW\ DYDLODELOLW\ RI LQIUDVWUXFWXUH SUR[LPLW\ WR

FXVWRPHUVWKHORFDWLRQRIWKDWILUPVRWKHUIDFLOLWLHVWD[HIIHFWVDQGRWKHUVWUDWHJLFIDFWRUV

&DSDFLW\

&RPSDQLHVPXVWDOVRGHWHUPLQHDIDFLOLW\VFDSDFLW\WRSHUIRUPLWV LQWHQGHG IXQFWLRQV$

ODUJHDPRXQWRIH[FHVVFDSDFLW\DOORZVWKHIDFLOLW\WREHYHU\IOH[LEOHDQGWRUHVSRQGWRZLGHVZLQJVLQWKHGHPDQGVSODFHGRQLW([FHVVFDSDFLW\KRZHYHUFRVWVPRQH\DQGWKHUHIRUH

FDQGHFUHDVHHIILFLHQF\$IDFLOLW\ZLWKOLWWOHH[FHVVFDSDFLW\ZLOOOLNHO\EHPRUHHIILFLHQWSHU

XQLW RI SURGXFW LW SURGXFHV WKDQ RQH ZLWK D ORW RI XQXVHG FDSDFLW\ 7KH KLJKXWLOL]DWLRQ

IDFLOLW\ KRZHYHU ZLOO KDYH GLIILFXOW\ UHVSRQGLQJ WR GHPDQG IOXFWXDWLRQV 7KHUHIRUH D

FRPSDQ\PXVWPDNHDWUDGHRIIWRGHWHUPLQHWKHULJKWDPRXQWRIFDSDFLW\WRKDYHDWHDFKRI

LWVIDFLOLWLHV

)DFLOLW\5HODWHG0HWULFV

0DQDJHU VKRXOG WUDFN WKH IROORZLQJ IDFLOLW\UHODWHG PHWULFV WKDW LQIOXHQFH VXSSO\ FKDLQ

SHUIRUPDQFH

y  &DSDFLW\PHDVXUHVWKHPD[LPXPDPRXQWDIDFLOLW\FDQSURFHVV

y  8WLOL]DWLRQPHDVXUHVWKHIUDFWLRQDOFDSDFLW\WKDWLVFXUUHQWO\EHLQJXVHGLQWKH

IDFLOLW\ 8WLOL]DWLRQ DIIHFWV ERWK WKH XQLW FRVW RI SURFHVVLQJ DQG DVVRFLDWHG

GHOD\V 8QLW FRVWV WHQG WR GHFOLQH DQG GHOD\V LQFUHDVH ZLWK LQFUHDVH LQ

XWLOL]DWLRQ

y  7KHRUHWLFDO IORZ F\FOH WLPH RI SURGXFWLRQ PHDVXUHV WKH WLPH UHTXLUHG WR

SURFHVVDXQLWLIWKHUHDUHDEVROXWHO\QRGHOD\VDWDQ\VWDJH

y  $FWXDODYHUDJHIORZF\FOHWLPHPHDVXUHVWKHDYHUDJHDFWXDOWLPHWDNHQIRUDOO

XQLWVSURFHVVHGRYHUDVSHFLILHGGXUDWLRQVXFKDVDZHHNRUPRQWK7KHDFWXDO

IORZF\FOHWLPHLQFOXGHVWKHWKHRUHWLFDOWLPHDQGDQ\GHOD\V

y  )ORZ WLPH HIILFLHQF\ LV WKH UDWLR RI WKH WKHRUHWLFDO IORZ WLPH WR WKH DFWXDO

DYHUDJHIORZWLPH

y  3URGXFWYDULHW\PHDVXUHVWKHQXPEHURISURGXFWVSURGXFWIDPLOLHVSURFHVVHG

LQ D IDFLOLW\ 3URFHVVLQJ FRVWV DQG IORZ WLPHV DUH OLNHO\ WR LQFUHDVH ZLWK

SURGXFWYDULHW\

y  3URFHVVLQJVHW XS GRZQ LGOH WLPHPHDVXUHV WKH IUDFWLRQRI WLPH WKDW WKH

IDFLOLW\ ZDV SURFHVVLQJ XQLW EHLQJ VHW XS WR SURFHVV XQLWV XQDYDLODEOH

EHFDXVHLWZDVGRZQRULGOHEHFDXVHLWKDGQRXQLWVWRSURFHVV

y  3URGXFWLRQVHUYLFHOHYHOPHDVXUHVWKHIUDFWLRQRISURGXFWLRQRUGHUVFRPSOHWHG

RQWLPHDQGLQIXOO

Page 47: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 47/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 47

&RPSRQHQWVRI,QYHQWRU\'HFLVLRQV

7KHPDMRULQYHQWRU\UHODWHGGHFLVLRQVWKDWVXSSO\FKDLQPDQDJHUVPXVWPDNHWRHIIHFWLYHO\

FUHDWHPRUHUHVSRQVLYHDQGPRUHHIILFLHQWVXSSO\FKDLQVDUH

&\FOH,QYHQWRU\&\FOHLQYHQWRU\LVWKHDYHUDJHDPRXQWRILQYHQWRU\XVHGWRVDWLVI\GHPDQGEHWZHHQUHFHLSWV

RI VXSSOLHU VKLSPHQWV 7KH VL]H RI WKH F\FOH LQYHQWRU\ LV D UHVXOW RI WKH SURGXFWLRQ

WUDQVSRUWDWLRQRUSXUFKDVHRIPDWHULDOLQODUJHORWV&RPSDQLHVSURGXFHRUSXUFKDVHLQODUJH

ORWVWRH[SORLWHFRQRPLHVRIVFDOHLQWKHSURGXFWLRQ WUDQVSRUWDWLRQRUSXUFKDVLQJSURFHVV

:LWK WKH LQFUHDVH LQ ORW VL]H KRZHYHU DOVR FRPHV DQ LQFUHDVH LQ FDUU\LQJ FRVW $V DQ

H[DPSOH RI D F\FOH VWRFN GHFLVLRQ FRQVLGHU DQ RQOLQH ERRN UHWDLOHU7KLV UHWDLOHUV VDOHV

DYHUDJHDURXQGWUXFNORDGVRIERRNVDPRQWK7KHF\FOHLQYHQWRU\GHFLVLRQVWKHUHWDLOHU

PXVWPDNHDUHKRZPXFKWRRUGHUIRUUHSOHQLVKPHQWDQGKRZRIWHQWRSODFHWKHVHRUGHUV

7KH HUHWDLOHUFRXOGRUGHUWR WUXFNORDGVRQFHHDFKPRQWKRULW FRXOGRQH WUXFNORDG HYHU\

WKUHHGD\V7KHEDVLFWUDGHRIIVXSSO\FKDLQPDQDJHUVIDFHLVWKHFRVWRIKROGLQJODUJHUORWVRI LQYHQWRU\ ZKHQ F\FOH LQYHQWRU\ ,KLJKYHUVXV WKH FRVW RI RUGHULQJ SURGXFW IUHTXHQWO\

ZKHQF\FOHLQYHQWRU\LVORZ

6DIHW\,QYHQWRU\

6DIHW\LQYHQWRU\LVLQYHQWRU\KHOGLQFDVHGHPDQGH[FHHGVH[SHFWDWLRQLWLVKHOGWRFRXQWHU

XQFHUWDLQW\,IWKHZRUOGZHUHSHUIHFWO\SUHGLFWDEOHRQO\F\FOHLQYHQWRU\ZRXOGEHQHHGHG

%HFDXVH GHPDQG LV XQFHUWDLQ DQG PD\ H[FHHG H[SHFWDWLRQV KRZHYHU FRPSDQLHV KROG

VDIHW\ LQYHQWRU\ WR VDWLVI\ DQXQH[SHFWHGO\ KLJK GHPDQG0DQDJHUV IDFH D NH\ GHFLVLRQ

ZKHQGHWHUPLQLQJKRZPXFKVDIHW\LQYHQWRU\WRKROG&KRRVLQJVDIHW\LQYHQWRU\LQYROYHV

PDNLQJDWUDGHRIIEHWZHHQWKHFRVWVRIKDYLQJWRRPXFKLQYHQWRU\DQGWKHFRVWVRIORVLQJVDOHVGXHWRQRWKDYLQJHQRXJKLQYHQWRU\

6HDVRQDO,QYHQWRU\

6HDVRQDOLQYHQWRU\LVEXLOWXSWRFRXQWHUSUHGLFWDEOHYDULDELOLW\LQGHPDQG&RPSDQLHVXVLQJ

VHDVRQDOLQYHQWRU\EXLOGXSLQYHQWRU\LQSHULRGVRIORZGHPDQGDQGVWRUHLW IRUSHULRGVRI

KLJK GHPDQG ZKHQ WKH\ ZLOO QRW KDYH WKH FDSDFLW\ WR SURGXFH DOO WKDW LV GHPDQGHG

0DQDJHUVIDFHNH\GHFLVLRQLQGHWHUPLQLQJZKHWKHUWREXLOGVHDVRQDOLQYHQWRU\DQGLIWKH\

GREXLOGLWLQGHFLGLQJKRZPXFKWREXLOG,IDFRPSDQ\FDQUDSLGO\FKDQJHWKHUDWHRILWV

SURGXFWLRQ V\VWHP DW YHU\ ORZ FRVW WKHQ LW PD\ QHHG VHDVRQDO LQYHQWRU\ EHFDXVH WKH

SURGXFWLRQ V\VWHP FDQDGMXVW WR D SHULRG RI KLJK GHPDQG ZLWKRXW LQFXUULQJ ODUJH FRVWV+RZHYHULIFKDQJLQJWKHUDWHRISURGXFWLRQLVH[SHQVLYHIRUH[DPSOHZKHQZRUNHUVPXVW

EHKLUHGRUILUHGWKHQDFRPSDQ\ZRXOGEHZLVHWRHVWDEOLVKDVPRRWKSURGXFWLRQUDWHDQG

EXLOGXSLWVLQYHQWRU\GXULQJSHULRGVRIORZGHPDQG7KHUHIRUHWKHEDVLFWUDGHRIIVXSSO\

FKDLQPDQDJHUVIDFH LQGHWHUPLQLQJ KRZPXFKVHDVRQDO LQYHQWRU\ WR EXLOG LV WKH FRVW RI

FDUU\LQJWKHDGGLWLRQDOVHDVRQDOLQYHQWRU\YHUVXVWKHFRVWRIKDYLQJPRUHIOH[LEOHSURGXFW

UDWH

Page 48: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 48/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 48

/HYHORI3URGXFW$YDLODELOLW\

/HYHORISURGXFWDYDLODELOLW\LVWKHIUDFWLRQRIGHPDQGWKDWLVVHUYHGRQHWLPHIURPSURGXFW

KHOGLQLQYHQWRU\$KLJKOHYHORISURGXFWDYDLODELOLW\SURYLGHVDKLJKOHYHORUUHVSRQVLYHQHVV

EXWLQFUHDVHFRVWVEHFDXVHDORWRILQYHQWRU\LVKHOGEXWUDUHO\XVHG,QFRQWUDVWDORZOHYHO

RI SURGXFW DYDLODELOLW\ ORZHUV LQYHQWRU\ KROGLQJ FRVWV EXW UHVXOWV LQ D KLJKHU IUDFWLRQ RI

FXVWRPHUVZKRDUHQRWVHUYHGRQ WLPH7KHEDVLFWUDGHRIIZKHQGHWHUPLQLQJWKH OHYHORI

SURGXFWDYDLODELOLW\LVEHWZHHQWKHFRVWRILQYHQWRU\WRLQFUHDVHSURGXFWDYDLODELOLW\DQGWKH

ORVVIURPQRWVHUYLQJFXVWRPHURQWLPH

,QYHQWRU\5HODWHG0HWULFV

$PDQDJHU VKRXOGWUDFN WKHIROORZLQJ LQYHQWRU\UHODWHPHWULFVWKDW LQIOXHQFHVXSSO\FKDLQ

SHUIRUPDQFH

y  $YHUDJH LQYHQWRU\ PHDVXUHV WKH DYHUDJH DPRXQW RI LQYHQWRU\ FDUULHG $YHUDJH

LQYHQWRU\VKRXOGEHPHDVXUHGLQXQLWVGD\VRIGHPDQGDQGILQDQFLDOYDOXH

y  3URGXFWVZLWKPRUHWKDQDVSHFLILHGQXPEHURIGD\VRILQYHQWRU\LGHQWLILHVDSURGXFW

IRUZKLFKWKHILUPLVFDUU\LQJDKLJKOHYHORILQYHQWRU\7KLVPHWULFFDQEHXVHGWR

LGHQWLI\ SURGXFWV WKDW DUH LQ RYHUVXSSO\ RU LGHQWLI\ UHDVRQV WKDW MXVWLI\ WKH KLJK

LQYHQWRU\VXFKDVSULFHGLVFRXQWVRUEHLQJDYHU\VORZPRYHU

y  $YHUDJH UHSOHQLVKPHQW EDWFK VL]H PHDVXUHV WKH DYHUDJH DPRXQW RI HDFK

UHSOHQLVKPHQWSURGXFW7KHEDWFKVL]HVKRXOGEHPHDVXUHGE\6.8LQWHUPVRIERWK

XQLWVDQGGD\VRIGHPDQG,WFDQEHHVWLPDWHGE\DYHUDJLQJPRUHWLPHWKHGLIIHUHQFH

EHWZHHQWKHPD[LPXPDQGWKHPLQLPXPLQYHQWRU\PHDVXUHGLQHDFKUHSOHQLVKPHQW

F\FOHRQKDQG

y  6HDVRQDOLQYHQWRU\PHDVXUHVWKHDPRXQWRIERWKF\FOHDQGVDIHW\LQYHQWRU\WKDWLV

SXUFKDVHGVROHO\GXHWRVHDVRQDOFKDQJHVDQGGHPDQG

y  )LOO UDWH PHDVXUHV WKH IUDFWLRQ RI RUGHUVGHPDQG WKDW ZHUH PHW RQ WLPH IURP

LQYHQWRU\)LOOUDWHVKRXOGQRWEHDYHUDJHGRYHUWLPHEXWRYHUDVSHFLILHGQXPEHURI

XQLWVRIGHPDQGVD\HYHU\WKRXVDQGPLOOLRQHWF

y  )UDFWLRQRIWLPHRXWRIVWRFNPHDVXUHVWKHIUDFWLRQRIWLPHWKDWDSDUWLFXODU6.8KDG

]HURLQYHQWRU\7KLVIUDFWLRQFDQEHXVHGWRHVWLPDWHWKHGHPDQGGXULQJWKHVWRFNRXW

SHULRG

&RPSRQHQWVRI7UDQVSRUWDWLRQ'HFLVLRQV

7KHNH\FRPSRQHQWV RI WUDQVSRUWDWLRQ WKDW FRPSDQLHVPXVWDQDO\]HZKHQ GHVLJQLQJ DQG

RSHUDWLQJDVXSSO\FKDLQDUH

'HVLJQRI7UDQVSRUWDWLRQ1HWZRUN

Page 49: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 49/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 49

7KHWUDQVSRUWDWLRQQHWZRUNLVWKHFROOHFWLRQRIWUDQVSRUWDWLRQPRGHV ORFDWLRQVDQG URXWHV

DORQJZKLFKSURGXFWFDQEHVKLSSHG$FRPSDQ\PXVWGHFLGHZKHWKHUWUDQVSRUWDWLRQIURPD

VXSSO\ FKDLQ VRXUFH ZLOO EH GLUHFW WR WKH GHPDQG SRLQW RU ZLOO JR WKURXJK LQWHUPHGLDWH

FRQVROLGDWLRQ SRLQWV 'HVLJQ GHFLVLRQV DOVR LQFOXGH ZKHWKHU PXOWLSOH VXSSO\ RU GHPDQG

SRLQWVZLOOEHLQFOXGHGLQDVLQJOHUXQRUQRW)LQDOO\FRPSDQLHVPXVWDOVRGHFLGHWKHVWRI

WUDQVSRUWDWLRQPRGHVWKDWZLOOEHXVHG

&KRLFHRI7UDQVSRUWDWLRQ0RGH

7KHPRGHRIWUDQVSRUWDWLRQLVWKHPDQQHULQZKLFKDSURGXFWLVPRYHGIURPRQHORFDWLRQLQ

WKHVXSSO\FKDLQQHWZRUNWR DQRWKHU&RPSDQLHVFDQFKRRVHEHWZHHQDLUWUXFN UDLO VHD

DQGSLSHOLQHDVPRGHVRIWUDQVSRUWIRUSURGXFWV7RGD\LQIRUPDWLRQJRRGVFDQDOVREHVHQW

YLD LQWHUQHW (DFK PRGH KDV GLIIHUHQW FKDUDFWHULVWLFV ZLWK UHVSHFW WR WKH VSHHG VL]H RI

VKLSPHQWVLQGLYLGXDOSDUFHOVWRSDOOHWVWR IXOOWUXFNVWRHQWLUHVKLSVFRVWRIVKLSSLQJDQG

IOH[LELOLW\WKDWOHDGFRPSDQLHVWRFKRRVHRQHSDUWLFXODUPRGHRYHUWKHRWKHUV

7UDQVSRUWDWLRQUHODWHG0HWULFV

$PDQDJHU VKRXOG WUDFN WKHIROORZLQJ WUDQVSRUWDWLRQUHODWHGPHWULFV WKDW LQIOXHQFH VXSSO\

FKDLQSHUIRUPDQFH

y  $YHUDJHLQERXQGWUDQVSRUWDWLRQFRVWW\SLFDOO\PHDVXUHVWKHFRVWRIEULQJLQJSURGXFW

LQWRDIDFLOLW\DVDSHUFHQWDJHRIVDOHVRUFRVWRIJRRGVVROV&2*6,GHDOO\WKLVFRVW

VKRXOG EH PHDVXUHG SHU XQLW EURXJKW LQ EXW WKLV FDQ EH GLIILFXOW 7KH LQERXQG

WUDQVSRUWDWLRQFRVWLVJHQHUDOO\LQFOXGHGLQ&2*6,WLVXVHIXOWRVHSDUDWHWKLVFRVWE\

VXSSOLHU

y  $YHUDJHLQFRPLQJVKLSPHQWVL]HPHDVXUHVWKHDYHUDJHQXPEHURIXQLWVRUGROODUVLQHDFKLQFRPLQJVKLSPHQWDWDIDFLOLW\

y  $YHUDJH LQERXQG WUDQVSRUWDWLRQ FRVW SHU VKLSPHQW PHDVXUHV WKH DYHUDJH

WUDQVSRUWDWLRQ FRVW RI HDFK LQFRPLQJ GHOLYHU\ $ORQJ ZLWK WKH LQFRPLQJ VKLSPHQW

VL]H WKLVPHWULF LGHQWLILHVRSSRUWXQLWLHV IRU JUHDWHUHFRQRPLHVRI VFDOH LQ LQERXQG

WUDQVSRUWDWLRQ

y  $YHUDJHRXWERXQGWUDQVSRUWDWLRQFRVWPHDVXUHVWKHFRVWRIVHQGLQJSURGXFWRXWRID

IDFLOLW\WRWKHFXVWRPHU,GHDOO\WKLVFRVWVKRXOGEHPHDVXUHGSHUXQLWVKLSSHGEXWLW

LVRIWHQPHDVXUHGDVDSHUFHQWDJH RI VDOHV ,W LVXVHIXO WRVHSDUDWH WKLVPHWULF E\

FXVWRPHU

y  $YHUDJHRXWERXQGVKLSPHQWVL]HPHDVXUHVWKHDYHUDJHQXPEHURIXQLWVRUGROODUVRQ

HDFKRXWERXQGVKLSPHQWDWDIDFLOLW\

y  $YHUDJH RXWERXQG WUDQVSRUWDWLRQ FRVW SHU VKLSPHQW PHDVXUHV WKH DYHUDJH

WUDQVSRUWDWLRQFRVWRIHDFKRXWJRLQJGHOLYHU\$ORQJZLWKWKHRXWJRLQJVKLSPHQWVL]H

Page 50: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 50/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 50

WKLV PHWULF LGHQWLILHV RSSRUWXQLWLHV IRU JUHDWHU HFRQRPLHV RI VFDOH LQ RXWERXQG

WUDQVSRUWDWLRQ

y  )UDFWLRQ WUDQVSRUWHG E\PRGHPHDVXUHV WKH IUDFWLRQ RI WUDQVSRUWDWLRQ LQ XQLWV RU

GROODUVXVLQJ HDFKPRGH RI WUDQVSRUWDWLRQ 7KLVPHWULFFDQ EH XVHG WRHVWLPDWH LI

FHUWDLQPRGHVDUHRYHUXVHGRUXQGHUXWLOL]HG

&RPSRQHQWVRI,QIRUPDWLRQ'HFLVLRQV

7KHIROORZLQJFRPSRQHQWVDUHLGHQWLILHGZKLFKDFRPSDQ\PXVWDQDO\]HLQRUGHUWRLQFUHDVH

HIILFLHQF\DQGLPSURYHUHVSRQVLYHQHVVZLWKLQLWVVXSSO\FKDLQ

3XVK9HUVXV3XOO

:KHQ GHVLJQLQJ SURFHVVHV RI WKHVXSSO\ FKDLQPDQDJHUV PXVW GHWHUPLQHZKHWKHU WKHVH

SURFHVVHVDUHSDUWRIWKHSXVKRUSXOO SKDVHLQ WKHFKDLQ3XVKV\VWHPV JHQHUDOO\ UHTXLUH

LQIRUPDWLRQLQWKHIRUPRIHODERUDWH0DWHULDO5HTXLUHPHQWV3ODQQLQJ053V\VWHPVWRWDNH

WKHPDVWHUSURGXFWLRQVFKHGXOHDQGUROOLWEDFNFUHDWLQJVFKHGXOHVIRUVXSSOLHUVZLWKSDUWW\SHVTXDQWLWLHVDQGGHOLYHU\GDWHV3XOOV\VWHPVUHTXLUHLQIRUPDWLRQRQDFWXDOGHPDQGWR

EH WUDQVPLWWHG H[WUHPHO\ TXLFNO\ WKURXJKRXW WKH HQWLUH FKDLQ VR WKDW SURGXFWLRQ DQG

GLVWULEXWLRQRISURGXFWVPD\UHIOHFWWKHUHDOGHPDQGDFFXUDWHO\

&RRUGLQDWLRQDQG,QIRUPDWLRQ6KDULQJ

6XSSO\ FKDLQ FRRUGLQDWLRQ RFFXUV ZKHQ DOO VWDJHV RI D VXSSO\ FKDLQ ZRUN WRZDUG WKH

REMHFWLYHRIPD[LPL]LQJWRWDOVXSSO\FKDLQSURILWDELOLW\EDVHGRQVKDUHGLQIRUPDWLRQ/DFNRI

FRRUGLQDWLRQ FDQ UHVXOW LQ VLJQLILFDQW ORVV RI VXSSO\ FKDLQ SURILW &RRUGLQDWLRQ DPRQJ

GLIIHUHQWVWDJHVLQDVXSSO\FKDLQUHTXLUHVHDFKVWDJHWRVKDUHDSSURSULDWHLQIRUPDWLRQZLWK

RWKHUVWDJHV)RUH[DPSOHLIDVXSSOLHULVWRSURGXFHWKHULJKWSDUWVLQDWLPHO\PDQQHUIRUDPDQXIDFWXUHU LQ D SXOO V\VWHP WKH PDQXIDFWXUHU PXVW VKDUH GHPDQG DQG SURGXFWLRQ

LQIRUPDWLRQZLWKWKHVXSSOLHU,QIRUPDWLRQVKDULQJLV WKLVFUXFLDOWR WKHVXFFHVVRIDVXSSO\

FKDLQ

)RUHFDVWLQJDQG$JJUHJDWH3ODQQLQJ

)RUHFDVWLQJ LV WKH DUW DQG VFLHQFH RI PDNLQJ SURMHFWLRQV DERXW ZKDW IXWXUHGHPDQG DQG

FRQGLWLRQVZLOOEH2EWDLQLQJ IRUHFDVWLQJLQIRUPDWLRQIUHTXHQWO\PHDQVXVLQJVRSKLVWLFDWHG

WHFKQLTXHVRHVWLPDWHIXWXUHVDOHVRUPDUNHWFRQGLWLRQV0DQDJHUVPXVW GHFLGHKRZ WKH\

ZLOO PDNH IRUHFDVWV DQG WR ZKDW H[WHQW WKH\ ZLOO UHO\ RQ IRUHFDVWV WR PDNH GHFLVLRQV

&RPSDQLHV RIWHQ XVH IRUHFDVWV ERWK RQ D WDFWLFDO OHYHO WR VFKHGXOH SURGXFWLRQ DQG RQVWUDWHJLF OHYHO WR GHWHUPLQHZKHWKHU WREXLOGQHZ SODQWV RUHYHQZKHWKHU WRHQWHU D QHZ

PDUNHW

2QFH D FRPSDQ\ FUHDWHV D IRUHFDVW WKH FRPSDQ\ QHHGV D SODQ WR DFW RQ WKLV IRUHFDVW

$JJUHJDWH SODQQLQJ WUDQVIRUPV IRUHFDVWV LQWR SODQV RI DFWLYLW\ WR VDWLVI\ WKH SURMHFWHG

GHPDQG $ NH\ GHFLVLRQ PDQDJHUV IDFH LV KRZ WR FROODERUDWH RQ DJJUHJDWH SODQQLQJ

WKURXJKRXW WKH HQWLUH VXSSO\ FKDLQ 7KH DJJUHJDWH SODQ EHFRPHV D FULWLFDO SLHFH RI

Page 51: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 51/169

Page 52: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 52/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 52

0DQDJHUVPXVWGHFLGHRQWKHQXPEHURIVXSSOLHUVWKH\ZLOOKDYH IRUDSDUWLFXODUDFWLYLW\

7KH\PXVWWKHQLGHQWLI\WKHFULWHULDDORQJZKLFKVXSSOLHUVZLOOEHHYDOXDWHGDQGKRZWKH\

ZLOO EH VHOHFWHG )RU WKH VHOHFWLRQ SURFHVV PDQDJHUV PXVWGHFLGHZKHWKHU WKH\ZLOO XVH

GLUHFW QHJRWLDWLRQV RUUHVRUW WRDQDXFWLRQ ,V DQ DXFWLRQ LVXVHG LWPXVW EHVWUXFWXUHG WR

HQVXUHWKHGHVLUHGRXWFRPH

3URFXUHPHQW

3URFXUHPHQW LV WKHSURFHVV LQZKLFKWKH VXSSOLHU VHQGVSURGXFW LQ UHVSRQVH WR FXVWRPHU

RUGHUV0DQDJHUVPXVWGHFLGHRQWKHVWUXFWXUHRISURFXUHPHQWRIGLUHFWDVZHOODVLQGLUHFW

PDWHULDOVDQGVWUDWHJLFDVZHOODVJHQHUDOPDWHULDOV,QHDFKFDVHLWLVLPSRUWDQWWRLGHQWLI\

WKHFULWLFDOPHFKDQLVPIRULQFUHDVLQJVXSSO\FKDLQSURILWVIRUH[DPSOHDILUPVKRXOGVHWXS

SURFXUHPHQW IRU GLUHFW PDWHULDOV WR HQVXUH JRRG FRRUGLQDWLRQ EHWZHHQ WKH VXSSOLHU DQG

EX\HU

6RXUFLQJUHODWHGPHWULFV

$PDQDJHUVKRXOGWUDFNWKHIROORZLQJVRXUFLQJUHODWHGPHWULFVWKDW LQIOXHQFHVXSSO\FKDLQSHUIRUPDQFH

y  'D\V SD\DEOH RXWVWDQGLQJPHDVXUHV WKHQXPEHU RIGD\V EHWZHHQZKHQD VXSSOLHU

SHUIRUPHGDVXSSO\FKDLQWDVNDQGZKHQLWZDVSDLG

y  $YHUDJHSXUFKDVHSULFHPHDVXUHVWKHDYHUDJHSULFHDWZKLFKDJRRGRUVHUYLFHZDV

SXUFKDVHG GXULQJ WKH \HDU 7KH DYHUDJH SULFHVKRXOGEHZHLJKWHG E\ WKH TXDQWLW\

SXUFKDVHGDWHDFKSULFH

y  5DQJH RI SXUFKDVH SULFH PHDVXUHV WKH IOXFWXDWLRQ LQ SXUFKDVH SULFH GXULQJ D

VSHFLILHGSHULRG7KHJRDOLVWRLGHQWLI\LIWKHTXDQWLW\SXUFKDVHGFRUUHODWHGZLWKWKH

SULFH

y  $YHUDJHSXUFKDVHTXDQWLW\PHDVXUHVWKHDYHUDJHDPRXQWSXUFKDVHGSHURUGHU7KH

JRDO LV WR LGHQWLI\ ZKHWKHU D VXIILFLHQW OHYHO RI DJJUHJDWLRQ LV RFFXUULQJ DFURVV

ORFDWLRQVZKHQSODFLQJDQRUGHU

y  )UDFWLRQRQWLPHGHOLYHULHVPHDVXUHVWKHIUDFWLRQRIGHOLYHULHVIURPWKHVXSSOLHUWKDW

ZHUHRQWLPH

y  6XSSO\TXDOLW\PHDVXUHVWKHTXDOLW\RISURGXFWVXSSOLHG

y  6XSSO\IXQGWLPHPHDVXUHVWKHDYHUDJHWLPHEHWZHHQZKHQDQRUGHULVSODFHGDQG

WKHSURGXFWDUULYHV

&RPSRQHQWVRI3ULFLQJ'HFLVLRQV

7KHIROORZLQJNH\ FRPSRQHQWVRISULFLQJ GHFLVLRQVDUH LGHQWLILHG WKDW DIIHFW VXSSO\FKDLQ

SHUIRUPDQFH

Page 53: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 53/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 53

3ULFLQJDQG(FRQRPLHVRI6FDOH

0RVW VXSSO\ FKDLQ DFWLYLWLHV GLVSOD\ HFRQRPLHV RI VFDOH &KDQJHRYHUV PDNH VPDOO

SURGXFWLRQUXQVPRUHH[SHQVLYHSHUXQLWWKDQODUJHSURGXFWLRQUXQV/RDGLQJDQGXQORDGLQJ

FRVWVPDNHLW FKHDSHU WRGHOLYHU D WUXFNORDG WRRQH ORFDWLRQ WKDQ IRXU ,QHDFKFDVH WKH

SURYLGHURIWKHVXSSO\FKDLQDFWLYLW\PXVWGHFLGHKRZWRSULFHLWDSSURSULDWHO\WRUHIOHFWWKHVH

HFRQRPLHVRIVFDOH$FRPPRQO\XVHGDSSURDFKLVWRRIIHUTXDQWLW\GLVFRXQWV&DUHPXVWEH

WDNHQWRHQVXUHWKDWTXDQWLW\GLVFRXQWVRIIHUHGDUHFRQVLVWHQWZLWKWKHHFRQRPLHVRIVFDOHLQ

WKH XQGHUO\LQJ SURFHVV 2WKHUZLVH WKHUH LV D GDQJHU RI FXVWRPHU RUGHUV EHLQJ GULYHQ

SULPDULO\ E\ WKH TXDQWLW\ GLVFRXQWV HYHQ WKRXJK WKH XQGHUO\LQJ SURFHVV GRHV QRW KDYH

VLJQLILFDQWHFRQRPLHVRIVFDOH

(YHU\GD\/RZ3ULFLQJ9HUVXV+LJK/RZ3ULFLQJ

$ILUPVXFKDV&RVWFRSUDFWLFHVHYHU\GD\ORZSULFLQJDWLWVZDUHKRXVHVWRUHVNHHSLQJSULFHV

VWHDG\ RYHU WLPH &RVWFR ZLOO JR WR WKH H[WHQW RIQRW RIIHULQJ DQ\ GLVFRXQW RQ GDPDJHG

ERRNVWR HQVXUHLWVHYHU\GD\ORZSULFLQJVWUDWHJ\,QFRQWUDVWPRVWVXSHUPDUNHWVSUDFWLFH

KLJKORZ SULFLQJDQG RIIHUVWHHSGLVFRXQWV RQD VXEVHW RI WKHLUSURGXFWHYHU\ZHHN 7KH

&RVWFRSULFLQJ VWUDWHJ\ UHVXOWV LQ UHODWLYHO\VWDEOHGHPDQG 7KHKLJKORZ SULFLQJ VWUDWHJ\

UHVXOWVLQDSHDNGXULQJWKHGLVFRXQWZHHN2IWHQIROORZHGE\DVWHHSGURSLQGHPDQGGXULQJ

WKHIROORZLQJZHHNV7KHWZRSULFLQJVWUDWHJLHV OHDGWRYHU\GLIIHUHQWGHPDQGSURILOHV WKDW

WKHVXSSO\FKDLQPXVWVHUYH

)L[HG3ULFH9HUVXV0HQX3ULFLQJ

$ILUPPXVWGHFLGHZKHWKHULWZLOOFKDUJHDIL[HGSULFHIRULWVVXSSO\FKDLQDFWLYLWLHVRUKDYH

DPHQXZLWKSULFHVWKDWYDU\ZLWKVRPHRWKHUDWWULEXWHVXFKDVWKHUHVSRQVHWLPHRUORFDWLRQ

RIGHOLYHU\ ,IPDUJLQDOVXSSO\FKDLQ FRVWVRU WKHYDOXH WR WKHFXVWRPHU YDU\ VLJQLILFDQWO\

DORQJVRPHDWWULEXWHLWLVRIWHQHIIHFWLYHWRKDYHDSULFLQJPHQX

3ULFLQJ5HODWHG0HWULFV

$ PDQDJHU VKRXOG WUDFN WKH IROORZLQJ SULFLQJUHODWHG PHWULFV :LWK PHQX SULFLQJ HDFK

PHWULFVKRXOGEHWUDFNHGVHSDUDWHO\IRUHDFKVHJPHQWLQWKHPHQX

y  3URILWPDUJLQPHDVXUHVSURILWDVDSHUFHQWDJHRIUHYHQXH$ILUPQHHGVWRH[DPLQHD

ZLGH YDULHW\ RI SURILWPDUJLQPHWULFV WR RSWLPL]H LWV SULFLQJ LQFOXGLQJ GLPHQVLRQV

VXFKDV W\SHRIPDUJLQ JURVVQHWHWFVFRSH 6.8SURGXFWOLQHGLYLVLRQ ILUP

FXVWRPHUW\SHDQGRWKHUV

y  'D\VVDOHVRXWVWDQGLQJPHDVXUHVWKHDYHUDJHWLPHEHWZHHQZKHQDVDOHLVPDGHDQG

ZKHQWKHFDVKLVFROOHFWHG

y  ,QFUHPHQWDOIL[HGFRVWSHURUGHUPHDVXUHVWKHLQFUHPHQWDOFRVWVWKDWDUHLQGHSHQGHQW

RIWKHVL]HRIWKHRUGHU7KHVHLQFOXGHFKDQJHRYHUFRVWVDWDPDQXIDFWXULQJSODQWRU

Page 54: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 54/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 54

RUGHUSURFHVVLQJRU WUDQVSRUWDWLRQ FRVWV WKDW DUH LQFXUUHGLQGHSHQGHQWRIVKLSPHQW

VL]HDWDPDLORUGHUILUP

y  ,QFUHPHQWDOYDULDEOHFRVWSHUXQLWPHDVXUHVWKHLQFUHPHQWDOFRVWVWKDWYDU\ZLWKWKH

VL]H RI WKH RUGHU 7KHVH LQFOXGH SDFNLQJ FRVWV DW D PDLORUGHU ILUP RU YDULDEOH

SURGXFWLRQFRVWVDWDPDQXIDFWXULQJSODQW

y  $YHUDJHVDOHSULFHPHDVXUHVWKHDYHUDJHSULFHDWZKLFKDVXSSO\FKDLQDFWLYLW\ZDV

SHUIRUPHGLQDJLYHQSHULRG7KHDYHUDJHVKRXOGEHREWDLQHGE\ZHLJKWLQJWKHSULFH

ZLWKWKHTXDQWLW\VROGDWWKDWSULFH

y  $YHUDJHRUGHUVL]HPHDVXUHVWKHDYHUDJHTXDQWLW\SHURUGHU7KHDYHUDJHVDOHSULFH

RUGHU VL]H LQFUHPHQWDO IL[HGFRVW SHURUGHUDQG LQFUHPHQWDO YDULDEOH FRVW SHUXQLW

KHOSHVWLPDWHWKHFRQWULEXWLRQIURPSHUIRUPLQJWKHVXSSO\FKDLQDFWLYLW\

y  5DQJHRIVDOHSULFHPHDVXUHVWKHPD[LPXPDQGWKHPLQLPXPRIVDOHSULFHSHUXQLW

RYHUDVSHFLILHGWLPHKRUL]RQ

y  5DQJHRI SHULRGLF VDOHVPHDVXUHV WKHPD[LPXP DQG WKHPLQLPXPRIWKH TXDQWLW\

VROG SHU SHULRG GD\ZHHNPRQWK GXULQJ D VSHFLILHG WLPH KRUL]RQ 7KH JRDO LV WR

XQGHUVWDQGDQ\FRUUHODWLRQEHWZHHQVDOHVDQGSULFHDQGDQ\SRWHQWLDORSSRUWXQLW\WR

VKLIWVDOHVE\FKDQJLQJSULFHRYHUWLPH

'HPDQG)RUHFDVWLQJLQD6XSSO\&KDLQ

'HPDQG)RUHFDVWLQJLVWKHDFWLYLW\RIHVWLPDWLQJWKHTXDQWLW\RIDSURGXFWRUVHUYLFHWKDWFRQVXPHUV

ZLOOSXUFKDVH'HPDQG IRUHFDVWLQJ LQYROYHV WHFKQLTXHV LQFOXGLQJERWK LQIRUPDOPHWKRGV VXFKDV

HGXFDWHGJXHVVHVDQGTXDQWLWDWLYHPHWKRGVVXFKDVWKHXVHRIKLVWRULFDOVDOHVGDWDRUFXUUHQWGDWDIURPWHVWPDUNHWV'HPDQGIRUHFDVWLQJPD\EHXVHGLQPDNLQJSULFLQJGHFLVLRQVLQDVVHVVLQJIXWXUH

FDSDFLW\UHTXLUHPHQWVRULQPDNLQJGHFLVLRQVRQZKHWKHUWRHQWHUDQHZPDUNHW

1HFHVVLW\IRU)RUHFDVWLQJ'HPDQG

2IWHQIRUHFDVWLQJGHPDQGLVFRQIXVHGZLWKIRUHFDVWLQJVDOHV%XWIDLOLQJWRIRUHFDVWGHPDQG

LJQRUHVWZRLPSRUWDQWSKHQRPHQD7KHUHLVDORWRIGHEDWHLQWKHGHPDQGSODQQLQJOLWHUDWXUH

DVKRZWRPHDVXUHDQGUHSUHVHQWKLVWRULFDOGHPDQGVLQFHWKHKLVWRULFDOGHPDQGIRUPVWKH

EDVLVRIIRUHFDVWLQJ6KRXOGZHXVHWKHKLVWRU\RIRXWERXQGVKLSPHQWVRUFXVWRPHURUGHUVRU

DFRPELQDWLRQRIWKHWZRWRSUR[\IRUGHPDQG

6WRFN(IIHFWV

7KHHIIHFWVWKDWLQYHQWRU\OHYHOVKDYHRQVDOHV,QWKHH[WUHPHFDVHRIVWRFNRXWVGHPDQG

FRPLQJLQWR\RXUVWRUHLVQRWFRQYHUWHGWRVDOHVGXHWRDODFNRIDYDLODELOLW\'HPDQGLVDOVR

XQWDSSHGZKHQVDOHVIRUDQLWHPDUHGHFUHDVHGGXHWRDSRRUGLVSOD\ORFDWLRQRUEHFDXVH

WKHGHVLUHGVL]HVDUHQRORQJHUDYDLODEOH)RUH[DPSOHZKHQDFRQVXPHUHOHFWURQLFVUHWDLOHU

Page 55: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 55/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 55

GRHVQRWGLVSOD\DSDUWLFXODUIODWVFUHHQ79VDOHVIRUWKDWPRGHODUHW\SLFDOO\ORZHUWKDQWKH

VDOHV IRUPRGHOVRQ GLVSOD\$QG LQ IDVKLRQ UHWDLOLQJRQFH WKH VWRFN OHYHO RI DSDUWLFXODU

VZHDWHUIDOOVWRWKHSRLQWZKHUHVWDQGDUGVL]HVDUHQRORQJHUDYDLODEOHVDOHVRIWKDWLWHPDUH

GLPLQLVKHG

0DUNHW5HVSRQVH(IIHFWV

7KHHIIHFWRIPDUNHWHYHQWVWKDWDUHZLWKLQDQGEH\RQGD UHWDLOHUVFRQWURO'HPDQGIRUDQ

LWHPZLOO OLNHO\ULVH LIDFRPSHWLWRU LQFUHDVHV WKHSULFHRU LI\RXSURPRWHWKH LWHPLQ\RXU

ZHHNO\ FLUFXODU7KH UHVXOWLQJ VDOHV LQFUHDVH UHIOHFWVD FKDQJH LQ GHPDQG DV D UHVXOW RI

FRQVXPHUV UHVSRQGLQJ WRVWLPXOL WKDW SRWHQWLDOO\ GULYH DGGLWLRQDO VDOHV5HJDUGOHVVRI WKH

VWLPXOL WKHVH IRUFHV QHHG WR EH IDFWRUHG LQWR SODQQLQJ DQGPDQDJHGZLWKLQ WKH GHPDQG

IRUHFDVW

,Q WKLV FDVH GHPDQG IRUHFDVWLQJ XVHV WHFKQLTXHV LQ FDXVDO PRGHOLQJ 'HPDQG IRUHFDVW

PRGHOLQJ FRQVLGHUV WKH VL]H RI WKH PDUNHW DQG WKH G\QDPLFV RI PDUNHW VKDUH YHUVXVFRPSHWLWRUVDQG LWV HIIHFW RQ ILUP GHPDQG RYHU D SHULRG RI WLPH ,Q WKHPDQXIDFWXUHU WR

UHWDLOHUPRGHO SURPRWLRQDO HYHQWV DUHDQ LPSRUWDQW FDXVDO IDFWRU LQ LQIOXHQFLQJ GHPDQG

7KHVHSURPRWLRQVFDQEHPRGHOHGZLWKLQWHUYHQWLRQPRGHOVRUXVHDFRQVHQVXVSURFHVVWR

DJJUHJDWHLQWHOOLJHQFHXVLQJLQWHUQDOFROODERUDWLRQZLWKWKH6DOHVDQG0DUNHWLQJIXQFWLRQV

&RPSRQHQWVRID)RUHFDVWDQG)RUHFDVWLQJ0HWKRGV

$FRPSDQ\PXVWEHNQRZOHGJHDEOHDERXWQXPHURXVIDFWRUVWKDWDUHUHODWHGWRWKHGHPDQG

IRUHFDVW6RPHRIWKHVHIDFWRUVDUHOLVWHGQH[W

 3DVWGHPDQG

  /HDGWLPHRISURGXFW

  3ODQQHGDGYHUWLVLQJRUPDUNHWLQJHIIRUWV

  6WDWHRIWKHFRPSDQ\

  3ODQQHGSULFHGLVFRXQWV  $FWLRQVWKDWFRPSHWLWRUVKDYHWDNHQ

$ FRPSDQ\PXVWXQGHUVWDQG VXFK IDFWRUV EHIRUH LWFDQ VHOHFW DQ DSSURSULDWH IRUHFDVWLQJPHWKRGRORJ\ )RU H[DPSOH KLVWRULFDOO\ D ILUP PD\ KDYH H[SHULHQFHG ORZ GHPDQG IRU

FKLFNHQQRRGOHVRXSLQ-XO\DQGKLJKGHPDQGLQ'HFHPEHUDQG-DQXDU\,IWKHILUPGHFLGHV

WRGLVFRXQW WKH SURGXFW LQ-XO\ WKH VLWXDWLRQ LV OLNHO\ WRFKDQJHZLWK VRPH RI WKH IXWXUH

GHPDQGVKLIWLQJWRWKHPRQWKRI-XO\7KHILUPVKRXOGPDNHLWVIRUHFDVWWDNLQJWKHIDFWRULQWR

FRQVLGHUDWLRQ

)RUHFDVWLQJ0HWKRGVDUH&ODVVLILHG$FFRUGLQJWRWKH)ROORZLQJ)RXU7\SHV

Page 56: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 56/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 56

  4XDOLWDWLYH TXDOLWDWLYH IRUHFDVWLQJ PHWKRGV DUH SULPDULO\ VXEMHFWLYH DQG UHO\ RQ

KXPDQMXGJPHQW7KH\DUHPRVWDSSURSULDWHZKHQOLWWOHKLVWRULFDOGDWDLVDYDLODEOHRU

ZKHQH[SHUWV KDYHPDUNHW LQWHOOLJHQFH WKDWPD\ DIIHFW WKHIRUHFDVW6XFKPHWKRGV

PD\DOVREHQHFHVVDU\WR IRUHFDVW GHPDQG VHYHUDO \HDUV LQWR WKH IXWXUH LQD QHZ

LQGXVWU\

  7LPH VHULHV 7LPHVHULHV IRUHFDVWLQJ PHWKRGV XVH KLVWRULFDO GHPDQG WR PDNH D

IRUHFDVW 7KH\ DUH EDVHG RQ WKH DVVXPSWLRQ WKDW SDVW GHPDQG KLVWRU\ LV D JRRG

LQGLFDWRU RI IXWXUH GHPDQG 7KHVH PHWKRGV DUH PRVW DSSURSULDWH ZKHQ WKH EDVLF

GHPDQGSDWWHUQGRHVQRWYDU\VLJQLILFDQWO\IURPRQH\HDUWRWKHQH[W7KHVHDUHWKH

VLPSOHVWPHWKRGVWRLPSOHPHQWDQGFDQVHUYHDVDJRRGVWDUWLQJSRLQWIRUDGHPDQG

IRUHFDVW

  &DXVDO &DXVDO IRUHFDVWLQJ PHWKRGV DVVXPH WKDW WKH GHPDQG IRUHFDVW LV KLJKO\

FRUUHODWHGZLWKFHUWDLQIDFWRUVLQWKHHQYLURQPHQWWKHVWDWHRIWKHHFRQRP\LQWHUHVW

UDWHVHWF&DXVDOIRUHFDVWLQJPHWKRGVILQGWKHLUFRUUHODWLRQEHWZHHQGHPDQGDQG

HQYLURQPHQWDO IDFWRUV DQG XVH HVWLPDWHV RIZKDW HQYLURQPHQWDO IDFWRUVZLOO EH WR

IRUHFDVW IXWXUH GHPDQG )RU H[DPSOH SURGXFW SULFLQJ LV VWURQJO\ FRUUHODWHG ZLWK

GHPDQG&RPSDQLHVFDQWKXVXVHFDXVDOPHWKRGVWRGHWHUPLQHWKHLPSDFWRISULFH

SURPRWLRQVRQGHPDQG

  6LPXODWLRQ VLPXODWLRQ IRUHFDVWLQJPHWKRGV LPLWDWH WKHFRQVXPHU FKRLFHV WKDW JLYH

ULVH WRGHPDQG WR DUULYH DWD IRUHFDVW8VLQJ VLPXODWLRQ D ILUPFDQ FRPELQH WLPH

VHULHVDQGFDXVDOPHWKRGVWRDQVZHUVXFKTXHVWLRQVDVZKDWZLOOEHWKHLPSDFWRID

SULFH SURPRWLRQ":KDWZLOO EH WKH LPSDFW RI FRPSHWLWRU RSHQLQJ D VWRUH QHDUE\"

$LUOLQHVVLPXODWHFXVWRPHUEX\LQJEHKDYLRUWRIRUHFDVWGHPDQGIRUKLJKHUIDUHVHDWV

ZKHQWKHUHDUHQRVHDWVDYDLODEOHDWWKHORZHUIDUHV

$FRPSDQ\PD\ILQGLWGLIILFXOWWRGHFLGHZKLFKPHWKRGLVPRVWDSSURSULDWHIRUIRUHFDVWLQJ

,QIDFW VHYHUDOVWXGLHVKDYH LQGLFDWHGWKDWXVLQJPXOWLSOHIRUHFDVWLQJPHWKRGV WRFUHDWHD

FRPELQHGIRUHFDVWLVPRUHHIIHFWLYHWKDQXVLQJDQ\RQHPHWKRGDORQH

$JJUHJDWH3ODQQLQJ

$JJUHJDWHSODQQLQJLVDQRSHUDWLRQDODFWLYLW\ZKLFKGRHVDQDJJUHJDWHSODQIRUWKH

SURGXFWLRQSURFHVVLQDGYDQFHRIWRPRQWKVWRJLYHDQLGHDWRPDQDJHPHQWDV

WRZKDWTXDQWLW\RIPDWHULDOVDQGRWKHUUHVRXUFHVDUHWREHSURFXUHGDQGZKHQVR

WKDWWKHWRWDOFRVWRIRSHUDWLRQVRIWKHRUJDQL]DWLRQLVNHSWWRWKHPLQLPXPRYHUWKDW

SHULRG

7KHTXDQWLW\RIRXWVRXUFLQJVXEFRQWUDFWLQJRI LWHPVRYHUWLPHRIODERUQXPEHUVWR

EHKLUHGDQGILUHGLQHDFKSHULRGDQGWKHDPRXQWRILQYHQWRU\WREHKHOGLQVWRFNDQG

WREHEDFNORJJHGIRUHDFKSHULRGDUHGHFLGHG$OORIWKHVHDFWLYLWLHVDUHGRQHZLWKLQ

Page 57: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 57/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 57

WKH IUDPHZRUN RI WKH FRPSDQ\ HWKLFV SROLFLHV DQG ORQJ WHUP FRPPLWPHQW WR WKH

VRFLHW\FRPPXQLW\DQGWKHFRXQWU\RIRSHUDWLRQ

$JJUHJDWHSODQQLQJKDVFHUWDLQSUHUHTXLUHGLQSXWVZKLFKDUHLQHYLWDEOH7KH\LQFOXGH

y  ,QIRUPDWLRQDERXWWKHUHVRXUFHVDQGWKHIDFLOLWLHVDYDLODEOHy  'HPDQGIRUHFDVWIRUWKHSHULRGIRUZKLFKWKHSODQQLQJKDVWREHGRQH

y  &RVWRIYDULRXVDOWHUQDWLYHVDQGUHVRXUFHV7KLVLQFOXGHVFRVWRIKROGLQJLQYHQWRU\

RUGHULQJ FRVW FRVW RI SURGXFWLRQ WKURXJK YDULRXV SURGXFWLRQ DOWHUQDWLYHV OLNH

VXEFRQWUDFWLQJEDFNRUGHULQJDQGRYHUWLPH

y  2UJDQL]DWLRQDOSROLFLHVUHJDUGLQJWKHXVDJHRIDERYHDOWHUQDWLYHV

$JJUHJDWH3ODQQLQJ LV FRQFHUQHGZLWKPDWFKLQJ VXSSO\ DQG GHPDQG RI RXWSXW RYHU WKH

PHGLXPWLPHUDQJHXSWRDSSUR[LPDWHO\PRQWKVLQWRWKHIXWXUH7HUPDJJUHJDWHLPSOLHV

WKDW WKH SODQQLQJ LV GRQH IRU D VLQJOH RYHUDOOPHDVXUH RI RXWSXW RU DW WKHPRVW D IHZ

DJJUHJDWHGSURGXFWFDWHJRULHV7KHDLPRIDJJUHJDWHSODQQLQJLVWRVHWRYHUDOORXWSXWOHYHOVLQ WKH QHDU WRPHGLXP IXWXUH LQ WKH IDFHRI IOXFWXDWLQJ RUXQFHUWDLQ GHPDQGV$JJUHJDWH

SODQQLQJPLJKWVHHNWRLQIOXHQFHGHPDQGDVZHOODVVXSSO\

2EMHFWLYHVRI$JJUHJDWH3ODQQLQJ

7KHDJJUHJDWHSODQQHUVPDLQREMHFWLYHLV WRLGHQWLI\ WKHIROORZLQJRSHUDWLRQDOSDUDPHWHUV

RYHUWKHVSHFLILHGWLPHKRUL]RQ

y  3URGXFWLRQ5DWH7KH QXPEHURIXQLWV WR EH FRPSOHWHG SHU XQLW WLPH VXFKDV SHU

ZHHNRUSHUPRQWK

y  :RUNIRUFHWKHQXPEHURIZRUNHUVXQLWVRIFDSDFLW\QHHGHGIRUSURGXFWLRQ

y  2YHUWLPHWKHDPRXQWRIRYHUWLPHSURGXFWLRQSODQQHG

y  0DFKLQH &DSDFLW\ /HYHO WKH QXPEHU RI XQLWV RI PDFKLQH FDSDFLW\ QHHGHG IRU

SURGXFWLRQ

y  6XEFRQWUDFWLQJWKHVXEFRQWUDFWHGFDSDFLW\UHTXLUHGRYHUSODQQLQJKRUL]RQ

y  %DFNORJ GHPDQG QRW VDWLVILHG LQ WKH SHULRG LQZKLFK LW DULVHV EXW FDUULHG RYHU WR

IXWXUHSHULRGV

y  ,QYHQWRU\RQ+DQGWKHSODQQHGLQYHQWRU\FDUULHGRYHUWKHYDULRXVSHULRGVLQWKH

SODQQLQJKRUL]RQ

'HVLJQ2SWLRQVIRUD7UDQVSRUWDWLRQ1HWZRUN

'LVWULEXWRU6WRUDJHZLWK&DUULHU'HOLYHU\

Page 58: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 58/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 58

8QGHU WKLV RSWLRQ LQYHQWRU\ LV QRW KHOGE\PDQXIDFWXUHUV DW WKH IDFWRULHV EXW LV KHOGE\

GLVWULEXWRUVUHWDLOHUVLQLQWHUPHGLDWHZDUHKRXVHVDQGSDFNDJHFDUULHUVDUHXVHGWRWUDQVSRUW

SURGXFWV IURP WKH LQWHUPHGLDWH ORFDWLRQ WR WKH ILQDO FXVWRPHU $PD]RQFRP DV ZHOO DV

LQGXVWULDO GLVWULEXWRUV OLNH::*UDLQJHUXVH WKLVDSSURDFKFRPELQHGZLWK GURS VKLSSLQJ

IURP DPDQXIDFWXUHU ,QIRUPDWLRQ DQG SURGXFW IORZV ZKHQ XVLQJ GLVWULEXWRU VWRUDJHZLWK

GHOLYHU\E\DSDFNDJHFDUULHUDUHVKRZQLQ)LJXUH

 

Figure 20 Distributor Storage with Carrier Delivery [Source: Sunil Chopra and Pete Meindl, Supply Chain

Management]

5HODWLYHWRPDQXIDFWXUHUVWRUDJHGLVWULEXWRUVWRUDJHZLOOUHTXLUHDKLJKHUOHYHORILQYHQWRU\

EHFDXVHWKHGLVWULEXWRUUHWDLOHUZDUHKRXVHDJJUHJDWHVGHPDQGXQFHUWDLQW\WRDORZHUOHYHO

WKDQWKHPDQXIDFWXUHU)URPDQLQYHQWRU\SHUVSHFWLYHGLVWULEXWRUVWRUDJHPDNHVVHQVHIRU

SURGXFWVZLWKVRPHZKDWKLJKHUGHPDQG%RWK$PD]RQDQG*UDLQJHURQO\VWRFNWKHPHGLXP

WRIDVWPRYLQJLWHPVDWWKHLUZDUHKRXVHZLWKVORZHUPRYLQJLWHPVVWRFNHGIXUWKHUXSVWUHDP

,QVRPH LQVWDQFHVSRVWSRQHPHQW FDQEHLPSOHPHQWHGZLWK GLVWULEXWRUVWRUDJH EXW LWGRHV

UHTXLUHWKDWWKHZDUHKRXVHGHYHORSVRPHDVVHPEO\FDSDELOLW\'LVWULEXWRUVWRUDJHKRZHYHU

UHTXLUHVPXFK OHVV LQYHQWRU\ WKDQ D UHWDLO QHWZRUN$PD]RQ DFKLHYHV DERXW WXUQV RI

LQYHQWRU\XVLQJZDUHKRXVHVWRUDJHZKLOH%RUGHUVDFKLHYHVDERXWWXUQVXVLQJUHWDLOVWRUHV

7UDQVSRUWDWLRQFRVWVDUHVRPHZKDWORZHUIRUGLVWULEXWRUVWRUDJHFRPSDUHGWRPDQXIDFWXUHU

VWRUDJHEHFDXVHDQHFRQRPLFPRGHRIWUDQVSRUWDWLRQHJWUXFNORDGFDQEHHPSOR\HGIRULQERXQGVKLSPHQWVWRWKHZDUHKRXVHZKLFKLVFORVHUWRWKHFXVWRPHU8QOLNHPDQXIDFWXUHU

VWRUDJHZKHUH PXOWLSOH VKLSPHQWV PD\ QHHG WR JR RXW IRU D VLQJOH FXVWRPHU RUGHUZLWK

PXOWLSOHLWHPVGLVWULEXWRUVWRUDJHDOORZVRXWERXQGRUGHUVWRWKHFXVWRPHUWREHEXQGOHGLQWR

D VLQJOH VKLSPHQW IXUWKHU UHGXFLQJ WUDQVSRUWDWLRQ FRVW 7UDQVSRUWDWLRQ VDYLQJV IURP

GLVWULEXWRUVWRUDJHUHODWLYHWRPDQXIDFWXUHUVWRUDJHLQFUHDVHIRUIDVWHUPRYLQJLWHPV

Page 59: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 59/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 59

&RPSDUHG WR PDQXIDFWXUHU VWRUDJH IDFLOLW\ FRVWV DUH VRPHZKDW KLJKHU ZLWK GLVWULEXWRU

VWRUDJHEHFDXVHRIDORVVRIDJJUHJDWLRQ3URFHVVLQJDQGKDQGOLQJFRVWVDUHFRPSDUDEOHWR

PDQXIDFWXUHUVWRUDJHXQOHVVWKHIDFWRU\LVDEOHWRVKLSWRWKHHQGFXVWRPHUGLUHFWO\IURPWKH

SURGXFWLRQOLQH,QWKDWFDVHGLVWULEXWRUVWRUDJHZLOOKDYHKLJKHUSURFHVVLQJFRVWV)URPD

IDFLOLW\ FRVW SHUVSHFWLYHGLVWULEXWRU VWRUDJH LVQRWDSSURSULDWH IRUH[WUHPHO\ VORZPRYLQJ

LWHPV

7KHLQIRUPDWLRQ LQIUDVWUXFWXUHQHHGHGZLWKGLVWULEXWRUVWRUDJH LVVLJQLILFDQWO\OHVVFRPSOH[

WKDQWKDWQHHGHGZLWKPDQXIDFWXUHUVWRUDJH7KHGLVWULEXWRUZDUHKRXVHVHUYHVDVDEXIIHU

EHWZHHQ WKH FXVWRPHU DQG WKH PDQXIDFWXUHU GHFUHDVLQJ WKH QHHG WR FRRUGLQDWH WKH WZR

FRPSOHWHO\5HDO WLPHYLVLELOLW\EHWZHHQFXVWRPHUVDQGWKHZDUHKRXVHLVQHHGHGZKHUHDV

UHDOWLPHYLVLELOLW\EHWZHHQWKHFXVWRPHUDQGWKHPDQXIDFWXUHULVQRW9LVLELOLW\EHWZHHQWKH

GLVWULEXWRUZDUHKRXVHDQGPDQXIDFWXUHUFDQEHDFKLHYHGDWDPXFKORZHUFRVWWKDQUHDOWLPH

YLVLELOLW\EHWZHHQWKHFXVWRPHUDQGPDQXIDFWXUHU

5HVSRQVH WLPHZLWK GLVWULEXWRU VWRUDJH LV EHWWHU WKDQZLWKPDQXIDFWXUHU VWRUDJH EHFDXVH

GLVWULEXWRU ZDUHKRXVHV DUH RQ DYHUDJH FORVHU WR FXVWRPHUV DQG WKH HQWLUH RUGHU LV

DJJUHJDWHG DW WKH ZDUHKRXVH ZKHQ VKLSSHG $PD]RQ IRU H[DPSOH SURFHVVHV DOO

ZDUHKRXVHVWRUHG LWHPV ZLWKLQ D GD\ DQG LW WKHQ WDNHV EXVLQHVV GD\V XVLQJ JURXQG

WUDQVSRUWDWLRQIRU WKHRUGHUWRUHDFKWKHFXVWRPHU*UDLQJHUSURFHVVHVFXVWRPHURUGHUVRQ

WKH VDPH GD\ DQGKDV HQRXJKZDUHKRXVHV WRGHOLYHUPRVWRUGHUV QH[W GD\XVLQJ JURXQG

WUDQVSRUW:DUHKRXVHVWRUDJHZLOOOLPLWWRVRPHH[WHQWWKHYDULHW\RISURGXFWVWKDWFDQEH

RIIHUHG *UDLQJHU GRHV QRW VWRUH YHU\ ORZ YROXPH LWHPV DW LWV ZDUHKRXVH UHO\LQJ RQ

PDQXIDFWXUHUVWRGURSVKLSVWKRVHSURGXFWVWRWKHFXVWRPHU&XVWRPHUFRQYHQLHQFHLVKLJK

ZLWKGLVWULEXWRUVWRUDJHEHFDXVHDVLQJOHVKLSPHQWUHDFKHVWKHFXVWRPHULQUHVSRQVHWRDQ

RUGHU2UGHU YLVLELOLW\EHFRPHV HDVLHU WKDQ ZLWKPDQXIDFWXUHU VWRUDJH EHFDXVH WKHUH LV D

VLQJOHVKLSPHQWIURPWKHZDUHKRXVHWRWKHFXVWRPHUDQGRQO\RQHVWDJHRIWKHVXSSO\FKDLQ

LV GLUHFWO\ LQYROYHG LQ ILOOLQJ WKH FXVWRPHU RUGHU 5HWXUQ DELOLW\ LV EHWWHU WKDQ ZLWK

PDQXIDFWXUHU VWRUDJH EHFDXVH DOO UHWXUQV FDQ EH SURFHVVHG DW WKH ZDUHKRXVH LWVHOI 7KH

FXVWRPHU DOVR KDV WR UHWXUQ RQO\ RQH SDFNDJH HYHQ LI WKH LWHPV DUH IURP VHYHUDO

PDQXIDFWXUHUV

7KHSHUIRUPDQFHRIGLVWULEXWRUVWRUDJHZLWKFDUULHUGHOLYHU\LVVXPPDUL]HGLQ7DEOH

Page 60: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 60/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 60

'LVWULEXWRU VWRUDJHZLWK FDUULHU GHOLYHU\ LVZHOO VXLWHG IRU PHGLXP WR IDVW PRYLQJ LWHPV

'LVWULEXWRUVWRUDJHDOVRPDNHVVHQVHZKHQFXVWRPHUVZDQWGHOLYHU\IDVWHUWKDQRIIHUHGE\

PDQXIDFWXUHU VWRUDJH EXW GR QRW QHHG LW LPPHGLDWHO\ 'LVWULEXWRU VWRUDJH FDQ KDQGOH

VRPHZKDWORZHUYDULHW\WKDQPDQXIDFWXUHUVWRUDJHEXWFDQKDQGOHDPXFKKLJKHUOHYHORI

YDULHW\WKDQDFKDLQRIUHWDLOVWRUHV

'LVWULEXWRU6WRUDJHZLWK/DVW0LOH'HOLYHU\

/DVWPLOHGHOLYHU\UHIHUVWRWKHGLVWULEXWRUUHWDLOHUGHOLYHULQJWKHSURGXFWWRWKHFXVWRPHUV

KRPHLQVWHDGRIXVLQJDSDFNDJHFDUULHU:HEYDQ3HDSRGDQG$OEHUWVRQVKDYHXVHGODVW

PLOH GHOLYHU\ LQ WKH JURFHU\ LQGXVWU\ 8QOLNH SDFNDJH FDUULHU GHOLYHU\ ODVWPLOH GHOLYHU\

UHTXLUHVWKHGLVWULEXWRUZDUHKRXVHWREHPXFKFORVHUWRWKHFXVWRPHULQFUHDVLQJWKHQXPEHU

Page 61: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 61/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 61

RIZDUHKRXVHVUHTXLUHG7KHZDUHKRXVHVWRUDJHZLWKODVWPLOHGHOLYHU\QHWZRUNLVDVVKRZQ

LQ)LJXUH

 

Figure 21 Distributor Storage With Last Mile Delivery [Source: Sunil Chopra and Pete Meindl, Supply Chain

Management]

'LVWULEXWRUVWRUDJHZLWKODVWPLOHGHOLYHU\UHTXLUHVKLJKHUOHYHOVRILQYHQWRU\WKDQDOORSWLRQV

RWKHU WKDQ UHWDLO VWRUHV EHFDXVH LW KDV D ORZHU OHYHO RI DJJUHJDWLRQ )URP DQ LQYHQWRU\

SHUVSHFWLYHZDUHKRXVHVWRUDJHZLWKODVWPLOHGHOLYHU\LVVXLWDEOHIRUUHODWLYHO\IDVWPRYLQJ

LWHPVZKHUHGLVDJJUHJDWLRQGRHVQRWOHDGWRDVLJQLILFDQWLQFUHDVHRILQYHQWRU\6WDSOHLWHPV

LQWKHJURFHU\LQGXVWU\ILWWKLVGHVFULSWLRQ

7UDQVSRUWDWLRQFRVWVDUHKLJKHVWXVLQJODVWPLOHGHOLYHU\7KLVLVEHFDXVHSDFNDJHFDUULHUVDJJUHJDWHGHOLYHU\DFURVVPDQ\UHWDLOHUVDQGDUHDEOHWRREWDLQEHWWHUHFRQRPLHVRIVFDOH

WKDQ DYDLODEOH WR D GLVWULEXWRU UHWDLOHU DWWHPSWLQJ ODVW PLOH GHOLYHU\ 'HOLYHU\ FRVWV

LQFOXGLQJSLFNLQJDQGWUDQVSRUWDWLRQFDQEHDVKLJKDVSHUKRPHGHOLYHU\LQWKH

JURFHU\ LQGXVWU\ /DVW PLOH GHOLYHU\ PD\ EH VRPHZKDW FKHDSHU LQ GHQVH FLWLHV

7UDQVSRUWDWLRQFRVWVPD\DOVREHMXVWLILDEOHIRUEXON\SURGXFWVZKHUHWKHFXVWRPHULVZLOOLQJ

WRSD\IRUKRPHGHOLYHU\+RPHGHOLYHU\IRUZDWHUDQGODUJHEDJVRIULFHKDVSURYHGTXLWH

VXFFHVVIXOLQ&KLQDZKHUHWKHKLJKSRSXODWLRQGHQVLW\KDVKHOSHGGHFUHDVHGHOLYHU\FRVWV

)DFLOLW\ DQG SURFHVVLQJ FRVWV DUH YHU\ KLJK XVLQJ WKLV RSWLRQ JLYHQ WKH ODUJH QXPEHU RI

IDFLOLWLHVUHTXLUHG)DFLOLW\FRVWVDUHVRPHZKDWORZHUWKDQDQHWZRUNZLWKUHWDLOVWRUHVEXWPXFK KLJKHU WKDQ HLWKHUPDQXIDFWXUHU VWRUDJHRU GLVWULEXWRU VWRUDJH ZLWK SDFNDJH FDUULHU

GHOLYHU\3URFHVVLQJFRVWVKRZHYHUDUHPXFKKLJKHUWKDQDQHWZRUNRIUHWDLOVWRUHVEHFDXVH

DOOFXVWRPHUSDUWLFLSDWLRQLVHOLPLQDWHG$JURFHU\VWRUHGRLQJODVWPLOHGHOLYHU\SHUIRUPVDOO

WKHSURFHVVLQJXQWLOWKHSURGXFWLVGHOLYHUHGWRWKHFXVWRPHUVKRPHXQOLNHDVXSHUPDUNHW

ZKHUHWKHUHLVPXFKPRUHFXVWRPHUSDUWLFLSDWLRQ

Page 62: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 62/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 62

7KHLQIRUPDWLRQ LQIUDVWUXFWXUHZLWK ODVWPLOH GHOLYHU\ LV VLPLODU WRGLVWULEXWRU VWRUDJHZLWK

SDFNDJH FDUULHU GHOLYHU\ ,W UHTXLUHV KRZHYHU WKH DGGLWLRQDO FDSDELOLW\ RI VFKHGXOLQJ

GHOLYHULHV5HVSRQVH WLPHVDUHIDVWHU WKDQWKHXVHRISDFNDJHFDUULHUV3URGXFWYDULHW\ LV

JHQHUDOO\ORZHUWKDQGLVWULEXWRUVWRUDJHZLWKFDUULHUGHOLYHU\7KHFRVWRISURYLGLQJSURGXFW

DYDLODELOLW\LVKLJKHUWKDQHYHU\RSWLRQRWKHUWKDQUHWDLOVWRUHV7KHFXVWRPHUH[SHULHQFHLV

YHU\JRRGXVLQJWKLVRSWLRQSDUWLFXODUO\IRUEXON\KDUGWRFDUU\LWHPV2UGHUYLVLELOLW\LVOHVVRIDQLVVXHJLYHQWKDWGHOLYHULHVDUHPDGHZLWKLQKRXUV7KHRUGHUWUDFNLQJIHDWXUHGRHV

EHFRPHLPSRUWDQWWRKDQGOHH[FHSWLRQVLQFDVHRILQFRPSOHWHRUXQGHOLYHUHGRUGHUV2IDOO

WKHRSWLRQV GLVFXVVHG UHWXUQDELOLW\ LVEHVWZLWK ODVWPLOH GHOLYHU\ EHFDXVHWUXFNVPDNLQJ

GHOLYHULHVFDQDOVRSLFNXSUHWXUQVIURPFXVWRPHUV5HWXUQVDUHPRUHH[SHQVLYHWRKDQGOH

WKDQDWDUHWDLOVWRUHZKHUHDFXVWRPHUFDQEULQJWKHSURGXFWEDFN

7KH SHUIRUPDQFH FKDUDFWHULVWLFV RI GLVWULEXWRU VWRUDJH ZLWK ODVW PLOH GHOLYHU\ DUH

VXPPDUL]HGLQ7DEOH

Page 63: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 63/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 63

,Q DUHDVZLWK KLJK ODERU FRVW LW LV YHU\ KDUG WR MXVWLI\ GLVWULEXWRU VWRUDJHZLWK ODVW PLOH

GHOLYHU\RQWKHEDVLVRIHIILFLHQF\RULPSURYHGPDUJLQ,WFDQRQO\EHMXVWLILHGLIWKHUHLVD

ODUJHHQRXJKFXVWRPHUVHJPHQWZLOOLQJWRSD\IRUWKLVFRQYHQLHQFH,QWKDWFDVHDQHIIRUW

VKRXOGEHPDGHWRFRXSOHODVWPLOHGHOLYHU\ZLWKDQH[LVWLQJQHWZRUNWRH[SORLWHFRQRPLHVRI

VFDOH DQG LPSURYH XWLOL]DWLRQ $Q H[DPSOH LV $OEHUWVRQV XVH RI H[LVWLQJ JURFHU\ VWRUHIDFLOLWLHV DQG ODERU WR SURYLGH KRPH GHOLYHU\ $ SRUWLRQ RI WKH JURFHU\ VWRUH VHUYHV DV D

IXOILOOPHQWFHQWHUIRURQOLQHRUGHUVDVZHOODVDUHSOHQLVKPHQWFHQWHUIRUWKHJURFHU\VWRUH

LWVHOI7KLVKHOSVLPSURYHXWLOL]DWLRQDQGORZHUWKHFRVWRISURYLGLQJWKLVVHUYLFH/DVWPLOH

GHOLYHU\PD\EHMXVWLILDEOHLIFXVWRPHURUGHUVDUHODUJHHQRXJKDQGFXVWRPHUVDUHZLOOLQJWR

SD\IRUWKLVVHUYLFH$OOKRPHGHOLYHU\FRPSDQLHVOLNH3HDSRGQRZFKDUJHIRUWKLVVHUYLFH

HYHQIRUYHU\ODUJHRUGHUVL]HV

Page 64: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 64/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 64

0DQXIDFWXUHURU'LVWULEXWRU6WRUDJHZLWK&XVWRPHU3LFNXS

,Q WKLV DSSURDFK LQYHQWRU\ LV VWRUHG DW WKH PDQXIDFWXUHU RU GLVWULEXWRU ZDUHKRXVH EXW

FXVWRPHUV SODFH WKHLU RUGHUV RQOLQH RURQ WKH SKRQH DQG WKHQ FRPH WRGHVLJQDWH SLFNXS

SRLQWVWRFROOHFWWKHLURUGHUV2UGHUVDUHVKLSSHGIURPWKHVWRUDJHVLWHWRWKHSLFNXSSRLQWVDV

QHHGHG([DPSOHVLQFOXGHGUHDPFRPRSHUDWHGE\(OHYHQ-DSDQZKLFKDOORZVFXVWRPHUV

WRSLFNXSRQOLQHRUGHUV DWD GHVLJQDWHG VWRUH$%%H[DPSOH LV::*UDLQJHUZKHUH

FXVWRPHUV FDQ SLFN XS WKHLU RUGHU DW RQH RI WKH *UDLQJHU UHWDLO RXWOHWV ,Q WKH FDVH RI

GUHDPFRP WKH RUGHU LV GHOLYHUHG IURP DPDQXIDFWXUHU RU GLVWULEXWRU ZDUHKRXVH WR WKH

SLFNXSORFDWLRQ,QWKHFDVHRI*UDLQJHUVRPHLWHPVDUHVWRUHGDWWKHSLFNXSORFDWLRQZKLOH

RWKHUVPD\FRPHIURPDFHQWUDOORFDWLRQ7KHLQIRUPDWLRQDQGSURGXFWIORZVLQWKHQHWZRUN

IRU(OHYHQ-DSDQLVDVVKRZQLQ)LJXUH

 

Figure 22 Manufacturer or Distributor Warehouse Storage with Customer Pickup [Source: Sunil Chopra

and Pete Meindl, Supply Chain Management]

(OHYHQKDVGLVWULEXWLRQFHQWHUV'&ZKHUHSURGXFW IURPPDQXIDFWXUHUVLV FURVVGRFNHG

DQGVHQWWRUHWDLORXWOHWVRQDGDLO\EDVLV$UHWDLOHUGHOLYHULQJDQRQOLQHRUGHUFDQEHWUHDWHG

DV RQH RI WKH PDQXIDFWXUHUV ZLWK GHOLYHULHV FURVVGRFNHG DQG VHQW WR WKH DSSURSULDWH (OHYHQRXWOHW6HUYLQJDVDQRXWOHWIRURQOLQHRUGHUVDOORZV(OHYHQWRLPSURYHXWLOL]DWLRQRI

LWVH[LVWLQJORJLVWLFDODVVHWV

,QYHQWRU\FRVWVXVLQJWKLVDSSURDFKFDQEHNHSWORZZLWKHLWKHUPDQXIDFWXUHURUGLVWULEXWRU

VWRUDJHWRH[SORLWDJJUHJDWLRQ*UDLQJHUNHHSVLWVLQYHQWRU\RIIDVWPRYLQJLWHPVDWSLFNXS

ORFDWLRQVZKLOHVORZPRYLQJLWHPVDUHVWRFNHGDWDFHQWUDORUZDUHKRXVHRULQVRPHFDVH

WKHPDQXIDFWXUHU

Page 65: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 65/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 65

7UDQVSRUWDWLRQ FRVW LV ORZHU WKDQ DQ\ VROXWLRQXVLQJSDFNDJH FDUULHUVEHFDXVH VLJQLILFDQW

DJJUHJDWLRQ LV SRVVLEOH ZKHQ GHOLYHULQJ RUGHUV WR D SLFNXS VLWH 7KLV DOORZV WKH XVH RI

WUXFNORDGRUOHVVWKDQWUXFNORDGFDUULHUVWRWUDQVSRUWRUGHUVWRWKHSLFNXSVLWH,QDFDVHOLNH

(OHYHQ -DSDQ WKHPDUJLQDO LQFUHDVH LQ WUDQVSRUWDWLRQ FRVW LV VPDOOEHFDXVH WUXFNV DUH

DOUHDG\PDNLQJGHOLYHULHV WR WKHVWRUHVDQG WKHLU XWLOL]DWLRQ FDQEHLPSURYHGE\ LQFOXGLQJ

RQOLQHRUGHUV

)DFLOLW\FRVWVDUHKLJKLIQHZSLFNXSVLWHVKDYHWREHEXLOW$VROXWLRQXVLQJH[LVWLQJVLWHVZLOO

ORZHUWKHDGGLWLRQDOIDFLOLW\FRVWV7KLVIRUH[DPSOHLVWKHFDVHZLWKGUHDPFRPDQG::

*UDLQJHU ZKHUH WKH VWRUHV DOUHDG\ H[LVW 3URFHVVLQJ FRVWV DW WKH PDQXIDFWXUHU RU WKH

ZDUHKRXVHDUHFRPSDUDEOHWRRWKHUVROXWLRQV3URFHVVLQJFRVWVDW WKHSLFNXSVLWHDUHKLJK

EHFDXVHHDFKRUGHUPXVWEHPDWFKHGZLWKDVSHFLILFFXVWRPHUZKHQWKH\DUULYH&UHDWLQJ

WKLV FDSDELOLW\ FDQ LQFUHDVH SURFHVVLQJ FRVWV VLJQLILFDQWO\ LI DSSURSULDWH VWRUDJH DQG

LQIRUPDWLRQV\VWHPVDUHQRWSURYLGHG ,QFUHDVHG SURFHVVLQJ FRVW DW WKHSLFNXS VLWHLV WKH

ELJJHVWKXUGOHWRWKHVXFFHVVRIWKLVDSSURDFK

$VLJQLILFDQWLQIRUPDWLRQLQIUDVWUXFWXUHLVQHHGHGWRSURYLGHYLVLELOLW\RIWKHRUGHUXQWLOWKH

FXVWRPHUSLFNV LWXS9HU\JRRG FRRUGLQDWLRQ LVQHHGHGEHWZHHQ WKH UHWDLOHU WKH VWRUDJH

ORFDWLRQDQGWKHSLFNXSORFDWLRQ

$ UHVSRQVH WLPHFRPSDUDEOHWRWKHXVHRISDFNDJH FDUULHUVFDQEHDFKLHYHG LQ WKLV FDVH

9DULHW\DQGDYDLODELOLW\FRPSDUDEOHWRDQ\PDQXIDFWXUHURUGLVWULEXWRUVWRUDJHRSWLRQFDQEH

SURYLGHG 7KHUH LV VRPH ORVV RI FXVWRPHU H[SHULHQFH EHFDXVH XQOLNH WKH RWKHU RSWLRQV

GLVFXVVHGFXVWRPHUVPXVW FRPHDQG SLFNXS WKHLU RUGHUV2QWKHRWKHU KDQGFXVWRPHUV

ZKRGRQRWZDQWWRSD\RQOLQHFDQSD\E\FDVKXVLQJ WKLVRSWLRQ ,QFRXQWULHVOLNH-DSDQ

ZKHUH HOHYHQ KDV RYHU RXWOHWV LW FDQ EH DUJXHG WKDW WKH ORVV RI FXVWRPHU

FRQYHQLHQFHLVVPDOOEHFDXVHPRVWFXVWRPHUVDUHFORVHWRDSLFNXSVLWHDQGFDQFROOHFWWKHLURUGHU DW WKHLU RZQ FRQYHQLHQFH ,Q VRPH FDVHV WKLV RSWLRQ FDQ EH FRQVLGHUHG PRUH

FRQYHQLHQWEHFDXVHLWGRHVQRWUHTXLUHWKHFXVWRPHUWREHDWKRPHDWWKHWLPHRIGHOLYHU\

2UGHUYLVLELOLW\LVH[WUHPHO\LPSRUWDQWIRUFXVWRPHUSLFNXSV7KHFXVWRPHUPXVWEHLQIRUPHG

ZKHQ WKH RUGHU KDV DUULYHG DQG WKH RUGHU VKRXOG EHHDVLO\ LGHQWLILHG RQFH WKH FXVWRPHU

DUULYHVWRSLFNLWXS6XFKDV\VWHPZLOOEHKDUGWRLPSOHPHQWEHFDXVHLWUHTXLUHVLQWHJUDWLRQ

RIVHYHUDOVWDJHVLQWKHVXSSO\FKDLQ5HWXUQVFDQSRWHQWLDOO\EHKDQGOHGDWWKHSLFNXSVLWH

7KHSUREOHPZLWKVRPHH[LVWLQJVLWHVVXFKDV(OHYHQVWRUHVLVWKDWWKH\DUHQRWHTXLSSHG

WR DFFHSW DQG SURFHVV UHWXUQV IRU SURGXFWV QRW VROG DW WKH VWRUHV )URP D WUDQVSRUWDWLRQ

SHUVSHFWLYHKRZHYHUUHWXUQIORZVFDQEHKDQGOHGXVLQJWKHGHOLYHU\WUXFNV)RUFXVWRPHUV

UHWXUQLQJDSURGXFWZLOOEHHDV\EHFDXVHWKH\KDYHDSK\VLFDOORFDWLRQWREULQJLWWR2YHUDOO

UHWXUQDELOLW\LVIDLUO\JRRGXVLQJWKLVRSWLRQ

7KH SHUIRUPDQFH FKDUDFWHULVWLFV RI PDQXIDFWXUHU RU GLVWULEXWRU VWRUDJH ZLWK FRQVXPHU

SLFNXSVLWHVDUHVXPPDUL]HGLQ7DEOH

Page 66: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 66/169

Page 67: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 67/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 67

FRPSDQLHV WKDW RIIHU PXOWLSOH RSWLRQV RI RUGHU SODFHPHQW LQFOXGH $OEHUWVRQVFRP

$OEHUWVRQVXVHVSDUWRI WKHIDFLOLW\DVD JURFHU\VWRUHDQGSDUWRIWKHIDFLOLW\DVDQRQOLQH

IXOILOOPHQWFHQWHU&XVWRPHUVFDQZDONLQWRWKHVWRUHRURUGHURQOLQH$%%H[DPSOHLV:

:*UDLQJHUZKHUHFXVWRPHUVFDQRUGHURQOLQH E\SKRQH RULQ SHUVRQDQG SLFNXS WKHLU

RUGHUDWRQH RI WKH *UDLQJHU UHWDLO RXWOHWV $OEHUWVRQV VWRUHV LWV LQYHQWRU\ DW WKH SLFNXS

ORFDWLRQLWVHOI,QWKHFDVHRI*UDLQJHUVRPHLWHPVDUHVWRUHGDWWKHSLFNXSORFDWLRQZKLOHRWKHUVPD\FRPHIURPDFHQWUDOORFDWLRQ

/RFDO VWRUDJH LQFUHDVHV LQYHQWRU\ FRVWV EHFDXVH RI ODFN RI DJJUHJDWLRQ )RU YHU\ IDVW

PRYLQJ LWHPV KRZHYHU WKHUH LVPDUJLQDO LQFUHDVH LQ LQYHQWRU\ HYHQ ZLWK ORFDO VWRUDJH

$OEHUWVRQVXVHVORFDOVWRUDJHJLYHQWKDWPRVWRILWVSURGXFWVDUHUHODWLYHO\IDVWPRYLQJDQG

DUHEHLQJVWRFNHGDWWKHVXSHUPDUNHWLQDQ\FDVH6LPLODUO\*UDLQJHUNHHSVLWVLQYHQWRU\RI

IDVWPRYLQJ LWHPV DWSLFNXS ORFDWLRQVZKLOH VORZPRYLQJ LWHPV DUH VWRFNHG DWD FHQWUDO

ZDUHKRXVH

7UDQVSRUWDWLRQ FRVW LV PXFK ORZHU WKDQ RWKHU VROXWLRQV EHFDXVH LQH[SHQVLYH PRGHV RI

WUDQVSRUWFDQEHXVHGWRUHSOHQLVKSURGXFWDWWKHUHWDLOVWRUH)DFLOLW\FRVWVDUHKLJKEHFDXVH

PDQ\ ORFDO IDFLOLWLHV DUH UHTXLUHG $ PLQLPDO LQIRUPDWLRQ LQIUDVWUXFWXUH LV QHHGHG LI

FXVWRPHUVZDONLQWRWKHVWRUHDQGSODFHWKHLURUGHU)RURQOLQHRUGHUVKRZHYHUDVLJQLILFDQW

LQIRUPDWLRQLQIUDVWUXFWXUHLVQHHGHGWRSURYLGHYLVLELOLW\RIWKHRUGHUXQWLOWKHFXVWRPHUSLFNV

LWXS

9HU\ JRRG UHVSRQVH WLPHV FDQ EH DFKLHYHG LQ WKLV FDVH EHFDXVH RI ORFDO VWRUDJH )RU

H[DPSOHERWK$OEHUWVRQVDQG*UDLQJHURIIHUVDPHGD\SLFNXSIURPWKHLUUHWDLOORFDWLRQV

3URGXFWYDULHW\VWRUHGORFDOO\ZLOOEHORZHUWKDQRWKHURSWLRQV,WLVPRUHH[SHQVLYHWKDQDOO

RWKHURSWLRQV WR SURYLGH D KLJK OHYHO RI SURGXFW DYDLODELOLW\ 2UGHUYLVLELOLW\ LV H[WUHPHO\

LPSRUWDQWIRUFXVWRPHUSLFNXSVZKHUHRUGHUVDUHSODFHGRQOLQHRURQWKHSKRQH5HWXUQVFDQEHKDQGOHGDWWKHSLFNXSVLWH2YHUDOOUHWXUQDELOLW\LVIDLUO\JRRGXVLQJWKLVRSWLRQ

7KHSHUIRUPDQFHFKDUDFWHULVWLFVRIDQHWZRUNZLWKFXVWRPHUSLFNXSVLWHVDQG ORFDOVWRUDJH

VXFKDVUHWDLOVWRUHVDUHVXPPDUL]HGLQ7DEOH

Page 68: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 68/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 68

7KHPDLQDGYDQWDJHRIDQHWZRUNZLWKORFDOVWRUDJHLVWKDWLWFDQORZHUWKHGHOLYHU\FRVWDQG

SURYLGH D IDVWHU UHVSRQVH WKDQ RWKHUQHWZRUNV 7KHPDMRU GLVDGYDQWDJH LV WKH LQFUHDVHG

LQYHQWRU\ DQG IDFLOLW\FRVWV6XFKD QHWZRUNLV EHVWVXLWHGIRU IDVWPRYLQJ LWHPVRULWHPV

ZKHUHFXVWRPHUVYDOXHWKHUDSLGUHVSRQVH

'LUHFW6KLSSLQJZLWK0LON5XQV

$PLON UXQ LV D URXWHRQ ZKLFK D WUXFNHLWKHU GHOLYHUVSURGXFW IURP D VLQJOH VXSSOLHU WR

PXOWLSOHUHWDLOHUVRUJRHVIURPPXOWLSOHVXSSOLHUVWRDVLQJOHEX\HUORFDWLRQDVVKRZQLQWKH

ILJXUHEHORZ

Page 69: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 69/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 69

Figure 23 Direct Shipping with Milk Runs, Single supplier to multiple retailers

Figure 24 Direct shipping with milk runs, multiple suppliers to single retailer [Source: Sunil Chopra and Pete

Meindl, Supply Chain Management]

,QGLUHFWVKLSSLQJZLWKPLONUXQVDVXSSOLHUGHOLYHUVGLUHFWO\WRPXOWLSOHEX\HUORFDWLRQVRQD

WUXFN RU D WUXFN SLFNV XS GHOLYHULHV GHVWLQHV IRU WKH VDPH EX\HU ORFDWLRQ IURP PDQ\

VXSSOLHUV:KHQXVLQJWKLVRSWLRQDVXSSO\FKDLQPDQDJHUKDVWRGHFLGHRQWKHURXWLQJRI

HDFKPLONUXQ

/HDQ6XSSO\&KDLQ0DQDJHPHQW

$QRWKHU LPSRUWDQW FRQFHSW LQ VXSSO\ FKDLQ LV HIIHFWLYHO\ PDQDJLQJ WKH ZDVWH JHQHUDWHG

GXULQJVXSSO\FKDLQRSHUDWLRQVSDUWLFXODUO\SURGXFWLRQDOVRUHIHUUHGWRDV/HDQ6XSSO\&KDLQ

PDQDJHPHQW/HDQVXSSO\FKDLQPDQDJHPHQWLV QRWH[FOXVLYHO\IRU WKRVHFRPSDQLHVZKR

PDQXIDFWXUH SURGXFWV EXW E\ EXVLQHVVHV ZKR ZDQW WR VWUHDPOLQH WKHLU SURFHVVHV E\

HOLPLQDWLQJZDVWH DQG QRQYDOXH DGGHG DFWLYLWLHV &RPSDQLHV KDYH D QXPEHURIDUHDV LQWKHLUVXSSO\FKDLQZKHUHZDVWH FDQ EHLGHQWLILHGDV WLPH FRVWVRU LQYHQWRU\7R FUHDWH D

OHDQHUVXSSO\FKDLQFRPSDQLHVPXVWH[DPLQHHDFKDUHDRIWKHVXSSO\FKDLQ7KHVWXG\RI

GLIIHUHQWDVSHFWVZKHQFRQVLGHULQJOHDQPDQXIDFWXULQJRUOHDQVXSSO\FKDLQLVLOOXVWUDWHGDV

IROORZV

  3URFXUHPHQW

Page 70: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 70/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 70

0DQ\EXVLQHVVHVKDYHFRPSOH[SXUFKDVLQJRSHUDWLRQV/DUJHFRPSDQLHVRIWHQKDYH

FRUSRUDWH SXUFKDVLQJJURXSVDVZHOODVORFDOSXUFKDVLQJ 7KLV FDQOHDG WRYHQGRUV

EHLQJJLYHQPXOWLSOHFRQWUDFWVOHDGLQJWRYDULDWLRQVLQSULFHVGHSHQGLQJRQORFDWLRQ

&RPSDQLHV WKDW SUDFWLFH OHDQVXSSO\ FKDLQPDQDJHPHQW UHGXFH WKHLU SURFXUHPHQW

IXQFWLRQVR WKDWHDFKYHQGRUKDVRQHSRLQWRIFRQWDFWRQHFRQWUDFWDQGRIIHUVRQH

SULFHIRUDOO ORFDWLRQV%XVLQHVVHVDUHORRNLQJWRQHZWHFKQRORJLHV WRDVVLVWWKHPLQLPSURYLQJ SURFXUHPHQW SURFHVVHV 7KHVH LQFOXGH LQWHUQHW EDVHG SXUFKDVLQJ WKDW

DOORZV UHTXLVLWLRQHUV WR SXUFKDVH LWHPV IURP YHQGRUV FDWDORJV FRQWDLQLQJ

FRPSDQ\ZLGH FRQWUDFW SULFHV &KDQJHV LQ SD\PHQW RSWLRQV WR YHQGRUV FDQ DOVR

VWUHDPOLQHSURFHVVHV&RPSDQLHV WKDWXVHD WZRZD\PDWFKZKLFK LVSD\PHQWRQ

UHFHLSW UDWKHU WKDQ SD\PHQW RQ LQYRLFH ZLOO UHGXFH UHVRXUFHV LQ WKHLU SXUFKDVLQJ

GHSDUWPHQWDVZHOODVLPSURYHVXSSOLHUUHODWLRQVKLSV

  0DQXIDFWXULQJ

/HDQVXSSO\FKDLQPDQDJHPHQWJDLQHGSRSXODULW\LQWKHPDQXIDFWXULQJDUHDDVWKLVLVZKHUH VLJQLILFDQW LPSURYHPHQW FDQ EH DFKLHYHG0DQXIDFWXULQJ SURFHVVHV FDQ EH

LPSURYHGWRUHGXFHZDVWHDQGUHVRXUFHVZKLOHPDLQWDLQLQJRSHUDWLRQDOSHUIRUPDQFH

&RPSDQLHVZKRKDYHDGRSWHGOHDQ VXSSO\FKDLQ SUDFWLFHVKDYHH[DPLQHGHDFK RI

WKHLUURXWLQJVELOORIPDWHULDOVDQGHTXLSPHQWWRLGHQWLI\ZKHUHLPSURYHPHQWVFDQEH

DFKLHYHG

  :DUHKRXVLQJ

:DUHKRXVH SURFHVVHV VKRXOG EH H[DPLQHG WR ILQG DUHDV RI HOLPLQDWLQJ ZDVWH RI

UHVRXUFHV DQG QRQYDOXH DGGHG VWHSV2QH DUHD WKH FRPSDQLHV VKRXOG DOZD\V EHZRUNLQJRQLVWKHUHGXFWLRQRIXQQHFHVVDU\LQYHQWRU\7KHDFFXPXODWLRQRILQYHQWRU\

UHTXLUHV UHVRXUFHV WRVWRUHDQGPDLQWDLQ LW %\ UHGXFLQJ XQQHFHVVDU\ LQYHQWRU\ D

FRPSDQ\ FDQ PLQLPL]HZDUHKRXVLQJ VSDFH DQG KDQGOLQJ LQ WXUQ UHGXFLQJ RYHUDOO

FRVWV

  7UDQVSRUWDWLRQ

%XVLQHVVHVZKRZDQWWRLPSOHPHQWOHDQSURFHVVHVRIWHQORRNWRWKHLUWUDQVSRUWDWLRQ

SURFHGXUHVWRVHHZKHUHWKH\FDQEHVWUHDPOLQHG,QPDQ\LQVWDQFHVFRPSDQLHVILQG

WKDW WKHLUHIIRUWVWR LPSURYHFXVWRPHUVDWLVIDFWLRQOHDGV WRSRRUVKLSSLQJGHFLVLRQV

2UGHUV DUH VKLSSHG ZLWKRXW FRPELQLQJ DGGLWLRQDO RUGHUV WR PLQLPL]H FRVWV RU

H[SHQVLYHVKLSSLQJRSWLRQVDUHVHOHFWHGEHFDXVHRIDFXVWRPHUUHTXHVW%XVLQHVVHV

RIWHQILQGWKDWWKH\DUHXVLQJDQXPEHURIVKLSSHUVXQQHFHVVDULO\ZKHQWKH\FRXOGEH

UHGXFLQJWKHLUVKLSSLQJRSWLRQVDQGUHGXFHRYHUDOOFRVWV

/HDQ VXSSO\ FKDLQ PDQDJHPHQW UHTXLUHV EXVLQHVVHV WR H[DPLQH HYHU\ SURFHVV LQ WKHLU

VXSSO\ FKDLQ DQG LGHQWLI\ DUHDV WKDW DUH XVLQJ XQQHFHVVDU\ UHVRXUFHV ZKLFK FDQ EH

Page 71: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 71/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 71

PHDVXUHGLQGROODUVWLPHRUUDZPDWHULDOV7KLVZLOOLPSURYHWKHFRPSDQ\VFRPSHWLWLYHQHVV

DVZHOODVLPSURYHWKHFRPSDQ\VRYHUDOOSURILWDELOLW\

5HGXFLQJ:DVWHLQWKH6XSSO\&KDLQ

%XVLQHVVHVDUHH[DPLQLQJHYHU\DUHDRIWKHLUVXSSO\FKDLQWRUHGXFHFRVWV5HGXFLQJZDVWHKDVEHFRPHDNH\FRPSRQHQWRIDQ\FRVWUHGXFWLRQSURJUDPWKDWLVLPSOHPHQWHG7KHUHDUH

DQXPEHURI SURFHVVHV WKDWFDQ EHXVHG LQRUGHU WR UHGXFHZDVWH LQD FRPSDQ\VVXSSO\

FKDLQ

  3URGXFW'HVLJQ

0DQ\FRPSDQLHVDUHH[DPLQLQJWKHGHVLJQRIWKHLUSURGXFWVWRLGHQWLI\ZKHUHWKHXVH

RIUDZPDWHULDOVFDQEHUHGXFHGRUH[SHQVLYHPDWHULDOVEHUHSODFHG ,QGHHGPDQ\

EXVLQHVVHVDUHUHYLHZLQJHDFKFRPSRQHQWWRLGHQWLI\ZKHWKHULWFDQEHPDQXIDFWXUHG

RUSXUFKDVHGPRUHFKHDSO\:KHQGHVLJQLQJSURGXFWSDFNDJLQJRSWLRQVFRPSDQLHVDUHH[DPLQLQJFKHDSHUDQGOHVVZDVWHIXOPDWHULDOV

  5HVRXUFH0DQDJHPHQW

(DFKSURGXFWLRQSURFHVVVKRXOGEHH[DPLQHGWRPLQLPL]HWKHZDVWHRIUDZPDWHULDOV

,QPDQXIDFWXULQJRSHUDWLRQVSURFHVVHVWKDWZDVWHPDWHULDOWKDWFDQQRWEHUHF\FOHGRU

UHXVHGPXVW EH UHGHVLJQHG (YHQ LQSURFHVVHV WKDW GR SURGXFHZDVWH WKDW FDQ EH

UHF\FOHGVKRXOGEHH[DPLQHGGXHWRWKHFRVWVLQUHF\FOLQJSURFHVVHV

  8VHRI6FUDS0DWHULDO

$VZHOODVPLQLPL]LQJWKHZDVWHRIUDZPDWHULDOVLQPDQXIDFWXULQJSURFHVVHVWKHXVH

UHXVH RI ZDVWH PDWHULDO FDQ EH H[SDQGHG ,PSURYHPHQWV LQ WKH WHFKQRORJ\ RI

UHFODLPLQJZDVWHPDWHULDOKDVPHDQWWKDWFRPSDQLHVWKDWSUHYLRXVO\GLVFDUGHGZDVWH

SURGXFWV QRZ KDYH WKH DELOLW\ WR UHXVH WKDW PDWHULDO $V WKH UHF\FOLQJ WHFKQRORJ\

EHFRPHVPRUHDYDLODEOHWKHFRVWVZLOOLQHYLWDEO\IDOOKHOSLQJPRUHEXVLQHVVHVZLWK

ZDVWHLVVXHV

  ,PSURYLQJ4XDOLW\

4XDOLW\FRQWUROLVEXLOWLQWRDOOPDQXIDFWXULQJSURFHVVHVEXWLVXVXDOO\IRFXVHGRQWKHILQLVKHGSURGXFWUDWKHUWKDQPLQLPL]LQJZDVWH4XDOLW\PDQDJHPHQWVKRXOGLQFOXGH

WKH JRDO RIPLQLPL]LQJ WKHZDVWH RI UDZPDWHULDOV DV ZHOO DV SURGXFLQJ D TXDOLW\

SURGXFW ,PSURYLQJ WKH RYHUDOO TXDOLW\ RI D FRPSDQ\VPDQXIDFWXULQJ SURFHVVZLOO

UHGXFH ZDVWH RYHUDOO DV LW ZLOO LQFUHDVH WKH TXDQWLW\ RI ILQLVKHG JRRGV WKDW SDVV

TXDOLW\LQVSHFWLRQ

Page 72: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 72/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 72

:KHQ FRPSDQLHV DUH FRQVLGHULQJZDVWHPLQLPL]DWLRQ SURJUDPV WKH\ZLOO ILQG WKDW VRPH

FRVWVZLOOEHUHTXLUHGLQWKHLPSOHPHQWDWLRQ+RZHYHUDVWKRVHSURJUDPVFRPHRQOLQHWKH

UHGXFWLRQ LQ ZDVWH ZLOO SURGXFH FRVW VDYLQJV JUHDWHU WKDQ WKH LQLWLDO LQYHVWPHQW 7KH

LPSOHPHQWDWLRQ RI ZDVWH PLQLPL]DWLRQ SURJUDPV KDV EHHQ VXFFHVVIXO LQ LPSURYLQJ

FRPSDQ\VSURGXFWVDVZHOODVUHGXFLQJRYHUDOOFRVWV 

Page 73: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 73/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 73

Chapter 4

Supply Chain of Pepsi Haidri Beverages

Page 74: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 74/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 74

&KDSWHU

6XSSO\&KDLQRI3HSVL+DLGUL%HYHUDJHV

8QGHUVWDQGLQJ6XSSO\&KDLQRI+DLGUL%HYHUDJHV

$VZHKDYHDOUHDG\GLVFXVVHGWKHFRQFHSWRIVXSSO\FKDLQLQGHWDLOLWZRXOGQRZEHPXFK

HDVLHUWRXQGHUVWDQGWKHFXUUHQWVXSSO\FKDLQRSHUDWHGPDQXDOO\E\+DLGULEHYHUDJHV

6XSSO\&KDLQ6WUDWHJ\RU'HVLJQ

,Q RUGHU WR HQVXUH D JRRG VXSSO\ FKDLQ VWUDWHJ\ +DLGUL %HYHUDJHV SODQV WZR \HDUV LQ

DGYDQFH ,W KDV VHYHUDO FRQWUDFWV ZLWK PDQXIDFWXUHUV DQG UHFHLYHV UDZ PDWHULDO RQ D

FRQYHQLHQW EDVLV 7KH FRPSDQ\ DOVR GHFLGHV ZKHUH SURGXFWLRQ SODQWV DUH WR EH SODFHG+DLGULKDVSURGXFWLRQSODQWVDW3HVKDZDUDQG ,VODPDEDG7KH SURGXFWLRQSURFHVVLV

DXWRPDWHG7KHFRPSDQ\KDVWRSURYLGHDQGPDQDJHWUDQVSRUWIRUWKHGHOLYHU\RISURGXFWV

DV ZHOO DV WKH DUUDQJHPHQW RI WKLUGSDUW\ VHUYLFHV IRU WKH SURFXUHPHQW RI SURGXFWV 7KH

VKLSSLQJGHSDUWPHQWKDQGOHVRUGHUVDQGWKH WUDQVSRUWGHSDUWPHQWGHFLGHVWKHYHKLFOHVIRU

VDIHGHOLYHU\

0DWHULDOSODQQLQJDQGVRXUFLQJLVFDUULHGRXWDVZHOO6RXUFHVRIVXSSO\RIUDZPDWHULDOERWK

ORFDODQGIRUHLJQDUHLGHQWLILHGDQGWHUPVDQGFRQGLWLRQVDUHQHJRWLDWHG&DSDFLW\SODQQLQJ

LV DOVR GRQH DW WKLV VWDJH 6DOHV IRUHFDVWLQJ DQG SURGXFWLRQ SODQQLQJ GHSHQGV XSRQ WKH

FDSDFLW\RIWKHRUJDQL]DWLRQZLWKUHVSHFWWR

  3URGXFWLRQFRQYHUWHG0/FUDWHVSHUGD\

  6WRUDJH5DZDQGSDFNLQJ6T)W  6WRUDJH)LQLVKHGJRRGV6T)W

+DLGULKDVD SURFXUHPHQWEXGJHW RI5VELOOLRQ$SSURYHGVXSSOLHUVFDQQRWJREH\RQG

WKLVEXGJHW7KHVXSSOLHU LVDXGLWHGE\WKHPRVWFRVW HIILFLHQWTXDOLW\FRQWUROGHSDUWPHQW

'LVWULEXWRUV DUH DOVR GHFLGHG E\ WKH FRPSDQ\ NHHSLQJ LQPLQG SDVW SHUIRUPDQFHV 7KH

FRPSDQ\KDVLQFUHDVHGLWVGLVWULEXWLRQFDSDFLW\IURPRQHWRVL[ILOOLQJOLQHVGXULQJWKHODVW

IHZ\HDUVOHQGLQJLWDFRPSHWLWLYHHGJHRYHU&RFD&ROD

6XSSO\&KDLQ3ODQQLQJ

$VWKHDERYHFRQILJXUDWLRQVKDYHEHHQVHWSODQQLQJPXVWEHGRQHZLWKLQWKHDERYHVWDWHG

FRQVWUDLQWV 7KH JRDO RI SODQQLQJ LV WR PD[LPL]H WKH VXSSO\ FKDLQ VXUSOXV 3ODQQLQJ

HVWDEOLVKHV SDUDPHWHUVZLWKLQ ZKLFK D VXSSO\ FKDLQ ZLOO IXQFWLRQ RYHU D SHULRG RI WLPH

&RPSDQLHVVWDUWWKHSODQQLQJSKDVHZLWKDIRUHFDVWIRUWKHFRPLQJ\HDURIGHPDQG3HSVL

FDUULHVRXW VDOHV IRUHFDVWLQJ IRUORFDO GHPDQG DVZHOODVIRUH[SRUWSXUSRVHV WRFRXQWULHV

Page 75: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 75/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 75

VXFKDV$IJKDQLVWDQ7KHDQQXDOVDOHVWDUJHWLVFRQYH\HGWRWKHVXSSO\FKDLQGHSDUWPHQWRI

+DLGUL%HYHUDJHV3ODQQLQJLVFDUULHGRXWRQDPRQWKO\ZHHNO\DQGGDLO\EDVLVDW+DLGUL

6XSSO\&KDLQ2SHUDWLRQ

&RPSDQ\PDNHVGHFLVLRQUHJDUGLQJ LQGLYLGXDO FXVWRPHURUGHUV7KHJRDO RIVXSSO\ FKDLQRSHUDWLRQVLV WRKDQGOHLQFRPLQJFXVWRPHURUGHUVLQ WKHEHVWSRVVLEOHPDQQHU'XULQJWKLV

SKDVHILUPVDOORFDWHLQYHQWRU\RUSURGXFWLRQWRLQGLYLGXDORUGHUVVHWDGDWHWKDWDQRUGHULV

WREHILOOHGJHQHUDWHSLFNOLVWVDWDZDUHKRXVHDOORFDWHWRVKLSSLQJVHWGHOLYHU\DQGVRRQ

7KHUHLVOHVVXQFHUWDLQW\DERXWGHPDQG$W+DLGULWKHSURGXFWLRQVDOHVDQGVXSSO\FKDLQ

GHSDUWPHQWVJHWWRJHWKHUWRGHFLGHWKHLQYHQWRU\XVXDOO\RQDZHHNO\EDVLV

3URFHVV9LHZVRID6XSSO\&KDLQ

3HSVLKDVDVHDVRQDOGHPDQG-XVWLQWLPHFRQFHSWLVDSSOLFDEOHLQQRQVHDVRQDOSHULRGDQG

QRW DSSOLFDEOH LQ VHDVRQDO SHULRG $OO SURFHVVHV WKDW DUH SDUW RI WKH SURFXUHPHQW F\FOH

PDQXIDFWXULQJF\FOHUHSOHQLVKPHQWF\FOHDQGFXVWRPHURUGHUF\FOHDUHSXVKSURFHVVHV

3HSVL6DOHVRUGHUDQGSURFHVVLQJ7KH6KLSSLQJ0DQDJHU UHFHLYHVVDOHVRUGHUIURP6DOHV

7HDPGLVWULEXWRUVWKURXJKWHOHSKRQH ID[HPDLORQHGD\EHIRUHGLVSDWFK7KHVDOHVDUH

PDGHWREDVHGLVWULEXWRUVRQDGYDQFHSD\PHQWDJDLQVWRUGHUVWKHQVKLSSLQJPDQDJHUSODQV

DFFRUGLQJWRWKHGHPDQGRIGLVWULEXWRUVRQGDLO\EDVLV

&RPSHWLWLYH(GJHDQG6XSSO\&KDLQ6WUDWHJLHV

 Figure 25 Supply Chain Strategy for Pepsi

7KHUHDUHWKUHHPDMRUVXVWDLQDEOHDGYDQWDJHVWKDWJLYH3HSVL&RDFRPSHWLWLYHHGJHDVWKH\RSHUDWHLQWKHJOREDOPDUNHWSODFH

  %LJPXVFXODUEUDQGV

  3URYHQDELOLW\WRLQQRYDWHDQGFUHDWHGLIIHUHQWLDWHGSURGXFWVDQG  3RZHUIXOJRWRPDUNHWV\VWHPV

Page 76: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 76/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 76

3HSVL&RVRYHUDOOPLVVLRQLVWRLQFUHDVHWKHYDOXHRIVKDUHKROGHUVLQYHVWPHQW7KH\GRWKLV

WKURXJK VDOHVJURZWKFRVW FRQWUROV DQGZLVH LQYHVWPHQWRI UHVRXUFHV 7KH\ EHOLHYH WKHLU

FRPPHUFLDO VXFFHVV GHSHQGV XSRQ RIIHULQJ TXDOLW\ DQG YDOXH WR WKHLU FRQVXPHUV DQG

FXVWRPHUV SURYLGLQJ SURGXFWV WKDW DUH VDIH ZKROHVRPH HFRQRPLFDOO\ HIILFLHQW DQG

HQYLURQPHQWDOO\VRXQGDQGSURYLGLQJDIDLUUHWXUQWRWKHLULQYHVWRUVZKLOHDGKHULQJWRWKH

KLJKHVWVWDQGDUGVRILQWHJULW\$FXVWRPHUZKLOHSXUFKDVLQJDERWWOHRI3HSVLZLOOFRQVLGHUSURGXFWTXDOLW\SULFH DQG DYDLODELOLW\ RI WKHSURGXFW7KXV 3HSVL LQ3DNLVWDQSDUWLFXODUO\

IRFXVHVLWVFRPSHWLWLYHVWUDWHJ\DVWRSURGXFLQJVXIILFLHQWYDULHW\UHDVRQDEOHSULFHVDQGWKH

DYDLODELOLW\RIWKHSURGXFW

6XSSO\&KDLQ6WUDWHJ\

6WHS7KH&XVWRPHUDQG6XSSO\&KDLQ8QFHUWDLQW\

D  ,GHQWLI\LQJ&XVWRPHU1HHGV

+DLGUL QHHGV WR XQGHUVWDQG WKH FXVWRPHU QHHGV IRU HDFK WDUJHWHG VHJPHQW DQG WKHXQFHUWDLQW\WKHVXSSO\FKDLQIDFHVLQVDWLVI\LQJWKHVHQHHGV$V+DLGULGHDOVZLWKEHYHUDJHV

ZKLFKDUHDIDVWPRYLQJFRQVXPHUJRRGLWNQRZVWKHUHTXLUHPHQWVRIFRQVXPHUV3HSVLLV

FRQVLGHUHGDVDGULQNZKLFKLVUHIUHVKLQJGXULQJVXPPHUDQGWDNHQUHJXODUO\GXULQJZLQWHU

ZLWKGHPDQGKLNLQJDURXQG IHVWLYDOVVXFKDV(LGDQGRFFDVLRQV VXFKDVZHGGLQJV+DLGUL

FDWHUV WR ERWK FLWLHV DQG UXUDO DUHDV ,W XQGHUVWDQGV WKH QHHGV RI ERWK $V GHPDQG IRU

EHYHUDJHVLVVHDVRQDOWKHTXDQWLW\RISURGXFWQHHGHGIRUHDFKORWLVWDNHQFDUHRIZLWKSDVW

GHPDQG LQPLQG&RQVXPHUV JHQHUDOO\ UHTXLUHD VPDOO UHVSRQVH WLPH KLJK VHUYLFH OHYHO

UHDVRQDEOHSULFHDQGVRPHYDULHW\IRUH[DPSOHKHDOWKFRQVFLRXVSHRSOHIDYRUGLHWYHUVLRQV

RIVRGDV

E'HPDQG8QFHUWDLQW\DQG,PSOLHG'HPDQG8QFHUWDLQW\

'HPDQGIRU3HSVLYDULHVE\SURGXFW)RUH[DPSOHWKHUHLVDJUHDWHUGHPDQGIRU3HSVLDV

FRPSDUHGWR0LULQGD$SSOHZKLFKLVQHZ+HQFH3HSVLKDVDORZGHPDQGXQFHUWDLQW\DV

FRPSDUHGWR0LULQGD$SSOH7KHSURGXFW3HSVLLV DSSURDFKLQJ LWVPDWXULW\VWDJH LQWKH

3/&ZKHUHDV0LULQGD$SSOHLVLQWKHLQWURGXFWRU\VWDJH

3HSVLV LPSOLHGGHPDQG XQFHUWDLQW\YDULHVZLWK WKHSURGXFW W\SH DVZHOO DV WKHFXVWRPHU

QHHGV'XHWRGHFUHDVHG OHDGWLPHWKHFXVWRPHUPD\SXUFKDVHLWVFRPSHWLWRUVSURGXFWLI

3HSVL LV QRW DYDLODEOH DW WKDW WLPH QHHG IRU JUHDWHU YDULHW\DQG KLJKHU OHYHO RI VHUYLFH

LPSOLHGGHPDQGXQFHUWDLQW\LQFUHDVHV7KLVLVWUXHIRUFLWLHVZKHUHXQPHWGHPDQGE\3HSVL

LVPHWE\&RFD&ROD$PUDW&RODDQGRWKHUVXFKFRPSHWLWRUV6XSSO\ XQFHUWDLQW\ LV DOVR DIIHFWHG E\ QHZ SURGXFWV 1HZ SURGXFWV KDYH KLJKHU VXSSO\

XQFHUWDLQW\

6WHS8QGHUVWDQGLQJWKH6XSSO\&KDLQ&DSDELOLWLHV

Page 77: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 77/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 77

)LJXUH

7KHHIILFLHQF\DQGUHVSRQVLYHQHVVYDULHVDFFRUGLQJWRWKHFRQVXPHUQHHGVLPSOLHGGHPDQG

XQFHUWDLQW\SURGXFWW\SHDQGPDUNHWVHJPHQWV,QUHPRWHDUHDV WKHFRPSDQ\ IRFXVHVRQ

EHLQJ VRPHZKDW HIILFLHQW DV RWKHUPRGHV RI WUDQVSRUWDWLRQ FRXOG WXUQ WKH SURGXFW WR EH

KLJKO\H[SHQVLYH$FFRUGLQJWRWKHFRPSDQ\LW GRHVQRWGHDOZLWKGLVWULEXWRUVZKRGRQRW

KDYHWRYHKLFOHVWKHUHIRUHDVWKHFRPSDQ\KDVIRFXVRQFRVWUHGXFWLRQXVHVVORZDQG

LQH[SHQVLYHPRGHVRIWUDQVSRUWDWLRQWKHGHPDQGLVFHUWDLQDQGXVHVHFRQRPLHVRIVFDOHLQSURGXFWLRQWKHSURGXFW3HSVLLVPRUH LQFOLQHGWRZDUGVEHLQJVRPHZKDWHIILFLHQW,QFLWLHV

WKH FRPSDQ\IRFXVHV LWV DWWHQWLRQRQEHLQJKLJKO\ UHVSRQVLYHDV3HSVL KDVWRPHHWVKRUW

OHDGWLPHPHHWDKLJKVHUYLFHOHYHOKDQGOHDODUJHYDULHW\RISURGXFWVDQGUHVSRQGWRZLGH

UDQJHVRITXDQWLW\GHPDQGHGHVSHFLDOO\DWWKHUHWDLOVWDJH

6WHS$FKLHYLQJWKH6WUDWHJLF)LW

0DNLQJRQHVWDJHPRUHUHVSRQVLYHDOORZVWKHRWKHUVWDJHWRIRFXVRQEHLQJPRUHHIILFLHQW

7KH 3HSVLVXSSO\ FKDLQDVVLJQ GLIIHUHQW UROHV WR LWV GLIIHUHQW VWDJHV WKH FRPSDQ\KDV WR

GHFLGHHLWKHUWRWUDQVIHUWKHUHVSRQVLYHQHVVWRWKHPDQXIDFWXUHVWDJHRUWRWKHUHWDLOHUVWDJH

:KLOH GLVFXVVLQJ WKH 3HSVLV VXSSO\ FDSDELOLW\ LW LV VHHQ WKDW 3HSVL WHQGV WR EH PRUHUHVSRQVLYHLQWKHFLWLHVDQGDELWOHVVLQWRZQV7KHUHIRUHWUDQVIHUULQJWKHUHVSRQVLYHQHVVWR

WKHUHWDLOHU DQG GLVWULEXWRUDOORZLQJ WKHP WR IDFHWKHKLJKHU LPSOLHGGHPDQG XQFHUWDLQW\

7KLVLQUHWXUQDOORZVWKHPDQXIDFWXUHUDQGVXSSOLHUWREHPRUHHIILFLHQW$WWKHVDPHWLPH

PXOWLSOHEHYHUDJHW\SHVFRQWULEXWHWRDEURDGHUSURGXFWSRUWIROLRFDXVLQJ+DLGULWRDGMXVWLWV

VWUDWHJLHVDFFRUGLQJO\WDLORULQJWKHVXSSO\FKDLQWREHVWPHHWWKHQHHGVRIHDFKEHYHUDJH

GHPDQG

'LVWULEXWLRQ&KDQQHOV

  'LUHFWGLVWULEXWLRQo  'HOLYHU\RISRVWPL[F\OLQGHUVKDQGOLQJRINH\DFFRXQWV7KHNH\DFFRXQWV

DUH GLIIHUHQW ZKROHVDOHUV UHVWDXUDQWV DQG KRWHOV OLNH 3L]]D+XW.)&0HWUR

ZKLFKVHUYHDVDSODFHIRUNH\VDOH7KHVHDUHNQRZQDVQDWLRQDONH\DFFRXQWV

DQGDUHYHU\LPSRUWDQWLQWHUPVRIFRPSHWLWLRQ

o  ([SRUW3DUWLHV

  ,QGLUHFWGLVWULEXWLRQ

Highly Efficient Highly ResponsiveSomewhat Efficient SomewhatResponsive

In towns PEPSI in cities 

Page 78: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 78/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 78

o  7KURXJK%DVHPDUNHWGLVWULEXWRUV

o  7KURXJK2XWVWDWLRQGLVWULEXWRUV

+DLGULXVHVOLJKWDQGKHDY\YHKLFOHVIRUVDIHGHOLYHU\RIJRRGVWRWKHGLVWULEXWRUVIRUWLPHO\

GHOLYHU\,WIROORZVWKHMXVWLQ WLPHFRQFHSWZKLFKLVDSSOLFDEOHLQ1RQVHDVRQDOSHULRGDQGQRWDSSOLFDEOHLQWKHVHDVRQDOSHULRG

5HYLHZDQG5HYLVH'LVWULEXWLRQ

7KLV LV XVXDOO\ GRQH WKURXJK WDNLQJ RYHU NH\ UHYHQXH DUHDV ,I WKH GLVWULEXWRU GRHV QRW

DFKLHYHLWVVDOHVWDUJHWWKHGLVWULEXWLRQLVWDNHQEDFNDQGDQDGGLWLRQRIQHZGLVWULEXWRULV

GRQH 7KHUHIRUH 3HSVLV VXSSO\ LV ORZ VXSSO\ XQFHUWDLQW\ 6RPH RI LWV VXSSO\ VRXUFH

FDSDELOLWLHVDUH

  /HVVEUHDNGRZQV  +LJKTXDOLW\  )OH[LEOHVXSSO\FDSDFLW\  0DWXUHSURGXFWLRQSURFHVV

)DFWRUV,QIOXHQFLQJ'LVWULEXWLRQ1HWZRUN'HVLJQ

$WWKHKLJKHVWOHYHOSHUIRUPDQFHRIDGLVWULEXWLRQQHWZRUNVKRXOGEHHYDOXDWHGDORQJWZR

GLPHQVLRQV

 &XVWRPHUQHHGVWKDWDUHPHW

  &RVWRIPHHWLQJFXVWRPHUQHHGV

7KHFXVWRPHUQHHGVWKDWDUHPHWLQIOXHQFHWKHFRPSDQ\VUHYHQXHVZKLFKDORQJZLWKFRVW

GHFLGH WKHSURILWDELOLW\ RI WKHGHOLYHU\QHWZRUN:KLOH FXVWRPHU VHUYLFH FRQVLVWV RIPDQ\

FRPSRQHQWVZH ZLOO FRQVLGHU WKRVHPHDVXUHV WKDW DUH LQIOXHQFHGE\ WKH VWUXFWXUH RI WKH

GLVWULEXWLRQQHWZRUNIRU3HSVL

5HVSRQVH7LPHIRU3HSVLLVPLQLPDODVWKHGLUHFWFXVWRPHUVIRU3HSVLDUHWKHUHWDLOHUVDQG

WKHQWKHFRQVXPHUV6RZLWKRYHUGHOLYHU\WUXFNVLQ,VODPDEDG3HSVLLVUHDGLO\DYDLODEOH

WRHYHU\UHWDLOHUZLWKLQPLQXWHV5DZDOSLQGLKDVZDUHKRXVHVIURPZKHUHWKHVXSSO\WR

WKHPDUNHWLVGRQHWKURXJK6KHK]RUHRUVPDOOFDUV3URGXFW9DULHW\LQ3HSVLLVODUJH7KH\KDYHPDGHWKHLUSODFHLQWKHPDUNHWZLWKWKHLUXQLTXH

SURGXFWOLQHUDQJLQJIURPFKLSVWRZDWHU$VZHDUHGHDOLQJZLWK+DLGULWKHSURGXFWYDULHW\

LQFOXGHVEHYHUDJHVUDQJLQJIURPWKHZDWHU$TXDILQDWR0RXQWDLQ'HZ3HSVL3HSVL0D[

8S0LULQGD0LULQGD$SSOH)RXQWDLQ)UHVK

Page 79: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 79/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 79

&XVWRPHUV 'HVLUH 3HSVL DQG 0RXQWDLQ 'HZ WKH PRVW 0RXQWDLQ 'HZ KDV WKH KLJKHVW

FRQVXPSWLRQLQ*XMUDQZDOOD5HFHQWO\WKHVDOHVIRUPOERWWOHVKDVGHFUHDVHGEXWWKH\

DUHWU\LQJWRLQFUHDVHLWDVLWJLYHVWKHFRPSDQ\KLJKHUSURILWV

$YDLODELOLW\RI3HSVLLVYHU\KLJKDQGWKHSURGXFWLVDOZD\VDYDLODEOHLQVWRFNZKHQHYHUDQ

RUGHUDUULYHV:KHQHYHUWKHGLVWULEXWRUVIHHOWKDWDIWHURQHORDGLQJWKHUHFRXOGEHDVWRFNRXW

WKH\SODFHDQRUGHUWR+DLGUL%HYHUDJHVLQDGYDQFHMXVWWRNHHSWKHIORRUZLWKHQRXJKVWRFN

LQ KDQG 7KH 'LVWULEXWRUV KDYH GD\V VWRFN DV EDFN XS ZLWK WKHP LQ RUGHU RI DQ\

PDOIXQFWLRQLQJRIWKHSODQWRURWKHUVXFKH[WHUQDOIDFWRUV

&XVWRPHU([SHULHQFHIRU3HSVLKDVDOZD\VEHHQSRVLWLYHDVWKH\UHFHLYHWKHSURGXFWZLWK

HDVH DQG RQ WLPH 7KH UHWDLOHUV DUH WKH GLUHFW FXVWRPHUV DV WKH\ SODFH DQ RUGHU WR WKH

GLVWULEXWRUV7KHUHKDVQHYHUEHHQD VKRUWDJHRUD GHOD\ IRU3HSVLLQ0HWUR RU3L]]D+XW

ZKLFKDUHWKHNH\DFFRXQWVIRUWKHFRPSDQ\

2UGHU9LVLELOLW\LQ3HSVLLVQRWUHDOO\DQHOHFWURQLFSKHQRPHQRQZKHUH\RXFDQWUDFN\RXU

RUGHUWKURXJKFRPSXWHU6LQFHWKHDUHDFRYHUHGE\3HSVL+DLGUL%HYHUDJHVLVQRWWRRELJ

DQGGLVWDQFHLQPLOHVLVQRWWRRODUJHLWLVTXLWHHDV\IRUDGLVWULEXWRUWRWUDFNKLVRUGHUYLDSKRQHFDOORURQORFDWLRQLQTXLU\

5HWXUQDELOLW\RI3HSVLKDVDOZD\VEHHQYHU\VWURQJLQDVHQVHWKDWXQVDWLVIDFWRU\LWHPVFDQ

EHUHWXUQHGDQGFKDQJHGRQ WKHVSRW7KLVLVWUXHIRUERWKWKHFRQVXPHUVDQGWKHUHWDLOHUV

3HSVLKDVODLGGRZQDV\VWHPWKURXJKZKLFKWKH\FDQHIIHFWLYHO\PDQDJHWKLVUHTXLUHPHQW

7KHUHWDLOHUVDUH WROGWRWDNHGRZQWKHFRPPHQWVDQGWKHDGGUHVVRUSKRQHQXPEHUVIURP

WKHSHUVRQZKR LVUHWXUQLQJ WKHERWWOH ,WVHHPVDWILUVW WKDWDFXVWRPHUDOZD\VZDQWV WKH

KLJKHVW OHYHO RI SHUIRUPDQFH DORQJ DOO WKHVHGLPHQVLRQV LQ SUDFWLFH KRZHYHU WKLV LV QRW

DOZD\VWKHFDVH

 'HVLJQ2SWLRQVIRU'LVWULEXWLRQ1HWZRUN

'LVWULEXWRU6WRUDJHZLWK&DUULHU'HOLYHU\

,Q 3HSVL LQYHQWRU\ LV QRW KHOG E\ WKH PDQXIDFWXUHUV DW WKH IDFWRULHV EXW LV KHOG E\

GLVWULEXWRUVUHWDLOHUVLQLQWHUPHGLDWHZDUHKRXVHVDQGSDFNDJHFDUULHUVDUHXVHGWRWUDQVSRUW

WKHSURGXFWVIURPWKHLQWHUPHGLDWHORFDWLRQWRWKHILQDOFXVWRPHU7KLVUHTXLUHVGLVWULEXWRU

VWRUDJH WR NHHS KLJK OHYHOV RI LQYHQWRU\ EHFDXVH GLVWULEXWRUUHWDLOHU DJJUHJDWHV GHPDQG

XQFHUWDLQW\ WR D ORZHU OHYHO WKDQ WKH PDQXIDFWXUHU 7UDQVSRUWDWLRQ FRVWV IRU 3HSVL DUH

VRPHZKDW ORZHU EHFDXVH DQ HFRQRPLF PRGH RI WUDQVSRUWDWLRQ HJ WUXFNORDG FDQ EH

HPSOR\HGIRULQERXQGVKLSPHQWVWRWKHZDUHKRXVHZKLFKLVFORVHUWRWKHFXVWRPHU)DFLOLW\FRVWLVKLJKEHFDXVHRIDORVVRIDJJUHJDWLRQDQGRIWHQHQGXSZLWKKLJKHUSURFHVVLQJFRVWV

7KHLQIRUPDWLRQVWUXFWXUHQHHGHGLVQRWWKDWFRPSOH[7KHGLVWULEXWLRQZDUHKRXVHVHUYHVDV

DEXIIHUEHWZHHQPDQXIDFWXUHUDQGFXVWRPHU5HDOWLPHYLVLELOLW\EHWZHHQFXVWRPHUVDQG

ZDUHKRXVHLVQHHGHGZKHUHDVYLVLELOLW\EHWZHHQFXVWRPHUDQGPDQXIDFWXUHULVQRWUHTXLUHG

5HVSRQVH WLPH LV DOVR UHGXFHG &XVWRPHU FRQYHQLHQFH LV KLJK DQG RUGHU YLVLELOLW\ ZLWK

PDQXIDFWXUHUVWRUDJHEHFRPHVHDVLHU'LVWULEXWRUVWRUDJH LVZHOOVXLWHGIRUPHGLXPWRIDVW

PRYLQJJRRGVDQGLWFDQDOVRKDQGOHKLJKHUOHYHORIYDULHW\WKDQUHWDLOVWRUHV

Page 80: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 80/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 80

Figure 27 Distributor Storage with Carrier Delivery method is used by Pepsi Haidri Beverages [Source: Pepsi

Shipment Department]

9DOXHRI'LVWULEXWLRQ6\VWHP

7KHUHDUHEDVLFDOO\WZRFRPSRQHQWVRIGLVWULEXWLRQ

y  6WRUDJH

y  'LVWULEXWLRQ

7KH VWRUDJH IDFLOLWLHV RI +DLGLUL %HYHUDJHV DUH GHVLJQHG LQ RUGHU WR ERRVW WKH WLPHO\

DYDLODELOLW\RIWKHSURGXFW)RUWKLVSXUSRVHWKHGLVWULEXWRUVDUHIXOO\HTXLSSHGZLWKIDFLOLWLHV

WKDWDUHQHHGHGWRHQVXUHLQWHQVLYHVXSSO\RIWKHSURGXFW7KHVWRUDJHIDFLOLWLHVDUHGHVLJQHG

WRFRQWDLQWKHPD[LPXPSRVVLEOHLQYHQWRU\LWHPVWKDWDUHQHHGHGDWDQ\JLYHQWLPH

+DLGLUL %HYHUDJHV KDV HVWDEOLVKHG VHYHUDO VWRUDJH XQLWV QHDUHU WR WKHPDUNHW LQ RUGHU WR

ERRVWDYDLODELOLW\7UDQVSRUWDWLRQFRQGXFWVLQYHQWRU\PRYHPHQWIURPSRLQWWRSRLQWLQVXSSO\

FKDLQRI+DLGHUL%HYHUDJHV,W LQFRUSRUDWHVDFRPELQDWLRQRIPRGHVDQGURXWHVDWGLIIHUHQW

VWDJHV7UDQVSRUWDWLRQFKRLFHVKDYHD ODUJH LPSDFWRQWKHUHVSRQVLYHQHVVVWUDWHJ\ RI WKH

EXVLQHVV +DLGLUL KDV VHYHUDO FRQWUDFWV ZLWK VHYHUDO GLVWULEXWRUV ZLWK PXOWLSOH WUDQVSRUW

IDFLOLW\ WKDW HQVXUH WKHPD[LPXP SRVVLEOH WUDQVSRUW RI LQYHQWRU\ ZLWKLQ D VKRUW SHULRG RI

WLPH 7KH GLVWULEXWLRQ GRHV QRW ZRUN EHWZHHQ VSHFLILF VXSSO\ FKDLQ FRPSRQHQWV EXW LW

SHUIRUPVDEDVLF IXQFWLRQ RI LQWHJUDWLRQDPRQJVW DOOVXSSO\FKDLQ FRPSRQHQWV ,QFDVHRI

)0&*OLNH3HSVL WKHYDOXHRIV\VWHPDWLFGLVWULEXWLRQSURFHVVFDQQRWEHXQGHUPLQHG7KH

3HSVL GLVWULEXWLRQ V\VWHP OLQNHG WKH HQWLUH VXSSO\ FKDLQ IRU DOO SURGXFW FDWHJRULHV 7KHGLVWULEXWLRQFHQWHUVDQG LWV LQIRUPDWLRQ QHWZRUNSOD\ DNH\UROH LQ WKDWUHJDUG7KHPDMRU

REMHFW LV WRFDUHIXOO\ WUDFNVDOHV RI LWHPV DQG RIIHUVKRUW UHSOHQLVKPHQW F\FOH WLPHV7KH

GLVWULEXWRUV RIIHU VWRUHG GHOLYHULHV WRR PDQ\ UHWDLO RXWOHWV LQ WKH WZLQ FLWLHV 'LIIHUHQW

SURGXFWVDUHEHLQJGHOLYHUHGFRQYHQLHQWO\RQSUHRUGHUV7KHGLVWULEXWLRQV\VWHPLVIOH[LEOH

HQRXJKWRDOWHUGHOLYHU\VFKHGXOHGHSHQGLQJRQFXVWRPHUGHPDQG7KH7HUULWRU\'LVWULEXWRU

0DQDJHUV PDLQWDLQ D FRQWDFW ZLWK WKH UHWDLOHUV LQ RUGHU WR ERRN DQG SODFH WKH RUGHUV

Page 81: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 81/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 81

:KHQHYHUDVWRUHSODFHVDQRUGHULWLV LPPHGLDWHO\WUDQVPLWWHGWRWKHVXSSOLHUWKURXJKWKH

GLVWULEXWLRQPDQDJHU

1RZ +DLGLUL UHFHLYHV RUGHUV IURP DOO GLVWULEXWLRQ FHQWHUV DQG WKH VKLSPHQW GHSDUWPHQW

GHOLYHUVWKHRUGHUV$WWKHGLVWULEXWLRQFHQWUHSURGXFWVIURPWKHPDQXIDFWXUHUDUHGHOLYHUHG

LQWRGLIIHUHQWWUXFNVDQGHDFKWUXFNPDNHVGHOLYHULHVWRPXOWLSOHUHWDLOVWRUHV7KHQXPEHURI

VWRUHVGHSHQGVXSRQWKHVDOHVYROXPH7KHV\VWHPZRUNVRQWUXVWDQGGRHVQRWUHTXLUHWKH

GHOLYHU\ SHUVRQ WR EH SUHVHQWZKHQ VWRUH SHUVRQQHO VFDQ WKH GHOLYHU\ 7KLV UHGXFHV WKH

GHOLYHU\WLPHDWHDFKVWRUH

+DLGLULKDVQLQHGLVWULEXWRUVLQ,VODPDEDGDQG5DZDOSLQGLQDPHO\6KDQGLVWULEXWRUV$ZDQ

GLVWULEXWRUV DQG $UEDE 'LVWULEXWRUV 7R VXSSRUW WKLV GLVWULEXWLRQ QHWZRUN WKH\ KDYH D

WUDQVSRUWGHSDUWPHQWZKLFKFRQVLVWVRIPRUHWKDQWHQZKHHOHUWUXFNVLQ,VODPDEDGDORQH

(DFK WUXFNKDV D FDSDFLW\ RI 3HSVL FDQV 5DZDOSLQGL GLVWULEXWLRQ LVPDGH SRVVLEOH

WKURXJK 6KHK]RUH DQG 6X]XNL EHFDXVH RI QDUURZ DQG FRQJHVWHG URDGV 7KH GLVWULEXWLRQ

GHSDUWPHQWLVLQGLUHFWFRQWDFWZLWKWKHPDQXIDFWXUHUVDQGNHHSVXSGDWLQJLQYHQWRU\OHYHOV

7KH\NHHSLQVWRFNVSDUHWKUHHGD\VVWRFNWRFRPEDWH[WHUQDOXQFHUWDLQW\7KHGLVWULEXWLRQGHSDUWPHQWLVUHVSRQVLEOHIRUDOOWKHYDULHW\RISURGXFWVLQWKHLUSRUWIROLR3HSVL&RVRYHUDOO

GLVWULEXWLRQ QHWZRUN VSUHDGV WKURXJKRXW 3DNLVWDQ FRQQHFWLQJ WKH UHPRWHVW RI SODFHV DQG

SURYLGLQJJUHDWFXVWRPHUVHUYLFH*OREDOL]DWLRQKDVLQFUHDVHGWKHFRPSHWLWLRQWKDW3HSVLLV

FRQVWDQWO\FRPLQJXSZLWKQHZSURMHFWVFDPSDLJQVDQGGLVWULEXWLRQ3HSVLZLWKPRUHWKDQ

RI SURILWV WKLV \HDU DQGZLWK WKH DQQXDO UHYLHZ RI WKHLU UDWHV ODVW UHYLVHGRQ WK

1RYHPEHULVORRNLQJPRUHDQGPRUHFRPSHWLWLYH

'HPDQG)RUHFDVWLQJ

,PSRUWDQFH

'HPDQG IRUHFDVWV IRUP WKH EDVLV RI DOO VXSSO\ FKDLQ SODQQLQJ DW +DLGLUL %HYHUDJHV

)RUHFDVWVRI IXWXUHGHPDQGDUHHVVHQWLDOIRUPDNLQJDFFXUDWHVXSSO\FKDLQGHFLVLRQVDQG

HQVXULQJ WKH FRPSDQ\V VXFFHVV ([DPSOHV RI VXFK GHFLVLRQV LQFOXGH KRZPXFK RI WKH

SURGXFWWRPDNHKRZPXFKWRLQYHQWRU\KRZPXFKWRUHSOHQLVKDQGKRZPXFKWRRUGHU

(DVHRI)RUHFDVWLQJ

%HYHUDJHVDUHDSXVKSURGXFW)RUHFDVWLQJLVQRWHDV\LQWKHEHYHUDJHLQGXVWU\DVWKHUHDUH

SRVVLEOH VHULRXV IOXFWXDWLRQV LQGHPDQG GXH WR VHDVRQDO FKDQJHV LQZLQWHU DQG VXPPHU

ZKLFKFDQQRWEHHDVLO\SUHGLFWHGEHIRUHKDQGRUFRQWUROOHG7KHUHIRUHDFFXUDWHIRUHFDVWLQJ

FDQEHGLIILFXOWDWWLPHVDQGWKHUHLVDPDUJLQIRUHUURU+RZHYHUKDYLQJPXOWLSOHSURGXFWOLQHV DQG GDLO\ SODQQLQJ SURFHGXUHV GR GHFUHDVH YDULDELOLW\ DW +DLGLUL 5LVN RI HUURU LV

GHFUHDVHGE\KLJKUHVSRQVLYHQHVV

)RUHFDVWLQJ0HWKRGV

$W+DLGHUL%HYHUDJHVDFRPELQDWLRQRIWKUHHIRUHFDVWLQJPHWKRGVLVXVHG7KHVHPHWKRGV

DUHXVHGIRUORFDOGHPDQGRQO\,QWKHFDVHRIH[SRUWVWRFRXQWULHVVXFKDV$IJKDQLVWDQQR

Page 82: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 82/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 82

IRUHFDVWLQJLVGRQHDVRUGHUVDUHWDNHQE\+DLGLULRQH\HDULQDGYDQFH)RUHFDVWLQJLVGRQH

LQFROODERUDWLRQZLWK3HSVL&R,QWHUQDWLRQDO7KHIROORZLQJPHWKRGVDUHXVHGLQFRPELQDWLRQ

IRUWKHSXUSRVHRIVDOHVDQGGHPDQGIRUHFDVWLQJ

  7L PH6HU LH V0HWKRG 

+L VWR U L FDO GH PDQG  G DW D FDQ EH  H II H FWL YH O\ XVHG  WR  I R U H FDVW  IXW XU H  GH PDQG +DLGL U L 

%H YH UDJH V W DNH V L QWR DFFR XQW  WKH  SU H YLR XV W ZR  \H DUV KL VWR U L FDOG DW D WR  I R U H FDVW  LW V

IXW XU H GH PDQG 2QWKL VEDVL VDGH PDQG I R U H FDVW I R UWKH FR PL QJ\H DUL VPDGH +DLGL U L 

FDUU LH VR XW GH PDQG I R U H FDVWL QJI R UOR FDOGH PDQG 

  4XDOLW DWL YH 0HWKRG 

8VL QJ KL VWR U L FDO G DW D DQG  PDUNHW  L QWH OOL JH QFH  DV D JXLGH  +DLGL U L V PDQDJH PH QW 

SUDFWL FH V WKHL U R ZQ MXG JPH QW  WR  GHWH UPL QH  WKH  GH PDQG  I R U H FDVW  +DLGL U L V

PDQDJH PH QW  I R UPVDSDQH O I R UDFKLH YL QJ WKL VSXUSR VH  WK DW  FR PSU L VH VR I WKH &(2

*0PDUNHWL QJWKH GH SDU W PH QW PDQDJH UVVDOH VVKL SSL QJTXDOLW \FR QW U R OPDUNHWL QJHW FDQG VSH FL DOO\KL U HG VXSSO\FK DL QDQDO\VW V$\H DUO\GH PDQG SODQL VI R U H FDVWHG L Q

WKL V ZD\ ZKL FK  L V WKH Q IXU  WKH U GL YLGHG  L QWR  PR QWK O\ ZHH NO\ DQG  G DL O\ SODQV

DFFR U GL QJO\

  &DXVDO0HWKRG 

&DXVDOI R U H FDVWL QJDVVXPH VWK DW WKH GH PDQG I R U H FDVW L VKL JK O\FR UU H ODWHG ZLWK FH U W DL Q

IDFWR UV L Q WKH  H QYL U R QPH QW  VXFK  DV WKH  VW DWH  R I WKH  H FR QR P\ L QWH U H VW  UDWH V DQG 

SU RG XFW  SU L FL QJ WK DW  FDQ FDXVH  D FK DQJH  L Q WKH  GH PDQG  $Q H [DPSOH  L V KR Z E\

L QW U RG XFL QJ D SU RG XFW YDU L DQW  VXFK DV3H SVL  7 ZL VW  FDQ L QIOXH QFH  GH PDQG  I R U WKH 

R U L JL QDOSU RG XFW WK DW L V3H SVL 3U R PRWLR QDODFWL YLWLH VE\3H SVL &R ,QWH UQDWLR QDOSODQQHG I R U WKH  \H DU L V DQRWKH U H [DPSOH  +DLGL U L  %H YH UDJH V SODQV LW V GH PDQG  I R U H FDVW  L Q

FR OODER UDWLR QZLWK 3H SVL &R L QWH UQDWLR QDONQR ZL QJWK DW L QFU H DVHG SU R PRWLR QDODFWL YLW \

OH DG VWR KL JKH UGH PDQG 

)R U H FDVWL QJL Q3UDFWL FH 

+DLGL U L  U H JXODUO\XSG DWH V LW VI R U H FDVW VDVDQG ZKH QQHHGHG  ,W NHH SV L QU H JXODU WR XFK ZLWK 

3H SVL &R ,QWH UQDWLR QDOKH DG TXDU WH UVL QWH JUDWH VGH PDQG SODQQL QJDQG I R U H FDVWL QJWK U R XJKR XW 

WKH VXSSO\FK DL QDQG NHH SVDQH \H R QPDUNHW W U H QG VVH DVR QDOYDU L DWLR QVDQG FR PSHWLWR UV

VW UDWH JLH V7KL VH QVXU H V WK DW  WKH  I R U H FDVW  U H IOH FW V WKH FXUU H QW  U H DOLW \DQG  U HG XFH VU L VN7KH 

XSG DWHG  I R U H FDVW  L V H VVH QWL DO I  R U WKH  FR PSDQ\ WR  FDUU\ R XW  VXSSO\ FK DL Q SODQQL QJ DQG GH FL VLR QV+DLG U L %H YH UDJH VR SH UDWL QJZLWKR XW DQXSG DWHG  I R U H FDVW  L VXQOL NH O\ WR PHHW  WKH 

QHHG VR ILW VFXVWR PH UVDQG LW VR ZQR UJDQL ]DWLR QDOR EMH FWL YH V

$JJU H JDWH 3ODQQL QJ

Page 83: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 83/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 83

3ODQQLQJ+RUL]RQ

7KH SODQQLQJ KRUL]RQ IRU +DLGLUL %HYHUDJHV LV RQH \HDU WKDW LV WZHOYH PRQWKV ZKLFK LV

IXUWKHUGLYLGHGLQWRTXDUWHUVPRQWKVDQGZHHNVUHVSHFWLYHO\

$JJUHJDWH3ODQQLQJ6WUDWHJ\

7LPHIOH[LELOLW\IURPZRUNIRUFHRUFDSDFLW\VWUDWHJ\XVLQJXWLOL]DWLRQDVWKHOHYHU

7KHDJJUHJDWHSODQQLQJVWUDWHJ\XVHGE\+DLGULEHYHUDJHVLVWKHWLPHIOH[LEOHVWUDWHJ\DVLW

LVPRVWVXLWHGWRWKHEHYHUDJHLQGXVWU\

&DSDFLW\ 7KH SODQW DW +DLGUL %HYHUDJHV QRUPDOO\ ZRUNV DW KRXUV D GD\ PDFKLQH

FDSDFLW\ EXW WKLV FDSDFLW\ FDQ EHWDNHQ XS WR KRXUV DGD\ZKHQ UHTXLUHGDV LQSHDN

WLPHVRIGHPDQG7KLVH[FHVVPDFKLQHFDSDFLW\FDQEHXWLOL]HGZKHQQHHGHG

,QRUGHUWRV\QFKURQL]HSURGXFWLRQZLWKGHPDQG+DLGULNHHSVDVWDEOHZRUNIRUFHE\XVLQJ

WKH H[LVWLQJZRUNIRUFHDQGYDU\LQJ WKH QXPEHU RI KRXUVZRUNHG RYHU WLPH 6XFK IOH[LEOH

VFKHGXOHV KHOS DFKLHYH V\QFKURQL]DWLRQ1R H[WHUQDOZRUNHUV DUH KLUHG LQVWHDG H[LVWLQJ

ZRUNHUVVKLIWVDUHLQFUHDVHGDQGWKH\DUHSDLGRYHUWLPH

,QYHQWRU\$W+DLGULSURGXFWLRQLVV\QFKURQL]HGZLWKGHPDQGDQGKLJKOHYHOVRI LQYHQWRU\

DUHDYRLGHG7KHFRPSDQ\PDLQWDLQVDPRQWKVVDIHW\LQYHQWRU\DVDWUDGHRIIEHWZHHQWKH

FRVWVRIKDYLQJWRRPXFKLQYHQWRU\DQGWKHFRVWVRIORVLQJVDOHVGXHWRQRWKDYLQJHQRXJK

LQYHQWRU\,QRUGHUWRVDYHRQFDUU\LQJDQGVWRUDJHFRVWV+DLGULDLPVWRNHHSORZHUOHYHOV

RI LQYHQWRU\ XVLQJ H[FHVV PDFKLQH FDSDFLW\ DQG ZRUNHU RYHUWLPH WR DGMXVW WR GHPDQG

YDULDWLRQVDVLQOLQHZLWKWKLVVWUDWHJ\

6WRFNRXWV7KHFRVWVDUHGLVWULEXWHGRYHUWKHZRUNIRUFHDQGVWRFNRXWVDUHDYRLGHG

3ODQQLQJ&RQVWUDLQWV

+DLGULKDVWRFRPSO\WRQDWLRQDOODERUODZVDQGODZVJRYHUQLQJZRUNLQJWLPHDQGUHVWWLPH

QR PRUH WKDQ ILIW\ KRXUV D ZHHN DV RXWOLQHG LQ WKH &RQVWLWXWLRQ RI 3DNLVWDQ DQG WKH

)DFWRULHV$FW7KLVLVWRHQVXUHWKHEDVLFULJKWVRIWKHZRUNHUV7KHFRPSDQ\FDQQRW

H[FHHGH[LVWLQJIL[HGFDSDFLW\LQSURGXFWLRQGHFLVLRQVZLWKUHVSHFWWR

y  3URGXFWLRQOLWUHVFRQYHUWHGWR0/FUDWHVSHUGD\

y  6WRUDJH5DZDQGSDFNLQJ6T)W

y  6WRUDJH)LQLVKHGJRRGV6T)W

7KH FRPSDQ\QHHGV WRFRPSO\ WR WKH FDSLWDO DYDLODEOH DQG KDV WRPDLQWDLQ DPLQLPXP

VDIHW\LQYHQWRU\OHYHODWDOOWLPHVWRDYRLGVWRFNRXWV

Page 84: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 84/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 84

7UDQVSRUWDWLRQ1HWZRUN

+DLGLUL %HYHUDJHV VXSSO\ FKDLQ VWUDWHJ\ LV FORVHO\ OLQNHG WR WKH DSSURSULDWH XVH RI

WUDQVSRUWDWLRQ ,Q D W\SLFDO PDUNHW TXLFN UHVSRQVH HQDEOHV VXSSO\ FKDLQV WR PHHW WKH

FXVWRPHUGHPDQGVIRUHYHUVKRUWHUOHDGWLPHVDQGWRV\QFKURQL]HWKHVXSSO\WRPHHWWKH

SHDNVDQGWURXJKVRIGHPDQG7KHPDMRUIRFXVLVWRGHWHUPLQHWKHSURFHVVHVWKDWDUHWREHLQWHJUDWHG LQ WKH VXSSO\ FKDLQ QHWZRUN ZLWK WKHLU FRUUHVSRQGLQJ VXSSOLHUV GLVWULEXWLRQ

FHQWHUVDQGWKHDVVRFLDWHGWUDQVSRUWOLQNVEHWZHHQWKHP

0RGHVRI7UDQVSRUWDWLRQ

/DQG 7UXFN RIIHUV DGYDQWDJH RI GRRU WR GRRU VKLSPHQW D VKRUWHU GHOLYHU\ WLPH DQG QR

WUDQVIHUEHWZHHQSLFNXSDQGGHOLYHU\+DLGLULEHYHUDJHXVHVWKH7/WUXFNORDGDSSURDFK

7KLVDSSURDFKSURYLGHVSDYHVWKHZD\IRUHFRQRPLHVRIVFDOHDQGLVDEOHWRPHHWVHUYLFH

UHTXLUHPHQWVZKLOHPLQLPL]LQJERWKWUXFNVLGOHDQGHPSW\WUDYHOWLPH7UXFNORDGVDUHPRUH

VXLWHGWR+DLGLULEHYHUDJHVEHFDXVHRIWKHXVHRIZDUHKRXVHVDQGODUJHUVKLSPHQWVWKHUHIRUHPDNLQJ LW FKHDS 5DZ PDWHULDOV IURP WKH VXSSOLHUV DUH EURXJKW XVLQJ WUXFNV ILQLVKHG

SURGXFWV DUH WUDQVSRUWHG WR GLVWULEXWRUV DQG WKHQ UHWDLOHUV XVLQJ WUXFNV DV ZHOO +DLGUL

EHYHUDJHVKDYHLWVRZQIOHHWRIVPDOODQGODUJHWUXFNVDQGYHKLFOHVIRUFDUU\LQJJRRGVDQG

UDZPDWHULDOZKLOHWKHGLVWULEXWRUVDOVRXVHWKHLURZQYHKLFOHV

:DWHU7KLVPRGHIRUPVRQO\DYHU\VPDOOSDUWRIWKHWRWDOWUDQVSRUWQHWZRUN,W LVXVHGIRU

VKLSSLQJRIHPSW\FDQVIURP'XEDLWR3RUW4DVLPLQ.DUDFKLIURPZKHUHLWLVEURXJKWE\

ODQGWRWKHSODQWLQ5DZDOSLQGL

$LU,WLVDJDLQDYHU\VPDOOSDUWRIWKHHQWLUHWUDQVSRUWQHWZRUN7KLVPRGHLVXVHGWRIO\LQ

FRQFHQWUDWHIRUP1HZ<RUN WR/DKRUH IURPZKHUH LW LV WUDQVSRUWHGE\ ODQG WRDVWRUDJHIDFLOLW\LQ+DWWHUDQGFROOHFWHGIURPWKHUHE\+DLGLUL%HYHUDJHVRZQWUXFNV7KHVKLSSLQJ

GHSDUWPHQWLVLQFKDUJHIRUVWRUDJHDQGVXEVHTXHQWGLVSODFHPHQWRIWKHSURGXFWRUGHUV7KH

LQYHQWRU\ FDSDFLW\ LV EHLQJ XWLOL]HG DQG PDLQWDLQHG LQ FRRUGLQDWLRQ ZLWK WKH SURGXFWLRQ

GHSDUWPHQWDQGLVEDVHGRQWKHWHUPSURGXFWLRQHVWLPDWHV

'HVLJQ2SWLRQVIRUD7UDQVSRUWDWLRQ1HWZRUN

6KLSPHQW YLDFHQWUDO'&ZLWK LQYHQWRU\VWRUDJHXVLQJPLONUXQV7KLVLV WKHPDLQ

PRGHXVHGIRUWUDQVSRUWLQJJRRGVWRFRQVXPHUVZKRDUHIDUDZD\3URGXFWVDUHWUDQVIHUUHG

WRWKHGLVWULEXWLRQFHQWHULQDSDUWLFXODUUHJLRQDQGDUHVWRUHGWKHUH6PDOOHUWUXFNVWKHQFDUU\

WKHVHSURGXFWVWRWKHORFDOUHWDLOHUVDVSHUGHPDQGLQVPDOOHUYHKLFOHVXVLQJPLONUXQV

7KLVPHWKRGLVFRVWHIIHFWLYHEHFDXVHLWVDYHVRQKLJKWUDQVSRUWFRVWWKDWZRXOGKDYHEHHQ

LQYROYHG LQ WUDQVSRUWLQJ WR HDFK UHWDLOHU GLUHFWO\ IRUP WKH VXSSOLHU DQG DOVR SUHYHQWV

VWRFNRXWVEHFDXVHLQYHQWRU\LVPDLQWDLQHGFORVHUWRWKHUHWDLORXWOHWV

Page 85: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 85/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 85

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

D.C

+DLGLUL%HYHUDJHV

'LUHFW 6KLSSLQJ 7KLV PHWKRG LV XVHG IRU WUDQVSRUWLQJ SURGXFWV WR NH\ DFFRXQW

KROGHUV VXFK DV .)& DQG 3L]]D +XW +DLGUL WUDQVSRUWV WR WKHP GLUHFWO\ 'LDJUDP LQ

$SSHQGL[

'LUHFW 6KLSSLQJ ZLWK 0LON5XQV 7KLVPHWKRG LV XVHG IRU WUDQVSRUWLQJ SRVW PL[

F\OLQGHUVWR UHWDLOHUVZLWKLQ WKH,VODPDEDG5DZDOSLQGLUHJLRQIRUIRXQWDLQIUHVK3HSVL7KH

VKLSPHQWLVPDGHLQPLONUXQV

6RXUFLQJ'HFLVLRQVLQ6XSSO\&KDLQ

)RU+DLGLUL%HYHUDJHVRXWVRXUFLQJUHVXOWVLQWKHVXSSO\FKDLQIXQFWLRQEHLQJSHUIRUPHGE\D

WKLUGSDUW\,WLVLQIDFWRQHRIWKHPRVWLPSRUWDQWIDFWRUVIDFLQJWKHILUP5DZPDWHULDOIRU

SURGXFWLRQ DQG SDFNDJLQJ LV EHLQJ RXWVRXUFHG WKURXJK FRQWUDFWV ,QERXQG DQG RXWERXQGWUDQVSRUWDWLRQRISURGXFWVIURPWKHPDQXIDFWXULQJSODFHWRWKHGLVWULEXWLRQFHQWHUDQGWKHQWR

WKH ILQDO FXVWRPHU LV DOVR EHLQJ RXWVRXUFHG WR D WKLUGSDUW\ 7KH EDVLFFRQVLGHUDWLRQV RI

+DLGLULLQWKLVUHJDUGDUH

y  3RLQWLQJRXWVRXUFHVRIVXSSO\DQGQHJRWLDWHZLWKVXSSOLHUV

y  6RXUFLQJRIUDZPDWHULDOIURPORFDODQGIRUHLJQVXSSOLHUV

y  'HFLGLQJWHUPVDQGFRQGLWLRQVZLWKVXSSOLHU

y  &RRUGLQDWLQJDFWLYLWLHVDQGGRFXPHQWDWLRQZLWKVXSSOLHUV

y  &RVWFRPSDULVRQVDQGTXDOLW\DVVXUDQFH

+DLGLULPDNHVWKHGHFLVLRQIURPZKHUHWRRXWVRXUFHE\LQYLWLQJELGVIRUWHQGHUVLQWKHORFDOQHZVSDSHUV7KHWHQGHUZRUNVDVDJHQHUDORIIHUWRDOOWKHLQWHUHVWHGSDUWLHVZKHWKHUWKH\

DUHUHODWHGWRWKHSURYLVLRQRIUDZPDWHULDORUGLVWULEXWLRQYHKLFOHV6RXUFLQJSURFHVVRIWKH

FRPSDQ\ LQFOXGHV WKH VHOHFWLRQ RI VXSSOLHU GHVLJQ RI VXSSOLHU FRQWUDFWV SURGXFW GHVLJQ

FROODERUDWLRQSURFXUHPHQWRIPDWHULDODQGVHUYLFHVDQGHYDOXDWLRQRIVXSSOLHUSHUIRUPDQFH

LQFDVHRIUDZPDWHULDOSURFXUHPHQW

Figure 7 (Shipping via Central DC) 

Page 86: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 86/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 86

6XSSOLHU6FRULQJDQG$VVHVVPHQW

)LJXUH6XSSOLHU6FRULQJDQG$VVHVVPHQW>6RXUFHKWWSZZZHWTFRPVXSSOLHUTXDOLW\@

:KHQFRPSDULQJVXSSOLHUV+DLGLULGRHVQRWRQO\IRFXVRQWKHTXRWHGSULFHEXWDOVRRWKHU

GLPHQVLRQVWKDWPD\DIIHFWWKH WRWDOFRVW RI WKHVXSSOLHU7KH IROORZLQJ IDFWRUVRWKHU WKDQ

TXRWHG SULFH DUH EHLQJ FRQVLGHUHG UHSOHQLVKPHQW OHDG WLPH VXSSO\ IOH[LELOLW\ VXSSO\

TXDOLW\SULFLQJWHUPVH[FKDQJHUDWHVGXWLHVDQGVXSSOLHUYLDELOLW\)RU+DLGLULWKHVXSSOLHU

VFRULQJDQGDVVHVVPHQWLVEDVHGRQWKHIHDWXUHWKDWWKHVXSSOLHUSHUIRUPDQFHLQWHUPVRI

UHSOHQLVKPHQW OHDG WLPH DQG RQ WLPH SHUIRUPDQFH GLVWLQJXLVK WKHP DPRQJVW WKHLU

FRPSHWLWRUV6RRQDIWHUWKHWHQGHUQRWLFHIRUWKHSURFXUHPHQWRIUDZPDWHULDOVLVDGYHUWLVHG

WKHVXSSOLHUVDUHDVNHGWRVHQGVDPSOHRIWKHSURGXFWV)RUH[DPSOHIRUWKHPDQXIDFWXUHRI

3HSVL FRQFHQWUDWH DQG VXJDU DUH GHPDQGHG RI KLJK TXDOLW\ ZKLFK LV WKH IRUWH RI WKH

FRPSDQ\7KHVHVDPSOHVDUHWHVWHGLQWKHWRWDOTXDOLW\ODERUDWRULHV,IWKHVDPSOHVPDWFK

ZLWKWKHVWDQGDUGVHWWKHQWKHVDOHVGHSDUWPHQWVHOHFWVWKDWSDUWLFXODUVXSSOLHU3HSVLEHLQJ

DQ ,62 FHUWLILHG FRPSDQ\ FDQQRW VHOO ORZ TXDOLW\ SURGXFWV WKHUHIRUH LW KDV VWULFW

VWDQGDUGVVHWIRUWKHSXUFKDVHRIUDZPDWHULDOVIURPVXSSOLHUV

5DZPDWHULDO3URFXUHPHQW

)RU WKH PDQXIDFWXULQJ RI 3HSVL SURGXFWV +DLGLUL SURFXUHV UDZ PDWHULDOV OLNH SDFNDJLQJ

PDWHULDOV ERWWOHV FDQV VXJDUDQG FRQFHQWUDWHHWF IURPERWK ORFDODQG IRUHLJQVXSSOLHUV

7KH PDWHULDOV XVHG LQ WKH PDQXIDFWXUH RI EHYHUDJHV DUH SULPDULO\ EHLQJ SURFXUHG IURP

YDULRXVSDUWVRIWKHFRXQWU\3ODVWLFERWWOHVDUHPRVWO\REWDLQHGIURP$3&2SODQWZKLFKLV

ORFDWHG ULJKW QH[W WR +DLGLULV IDFWRU\ &DQV DUH LPSRUWHG UHDG\PDGH DQG SULQWHG IURP

'XEDLLQWZRSDUWVWKHFDVHDQGWKHOLG6XJDULVSXUFKDVHGIURPVHYHUDOGLIIHUHQWVXSSOLHUV

FKRVHQIURPD OLVWDOUHDG\VHOHFWHGE\3HSVL&R ,QWHUQDWLRQDO7KH FRQFHQWUDWHLVREWDLQHG

GLUHFWO\IURP3HSVL&R,QWHUQDWLRQDO7KHPDQDJHPHQWXVXDOO\DGYHUWLVHVLQWKHQHZVSDSHUWR

LQYLWHWHQGHUVIRUWKHVXSSO\RIWKHVHUDZPDWHULDOV7KHEDVLFFRPSRQHQWVRIUDZPDWHULDO

DUHFRQFHQWUDWH&2VXJDUDQGJDV

1HJRWLDWLRQVZLWK6XSSOLHUV

3URFXUHPHQW0DQDJHUVDW+DLGLULSHUIRUPWHFKQLFDOHYDOXDWLRQRIWKHVXSSOLHUVLQFOXGLQJWKH

DQDO\VLVRIWKHLUKLVWRULFDOILQDQFLDOUHFRUGOHDGWLPHDQGLQIUDVWUXFWXUHEHIRUHVHOHFWLRQ,Q

VRPHFDVHVDIWHUVHOHFWLRQRIWKHVXSSOLHU+DLGLULHQWHUVLQWRQHJRWLDWLRQVWRVHWWKHWHUPVRI

Page 87: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 87/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 87

WKHFRQWUDFWV+DLGLULVVXSSO\FRQWUDFWZLWKWKHVXSSOLHUVSHFLILHVSDUDPHWHUVJRYHUQLQJWKH

EX\HUVXSSOLHU UHODWLRQVKLS %XW LQ DGGLWLRQ WR WKLV FRQWUDFW IXUWKHU QHJRWLDWLRQVZLWK WKH

VXSSOLHUDUHRSWHGIRUHVWDEOLVKLQJDVLJQLILFDQWLPSDFWRQWKHEHKDYLRUDQGSHUIRUPDQFHRI

DOOVWDJHVLQWKHVXSSO\FKDLQ+DLGLULHQMR\VDEDUJDLQLQJHGJHLQWKHQHJRWLDWLRQSURFHVV

DQGGLFWDWHVWKHWHUPVUDWKHUWKDQWRIROORZWKHP

6HOHFWLRQ&ULWHULDRI'LVWULEXWRUV

6HOHFWLRQRIGLVWULEXWRUVLVDFULWLFDOVWHSEHFDXVHWKHPDMRULW\RIVXSSO\WRWKHUHWDLOHUVLV

KDQGOHGE\WKHGLVWULEXWRUV(IILFLHQWDQGZHOOSODFHGGLVWULEXWRUVDUHHVVHQWLDOIRUHQVXULQJ

SURGXFWDYDLODELOLW\ZKLFK LV WKHPDLQ WDUJHWRI WKHFRPSDQ\)RUWKLVSXUSRVH DSSOLFDQW

GLVWULEXWRUVPXVWKDYHYHKLFOHVGHSHQGVXSRQDUHDVXSSOLHGKDYHFDVHVRI

HPSW\ERWWOHVDQGGHSRVLW5VDVVHFXULW\'LVWULEXWRUVZKRPHHWWKHVHFULWHULDDUH

WKHQFRQVLGHUHGDVSRWHQWLDOVDQGWKHQVHOHFWHGDIWHUQHJRWLDWLRQVRQFRVWDQGRWKHUIDFWRUV

,QFDVHRI+DLGLULVGLVWULEXWRUVWKHFRPSDQ\DOORFDWHVDIL[HGTXRWDWRLWVGLVWULEXWRUVDQG

GRHV QRW VKRZ IOH[LELOLW\ RI EX\LQJ EDFN 5HYHQXH VKDULQJ FRQWUDFW H[LVWV EHWZHHQ WKH

GLVWULEXWRUDQG+DLGLUL

3URGXFW&DWHJRUL]DWLRQE\9DOXHDQG&ULWLFDOLW\

3HSVLV VWUDWHJLF LWHP LV LWV GULQN IRUPXOD ,W LV FRQVLGHUHG WR EH D EDVH OLQH IRU WKH

FRPSDQ\VEXVLQHVVDOORYHUWKHZRUOG7KHFULWLFDOLWHPLV WKHJDVFRPSRQHQWWKDWLV&2

WKHFRPSDQ\PXVW HQVXUH WKHDYDLODELOLW\ RI WKLV LWHPZLWK OHVV FRPSDUDWLYHDFFXPXODWHG

FRVW&DQVDQGERWWOHVFRPHLQWRWKHFDWHJRU\RIJHQHUDOLWHPVWKHFRPSDQ\WULHVWRHQVXUH

PD[LPXPHIILFLHQF\ZKLOHEX\LQJWKHVH LWHPV7KHXVH W\SHDQGVSHFLILFDWLRQVRIERWWOHVGLIIHUZLWK GLIIHUHQW SURGXFWV*HQHUDO LWHPVKDYHPRUHVSHFLILFXVH DVFRPSDUHGWR EXON

LWHPV6XJDUPD\ULJKWO\EHSODFHGXQGHUWKHFDWHJRU\RIEXONLWHPV+DLGLULSURFXUHVVXJDU

IRULWVXVHLQWKHSURGXFWLRQSURFHVV0D[LPXPHIILFLHQF\KDVEHHQHQVXUHGZKLOHEX\LQJ

VXJDUDQGLWVUHODWHGSURGXFWVLQEXON%XONLWHPVDUHXVHGLQYDULDEO\LQDOOSURGXFWVRI3HSVL

ZLWKVOLJKWO\YDULDWLRQVRISURSRUWLRQ

Page 88: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 88/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 88

3ULFLQJ

DQG

5HYHQX

H

0DQDJH

PHQW

%HLQJD IUDQFKLVHRI3HSVL&R ,QWHUQDWLRQDO+DLGLULEHYHUDJHVFDQQRWYDU\ WKHSULFH RI LWV

GULQNVLQWKHUHWDLOPDUNHWLQRUGHUWRUHJXODWHUHYHQXHDQGSURILWLWKDVWRIROORZWKHSULFLQJ

VHWDQGGHWHUPLQHGE\3HSVL&RLQWHUQDWLRQDO+RZHYHUDOOWKHUHYHQXHPDQDJHPHQWSROLF\

JXLGHOLQHVDUHSURYLGHGIURP3HSVL&R,QWHUQDWLRQDO)RUDQHIIHFWLYHUHYHQXHPDQDJHPHQW

SULFLQJLVDQ LPSRUWDQWOHYHUWRLQFUHDVHVXSSO\FKDLQSURILWE\EHWWHUPDWFKLQJVXSSO\DQG

GHPDQG$VSHU3HSVLVSROLF\+DLGLULXVHVGLIIHUHQWLDOSULFLQJEDVHGRQFXVWRPHUVHJPHQW

WLPHRIXVHDQGSURGXFWRUFDSDFLW\DYDLODELOLW\,QRUGHUWRLQFUHDVHVXSSO\FKDLQSURILWVDQG

WRWDOPDUJLQHDUQHGIURPWKHVHDVVHWVPDQDJHUVXVH DOODYDLODEOH OHYHUV LQFOXGLQJSULFH

7KLVLVDSULPDU\UROHRIUHYHQXHPDQDJHPHQW

5HYHQXH0DQDJHPHQWIRU6HDVRQDO'HPDQG

6HDVRQDOSHDNVRIGHPDQGDUHFRPPRQHYHU\\HDU,Q3HSVLWKHVHDVRQDOGHPDQGYDULHVDV

LWLQFUHDVHVFRQVLGHUDEO\LQVXPPHUWKDQLQZLQWHUV2IISHDNGLVFRXQWLQJFDQVKLIWGHPDQG

IURPSHDNWRQRQSHDNSHULRGV7KLVLVH[DFWO\ZKDW3HSVLGRHVDVLWUHGXFHVLWVSULFHVRQ

OLWUHERWWOHVDQGFRPHVXSZLWKQHZVDYLQJVFKHPHVMXVWWRDWWUDFWFXVWRPHUV3HSVLFKDUJHV

KLJKHUSULFHGXULQJSHDNSHULRGVDQGDORZHUSULFHGXULQJRIISHDNSHULRGV

3ULFLQJDQG5HYHQXH0DQDJHPHQWIRU0XOWLSOH&XVWRPHU6HJPHQWV

7KHVHDUHGLIIHUHQWVHJPHQWVZKLFK3HSVLKDVDOORFDWHGDQGWDUJHWVPXOWLSOHFXVWRPHUVIURP

WKHVHVHJPHQWVVXFKDVFKLOGUHQWHHQDJHUVDQGDGXOWV7KHSURGXFWUDQJHLVDYDLODEOHLQWLQ

JODVVERWWOHVSODVWLFOLWHUERWWOHVDQGIRXQWDLQIUHVK7LQLVUHODWLYHO\H[SHQVLYHWKDQJODVV

ERWWOHVDQGFDWHUVWRDGLIIHUHQWVHJPHQW7RXVHUHYHQXHPDQDJHPHQWVXFFHVVIXOO\ZKHQ

VHUYLQJPXOWLSOHFXVWRPHUVHJPHQWV+DLGLULIROORZVWKHVHWDFWLFVHIIHFWLYHO\E\EDVLQJSULFH

RQWKHYDOXHVDVVLJQHGE\HDFKVHJPHQW7KH\DOVRXVHGLIIHUHQWSULFHVIRUHDFKVHJPHQWIRU

H[DPSOHD3HSVLFDQFRVWV5VDQGDW WKHVDPHWLPH3HSVLERWWOHFRVWVRQO\5VVR

utdallas .e du/ ~ m e tin

2 6

C r itic a l I tem s

 E nsu re a v a i lab i l ity

G a s C O 2

S tr a te g ic I tem s

 E n su re lon g t e rmre la t io n sh ip

 D r in k F o r m u la

G e ne ra l I tem s

 E n s u r e lo w c o s t  

C a n s a n d b o t tle s

B u lk P u r c ha seI tem s

 E n s u r e lo w c o s t  

 Sug a r 

L ow

L ow

H ig h

H ig h

V a l u e / Co st

      C

    r      i     t      i    c    a

      l      i     t    y

Figure 29 Product  

¡  tegorization by value & 

riticality 

Page 89: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 89/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 89

3HSVL XVHV GLIIHUHQW SULFHV IRU HDFK VHJPHQW 7R JDLQ WKH HGJH 3HSVL IRUHFDVWV DW WKH

VHJPHQW OHYHO DV ZHOO WR KHOS NHHS 3HSVL FRPSHWLWLYH LQ WKHLU SULFLQJ DQG UHYHQXH

PDQDJHPHQW

3ULFLQJDQG5HYHQXHPDQDJHPHQWIRU%XONDQG6SRW&XVWRPHUV

+DLGLULVKDVNH\DFFRXQWVOLNH6DYRUIRRGV.)&3L]]D+XWHWFDQGSULFLQJLVDGMXVWHGLQ

RUGHU WR IDFLOLWDWH WKHVH FXVWRPHUV 7KH\ DUH RIIHUHG GLVFRXQWHG SULFHV EHFDXVH WKH\ DUH

SRWHQWLDOORQJWHUPFXVWRPHUVDQGWKH\DOZD\VSXUFKDVHLQEXON1RWRQO\WKDWWKH\VHUYHDV

DQLPSRUWDQWPHDQVRISURPRWLRQ%\RIIHULQJORZHUSULFHVWRVXFKODUJHVFDOHFXVWRPHUV

WKH FRPSDQ\XOWLPDWHO\ EHQHILWV$W WKH VDPH WLPH WKH GLVWULEXWRUVDOVR UHDFKRXW WR WKH

UHWDLOHUVZKRXVXDOO\EX\DWWKHVSRWLQVPDOOTXDQWLWLHV

8VLQJ,Q3UDFWLFH

0DQDJHUV GR JDWKHU DFFXUDWH DQG FRPSOHWH GDWD UHODWLQJ WR SURGXFWV RIIHUHG SULFHV

FRPSHWLWLRQ DQG PRVW LPSRUWDQW FXVWRPHU EHKDYLRU )RU 3HSVL LWV HTXDOO\ LPSRUWDQW WR

TXDQWLI\WKHH[SHFWHGEHQHILWVIURPUHYHQXHPDQDJHPHQW+LVWRULFDOGDWDDQGDJRRGPRGHO

RI FXVWRPHU SUHIHUHQFHV DUH EHLQJ XVHG WR HVWLPDWH WKH EHQHILWV 3HSVL GLIIHUHQWLDWHV

EHWZHHQWKHFXVWRPHUVZKRWUXO\QHHGWKHVXSSO\FKDLQDVVHWGXULQJSHDNSHULRGDQGWKRVH

ZKRZLOO EHQHILW IURPPRYLQJ WKHLU RUGHU WR WKH RIISHDN SHULRG7KLVDSSURDFK LQFUHDVHV

SURILWVIRUWKHILUPZKLOHDOVRVDWLVI\LQJWKHFXVWRPHUVFUHDWLQJDGRXEOHLPSDFW5HYHQXH

PDQDJHPHQWWDFWLFVKDYHEURXJKWLQKXJHSURILWVWRWKHFRPSDQ\

Page 90: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 90/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 90

Chapter 5

Ideal Features of a Supply ChainManagement System

Page 91: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 91/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 91

&KDSWHU

,GHDO)HDWXUHVRID6XSSO\&KDLQ0DQDJHPHQW6\VWHP

7KHUHDOLW\RIWRGD\VJOREDOHFRQRP\LVVXFKWKDWPDQXIDFWXULQJILUPVHYHU\ZKHUHIDFHVWLII

FRPSHWLWLRQDVDUHVXOWRIRXWVRXUFLQJWRFRXQWULHVZKHUHFKHDSHUODERULVUHDGLO\DYDLODEOH

%HFDXVHRIWKLVQHZPHWKRGVRIPDQXIDFWXULQJDQGGHOLYHU\KDYHEHHQFUHDWHGDQGRXWRI

WKLVKDYHFRPH6XSSO\&KDLQ0DQDJHPHQW6&0

7REHWWHU DSSUHFLDWH WKLV UHODWLYHO\ QHZDUHDRI WHFKQRORJ\ RQH QHHGV WRXQGHUVWDQG WKH

JHQHUDOVXSSO\FKDLQPRGHOWKHHFRQRPLFIDFWRUVLQYROYHGLQWKHVXSSO\FKDLQSURFHVVDQG

KRZWKHVRIWZDUHPDUNHWKDVGHYHORSHGVROXWLRQVWRPHHWWKHFKDOOHQJHVIDFHGE\WRGD\V

PDQXIDFWXUHUVDQGGLVWULEXWRUV

)LHUFHFRPSHWLWLRQLVQRWWRGD\VPDQXIDFWXUHUVRQO\FRQFHUQ5LVLQJIXHOFRVWVDQLQFUHDVH

LQ WKH QXPEHU RI JRYHUQPHQW UHJXODWLRQV D JUHDWHU QHHG IRU YLVLELOLW\ DV SURGXFWV RU

FRPSRQHQWVPRYHFURVVFRXQWU\DQGDFURVVQDWLRQVPDLQWDLQLQJFXVWRPHUVDWLVIDFWLRQDOO

WKHVHLVVXHVDUHIRUFLQJRUJDQL]DWLRQVWRORRNIRUIDVWHUPRUHHIILFLHQWZD\VRISURGXFLQJ

DQG PRYLQJ JRRGV 6&0 VRIWZDUH LV QRZ DYDLODEOH WR DFFRPPRGDWH WKH QHHGV RI

PDQXIDFWXUHUVWRGD\

7KH1HHGIRU6XSSO\&KDLQ0DQDJHPHQW6\VWHPV

6&0 LV YHU\FRPSOH[ DQG EHFDXVH SURGXFWV PRYH WKURXJKPXOWLSOHSDUWQHUV LW LVTXLWH

GLIILFXOW WRDFKLHYHPD[LPXPSURILWVPLQLPXPFRVWVDQG WRJDLQ WKHQHHGHGFRPSHWLWLYH

HGJH 6&0 KDV PDQ\ QRGHV WKDW FRQQHFW VXSSOLHUV PDQXIDFWXUHUV DQG GLVWULEXWRUV

WRJHWKHU 7KH VXSSO\ FKDLQ DOVR EULQJV PDQXIDFWXUHUV DQG GLVWULEXWRUV FORVHU WR WKH

RXWVRXUFHGSURGXFHUVFUHDWLQJDYDOXHFKDLQZKHUHHDFKPDQXIDFWXULQJSURFHVVDQGHDFK

SURGXFWLVWUDFNHGIURPWKHPDQXIDFWXUHUDOOWKHZD\WRWKHILQDOFRQVXPHU

,QRUGHUIRUWKLVYDOXHFKDLQWREHFUHDWHGWKURXJKRXWWKHVXSSO\FKDLQDVZHOODVDWHDFK

QRGHVRIWZDUHKDVEHHQGHYHORSHGWRKHOSFRPSDQLHVWXUQRXWDSURILWDEOHERWWRPOLQHDQG

LQFUHDVHPDUNHWVKDUHLQWKHLUUHVSHFWLYHLQGXVWULHV8VLQJWKHVHVRIWZDUHVROXWLRQVSURILWV

DUHPD[LPL]HGFRVWVDUHNHSWWRDPLQLPXPDQGVFKHGXOLQJDQGWLPLQJDUHNHSWLQFKHFN

,QDGGLWLRQFROODERUDWLRQEHWZHHQSDUWQHUVFDQEHGDXQWLQJHVSHFLDOO\VLQFHHDFKSDUWQHU

ZDQWVWRPDNHDSURILW%HFDXVHRIWKLVDQGRWKHUIDFWRUVVXFKDVULVLQJSHWUROSULFHVDQGWKH

VWHDG\ LQFUHDVHRIJRRGVEHLQJPDQXIDFWXUHG LQ&KLQD DQG(DVWHUQ(XURSHDQ FRXQWULHV

LQWHUQDWLRQDO FROODERUDWLRQDQG TXLFN LQYHQWRU\ WXUQRYHU DUH HVVHQWLDO6&0VRIWZDUH FDQ

HTXLS D IDFLOLW\ ZLWK WKH FDSDFLW\ WR UHFHLYH WKH LQFUHDVHG YROXPH RI SURGXFW VKLSPHQWV

FRPLQJIURPORZHUFRVWFRXQWULHV

Page 92: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 92/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 92

6RIWZDUH6ROXWLRQVIRU7RGD\V0DQXIDFWXUHUVDQG'LVWULEXWRUV

%HFDXVH RI WKH JURZLQJ FRPSOH[LW\ RI WRGD\V VXSSO\ FKDLQV LQFOXGLQJ JHRJUDSKLF DQG

LQWHUQDWLRQDO LVVXHV ILQDQFLDO FRQVWUDLQWV DQG WKH VKHHU QXPEHU RI SOD\HUV WKDW FDQ EH

LQYROYHG 6&0 VRIWZDUH KDV EHHQ GHYHORSHG VR WKDW PDQXIDFWXUHUV DQG GLVWULEXWRUV FDQ

ZRUNZLWKRXWPLVVLQJDEHDW

3HRSOH W\SLFDOO\ LQYROYHG LQ VXSSO\ FKDLQ DFWLYLWLHV LQFOXGH PDQXIDFWXUHUV GLVWULEXWRUV

ORJLVWLFV SURIHVVLRQDOV SURFXUHPHQW VSHFLDOLVWV YHQGRU PDQDJHUV FRPPRGLW\ EX\HUV

SODQQHUV DQG HYHQ UHWDLOHUV $OO RI WKHVH SOD\HUV QHHG DVVLVWDQFH LQ VROYLQJ FRPSOH[

EXVLQHVVLVVXHVWKDWDULVHLQWKHVXSSO\FKDLQ

6&0VRIWZDUHDGGUHVVHV WKHQHHGVRI ERWKPDQXIDFWXUHUV DQGGLVWULEXWRUV 7KHVRIWZDUH

FDQEHFXVWRPL]HGWRPHHWPDQXIDFWXUHUVQHHGVE\VRXUFLQJDQGREWDLQLQJWKHPDWHULDOV

UHTXLUHG WR SURGXFH VHPLILQLVKHG RU ILQLVKHG JRRGV DQG WR DLG GLVWULEXWRUV LQ PRYLQJ

SURGXFWVTXLFNO\DQGHIILFLHQWO\DOORZLQJPD[LPXPYLVLELOLW\DFURVVWKHORJLVWLFVQHWZRUN

6XSSO\FKDLQVRIWZDUHLQFOXGHVPDQ\W\SHVRIVRIWZDUHVROXWLRQVWKDWPD\EHVROGDVVWDQG

DORQH PRGXOHV <HW ZKHQ FRPELQHG WRJHWKHU WKHVH VROXWLRQV JLYH VXSSO\ FKDLQ

SURIHVVLRQDOVWKHYLVLELOLW\WKH\QHHGLQWRWKHLURSHUDWLRQV,QWHUPVRIOHDQPDQXIDFWXULQJD

K\EULG RI ERWKPDQXIDFWXULQJ DQG GLVWULEXWLRQ PRGXOHV LV XVHG JLYLQJ ZD\ WRPD[LPXP

HIILFLHQF\DQGORZRU]HURZDVWHGPDWHULDOVLQWKHPDQXIDFWXULQJHQYLURQPHQW

&RUH&RPSRQHQWVRI6&06RIWZDUH

,QDW\SLFDO6&0VROXWLRQVRIWZDUHPRGXOHVLQFOXGHGDUHDZDUHKRXVHPDQDJHPHQWV\VWHP

:06 WUDQVSRUWDWLRQ PDQDJHPHQW V\VWHP 706 VXSSOLHU UHODWLRQVKLS PDQDJHPHQW

650LQWHUQDWLRQDOWUDGHORJLVWLFV,7/SURFXUHPHQWGHPDQGPDQDJHPHQW'0VXSSO\

FKDLQ DQDO\WLFV RUGHU PDQDJHPHQW DQG VHUYLFH SDUWV SODQQLQJ )RU PDQXIDFWXULQJ

FRPSDQLHV6&0DOVRLQFOXGHWKHPRGXOHVVXSSRUWLQJPDQXIDFWXULQJRSHUDWLRQV

  :DUHKRXVH0DQDJHPHQW6\VWHPV:06

$WWKHKHDUWRIDQ6&0VROXWLRQOLHVERWKWKH:06DQGWKH706DSSOLFDWLRQV7KH:06

VROXWLRQGHDOVZLWK WKHLQYHQWRU\WKDW LV WREHPRYHGWKURXJKRXWWKHVXSSO\FKDLQ)RU

LQYHQWRU\PRYHPHQWZLWKLQWKHZDUHKRXVHWREHHIILFLHQWWKHSURFHVVPXVWEHRSWLPL]HG

WKURXJK YLVLELOLW\ RI WKH SURGXFWV 9LVLELOLW\ LV XVXDOO\ HQDEOHG E\ 5DGLR )UHTXHQF\

,GHQWLILFDWLRQ5),'WHFKQRORJ\

6&0FDQPDQDJHZDUHKRXVHDFWLYLWLHVLQFOXGLQJ

Page 93: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 93/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 93

y  ,QERXQG 3URFHVVLQJ DQG 5HFHLSW &RQILUPDWLRQ 5HFHLYH DQG SURFHVV H[WHUQDOO\

SURFXUHGJRRGVLQWR\RXUZDUHKRXVHZLWKDVLQJOHUDGLRIUHTXHQF\VFDQ

y  2XWERXQG3URFHVVLQJ8VH5),'WHFKQRORJ\WRPDQDJHDOOWKHVWHSVRIWKHJRRGV

LVVXHLQFOXGLQJGLVWULEXWLRQDQGSURRIRIGHOLYHU\DFWLYLWLHV

y  &URVV'RFNLQJ'LUHFWLQERXQGJRRGVIURPUHFHLSWWRLVVXHZLWKRXWLQWHULPVWRUDJH

0LQLPL]H GXSOLFDWH JRRGV PRYHPHQWV RSWLPL]H WKH IORZ RI JRRGV DQG VKRUWHQURXWHVZLWKLQWKHZDUHKRXVH

y  :DUHKRXVLQJDQG6WRUDJH0DQDJHPHQW2SWLPL]HLQWHUQDOPRYHPHQWVDQGVWRUDJH

RIJRRGVZLWKLQDZDUHKRXVH

y  3K\VLFDO,QYHQWRU\3ODQDQGH[HFXWHSK\VLFDOLQYHQWRU\RUF\FOHFRXQWV

  7UDQVSRUWDWLRQ0DQDJHPHQW6\VWHP706

7KH 706 VRIWZDUH LVRQH RI WKH NH\ FRPSRQHQWV WR WKH VXSSO\ FKDLQ 7KLV VRIWZDUH

PDQDJHVWKHVFKHGXOLQJRIDOOWUDQVSRUWPRGHVXVHGWRPRYHSURGXFWVIURPRQHORFDWLRQ

WRDQRWKHULQDGGLWLRQWRILQGLQJWKHEHVWURXWHVWRWDNHDQGGHWHUPLQLQJZKLFKSURGXFWVDUH EHVW WUDQVSRUWHGE\ZKDW W\SHRI WUDQVSRUWDWLRQ WKDW LV WUXFN UDLOVHD RUSODQH

706VRIWZDUHDOVRDOORZVLQGLYLGXDOVZLWKLQWKHWUDQVSRUWDWLRQQHWZRUNVXFKDVGULYHUV

RU PDQDJHUV WR ORJ LQ WR D WUDQVSRUWDWLRQ SRUWDO WR FRPPXQLFDWH GLUHFWO\ DQGPDNH

XSGDWHVLQUHDOWLPH

6&0FDQPDQDJHNH\WUDQVSRUWDWLRQSURFHVVHVLQFOXGLQJ

y  7UDQVSRUWDWLRQ 3ODQQLQJ 2SWLPL]H VKLSPHQWV DVVLJQ FDUULHUV WR VKLSPHQWV DQG

WHQGHUVKLSPHQWVWRDVVLJQHGFDUULHUV

y  7UDQVSRUWDWLRQ ([HFXWLRQ 6HOHFW FDUULHUV FDOFXODWH IUHLJKW FRVWV VHWWOH VKLSPHQW

FRVWV DQG SULQW GRFXPHQWV 8VH GHQLHGSDUW\ DQG HPEDUJR OLVWV ZKHQ VKLSSLQJ

LQWHUQDWLRQDOO\

y  )UHLJKW&RVWLQJ&DOFXODWHDQGVHWWOH IUHLJKWFRVWVEDVHGRQDFWXDOVKLSPHQWVDQG

FXUUHQWUDWHVDQGXVHWKLVLQIRUPDWLRQWRYHULI\LQYRLFHV

  ,QWHUQDWLRQDO7UDGH/RJLVWLFV

7KH ,7/ PRGXOH ZLWKLQ WKH 6&0 VXLWH KDQGOHV WKH GHWDLOV IRU LQWHUQDWLRQDO WUDGH

&ROODERUDWLRQ EHWZHHQ FRXQWULHV FRPSOLDQFH LVVXHV WDULIIV DQG WD[HV HYHQW

PDQDJHPHQWVKLSPHQWWUDFNLQJDQG LPSRUWDQGH[SRUWPDQDJHPHQWDUHDOO GHDOWZLWK

E\JLYLQJPDQ\SHRSOHDFURVVWKHVXSSO\FKDLQDFFHVVDQGYLVLELOLW\LQWRWKHLVVXHVWKDWFDQRFFXUDWDQ\QRGHZLWKLQWKHVXSSO\FKDLQDQGQRWRQO\LQWRWKHSURGXFWVWKHPVHOYHV

LQWKHLQWHUQDWLRQDOFRQWH[W

  6XSSOLHU5HODWLRQVKLS0DQDJHPHQW650

Page 94: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 94/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 94

650VRIWZDUHHQDEOHVVXSSOLHUVDQGGHOLYHU\VLWHLQGLYLGXDOVWRDFFHVVVXSSOLHUSRUWDOV

IRUWKHIROORZLQJWZRUHDVRQV

L  7R IDFLOLWDWH FRPPXQLFDWLRQ DPRQJ WKHVH SDUWLHV DQG WR XSGDWH WKHP RQ DQ\

SUREOHPVWKHVXSSOLHUPD\EHH[SHULHQFLQJDWLWVHQGDQG

LL  7RDOORZPDQDJHUVWRXVHVFRUHFDUGVWRUDWHVXSSOLHUVDVJRRGDYHUDJHRUSRRU

)RUH[DPSOHLIDVXSSOLHULVQRWFRPSO\LQJZLWKVWDQGDUGVRULVQRWUHVSHFWLQJGHOLYHU\

WLPHVRULIWKHVXSSOLHUVJRRGVDUHVLPSO\QRWDYDLODEOHWKHVXSSOLHUZLOOEHJLYHQDSRRU

UDWLQJ ,I WKH VXSSOLHU UHFHLYHV WRRPDQ\ SRRU UDWLQJV RU LI WKH SUREOHPV FRQWLQXH WR

RFFXUWKHVXSSOLHUFDQEHMXVWLILDEO\UHSODFHGE\DQHZRQH

  6XSSO\&KDLQ$QDO\WLFV

6XSSO\FKDLQDQDO\WLFVLVDWRROWKDWDOORZVPDQDJHUVDQGRWKHUVLQYROYHGLQGHFLVLRQ

PDNLQJSURFHVVHVWKHDELOLW\WRFUHDWHZKDWLIVFHQDULRVHQDEOLQJZRUNDURXQGVFHQDULRVWREHSXW LQWR SODFHEHIRUH LQFLGHQWV RFFXU 7KLV DOVR HQDEOHV SURGXFWLRQ DQG VXSSO\

FKDLQSODQQLQJWREHRSWLPL]HG

6&0VXSSRUWV VXSSO\FKDLQ YLVLELOLW\ GHVLJQDQGDQDO\WLFVZLWK IHDWXUHV DQGIXQFWLRQV

WKDWHQDEOHVXSSO\FKDLQGHVLJQDQGDQDO\WLFVSURFHVVHVLQFOXGLQJ

y  6WUDWHJLF 6XSSO\ &KDLQ 'HVLJQ :LWK YLVLELOLW\ DFURVV WKH HQWLUH VXSSO\ FKDLQ

QHWZRUN SODQQHUV DQG NH\ GHFLVLRQ PDNHUV FDQ SHUIRUP VWUDWHJLF DQG WDFWLFDO

EXVLQHVV SODQQLQJ 7KH\ FDQ WHVW VFHQDULRV WR GHWHUPLQH KRZ WKH VXSSO\ FKDLQ

QHWZRUNFDQDGGUHVVFKDQJHVLQWKHPDUNHWWKHEXVLQHVVRUFXVWRPHUGHPDQG

y  6XSSO\&KDLQ$QDO\WLFV6&0HQDEOHVWRGHILQHVHOHFWDQGPRQLWRU.3,VWRJHWDQ

LQWHJUDWHGFRPSUHKHQVLYHYLHZRISHUIRUPDQFHDFURVVWKHVXSSO\FKDLQ&RPSDQLHV

FDQ DOVR XVH SUHGHILQHG .3,V EDVHG RQ WKH VXSSO\ FKDLQ RSHUDWLRQV UHIHUHQFH

6&25PRGHO WRPRQLWRU VRXUFLQJ SODQQLQJ SURGXFWLRQ GLVWULEXWLRQ DQG UHWXUQV

SURFHVVHV

  'HPDQG0DQDJHPHQW

'0 VRIWZDUH JLYHV ERWK PDQXIDFWXUHUV DQG GLVWULEXWRUV WKH DELOLW\ WR IRUHFDVW DQG

PDQDJH WKH GHPDQG IRU SDUWLFXODU SURGXFWV VROGZLWKLQ WKHLU UHVSHFWLYHPDUNHWV '0

VRIWZDUH WDNHVKLVWRULFDO VDOHV DQGZDUHKRXVH GDWD DQG SURYLGHV DJXLGHOLQH WRZKDW

VKRXOGEHSURFXUHGDQGDWZKDWWLPHWDNLQJLQWRDFFRXQWVHDVRQDOYDULDELOLW\7KLVKHOSV

LQWKHSODQQLQJRIZKDWLVQHHGHGWREHSURGXFHGDQGKRZPXFKRIHDFKPDWHULDOLVWREH

 1  Key Performance Indicators (KPI) are financial and non-financial measures or metrics used to help an

organization define and evaluate how successful it is, typically in terms of making progress towards its long-term

organizational goals. KPIs can be specified by answering the question, "What is really important to different

stakeholders?"

Page 95: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 95/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 95

SURFXUHG'0VRIWZDUHFDQDOVRKHOSPDQXIDFWXUHUVREWDLQSDUWLFXODUFRPSRQHQWVIURP

GLIIHUHQW VRXUFHV WR SURGXFH FRPSOH[ SURGXFWV ZLWKLQ DSSURSULDWH WLPHOLQHV 7KH

VRIWZDUHPD\ DOVR WDNH GDWD IURP WKH KXPDQ UHVRXUFHV +5DSSOLFDWLRQ WRVFKHGXOH

ODERUHUVDFFRUGLQJWRSURGXFWLRQGHPDQG

  2UGHU0DQDJHPHQW

(OLPLQDWHWKHVRIWFRVWVGHOD\VDQGHUURUVDVVRFLDWHGZLWKPDQXDOO\JHQHUDWLQJVHQGLQJ

UHFHLYLQJ DQG DFNQRZOHGJLQJ RUGHUV 6&0 DXWRPDWHV WKLV HQWLUH SURFHVV FXWWLQJ

DGPLQLVWUDWLRQFRVWVDQGVDYLQJKXQGUHGVRIWKRXVDQGVRIGROODUVSHU\HDULQRYHUKHDGV

ZKLOHPDNLQJVXSSO\FKDLQPRUHHIILFLHQW6XSSO\&KDLQ0DQDJHPHQW+XEHQDEOHVWKH

VXSSO\FKDLQ WRH[WHQGZD\EH\RQGHQWHUSULVH0XFKRI WKHLQHIILFLHQF\DQGFRVW WKDW

FDUU\LVDGLUHFWUHVXOWRISRRUODWHRUQRQH[LVWHQWFRPPXQLFDWLRQZLWKVXSSOLHUV6&0

V\VWHPVLPSO\WDNHWKH LQIRUPDWLRQRUJDQL]DWLRQFKRRVHWRSURYLGHDQGGHOLYHULWWR WKH

SHRSOHLQUHDOWLPHDQGLQWKHIRUPDWWKH\UHTXLUH

6&0FDQPDQDJHRUGHUIXOILOOPHQWDFWLYLWLHVLQFOXGLQJ

y  6DOHV2UGHU3URFHVVLQJ)XOILOODFRQWUDFWRUSXUFKDVHRUGHUZLWKDVSHFLILFSURGXFW

FRQILJXUDWLRQDQGTXDQWLW\RUDJLYHQVHUYLFHDWDVSHFLILFWLPH

y  %LOOLQJ +DQGOH WKH HQWLUH ELOOLQJ SURFHVV IURP WKH FUHDWLRQ DQG FDQFHOODWLRQ RI

LQYRLFHVWKURXJKWKHWUDQVIHURIELOOLQJLQIRUPDWLRQWRWKHDFFRXQWLQJGHSDUWPHQW

  3URFXUHPHQW

6&0VXSSRUWVHQGWRHQGSURFXUHPHQWLQFOXGLQJSURFHVVHVIRU

y  6WUDWHJLF6RXUFLQJ,GHQWLI\DQGHYDOXDWHYHQGRUVEDVHGRQKLVWRULFDOSHUIRUPDQFH

DQG RWKHU GDWD &UHDWH ORQJWHUP VRXUFLQJ SODQV WKDW DOLJQ ZLWK ILQDQFLDO DQG

PDUNHWLQJVWUDWHJLHV

y  3XUFKDVH2UGHU3URFHVVLQJ&RQYHUWGHPDQGVXFKDVSXUFKDVHUHTXLVLWLRQVDQGH

VKRSSLQJ FDUWV LQWR SXUFKDVH RUGHUV RU GHOLYHU\ VFKHGXOHV IRU D VFKHGXOLQJ

DJUHHPHQW

y  ,QYRLFLQJ 5HFHLYH HQWHU DQG FKHFNYHQGRU LQYRLFHV IRU FRUUHFWQHVV LQ WHUPV RI

FRQWHQWSULFHDQGFRPSXWDWLRQ

  0DQXIDFWXULQJ

6&0VXSSRUWVDOOSURGXFWLRQSURFHVVHVLQFOXGLQJHQJLQHHUWRRUGHUFRQILJXUHWRRUGHU

PDNHWRRUGHUDQGPDNHWRVWRFNPDQXIDFWXULQJ7KHVROXWLRQHQDEOHVERWK

Page 96: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 96/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 96

y  3URGXFWLRQ 3ODQQLQJ DQG 'HWDLOHG 6FKHGXOLQJ 2SWLPL]H VFKHGXOHV IRU PDFKLQH

ODERUDQGRYHUDOOFDSDFLW\XWLOL]DWLRQIDFWRULQJ LQFXVWRPHUGHOLYHU\GDWHVPDWHULDO

DYDLODELOLW\DQGUHDOWLPHPDQXIDFWXULQJFRQGLWLRQV

y  0DQXIDFWXULQJ2SHUDWLRQV&DSWXUHSURGXFWLRQ LQIRUPDWLRQIURP WKHVKRS IORRU WR

VXSSRUWSURGXFWLRQFRQWURODQGFRVWLQJSURFHVVHV

 6HUYLFH3DUWV3ODQQLQJ

6&0FDQDOVRKDQGOHVHUYLFHSDUWVSODQQLQJDFWLYLWLHVLQFOXGLQJ

y  3DUWV'HPDQG3ODQQLQJ,PSURYHWKHDFFXUDF\RIIRUHFDVWVWKURXJKEHWWHUPRGHOLQJ

RIGHPDQGTXDQWLWLHVHYHQWVDQGWKHLUUHVSHFWLYHGHYLDWLRQV&RPSDQLHVFDQVHOHFW

VRSKLVWLFDWHGIRUHFDVWPRGHOVDQGRSWLPL]HPRGHOSDUDPHWHUVWRLPSURYHIRUHFDVWLQJ

IRU VORZPRYLQJ SDUWV RU IRU SDUWV ZLWK LUUHJXODU GHPDQG SDWWHUQV 7KURXJK

DJJUHJDWHG IRUHFDVWSDUDPHWHU SURILOH PDLQWHQDQFH FDQ PDNH GDWD PDLQWHQDQFH

PRUHHIILFLHQWy  3DUWV,QYHQWRU\3ODQQLQJ5HGXFHLQYHQWRU\OHYHOVDQGDFKLHYHUHWDLOVHUYLFHOHYHOV

E\SURYLGLQJ PRUH SUHFLVH GHPDQG PRGHOLQJ&RPSDQLHV FDQ GLVWULEXWH LQYHQWRU\

RSWLPDOO\ZLWKLQWKHPXOWLHFKHORQVXSSO\FKDLQWRHQVXUHKLJKVHUYLFHOHYHOVZKLOH

NHHSLQJLQYHQWRU\OHYHOVDWDPLQLPXP

y  3DUWV6XSSO\3ODQQLQJ5HGXFHLQYHQWRU\LQWKHVXSSO\FKDLQE\LPSURYLQJVXSSOLHU

DOLJQPHQWLQFUHDVLQJDXWRPDWLRQDQGGHYHORSLQJDFFXUDWHVXSSO\SODQV&RPSDQLHV

FDQDOVRUHGXFHRSHUDWLRQDOFRVWWKURXJKHIILFLHQWSXUFKDVLQJSUDFWLFHV

y  3DUWV'LVWULEXWLRQ3ODQQLQJ6HWXSVWRFNWUDQVIHUVIRUSDUWVZLWKLQDVHUYLFHSDUWV

QHWZRUNWRUHGXFHVWRFNRXWVLWXDWLRQVDQGRSHUDWLRQDOFRVWV

y  3DUWVPRQLWRULQJ:RUNZLWKVXSSOLHUVDQGFXVWRPHUVWRH[FKDQJHLQIRUPDWLRQDQGKDQGOHDOHUWVFROODERUDWLYHO\

2WKHU6XSSRUWHG)HDWXUHVRI6XSSO\&KDLQ0DQDJHPHQW6\VWHPV

6XSSO\ &KDLQ PDQDJHPHQW KHOSV WR FRVWHIIHFWLYHO\ FROODERUDWH ZLWK VXSSOLHUV DQG

FXVWRPHUVWRGUDPDWLFDOO\UHGXFHLQYHQWRU\OHYHOVLQFUHDVHLQYHQWRU\RYHUWXUQDQGVWULSRXW

DGPLQLVWUDWLYHFRVWV6XSSO\&KDLQV\VWHPVPDNHVLQIRUPDWLRQDYDLODEOHWRVXSSOLHUVLQUHDO

WLPHHQDEOLQJWKHHQWLUHVXSSO\FKDLQWRZRUNIDVWHUVPDUWHUDQGPRUHFRVWHIIHFWLYHO\

  3ODQQLQJDQG)RUHFDVWLQJ

$ PDMRU IDFWRU EHKLQG PLVVHG SURGXFW GHDGOLQHV LV WKDW VXSSOLHUV DUH QRW JLYHQ HQRXJK

ZDUQLQJ DERXW FKDQJHV WRSURGXFWLRQ VFKHGXOHV8VLQJ 6XSSO\&KDLQ0DQDJHPHQW+XE

VXSSOLHUVZLOO NQRZDERXWSURGXFWLRQ SODQV)HZHUPLVWDNHV DQG ODVWPLQXWHFKDQJHV DUH

PDGHDQGJRRGVDUHGHOLYHUHGRQWLPHWRWKHFRUUHFWORFDWLRQ

  9LVLELOLW\

Page 97: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 97/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 97

&XUUHQW LQYHQWRU\ OHYHOV WHQG WR EORDW DV D UHVXOW RI SRRU YLVLELOLW\ LQWR GHPDQG IORZLQJ

WKURXJKVXSSO\FKDLQ%\PDNLQJXSFRPLQJGHPDQGWUDQVSDUHQWWRVXSSOLHUVKHOSWRORZHU

DOORIFRVWVDQGUXQDIDUPRUHHIILFLHQWVXSSO\FKDLQ2QFHVXSSOLHUVVHHLQYHQWRU\OHYHOV

DQGVKRUWWHUPDQGORQJWHUPUHTXLUHPHQWVIRUWKHLUSURGXFWVWKH\FDQEHWWHUUXQWKHLURZQ

RSHUDWLRQV EX\LQJ VPDUWHU KROGLQJ OHVV LQYHQWRU\ GRLQJ OHVV ODVWPLQXWH DQG H[SHQVLYH

WUDQVSRUWDWLRQDQGFXWWLQJWKHLUSURGXFWLRQVHWXSV

  )LQDQFLDO6XSSO\&KDLQ0DQDJHPHQW)6&0

)LQDQFLDO 6XSSO\ &KDLQ0DQDJHPHQW VHW RI DSSOLFDWLRQV SURYLGHV D FRPSOHWH LQWHJUDWHG

VROXWLRQ IRUPDQDJLQJ HOHFWURQLF FXVWRPHU ELOOLQJ UHFHLYDEOHV FROOHFWLRQV DQG FXVWRPHU

FUHGLW ULVN )6&0 KHOSV WR PRUH HIIHFWLYHO\ FRQWURO FRPSDQ\V DFFRXQWV UHFHLYDEOH

SURFHVVHVDQGHQVXUHFDVKIORZVWKURXJKRQOLQHELOOLQJPRUHVWUHDPOLQHGKDQGOLQJRIELOOLQJ

GLVSXWHVDQGFROOHFWLRQV

&RPSOHWH LQWHJUDWLRQ ZLWK FRUH (53 DSSOLFDWLRQV HQVXUHV WKDW FRPSDQ\ UHFHLYDEOHV DQG

FROOHFWLRQVSURIHVVLRQDOVKDYHWKHPRVWXSWRGDWHGDWD6RWKH\FDQUHVROYHLVVXHVTXLFNO\

UHVXOWLQJLQDFFHOHUDWHGFDVKIORZDQGORZHURSHUDWLQJH[SHQVHV

)6&0LQFOXGHVWKHIROORZLQJDSSOLFDWLRQV

y  &UHGLW0DQDJHPHQW

o  (PSOR\V VRSKLVWLFDWHG WRROV WR DQDO\]H FXVWRPHU FUHGLW ZRUWKLQHVV DQG

HVWDEOLVKSROLF\

o  +HOSVWRDYRLGEDGGHEWORVVHVE\SURDFWLYHO\PDQDJLQJFXVWRPHUFUHGLWULVN

H[SRVXUH

y  (OHFWURQLF,QYRLFLQJDQG3D\PHQWV

o  (QDEOHV FXVWRPHU DFFHVV WR LQYRLFHV DFFRXQW VWDWXV DQG SD\PHQW

LQIRUPDWLRQRYHUWKH,QWHUQHW

o  ,QWHJUDWHVVHDPOHVVO\ZLWK\RXUH[LVWLQJFXVWRPHURUVXSSOLHUIDFLQJSRUWDOV

y  'LVSXWH0DQDJHPHQW

o 5HVROYHVDFFRXQWVUHFHLYDEOHGLVSXWHVIDVWHUDQGPRUHV\VWHPDWLFDOO\

o  5HGXFHVGD\VVDOHVRXWVWDQGLQJ'62DQGLPSURYHFDVKIORZV

y  &ROOHFWLRQV0DQDJHPHQW

o  (QDEOHVWKHPRUHHIIHFWLYHPDQDJHPHQWRISDVWGXHDFFRXQWV

o  (QVXUHVIDVWHUFROOHFWLRQRIGHOLQTXHQWSD\PHQWVWKRXJKSULRULWL]HGFROOHFWLRQV

HIIRUWV

Page 98: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 98/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 98

6XSSO\&KDLQ3ODQQLQJDQG&ROODERUDWLRQ

6&0 LQFOXGHV IHDWXUHV DQG IXQFWLRQV WR VXSSRUW FROODERUDWLYH VXSSO\ FKDLQ SODQQLQJ

SURFHVVHVLQFOXGLQJVWUDWHJLFWDFWLFDODQGRSHUDWLRQDOSODQQLQJ

6WUDWHJLF7DFWLFDODQG2SHUDWLRQDO3ODQQLQJ

6&0FDQRSWLPL]HDIXOOUDQJHRISODQQLQJDFWLYLWLHVLQFOXGLQJ

y  'HPDQG 3ODQQLQJ DQG )RUHFDVWLQJ )RUHFDVW DQG SODQ DQWLFLSDWHG GHPDQG IRU

SURGXFWV RU SURGXFW FKDUDFWHULVWLFV 8VH VWDWHRIWKHDUW IRUHFDVWLQJ DOJRULWKPV IRU

SURGXFWOLIHF\FOHSODQQLQJDQGWUDGHSURPRWLRQSODQQLQJ

y  6DIHW\ 6WRFN3ODQQLQJ $VVLJQ RSWLPDO VDIHW\ VWRFNDQG WDUJHW VWRFN OHYHOV LQDOO

LQYHQWRULHV LQ WKH VXSSO\ QHWZRUN 0HHW GHVLUHG FXVWRPHU VHUYLFH OHYHOV ZKLOH

PDLQWDLQLQJDPLQLPXPDPRXQWRIVDIHW\VWRFN

y  6XSSO\ 1HWZRUN3ODQQLQJ ,QWHJUDWH SXUFKDVLQJPDQXIDFWXULQJ GLVWULEXWLRQ DQGWUDQVSRUWDWLRQSODQVLQWRDQRYHUDOOVXSSO\SLFWXUHVRWKDWXVHUVFDQVLPXODWHDQG

LPSOHPHQW FRPSUHKHQVLYH WDFWLFDO SODQQLQJ DQG VRXUFLQJ GHFLVLRQV EDVHG RQ D

VLQJOHJOREDOO\FRQVLVWHQWPRGHO7KLVFDQLQYROYHKHXULVWLFVDQGFDSDFLW\SODQQLQJ

RSWLPL]DWLRQDQGPXOWLOHYHOVXSSO\DQGGHPDQGPDWFKLQJ

y  'LVWULEXWLRQ3ODQQLQJ'HWHUPLQH WKHEHVWVKRUWWHUPVWUDWHJ\WRDOORFDWHDYDLODEOH

VXSSO\WRPHHWGHPDQGDQGWRUHSOHQLVKVWRFNLQJORFDWLRQV7RDFKLHYHWKLVSODQQHUV

FDQGHWHUPLQHZKLFKGHPDQGVFDQEHIXOILOOHGE\H[LVWLQJVXSSO\HOHPHQWV

y  6XSSO\1HWZRUN&ROODERUDWLRQ:RUNZLWK SDUWQHUVDFURVVVXSSO\ QHWZRUN8VLQJ

FROODERUDWLRQ IHDWXUHV WKDW LPSURYH YLVLELOLW\ LQWR VXSSO\ DQG GHPDQG FRPSDQ\V

SDUWQHUV FDQ UHGXFH LQYHQWRU\ EXIIHUV LQFUHDVH WKH YHORFLW\ RI UDZ PDWHULDOV DQGILQLVKHG JRRGV WKURXJK WKH SLSHOLQH LPSURYH FXVWRPHU VHUYLFH DQG LQFUHDVH

UHYHQXHV

%XVLQHVV%HQHILWV

6&0FDQKHOSWRWUDQVIRUPDWUDGLWLRQDOOLQHDUVXSSO\FKDLQLQWRDQDGDSWLYHQHWZRUNZLWK

WKHIROORZLQJEHQHILWV

y  )DVWHU5HVSRQVHWR&KDQJHVLQ6XSSO\DQG'HPDQG:LWKLQFUHDVHGYLVLELOLW\LQWR

WKHVXSSO\FKDLQDQGDGDSWLYHVXSSO\FKDLQQHWZRUNV\RXFDQEHPRUHUHVSRQVLYH&RPSDQLHVFDQVHQVHDQGUHVSRQGTXLFNO\WRFKDQJHVDQGTXLFNO\FDSLWDOL]HRQQHZ

RSSRUWXQLWLHV

y  ,QFUHDVHG&XVWRPHU6DWLVIDFWLRQ%\RIIHULQJDFRPPRQLQIRUPDWLRQIUDPHZRUNWKDW

VXSSRUWVFRPPXQLFDWLRQDQGFROODERUDWLRQ6&0HQDEOHVWREHWWHUDGDSWWRDQGPHHW

FXVWRPHUGHPDQGV

y  &RPSOLDQFH ZLWK 5HJXODWRU\ 5HTXLUHPHQWV FRPSDQLHV FDQ WUDFN DQG PRQLWRU

FRPSOLDQFHLQDUHDVVXFKDVHQYLURQPHQWKHDOWKDQGVDIHW\

Page 99: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 99/169

Page 100: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 100/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 100

LQPDQXIDFWXULQJWRFKHFNDYDLODELOLW\RIWKHHQWLUHELOORIPDWHULDOV7KHWHFKQRORJ\

FDQPDNHWKHUHFHLYLQJRIDWUXFNPXFKIDVWHUDQGFKHDSHU)XOOLPSOHPHQWDWLRQRI

5),' FRXOG HOLPLQDWH WKH QHHG IRU PDQXDO FRXQWLQJ DQG EDUFRGH VFDQQLQJ DW WKH

UHFHLYLQJGRFN,WFDQDOVREHXVHGWRJHWDQH[DFWFRXQWRILQFRPLQJLWHPVDQGLWHPV

LQVWRUDJH5),'WHFKQRORJ\KRZHYHUKDV\HWWRUHDFKSHUFHQWDFFXUDF\DQGLWV

FRVWSHUXQLWLVVWLOOKLJKHQRXJKWRPDNHJOREDODFFHSWDQFHGLIILFXOWHYHQDWWKHFDVHOHYHO

(%XVLQHVVDQG&RQWULEXWLRQ1HWZRUN

,PSDFWRI(%XVLQHVVRQ&XVWRPHU6HUYLFHV

  &XVWRPHU VHUYLFH LV WKH PRVW LPSRUWDQW IXQFWLRQ RI HEXVLQHVV *RRG FXVWRPHU

VHUYLFHPHDQVUHVSRQVLYHQHVV,WPHDQVRQHFDQXQGHUVWDQGDQWLFLSDWHDQGUHVSRQG

TXLFNO\WRWKHQHHGVDQGGHPDQGVRIFXVWRPHUV

  7UDQVSDUHQW$YDLODELOLW\

&XVWRPHUVRUFOLHQWVVKRXOGDOZD\VEHDEOHWRFRQWDFWZLWKEXVLQHVVHVLPPHGLDWHO\

DQGFXVWRPHUHDVLO\DFFHVVLEOHWRWKHP

  9LVLELOLW\

%XVLQHVVFRQWDFWLQIRUPDWLRQVKRXOGEHDYDLODEOHDQ\ZKHUHWRFXVWRPHUV,WLVYLWDOWR

KDYHHDVLO\DYDLODEOHHPDLOOLQNVWROOIUHHWHOHSKRQHQXPEHUVDQGOLQNVWRIHHGEDFN

IRUPV

  (PDLO/LVWV

(PDLOOLVWVDUHSRZHUIXOWRROVLQHEXVLQHVVFXVWRPHUVHUYLFH%XVLQHVVFDQPDLQWDLQ

WKHLUYLVLELOLW\ZLWKWKHLUFOLHQWVRUFXVWRPHUVZKLOHSURYLGLQJLPSRUWDQWLQIRUPDWLRQWR

WKHP 7KHVH OLVWV FDQ JLYH RQJRLQJ RU URXWLQH LQIRUPDWLRQ DV ZHOO DV QHZV DQG

SRVLWLYHDGYDQFHPHQWVRUFKDQJHV5HVSRQVHDQG IHHGEDFN VKRXOGEHHQFRXUDJHG

E\SURYLGLQJOLQNVEDFNWRFXVWRPHUVDQGIXOOFRQWDFWLQIRUPDWLRQ

  $XWR5HVSRQGHUV

,WLV VPDUW WRSURYLGHDVPXFK LQIRUPDWLRQDV SRVVLEOH WR FXVWRPHUV E\XVLQJ DXWR

UHVSRQGHUV:KHQFXVWRPHUVHQGVDQHPDLOWRDXWRUHVSRQGHULWFDQVHQGEDFNDQ\

DSSURSULDWHLQIRUPDWLRQDXWRPDWLFDOO\

  ,QWHUDFWLYLW\

Page 101: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 101/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 101

%\ LQFUHDVLQJ WKH HDVH RI LQWHUDFWLYLW\ ZLWK FXVWRPHU EXVLQHVVHV LQFUHDVH WKH

OLNHOLKRRGRIDQH[FKDQJHRILQIRUPDWLRQ7KLVFDQEHDFKLHYHGWKURXJKIRUPVXUYH\V

DQGLQFHQWLYHV

  &XVWRPHU([SHULHQFHV

$Q HEXVLQHVV FDQ JUHDWO\ LQFUHDVH FXVWRPHU H[SHULHQFH LQ WHUP RI DFFHVV

FXVWRPL]DWLRQDQGFRQYLQFHV

  3URGXFW9DULHW\

(EXVLQHVVRIIHUVDODUJHYDULHW\RISURGXFWVWRFXVWRPHUV

  (IILFLHQW)XQG7UDQVIHU

$QHEXVLQHVVFDQHQKDQFHUHYHQXHVE\VSHHGLQJXSFROOHFWLRQ

,PSDFWRI(%XVLQHVVRQ&RVW

(EXVLQHVVDIIHFWVLQYHQWRU\IDFLOLWLHVDQGWUDQVSRUWDWLRQDQGLQIRUPDWLRQFRVWV

,QYHQWRU\

$Q HEXVLQHVV FDQ ORZHU LQYHQWRU\ OHYHO DQG LQYHQWRU\ FRVW E\ LPSURYLQJ VXSSO\

FKDLQFRRUGLQDWLRQDQGFUHDWLQJEHWWHUPDWFKEHWZHHQVXSSO\DQGGHPDQG%HQHILWV

DUH6PRRWKLQJ6XSSO\'HPDQGXQFHUWDLQWLHVDQG(FRQRPLHVRIVFDOH6WDUWXSFRVWV

7UDQVSRUWIL[HGFRVWV&RVWLQFOXGHV&DSLWDOFRVW5LVNDQG2SHUDWLRQDOFRVWV

7\SHVRILQYHQWRU\

Competitive Strategy

S.C. Strategy

Inventory Transportation Facilities Information

Efficiency Responsiveness

Page 102: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 102/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 102

%\XQFHUWDLQW\W\SH

y  &\FOH,QYHQWRU\GHVLJQHGWRPHHWHFRQRPLHVRIVFDOH(26

y  6DIHW\,QYHQWRU\GHVLJQHGWRPHHWXQFHUWDLQWLHVPDUJLQDODQDO\VLV

%\VXSSO\FKDLQVWDJHy  5DZPDWHULDOV3URFHVVLQYHQWRU\

y  5HDG\SURGXFWLQYHQWRU\

7UDQVSRUWDWLRQ7UDQVSRUWDWLRQ0RGHV DLU WUXFN VHD UDLO ,Q+RXVHRU2XWVRXUFH

7UDQVSRUWDWLRQ VSHHGPDNHVD SRVLWLYH FRQWULEXWLRQ WR UHVSRQVLYHQHVV DQG FDQ EH

LQFUHDVHGDWDFRVW

)DFLOLWLHV &DSDFLW\ 7ZR EDVLF W\SHV RI IDFLOLWLHV FRVWV PXVW EH LQFOXGHG LQ WKH

DQDO\VLVDUHFRVWUHODWHGWR/RFDWLRQRIIDFWRULHVZDUHKRXVHVUHWDLORXWOHWVDQGFRVW

UHODWHG WRRSHUDWLRQ ,QFUHDVLQJ WKHQXPEHURIZDUHKRXVLQJ IDFLOLWLHV LQ D ORJLVWLFVQHWZRUNJHQHUDOO\LPSURYHVFXVWRPHUVHUYLFHEHFDXVHDGGLWLRQDOVWRFNLQJORFDWLRQV

UHGXFH DYHUDJH GHOLYHU\ WLPHV WR FXVWRPHUV+RZHYHUPRUH ZDUHKRXVHV LQFUHDVH

ZDUHKRXVLQJ DQG LQYHQWRU\ FRVWV :DUHKRXVLQJ FRVWV LQFUHDVH EHFDXVH WKHUH DUH

PRUHRYHUKHDGDQGIL[HGFRVWVWRDEVRUE,QYHQWRU\FRVWVLQFUHDVHEHFDXVHDJUHDWHU

QXPEHURIZDUHKRXVHVPHDQVPRUHVDIHW\VWRFNLQYHQWRU\PXVWKHOGV\VWHPZLGHWR

SURYLGHDVSHFLILHGOHYHORIFXVWRPHUVHUYLFH

,QFRQWUDVWWUDQVSRUWDWLRQFRVWVGHFUHDVHDVWKHQXPEHURIIDFLOLWLHVLVLQFUHDVHGRYHU

VRPHUDQJH5DWKHUWKDQVKLSSLQJVPDOOHUTXDQWLWLHVGLUHFWIURPSRLQWVRIVXSSO\HJ

3ODQWVWRFXVWRPHUVZDUHKRXVHVVHUYHDVSURGXFWPL[LQJFHQWUHVWKDWDOORZODUJHU

FRQVROLGDWHGVKLSPHQWVEHWZHHQVXSSO\SRLQWVDQGZDUHKRXVHV7KLVWUDQVSRUWDWLRQ

FRVWDGYDQWDJHEHFRPHVGLPLQLVKHGKRZHYHU LIWRRPDQ\ZDUHKRXVHVDUHSUHVHQW

EHFDXVHWKHVKLSPHQWVL]HVEHWZHHQVXSSO\SRLQWVDQGZDUHKRXVHVGHFUHDVHWR WKH

SRLQW WKDWWKHUH LV OLWWOHVKLSPHQW FRQVROLGDWLRQDGYDQWDJHRYHU GLUHFW VKLSPHQWV WR

FXVWRPHUV

,QIRUPDWLRQ

  $FFXUDWHIRUHFDVWLQJ

  &RRUGLQDWLRQEHWZHHQVWDJHVRI6&

  )DVWF\FOHV

  ,QYHQWRU\UHGXFWLRQ

  /RVWVDOHVUHGXFWLRQ

  0DUNGRZQVUHGXFWLRQ

Page 103: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 103/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 103

7KH5ROHRI,7LQ)RUHFDVWLQJ

7KHUHLV DQDWXUDO UROHRI,7 LQIRUHFDVWLQJ JLYHQ WKH ODUJHDPRXQWRI GDWDLQYROYHG7KH

IUHTXHQF\ZLWKZKLFK IRUHFDVWLQJ LVSHUIRUPHGDQGWKHLPSRUWDQFHRIJHWWLQJWKHKLJKHVW

TXDOLW\UHVXOWVSRVVLEOH7KHIRUHFDVWLQJPRGXOHZLWKLQDVXSSO\FKDLQ,7V\VWHPRIWHQFDOOHG

WKHGHPDQGSODQQLQJPRGXOHLVDFRUHVXSSO\FKDLQVRIWZDUHSURGXFW

&RPPHUFLDOGHPDQGSODQQLQJPRGXOHVFRPHZLWKDYDULHW\RIIRUHFDVWLQJDOJRULWKPZKLFK

FDQEHTXLWH DGYDQFHGDQGDUHVRPHWLPHV SURSULHWDU\7KHVHPHWKRGRORJLHV RIWHQJLYHD

PRUHDFFXUDWHIRUHFDVW WKHQZKDW FDQEHSURGXFHGWKURXJKWKHXVHRIDJHQHUDOSDFNDJH

VXFKDVH[FHO0RVWGHPDQGSODQQLQJDSSOLFDWLRQPDNHLWHDV\WRWHVWWKHYDULRXVIRUHFDVWLQJ

DOJRULWKPV DJDLQVW KLVWRULFDO GDWD WR GHWHUPLQH WKH RQH WKDW SURYLGHV WKH EHVW ILW WR WKH

REVHUYHGGHPDQGSDWWHUQ 7KHDYDLODELOLW\ RIDYDULHW\RI IRUHFDVWLQJRSWLRQV LV LPSRUWDQW

EHFDXVHGLIIHUHQWIRUHFDVWLQJDOJRULWKPVSURYLGHGLIIHUHQWOHYHOVRITXDOLW\GHSHQGLQJRQWKH

DFWXDOGHPDQGSDWWHUQV7KH,7V\VWHPFDQEHXVHGWREHVWGHWHUPLQHIRUHFDVWLQJPHWKRGV

QRWMXVWIRUWKHILUPRYHUDOOEXWDOVRE\SURGXFWFDWHJRULHVDQGPDUNHWV

*RRG GHPDQG SODQQLQJ PRGXOHV OLQN QRW RQO\ WR FXVWRPHU RUGHUV EXW RIWHQ GLUHFWO\ WR

FXVWRPHUVDOHV LQIRUPDWLRQ DV ZHOO LQFRUSRUDWLQJ WKHPRVW FXUUHQW GDWD LQWR WKH GHPDQG

IRUHFDVW 0XFK RI WKH SURJUHVV LQ DUHDV VXFK DV FROODERUDWLYH SODQQLQJ LV GXH WR ,7

LQQRYDWLRQVWKDWDOORZWKHH[FKDQJHDQGLQFRUSRUDWLRQRIIRUHFDVWVEHWZHHQHQWHUSULVHV

*RRG GHPDQG SODQQLQJ PRGXOHV FRQWDLQ WRROV WR SHUIRUPZKDWLI DQDO\VLV UHJDUGLQJ WKH

LPSDFWRISRWHQWLDO FKDQJHV LQSULFHVRQGHPDQG7KHVH WRROVKHOS DQDO\]H WKHLPSDFWRI

SURPRWLRQVRQGHPDQGDQGFDQEHXVHGWRGHWHUPLQHWKHH[WHQWDQGWLPLQJRISURPRWLRQV

.HHSLQPLQGWKDWQRQHRIWKHVHWRROVLVIRROSURRI)RUHFDVWVDUHYLUWXDOO\DOZD\VZURQJ$JRRG,7V\VWHPVKRXOGKHOSWUDFNWKHKLVWRULFDOIRUHFDVWHUURUVVRWKH\FDQEHLQFRUSRUDWHG

LQWR IXWXUH GHFLVLRQV $ ZHOO VWUXFWXUHG IRUHFDVW DORQJ ZLWK D PHDVXUH RI HUURU FDQ

VLJQLILFDQWO\LPSURYHGHFLVLRQPDNLQJ

)RUHFDVWLQJPRGXOHV DUH DYDLODEOH IURP DOO WKH PDMRU VXSSO\ FKDLQ VRIWZDUH FRPSDQLHV

LQFOXGLQJWKH(53ILUPVVXFKDV6$3DQG2UDFOH)LQDOO\VRPHRIWKH'50IRFXVHGILUPV

KDYH HOHPHQWV RI IRUHFDVWLQJ LQ WKHLU SURGXFWV JLYHQ WKHLU IRFXV RQ FXVWRPHU IDFLQJ

SURFHVVHV)RUHFDVWLQJDQG,7KDYHDORQJKLVWRU\7KHFODVVLFVXSSO\FKDLQ,7SDFNDJHKDV

DIRUHFDVWLQJPRGXOHIHHGLQJIRUHFDVWVWRDSODQQLQJPRGXOH)RUHFDVWLQJLVFRUHSDUWRI,7

LQWKHVXSSO\FKDLQ

5LVN0DQDJHPHQWLQ)RUHFDVWLQJ

7KHULVNDVVRFLDWHGZLWK IRUHFDVW HUURUPXVW EHFRQVLGHUHGZKHQSODQQLQJ IRU WKHIXWXUH

(UURUVLQIRUHFDVWLQJFDQFDXVHVLJQLILFDQWPLVDOORFDWLRQRIUHVRXUFHVLQLQYHQWRU\IDFLOLWLHV

WUDQVSRUWDWLRQ VRXUFLQJ SULFLQJ DQG HYHQ LQ LQIRUPDWLRQ PDQDJHPHQW )RUHFDVW HUURUV

GXULQJQHWZRUNGHVLJQPD\FDXVHWRRPDQ\WRR IHZRUWKHZURQJ W\SH RIIDFLOLWLHVWREH

Page 104: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 104/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 104

EXLOW $W WKH SODQQLQJ OHYHO SODQV DUH GHWHUPLQHG IURP IRUHFDVWV VR WKH DFWXDO LQYHQWRU\

SURGXFWLRQWUDQVSRUWDWLRQVRXUFLQJDQGSULFLQJSODQVWKDWDFRPSDQ\SURGXFHVDQGIROORZV

GHSHQGRQDFFXUDWHIRUHFDVWLQJ(YHQRQDQRSHUDWLRQDOOHYHOIRUHFDVWLQJSOD\VDUROH,WKH

DFWXDOGD\WRGD\DFWLYLWLHVWKDWDUHH[HFXWHGZLWKLQDFRPSDQ\

/RQJOHDGWLPHVUHTXLUHIRUHFDVWVWREHPDGHIXUWKHULQDGYDQFH6HDVRQDOLW\DOVRWHQGVWRLQFUHDVHIRUHFDVWHUURU)RUHFDVWHUURULQFUHDVHZKHQSURGXFWOLIHF\FOHVDUHVKRUWEHFDXVH

WKHUH DUH IHZ KLVWRULFDO GDWD WR EXLOG RQ ZKHQ SURGXFLQJ D IRUHFDVW )LUPV ZLWK D IHZ

FXVWRPHUVRIWHQH[SHULHQFHYHU\OXPS\GHPDQGWKDWLVKDUGHUWRIRUHFDVWWKDQGHPDQGIURP

PDQ\ VPDOO FXVWRPHUV ZKLFK WHQGV WR EH VPRRWKHU )RUHFDVW TXDOLW\ VXIIHUV ZKHQ LW LV

EDVHGRQRUGHUV SODFHG E\ LQWHUPHGLDULHV LQDVXSSO\FKDLQ UDWKHU WKDQRQ HQG FXVWRPHU

GHPDQG

,PSURYHG UHVSRQVLYHQHVVDQG SRROLQJRIWHQ FRPHDW D FRVW ,QFUHDVH VSHHGPD\ DFKLHYH

FDSDFLW\LQYHVWPHQW:KHUHDVSRROLQJWHQGVWRLQFUHDVHWUDQVSRUWDWLRQFRVW7RDFKLHYHWKH

ULJKW EDODQFH EHWZHHQ ULVN PLWLJDWLRQ DQG FRVW LW LV LPSRUWDQW WR WDLORU WKH PLWLJDWLRQ

VWUDWHJLHV)RULQVWDQFHVZKHQGHDOLQJZLWKDFRPPRGLW\IRUZKLFKVKRUWIDOOVFDQHDVLO\EH

PDGH XS RU E\ VSRW PDUNHW SXUFKDVHV VSHQGLQJ ODUJH DPRXQWV WR LQFUHDVH WKH

UHVSRQVLYHQHVVRIWKHVXSSO\FKDLQLVQRWZDUUDQWHG

)RUHFDVWLQJLQ3UDFWLFH

&ROODERUDWHLQ%XLOGLQJ)RUHFDVWV

&ROODERUDWLRQ ZLWK \RXU VXSSO\ FKDLQ SDUWQHUV FDQ RIWHQ FUHDWH D PXFK PRUH DFFXUDWH

IRUHFDVW ,W WDNHV DQ LQYHVWPHQW RI WLPH DQG HIIRUW WR EXLOG WKH UHODWLRQVKLSV ZLWK \RXU

SDUWQHUV WR EHJLQ VKDULQJ LQIRUPDWLRQ DQG FUHDWLQJ FROODERUDWLYH IRUHFDVWV +RZHYHU WKH

VXSSO\FKDLQEHQHILWVRIFROODERUDWLRQDUHRIWHQRQRUGHUWRPDJQLWXGHJUHDWHUWKDQWKHFRVW

7KHUHDOLW\WRGD\KRZHYHULVWKDWPRVWIRUHFDVWVGRQRWHYHQDFFRXQWIRUDOOWKHLQIRUPDWLRQ

DYDLODEOH DFURVV WKH GLIIHUHQW IXQFWLRQV RI D ILUP 3URJUHVV QHHGV WR EH PDGH EHIRUH DOO

VXSSO\FKDLQLQIRUPDWLRQLVDFFRXQWHGIRUDQGXWLOL]HG

6KDUH2QO\WKH'DWDWKDW7UXO\3URYLGHV9DOXH

7KHYDOXHRIGDWDGHSHQGVRQZKHUHRQHVLWVLQWKHVXSSO\FKDLQ)RULQVWDQFHVDUHWDLOHU

ILQGV SRLQW RI VDOHV GDWD WR EH TXLWH YDOXDEOH LQPHDVXULQJ WKH SHUIRUPDQFH RI LWV VWRUH

+RZHYHUDPDQXIDFWXUHUVHOOLQJWRDGLVWULEXWRUZKRLQWXUQVHOOVWRUHWDLOHUVGRHVQRWQHHG

DOO WKH SRLQW RI VDOH GHWDLO 7KH PDQXIDFWXUHU ILQGV DJJUHJDWH GHPDQG GDWD WR EH TXLWH

YDOXDEOH ZLWKPDUJLQDOO\ LV WUXO\ UHTXLUHG GHFUHDVHV LQYHVWPHQW LQ ,7 DQG LPSURYHV WKH

FKDQFHVRIVXFFHVVIXOFROODERUDWLRQ

%H6XUHWR'LVWLQJXLVK%HWZHHQ'HPDQGDQG6DOHV

2IWHQFRPSDQLHVPDNHWKHPLVWDNHRIORRNLQJDWKLVWRULFDOVDOHVDQGDVVXPLQJWKDWWKLVLV

ZKDWWKHKLVWRULFDOGHPDQGZDVWRJHWWUXHGHPDQGDGMXVWPHQWQHHGWREHPDGHIRUXQPHW

GHPDQGGXHWRVWRFNRXWVFRPSHWLWRUDFWLRQVSULFLQJDQGSURPRWLRQV

Page 105: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 105/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 105

7KH5ROHRI,7LQ$JJUHJDWH3ODQLQJ

$JJUHJDWHSODQLQJLVWKHVXSSO\FKDLQDUHDLQZKLFKLQIRUPDWLRQWHFKQRORJ\LVPRVWO\XVHG

7KH DJJUHJDWH SURGXFWLRQ SODQQLQJ $33 SUREOHP LV DERXW GHWHUPLQLQJ WKH RSWLPXP

SURGXFWLRQZRUNIRUFHDQGLQYHQWRU\OHYHOVIRUHDFKSHULRGRIWKHSODQQLQJKRUL]RQIRUD

JLYHQ VHW RI SURGXFWLRQ UHVRXUFHV DQG FRQVWUDLQWV 6XFK SODQQLQJ XVXDOO\ LQYROYHV RQHSURGXFW RU D IDPLO\ RI VLPLODU SURGXFWV ZLWK VPDOO GLIIHUHQFHV VR WKDW FRQVLGHULQJ WKH

SUREOHPIURPDQDJJUHJDWHGYLHZSRLQWLVMXVWLILHG7KHSURGXFWGHPDQGGDWDDUHDVVXPHGWR

EHNQRZQZLWKFHUWDLQW\KRZHYHUSURYLVLRQVIRUIRUHFDVWHUURUPD\EHLQFRUSRUDWHG7KH

JRDO LV WRPHHW WKH IRUHFDVWHG SURGXFW GHPDQG LQ D FRVWHIIHFWLYHPDQQHU 7\SLFDO FRVWV

UHODWHG WR $33 LQFOXGH SD\UROO KLULQJOD\RIIV RYHUWLPHXQGHU WLPH DQG LQYHQWRU\

VKRUWDJHEDFNRUGHULQJ1XPHURXV$33PRGHOVZLWKYDU\LQJGHJUHHVRIVRSKLVWLFDWLRQKDYH

EHHQLQWURGXFHGLQWKHODVWIRXUGHFDGHV

$JJUHJDWH SODQQLQJ LV D SURFHVV E\ ZKLFK D FRPSDQ\ GHWHUPLQHV OHYHOV RI FDSDFLW\

SURGXFWLRQVXEFRQWUDFWLQJLQYHQWRU\VWRFNRXWVDQGSULFLQJRYHUDVSHFLILHGWLPHKRUL]RQ,WV JRDO LV WRPD[LPL]H SURILW ,Q DJJUHJDWH SODQQLQJ GHFLVLRQVPDGH DWD SURGXFW IDPLO\

OHYHO)RUSODQQLQJWLPHIUDPHRIWRPRQWKVLVUHTXLUHG

5ROHRI$JJUHJDWH3ODQQLQJLQ6&0

,WVSHFLILHVRSHUDWLRQDOSDUDPHWHUVRYHUWKHWLPHKRUL]RQ

o  3URGXFWLRQUDWH

o  :RUNIRUFH

o 2YHUWLPH

o  0DFKLQHFDSDFLW\OHYHO

o  6XEFRQWUDFWLQJ

o  %DFNORJ

o  ,QYHQWRU\RQKDQG

$OO VXSSO\ FKDLQ VWDJHV VKRXOG ZRUN WRJHWKHU RQ D SODQ WKDW ZLOO RSWLPL]H VXSSO\ FKDLQ

SHUIRUPDQFH ,QIRUPDWLRQ 1HHGHG IRU DQ $JJUHJDWH 3ODQ DUH 'HPDQG IRUHFDVW LQ HDFK

SHULRG3URGXFWLRQFRVWVODERUFRVWVUHJXODUWLPHDQGRYHUWLPH6XEFRQWUDFWLQJFRVWVFRVW

RI FKDQJLQJ FDSDFLW\ KLULQJ RU OD\RII DQG FRVW RI DGGLQJ RU UHGXFLQJPDFKLQH FDSDFLW\

/DERUPDFKLQHKRXUVUHTXLUHGSHUXQLW,QYHQWRU\KROGLQJFRVW6WRFNRXWRUEDFNORJFRVW

$JJUHJDWH3ODQQLQJLQ3ODQQLQJLQ3UDFWLFH

y  7KLQNEH\RQGWKHHQWHUSULVHWRWKHHQWLUHVXSSO\FKDLQ

y  0DNHSODQVIOH[LEOHEHFDXVHIRUHFDVWVDUHDOZD\VZURQJ

y  5HUXQWKHDJJUHJDWHSODQDVQHZLQIRUPDWLRQHPHUJHV

y  8VHDJJUHJDWHSODQQLQJDVFDSDFLW\XWLOL]DWLRQLQFUHDVHV

Page 106: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 106/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 106

7KH5ROHRI,7LQ,QYHQWRU\0DQDJHPHQW

0RVWRI WKH UHVHDUFKHV LQVXSSO\ FKDLQDUHDV DUH FRQFHUQHG DERXW RSWLPL]LQJ WKH VXSSO\

FKDLQ LQ WHUPV RI LWV HIILFLHQF\ DQG FRPSHWHQFH LQ WKH SURGXFW PDUNHW EXW RQO\ OLPLWHG

VWXGLHV DUH GRQH FRQVLGHULQJ WKH LQYHQWRU\ PDQDJHPHQW LQ VXSSO\ FKDLQV (IIHFWLYH

LQYHQWRU\PDQDJHPHQWLQDVXSSO\FKDLQFDQSOD\DYLWDOUROHLQFXWWLQJLQYHQWRU\KROGLQJFRVWV DFURVV WKH GLIIHUHQW VWDJHV RI WKH VXSSO\ FKDLQ 7KH SULPH REMHFWLYH IRU DOO VXSSO\

FKDLQVLVWRSURYLGHFOLHQWVZLWKZKDWWKH\ZDQWZKHQWKH\ZDQWLW,QYHQWRU\PDQDJHPHQW

SOD\VDFHQWUDOUROHLQHYHU\VXSSO\FKDLQVQHHGWRVDWLVI\LWVFOLHQWV,QYHQWRU\PDQDJHPHQW

KHOS WKHFRPSDQLHVGHYHORS DQHIIHFWLYHDSSURDFKWR LQYHQWRU\ LW DQDO\]HWKH LPSDFW RI

LQWHUQDO DQG H[WHUQDO IDFWRUV WR LQWHJUDWH LQYHQWRU\ ZLWK SXUFKDVLQJ PDQXIDFWXULQJ

GLVWULEXWLRQPDUNHWLQJ DQG VDOHV WR FUHDWH LQYHQWRU\ SROLFLHV WKDWPDNHVHQVH ,W KHOS WR

DQDO\VHVWKH

&OLHQWQHHGVDQGWKHLULQIOXHQFHRQLQVWRFNILOOUDWHVOHDGWLPHDQGDFFXUDF\

&RVWV LQFXUUHG IURP SXUFKDVH WUDQVDFWLRQ H[SHQVHV PDQXIDFWXULQJ VHWXSFKDQJHRYHUH[SHQVHVDQGPRUH

2SHUDWLRQVFKDQJHVGULYHQE\SURPRWLRQVRUUHFDOOVDQG6.8SUROLIHUDWLRQ

7HFKQRORJ\ DQG LWV DELOLW\ WR SURYLGH WUHQG SURILOLQJ DQG VHDVRQDOLW\EDVHG

IRUHFDVWLQJWUDGLQJSDUWQHUYLVLELOLW\DQGSODQQLQJFROODERUDWLRQ

&RUSRUDWH JRDOV ZKHWKHU UHYHQXH XQLW VDOHV LQFUHDVHV LQYHQWRU\PDQDJHPHQW

KHOSWRXQGHUVWDQGLQYHQWRU\DQGORZHULQYHQWRU\FRVW

5ROHRI,7LQ7UDQVSRUWDWLRQ

7UDQVSRUWDWLRQLVRQHRIWKHPDMRULWHPVRIFRVWLQDVXSSO\FKDLQ$VDILUPVDELOLW\WRVHUYH

WKH FXVWRPHUV GHSHQGV RQ KRZ HIILFLHQWO\ DQG TXLFNO\ WKH RUGHUV DUH GHOLYHUHG

WUDQVSRUWDWLRQPDQDJHPHQW EHFRPHV RQH RI WKH LPSRUWDQW RSHUDWLRQV LQ D VXSSO\ FKDLQ

7KHUH DUH WZR LPSRUWDQW IXQFWLRQV SHUIRUPHG E\ WUDQVSRUWDWLRQ SURGXFW PRYHPHQW DQG

SURGXFW VWRUDJH :KLOH SURGXFW PRYHPHQW LV WKH SULPDU\ IXQFWLRQ RI WUDQVSRUWDWLRQ

WHPSRUDU\SURGXFWVWRUDJHEHFRPHVLWVVHFRQGDU\IXQFWLRQ7KHUHDUHILYHNH\SDUWLFLSDQWV

LQ WUDQVSRUWDWLRQ HQYLURQPHQW WKH VKLSSHU WKH FDUULHU WKH UHFHLYHU RU FRQVLJQHH WKH

JRYHUQPHQWDQGWKHSXEOLF

7KHFRPSOH[LW\RIWUDQVSRUWDWLRQGHFLVLRQVGHPDQGVWRXVHRI,7V\VWHPV

,7VRIWZDUHFDQDVVLVWLQ

  ,GHQWLILFDWLRQRIRSWLPDOURXWHVE\PLQLPL]LQJFRVWVVXEMHFWWRGHOLYHU\FRQVWUDLQWV

  2SWLPDOIOHHWXWLOL]DWLRQ

  *36DSSOLFDWLRQV5LVNPDQDJHPHQWLQWUDQVSRUWDWLRQ

Page 107: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 107/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 107

7KHJRDORIDWUDQVSRUWDWLRQULVNPDQDJHPHQWSURJUDPLVWRUHGXFHWKHULVNVRIWUDQVSRUWLQJ

KD]DUGRXVPDWHULDOV4XDOLWDWLYHRUTXDQWLWDWLYHWUDQVSRUWDWLRQULVNDQDO\VLV75$PHWKRGV

DUH LPSRUWDQW HOHPHQWV RI D WUDQVSRUWDWLRQ ULVNPDQDJHPHQWSURJUDP DOORZLQJ FRPSDQ\

PDQDJHPHQW WR LGHQWLI\ PDMRU ULVN FRQWULEXWRUV DQG WKH HIIHFWLYHQHVV RI YDULRXV ULVN

UHGXFWLRQ RSWLRQV $ZLGHYDULHW\RI75$PHWKRGV UDQJLQJ IURP VLPSOH WRFRPSOH[ DUH

XVHGLQWKHLQGXVWULHV7KHUHDUHWKUHHPDLQW\SHVRIULVNIRUWUDQVSRUWLQJDVKLSPHQW

  7KHULVNWKDWVKLSPHQWLVODWH

  7KHULVNWKDWVKLSPHQWLVQHYHUUHDFKHGLWVGHVWLQDWLRQEHFDXVHLQWHUPHGLDWHQRGHV

DUHRUOLQNVDUHGLVUXSWHGE\H[WHUQDOIDFWRUV

  7KHULVNRIKD]DUGRXVPDWHULDO

,QHDFKFDVHLWLVLPSRUWDQWWRLGHQWLI\WKHVRXUFHVRIULVNDQGWKHLUFRQVHTXHQFHVDQGSODQ

VXLWDEOHPLWLJDWLRQVWUDWHJLHV

5LVNPLWLJDWLRQVWUDWHJLHV

  'HFUHDVHWKHSUREDELOLW\RIGLVUXSWLRQV  $OWHUQDWLYHURXWLQJV  ,QFDVHRIKD]DUGRXVPDWHULDOVWKHXVHRIPRGLILHGFRQWDLQHUVORZULVNWUDQVSRUWDWLRQ

PRGHOVPRGLILFDWLRQRISK\VLFDODQGFKHPLFDOSURSHUWLHVFDQSURYHWREHHIIHFWLYH

0DNLQJ7UDQVSRUWDWLRQ'HFLVLRQVLQ3UDFWLFH

  $OLJQWUDQVSRUWDWLRQVWUDWHJ\ZLWKFRPSHWLWLYHVWUDWHJ\

  &RQVLGHUERWKLQKRXVHDQGRXWVRXUFHGWUDQVSRUWDWLRQ  'HVLJQDWUDQVSRUWDWLRQQHWZRUNWKDWFDQKDQGOH  HFRPPHUFH

  8VHWHFKQRORJ\WRLPSURYHWUDQVSRUWDWLRQSHUIRUPDQFH

  'HVLJQIOH[LELOLW\LQWRWKHWUDQVSRUWDWLRQQHWZRUN

7KH)XWXUHRI,7LQ6XSSO\&KDLQ

,QIRUPDWLRQ V\VWHPV WKDW IRFXV RQPLFUR SURFHVVHV DUH PXFKPRUH VXFFHVVIXO )RU ILUPWDUJHWLQJPDFURSURFHVV IXQFWLRQDOLW\WKHDELOLW\WR LQWHJUDWHDFURVVPDFURSURFHVVHV7KLV

FRQFOXVLRQ LVDQ LPSRUWDQWLPSOLFDWLRQRIFRPSDQLHV WKRVHXVHVRIWZDUH&KDUDFWHULVWLFVRI

VRIWZDUHLPSURYHWKHSHUIRUPDQFHRILWVXVHUV7KXVDXVHURIVXSSO\FKDLQVRIWZDUHVKRXOG

ILUVW LGHQWLI\ DUHDV ZLWKLQ WKH WUHHPDFUR SURFHVVHVZKHUH LPSURYHPHQWZLOO SURYLGH WKH

PD[LPXP OHYHUDJH6RIWZDUHDQG,7 GHFLVLRQV VKRXOGWKHQ VXSSRUW WKHJRDO RI LPSURYLQJ

SHUIRUPDQFHDORQJWKHVHSURFHVVHV

Page 108: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 108/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 108

7KHUHDUHWZRSRWHQWLDOZD\VIRUDFRPSDQ\WRHQWHULQDPDUNHW7KHILUVWLVWURXJKWKH

VXSHULRU IXQFWLRQDOLW\ZKHWKHULW LVVSHFLILF IXQFWLRQDOLW\QHHGHGE\DSDUWLFXODULQGXVWU\RU

DQ DSSOLFDWLRQ ZLWK YDVWO\ LPSURYHG HDVH RI XVH 3URYLGH DQ LQWHJUDWHG SURGXFW WKDW

LQFUHDVHV WKH OLQNDJHEHWZHHQ WKHPDFUR SURFHVVHV ,W LVGLIILFXOW IRU VWDUWXS WREXLOGDQ

LQWHJUDWHGSURGXFWDFURVV&50,6&0DQG650+RZHYHUD ODUJHVRIWZDUHFRPSDQ\ZLWK

WUHPHQGRXVUHVRXUFHVDQGDKLVWRU\RISXOOLQJGHVSHUDWHSURGXFWVLQWRDQLQWHJUDWHGSDFNDJHFRXOGWDNHWKLVSDWK

5LVN0DQDJHPHQWLQ,7

7KHUHDUH VHYHUDO ULVNV DVVRFLDWHGZLWK WKH XVH RI ,7 LQ WKH VXSSO\ FKDLQ WKH ODUJHU WKH

FKDQJHLQWKH,7V\VWHPWKHJUHDWHULVWKHULVNRIDQHJDWLYHLPSDFWRQRSHUDWLRQV7KHILUP

FDQQRWIXQFWLRQSURSHUO\LI,7VXIIHUVIURPDPDMRUIDLOXUH

7KHPDMRUDUHDVRIULVNLQ,7FDQEHGLYLGHGLQWRWZREURDGFDWHJRULHV

7KHILVWLV WKHULVN LQYROYHGZLWK LQVWDOOLQJQHZ ,7V\VWHPV'XULQJ WKHSURFHVV RIJHWWLQJQHZ,7V\VWHPVUXQQLQJDILUPLVIRUFHGWRWUDQVLWLRQIURPWKHROGSURFHVVHVLWXVHGLQLWV

RSHUDWLRQV WR WKH QHZSURFHVV LQ LWV ,7 V\VWHP+HUH SUREOHP FDQ EH RFFXUULQJ LQ ERWK

EXVLQHVV SURFHVV DQG LQ WHFKQLFDO LVVXHV RQ WKH EXVLQHVV SURFHVV VLGH QHZ ,7 V\VWHP

UHTXLUHVHPSOR\HHVWRRSHUDWHDFFRUGLQJWRQHZSURFHVVHV7KHUHPD\EHGLIILFXOWWROHDUQ

DQGHPSOR\HHVZKRSUHIHUWKHROGZD\VRIGRLQJEXVLQHVVPD\IHHOGLIILFXOW\

7KHUH DUH VRPH WHFKQLFDO LVVXHV 7KH DPRXQW RI LQWHJUDWLRQ WKDW QHHGV WR WDNH SODFH

EHWZHHQGHVSHUDWHV\VWHPVLVRIWHQRYHUZKHOPLQJ:KHQILUPVZLWFKWRQHZV\VWHPZKLFK

LVQRWSURSHUO\LQWHJUDWHGWKDQSUREOHPVRFFXU(YHQZKHQWKHHPSOR\HHVDUHERXJKWLQWR

WKHQHZSURFHVVDQGDOOWKHWHFKQLFDOKXUGOHVDUHRYHUFRPHLWLVRIWHQDGHOLFDWHEDODQFHWRDFWXDOO\PDNHWKHWUDQVDFWLRQRYHUWRWKHQHZV\VWHP

$ ILUP VWLOOIDFHV ULVNVRQFH LWV ,7V\VWHPVDUHRSHUDWLQJ7KHPRUHD ILUPUHOLHV LQ,7WR

PDNH GHFLVLRQ DQG H[HFXWHSURFHVVHV WKH KLJKHU LV WKH ULVN WKDW DQ\ VRUW RI ,7SUREOHP

UDQJLQJIURPVRIWZDUHJOLWFKHVWRSRZHURXWDJHVWRYLUXVFDQFRPSOHWHO\VKXWGRZQILUPV

RSHUDWLRQV6RPHV\VWHPVRQO\DOORZDSURFHVVWREHH[HFXWHGLQRQHZD\7KHQWKHILUP

VHWWOHVLQWRDSDWWHUQRIGRLQJWKLQJLQRQHZD\REYLRXVO\WKHUHDUHJUHDWHIILFLHQF\EHQHILWV

RI WKLV EXW ILUPDOVR UXQ WKLV ULVN WKDW WKH SURFHVV LV QRW RI WKH SHUIRUPDQFH OHYHO RI LWV

FRPSHWLWRUV DQG WKDW LWV V\VWHPV PDNH LW GLIILFXOW WR FKDQJH WR QHZHU PRUH HIIHFWLYH

SURFHVVHV

:KHQ,PSOHPHQWLQJ,76\VWHPV

y  ,QVWDOO,7V\VWHPLQDQLQFUHPHQWDOIDVKLRQUDWKHUWKDQLQDELJEDQJDSSURDFK7KLV

DOORZ WKH ILUP WR OLPLW WKH GDPDJH DQG HDV\ WR SLQSRLQW SUREOHP DUHDV GXULQJ

LQVWDOODWLRQ

Page 109: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 109/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 109

y  )LUPFDQLPSOHPHQWGXSOLFDWHV\VWHPWRHQVXUHQHZV\VWHPZRUNZHOO7KHILUPFDQ

NHHSLWVROGV\VWHPUXQQLQJDWWKHVDPHWLPHUWKHQHZRQHLVUXQQLQJ,IQHZV\VWHP

FUHDWHVSUREOHPVWKDQROGV\VWHPFDQEHXWLOL]HGDVLWVWLOOH[LVWV

y  ,PSOHPHQWRQO\WKHOHYHORIFRPSOH[LW\WKDWRQHQHHGVEHDFXUHFRPSOH[LWLHVLQFUHDVH

WKHULVNV

2QHWKHRSHUDWLRQDOVLGHPLWLJDWLRQVWUDWHJLHVLQFOXGHGDWDEDFNXSV\VWHPVV\VWHPVUXQQLQJ

LQ SDUDOOHO LQ FDVH ZKHQ RQH VKRXOG VXIIHU D SUREOHP DQG UDQJH RI VHFXULW\ VRIWZDUH

SURGXFWV3LFNLQJV\VWHPVWKDWFDQIOH[LELOLW\RIFKDQJHLIQHHGEFDQEHLPSRUWDQW

7KHUROHRI,7LQ6RXUFLQJ

6RXUFLQJUHODWHG,7KDV KDG WKHPRVW XSVDQGGRZQRIDQ\VXSSO\FKDLQVRIWZDUH VHFWRU

7KHVRXUFLQJVRIWZDUHZRUOG FUHDWHGPDQ\ HOHFWURQLFPDUNHWSODFHV LQ WKHODWH V WKDW

ZHUHH[SHFWHGWRWUDQVIRUPWKHSXUFKDVHRIJRRGVDQGVHUYLFHV7KHUHDUHDZLGHYDULHW\RI

DUHDVLQZKLFK,7FDQDQGLVXVHGLQVRXUFLQJWRGD\,QIDFWWKHUHLVDJUHDWHUGLYHUVLW\LI,7VRXUFLQJSURGXFWVWKDQLQPRVWVXSSO\FKDLQDUHDV

6RPHRIWKH0DMRU,73URGXFW$UHDV:LWKLQ6RXUFLQJ

'HVLJQ&ROODERUDWLRQ

7KLVVRIWZDUH LPSURYHVWKHGHVLJQRI SURGXFW WURXJKFROODERUDWLRQEHWZHHQPDQXIDFWXUHU

DQG WKH VXSSOLHUV 7KH VRIWZDUH IDFLOLWDWHV WKH MRLQW VHOHFWLRQ RI FRPSRQHQWV WKDW KDYH

SRVLWLYHVXSSO\FKDLQFKDUDFWHULVWLFVVXFKDVHDVHRIPDQXIDFWXUDELOLW\DFWLYLWLHVLQFOXGHWKHVKDULQJ RIHQJLQHHULQJ FKDQJH RUGHUEHWZHHQ DPDQXIDFWXUHUDQG LWV VXSSOLHUV 7KLV WKLV

HOLPLQDWHVWKHFRVWO\GHOD\VWKDWRFFXUZKHQVHYHUDOVXSSOLHUVDUHGHVLJQLQJFRPSRQHQWVIRU

WKHPDQXIDFWXUHUVSURGXFWFRQFXUUHQWO\

6RXUFH

6RXUFLQJVRIWZDUHDVVLVWV LQ WKHTXDOLILFDWLRQRI VXSSOLHUV DQGKHOSV LQ VXSSOLHUVHOHFWLRQ

&RQWUDFW PDQDJHPHQW DQG VXSSOLHU HYDOXDWLRQ $Q LPSRUWDQW REMHFWLYH LV WR DQDO\]H WKH

DPRXQWWKDWDQILUPVSHQGZLWKHDFKVXSSOLHU6XSSOLHUDUHHYDOXDWHGDORQJVHYHUDOFULWHULD

LQFOXGH OHDG WLPH UHOLDELOLW\ TXDOLW\DQG SULFH 7KLV WKLQJ LPSURYHV VXSSOLHU SHUIRUPDQFH

DQG KHOS LQ VHOHFWLRQ RI VXSSOLHUV &RQWDFW PDQDJHPHQW LV DOVR DQ LPSRUWDQW SDUW RIVRXUFLQJ

1HJRWLDWH

1HJRWLDWLRQ ZLWK VXSSOLHU FRQWDLQV PDQ\ VWHSV VWDUWLQJ ZLWK UHTXHVW IRU TXRWH 7KH

QHJRWLDWLRQSURFHVVPD\DOVRLQFOXGHWKHGHVLJQDQGH[HFXWLRQRIDXFWLRQV7KHJRDORIWKLV

SURFHVVLVWRQHJRWLDWHDQHIIHFWLYHFRQWUDFWWKDWVSHFLILHVSULFHDQGGHOLYHU\SDUDPHWHUVIRU

Page 110: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 110/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 110

DVXSSOLHULQDZD\WKDWEHVWPDWFKWKHHQWHUSULVHQHHGV6XFFHVVIXOVRIWZDUHDXWRPDWHVWKH

5)2SURFHVVDQGWKHH[HFXWLRQRIDXFWLRQV

%X\

%X\VRIWZDUHH[HFXWHVWKHDFWXDOSURFXUHPHQWRIPDWHULDOIURPVXSSOLHUV7KLVLQFOXGHVWKH

FUHDWLRQ PDQDJHPHQW DQG DSSURYDO RI SXUFKDVH RUGHU 6XFFHVVIXO VRIWZDUH LQ WKLV DUHDDXWRPDWHVWKHSURFXUHPHQWSURFHVVDQGKHOSVGHFUHDVHSURFHVVLQJFRVWDQGWLPH

6XSSO\&ROODERUDWLRQ

2QFHDQDJUHHPHQWIRUVXSSO\LVHVWDEOLVKHGEHWZHHQWKHHQWHUSULVHDQGDVXSSOLHUVXSSO\

FKDLQ SHUIRUPDQFHFDQEH LPSURYHGE\ FROODERUDWLQJRQ IRUHFDVWV SURGXFWLRQ SODQV DQG

LQYHQWRU\ OHYHOV7KHJRDO RIFROODERUDWLRQLV WRHQVXUHD FRPPRQSODQDFURVVWKHVXSSO\

FKDLQ*RRGVRIWZDUHLQWKLVDUHDVKRXOGEHDEOHWRIDFLOLWDWHFROODERUDWLYHIRUHFDVWLQJDQG

SODQQLQJLQDVXSSO\FKDLQ

7KHPRVWVLJQLILFDQWSUREOHPWRVXFFHVVRIVRXUFLQJVRIWZDUHLVWKDWHPSOR\HHVRIWHQMXVWGRQRWZDQW WRXVH WKH VRIWZDUH$V VRXUFLQJ VRIWZDUHRIWHQ OLPLWV ZKDWFDQ EHSXUFKDVHG

PDQ\SHRSOHEULVWOHDWWKHORVVRIIUHHGRPWRSXUFKDVHZKDWWKH\IHHODUHWKHEHVWLWHPIRU

WKHLUFRPSDQ\,QPDQ\FDVHVSHRSOHMXVWJRDURXQGWKHV\VWHPDQGEX\WKHSURGXFWVWKH\

ZDQW$QRWKHUGLIILFXOW\DULVHVZKHQVXFFHVVIXOXVHRIWKH,7V\VWHPVUHTXLUHVFROODERUDWLRQ

DPRQJGLIIHUHQWHQWHUSULVHV'LIILFXOW WRFRQYLQFHILUPVRI WKHEHQHILWVRIXVLQJWKHV\VWHP

DQGRIWHQHDFKILUPLVVXVSLFLRXVRIWKHRWKHUV

5LVN0DQDJHPHQWLQ6RXUFLQJ

6RXUFLQJULVNVLQDQLQDELOLW\WRPHHWGHPDQGRQ WLPHDQLQFUHDVHLQSURFXUHPHQWFRVWVRU

WKHORVVRILQWHOOHFWXDOSURSHUW\,WLVLPSRUWDQWWRGHYHORSPLWLJDWLRQVWUDWHJ\$QLQDELOLW\WR

PHHWGHPDQGRQWLPHDULVHVEHFDXVHRIGLVUXSWLRQRUGHOD\IURPWKHVXSSO\VRXUFH7KHULVN

RI VXSSO\ GLVUXSWLRQPD\ EH VHULRXV HVSHFLDOO\ ZLWK IDU VRXUFHV 'LVUXSWLRQ ULVN FDQ EH

PLQLPL]HGE\GHYHORSLQJPXOWLSOHVRXUFHV'HYHORSLQJPXOWLSOHVRXUFHVLV YHU\H[SHQVLYH

IRU SURGXFWV ZLWK ORZ GHPDQG 'HOD\ IURP VXSSO\ VRXUFH FDQ EH PLWLJDWHG E\ FKDUULQJ

LQYHQWRU\RUGHYHORSLQJDEDFNXSVRXUFHWKDWLVPRUHUHVSRQVLYH&DULQJ LQYHQWRU\ LVEHVW

IRUORZYDOXHVSURGXFWVWKDWGRQRWEHFRPHREVROHWHTXLFNO\

7KHULVNRIKLJKHUSURFXUHPHQWFRVWVFDQEHVLJQLILFDQWZKHQLQGXVWU\ZLGHGHPDQGIRUWKH

SURGXFWH[FHHGVDYDLODEOHVXSSO\H[FKDQJHUDWHVDUHXQIDYRUDEOHRUWKHUHLVDVLQJOHVXSSO\

VRXUFH([FKDQJHUDWHULVNFDQEHPLQLPL]HGE\GHYHORSLQJDJOREDOVXSSO\QHWZRUNWKDWLVIOH[LEOHHQRXJKWREHUHFRQILJXUHGEDVHG LQH[FKDQJHUDWHIOXFWXDWLRQV7KHULVNRIKROGXS

EHFDXVHRIDVLQJOHVRXUFHFDQEHFRXQWHUHGE\GHYHORSLQJDOWHUQDWLYHVRXUFHVRUEULQJLQJ

SDUWRIWKHVXSSO\FDSDELOLW\LQKRXVH

Page 111: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 111/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 111

,QWHOOHFWXDOSURSHUW\ULVNFDQEHPLWLJDWHGE\NHHSLQJSURGXFWVLQKRXVH(YHQZKHQSURGXFW

LVRXWVRXUFHGILUPFDQPDLQWDLQRZQHUVKLSRISDUWRIWKHHTXLSPHQWLILWLVYLHZHGDVKDYLQJ

VLJQLILFDQWLQWHOOHFWXDOSURSHUW\YDOXH

0DNLQJ6RXUFLQJGHFLVLRQLQSUDFWLFH

8VH0XOWLIXQFWLRQDO7HDPV

(IIHFWLYHVWUDWHJLHV IRUVRXUFLQJ UHVXOW IURPPXOWLIXQFWLRQDOFROODERUDWLRQZLWK LQ ILUPV$

VRXUFLQJ VWUDWHJ\ IURP WKHSXUFKDVLQJJURXS LV OLNHO\ REH UHODWLYHO\QDUURZDQG IRFXVRQ

SXUFKDVH SULFH $ VWUDWHJ\ GHYHORSV ZLWK WKHFROODERUDWLRQRI SXUFKDVLQJ PDQXIDFWXULQJ

HQJLQHHULQJDQGSODQQLQJLVPXFKPRUHOLNHO\WRLGHQWLI\WKHFRUUHFWGULYHUVRIWRWDOFRVW7KH

FROODERUDWLRQPXVW EH FRQWLQXHG EH\RQG VWUDWHJ\ IRUPXODWHG WR WKH SURFXUHPHQW SKDVH

EHFDXVH WKDW LV ZKHUH PDQXIDFWXULQJ DQG HQJLQHHULQJ DUH PRVW OLNHO\ WR UHDOL]H WKH IXOO

EHQHILWVRIJRRGVRXUFLQJVWUDWHJ\

(QVXUH$SSURSULDWH&RRUGLQDWLRQ$FURVV5HJLRQVDQG%XVLQHVV8QLWV

&RRUGLQDWLRQRISXUFKDVLQJDFURVVDOOUHJLRQVDQGEXVLQHVVXQWLODOORZVDILUPWRPD[LPL]H

HFRQRPLHVRIVFDOHLQSXUFKDVLQJDQGDOVRWRUHGXFHWUDQVDFWLRQFRVWV2WKHURSSRUWXQLWLHV

IURPLPSURYHGVRXUFLQJVXFKDVEHWWHUVXSSO\FKDLQFRRUGLQDWLRQDQGGHVLJQFROODERUDWLRQ

KRZHYHUPD\ UHTXLUH VWURQJ LQYROYHPHQWDW WKHEXVLQHVVXQLW OHYHO WREH UHDOO\ HIIHFWLYH

0DQGDWLQJJOREDOFRRUGLQDWLRQDFURVVDOOEXVLQHVVXQLWVPD\FRPSOLFDWHWKHVHHIIRUWV0RVW

RI WKH YDOXH LV H[WUDFWHG IURP EHWWHU GHVLJQ FROODERUDWLRQ DQG FRRUGLQDWHG VXSSO\ FKDLQ

IRUHFDVWLQJDQGIXOILOOPHQWDUHEHWWHUVHUYHGZLWKVRPHZKDWPRUHGHFHQWUDOL]HGVRXUFLQJ

$OZD\V(YDOXDWHWKH7RWDO&RVWRI2ZQHUVKLS

$QHIIHFWLYHVRXUFLQJVWUDWHJ\VKRXOGQRWPDNHSULFHUHGXFWLRQLWVVROHREMHFWLYH$OOIDFWRUV

WKDW LQIOXHQFH WKH WRWDO FRVW RI RZQHUVKLS VKRXOG EH LGHQWLILHG DQG XVHG LQ VHOHFWLQJ

VXSSOLHUV6XSSOLHUVSHUIRUPDQFHDORQJDOOUHOHYDQWGLPHQVLRQVVKRXOGEHPHDVXUHGDQGLWV

LPSDFW RQ WRWDO FRVW VKRXOG EH TXDQWLILHG )RFXVLQJ RQ WKH WRWDO FRVW RI RZQHUVKLS DOVR

DOORZVDEX\HUWREHWWHULGHQWLI\RSSRUWXQLWLHVIRUEHWWHUFROODERUDWLRQLQGHVLJQSODQQLQJDQG

IXOILOOPHQW

%XLOG/RQJ7HUP5HODWLRQVKLSVZLWK.H\6XSSOLHUV

$EDVLFWKLQJRIJRRGVRXUFLQJLVWKDWDEX\HUDQGDVXSSOLHUZRUNLQJWRJHWKHUFDQJHQHUDWH

PRUHRSSRUWXQLWLHVIRUVDYLQJWKDQWKHWZRSDUWLHVZRUNLQJVHSDUDWHO\6ROLGUHODWLRQVKLSLV

OLNHO\WRUHVXOWRQO\ZKHQWZRSDUWLHVKDYHORQJWHUPUHODWLRQVKLSDQGGHJUHHRIWUXVW$ORQJ

WHUPUHODWLRQHQFRXUDJHVXSSOLHUVWRH[SDQGJUHDWHUHIIRUWRQLVVXHVWKDWDUHLPSRUWDQWWRD

SDUWLFXODU EX\HUV WKLV LQFOXGH LQYHVWPHQW LQ EX\HU VSHFLILF WHFKQRORJ\ DQG GHVLJQ

FROODERUDWLRQ7KHVHFDSDELOLWLHVDUHYHU\LPSRUWDQWZKHQVRXUFLQJGLUHFWPDWHULDOV

Page 112: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 112/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 112

7KH5ROHRI,7LQ3ULFLQJDQG5HYHQXH0DQDJHPHQW

7KHDUHDRILPSDFWIRU,7ZLWKLQ350LVKHSULFLQJRIUHWDLOJRRGVLQWKHFRQVXPHUSDFNDJH

JRRGFDWHJRU\7KHJURFHU\VWRUHKDYHXWLOL]HGWKLVWHFKQRORJ\WSULFHWKHLUSURGXFWVDW WKH

UHWDLO OHYHO 7KH SULFLQJ SUREOHP WDFNOH LQYROYHV ERWK WKH UHJXODU DV ZHOO DV SURPRWLRQDO

SULFLQJRISURGXFWV

350V\VWHPVKDYHDOVRLPSDFWRQIDVKLRQJRRGV+HUHWKHFKDOOHQJHUHYROYHVDURXQGKRZ

WRRSWLPDOO\PDUNGRZQWKHSULFHRIJRRGVDVWKHVW\OHVDQGVHDVRQVFKDQJH7KHJRDOLVWR

PDUNGRZQ WKH SULFHHQRXJK WR VHOOPRVWRI WKH SURGXFW EXWZLWKRXWPDUNLQJ LWGRZQVR

PXFKWKDWSURILWLVWKURZQDZD\

7KHPDMRUSLWIDOOLQWKHSULFLQJDQGUHYHQXHPDQDJHPHQWDUHDRI ,7UHYROYHDURXQGOLQNLQJ

350 GHFLVLRQV ZLWK RWKHU DUHDV DQG V\VWHPV RI WKH FRPSDQ\ 3ULFLQJ LV JHQHUDOO\

GHWHUPLQHG ZLWKLQ D UHODWLYHO\ ZHOO GHILQHG DUHD RI D FRPSDQ\ PDNLQJ LW HDV\ WR VHWXS

SULFLQJVRIWZDUH7KLVHDVHRILQVWDOODWLRQFDQFDXVHSUREOHPVLIWKHUHLVQRLQWHJUDWLRQZLWK

LQYHQWRU\ GLVWULEXWLRQ DQG SURGXFWLRQ V\VWHP $ FRPPRQ SUREOHP LV D VRIWZDUH

UHFRPPHQGDWLRQRIDSULFHUHGXFWLRQZKLFKLQWXUQEULQJVRQDVXUJHLQGHPDQG7KLVOHDGR

GLVVDWLVILHGFXVWRPHUVLI WKHUHLV LQVXIILFLHQWLQYHQWRU\EHFDXVHWKHSULFLQJV\VWHPVGLGQRW

FRPPXQLFDWHZLWKWKHLQYHQWRU\PDQDJHPHQWV\VWHP7KLVODFNRIFRRUGLQDWLRQFDQEHTXLWH

KDUPIXODQGJUHDWO\GLOXWHWKHEHQHILWVRI350

8VLQJ3ULFLQJDQG5HYHQXH0DQDJHPHQWLQ3UDFWLFH

(YDOXDWH<RXU0DUNHW&DUHIXOO\

7KHILUVWVWHSLQUHYHQXHPDQDJHPHQWLVWRLGHQWLI\WKHFXVWRPHUVHJPHQWVEHLQJVHUYHGDQG

WKHLUQHHGV7KHJRDOLVWRXQGHUVWDQGZKDWWKHFXVWRPHULVEX\LQJ,GHQWLILHGPDUNHWQHHGV

,W LV LPSRUWDQW WR JDWKHU DFFXUDWH DQG FRPSOHWH GDWD UHODWLQJ WR SURGXFW RIIHUHG SULFHV

FRPSHWLWLRQDQGPRVWLPSRUWDQWFXVWRPHUEHKDYLRU,QIRUPDWLRQDERXWFXVWRPHUEHKDYLRULV

DYDOXDEOHDVVHW$SURSHUXQGHUVWDQGLQJRIFXVWRPHUSUHIHUHQFHVDQGDTXDOLILFDWLRQRIWKH

LPSDFW RI YDULRXV WDFWLFV RQ FRQVXPHU EHKDYLRU DUH DW WKH FRUH RI VXFFHVVIXO UHYHQXH

PDQDJHPHQW

4XDQWLI\WKH%HQHILWVRI5HYHQXH0DQDJHPHQW

+LVWRULFDOGDWDDQGDJRRGPRGHORIFXVWRPHUSUHIHUHQFHVVKRXOGEHXVHGWRHVWLPDWHWKHEHQHILWVWKURXJKDVLPXODWLRQ7KHRXWFRPHRIWKLVVWHSVKRXOGEHH[SOLFLWUHYHQXHWDUJHWV

WKDWDUHWREHDFKLHYHGDVDUHVXOWRIUHYHQXHPDQDJHPHQW7KHUHYHQXHWDUJHWVKRXOGEH

VXFKWKDWDOOSHRSOHLQYROYHGEHOLHYHLQ WKHP7KHUHYHQXHPDQDJHPHQWHIIRUWVKRXOGWKHQ

EHFRPSDUHGWREHH[SHFWHGEHQHILW

,PSOHPHQWD)RUHFDVWLQJ3URFHVV

Page 113: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 113/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 113

7KH IRXQGDWLRQ RI UHYHQXHPDQDJHPHQW V\VWHP LV WKH IRUHFDVWLQJ IXQFWLRQ )RUHFDVWLQJ

LQYROYHVHVWLPDWHGGHPDQGDQGDOVRDWWULEXWLQJDQH[SHFWHGHUURUWRWKHIRUHFDVWLWVHOI%RWK

WKH HVWLPDWHG YDOXH DQG WKH H[SHFWHG HUURU DUH LPSRUWDQW LQSXW LQWR DQ\ UHYHQXH

PDQDJHPHQWPRGHO ,W LVYHU\GLIILFXOW WRIRUHFDVW DWDPLFUR OHYHOZKHUH DOOEHKDYLRU LV

HVVHQWLDOO\LGLRV\QFUDWLF6RLWLVHQVXUHWKDWUHYHQXHPDQDJHPHQWWDFWLFVDUHSODQQHGRYHU

DQDJJUHJDWHHQRXJKOHYHOWKDWHIIHFWLYHIRUHFDVWLQJLVSRVVLEOH

)LQDOO\ DV QHZ LQIRUPDWLRQ EHFRPHV DYDLODEOH UHIRUHFDVWLQJ WR VHH LI WKH UHYHQXH

PDQDJHPHQWWDFWLFVFXUUHQWO\LQSODFHDUHVWLOODSSURSULDWH7KHIUHTXHQF\RIIRUHFDVWLQJZLOO

GHSHQGRQWKHDPRXQWRIPDUNHWDFWLYLW\,GHDOO\WKHIRUHFDVWDQGWKHUHYHQXHPDQDJHPHQW

GHFLVLRQVKRXOGEHHYDOXDWHGDIWHUHYHU\WUDQVDFWLRQ

$SSO\2SWLPL]DWLRQWR2EWDLQWKH5HYHQXH0DQDJHPHQW'HFLVLRQ

7KH JRDO RI RSWLPL]DWLRQ LV WRXVH IRUHFDVWV RI FXVWRPHU EHKDYLRU WR LGHQWLI\ D UHYHQXH

PDQDJHPHQWWDFWLFWKDWZLOOEHPRVWHIIHFWLYH

,QYROYH%RWK6DOHVDQG2SHUDWLRQV

7KHVDOHVSHRSOHPXVWXQGHUVWDQGWKHUHYHQXHPDQDJHPHQWWDFWLFLQSODFHVRWKDWWKH\FDQ

DOLJQ WKHLU VDOHV SLWFK DFFRUGLQJO\ 7KH VDOHV IRUFH PXVW GLIIHUHQWLDWH EHWZHHQ WKRVH

FXVWRPHUVZKRWUXO\QHHGWKHVXSSO\FKDLQDVVHWGXULQJWKHSHDNSHULRGDQGWKRVHWKDWZLOO

EHQHILWIURPPRYLQJWKHLURUGHUWRWKHRIISHDNSHULRG7KLVDSSURDFKZLOOLQFUHDVHSURILWIRU

WKHILUPZKLOHDOVRVDWLVI\LQJFXVWRPHUV2SHUDWLRQVPXVWXQGHUVWDQGWKHSRWHQWLDORXWFRPHV

WDNLQJSODFH

8QGHUVWDQGDQG,QIRUPWKH&XVWRPHU

&XVWRPHUV PD\ KDYHQHJDWLYH SHUFHSWLRQ DERXW UHYHQXHPDQDJHPHQW WDFWLFV LI WKH\ DUHVLPSO\SUHVHQWHGDVDPHFKDQLVPIRUH[WUDFWLQJPD[LPXPUHYHQXH7KXVLWLVLPSRUWDQWIRU

ILUPVWRVWUXFWXUHWKHLUUHYHQXHPDQDJHPHQWSURJUDPLQDZD\WKDWUHYHQXHLQFUHDVHVZKLOH

LPSURYLQJ VHUYLFHV DORQJ VRPH GLPHQVLRQV WKDW LV LPSRUWDQW WR FXVWRPHU WKDW SD\ WKH

KLJKHVWSULFH

,QWHJUDWH6XSSO\3ODQQLQJZLWK5HYHQXH0DQDJHPHQW

,QWHJUDWHVXSSO\SDQQLQJDQGUHYHQXHPDQDJHPHQWFDQFUHDWHVLJQLILFDQWYDOXH&RPELQH

UHYHQXH PDQDJHPHQW ZLWK GHFLVLRQV RQ WKH VXSSO\ VLGH $IWHU DSSO\LQJ UHYHQXH

PDQDJHPHQWDPDQXIDFWXUHUILQGVWKDWWKHSURGXFWLRQRIDVKRUWOHDGWLPHIDFLOLW\SURYLGHV

WKH PDMRULW\ RI LWV SURILW LW VKRXOG ORRN LQWR DGGLQJ PRUH VKRUW OHDG WLPH FDSDFLW\8QGHUVWDQGLQJDQGDFWLQJRQWKHLQWHUDFWLRQVDPRQJVXSSO\GHPDQGDQGSULFLQJFDQEULQJ

DERXWSRZHUIXOUHVXOWV

7KH)LQDO:RUG

6&0 VRIWZDUH KDV EHHQ GHVLJQHG WR PHHW WKH QHHGV RI ILUPV ZLWK JOREDO GLVWULEXWLRQ

ORJLVWLFVDQGPDQXIDFWXULQJQHHGV/HDQPDQXIDFWXULQJDQGYLVLELOLW\LQWKHVXSSO\FKDLQDUH

Page 114: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 114/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 114

FUXFLDO HOHPHQWV IRU ERWK GLVWULEXWRUV DQG PDQXIDFWXULQJ H[HFXWLYHV 0RYLQJ SURGXFWV

DPRQJPXOWLSOHORFDWLRQVDQGFRXQWULHVFDQEHDGDXQWLQJWDVNDQG6&0VRIWZDUHRIIHUVWKH

IOH[LELOLW\WRWUDFNDOOLQYHQWRU\DWDQ\SRLQWLQWKHVXSSO\FKDLQ

$GGLWLRQDOO\WKHLVVXHVRIFRPSOLDQFHVFKHGXOLQJIOH[LELOLW\FRRUGLQDWLRQDQGYLVLELOLW\FDQ

EHJUHDWO\LPSURYHGEHFDXVHRIWKHFRPELQDWLRQRIEXVLQHVVSURFHVVHVLQWHJUDWHGLQWR6&0VRIWZDUHQRPDWWHUKRZFRPSOH[WKHVXSSO\FKDLQLV

 

Page 115: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 115/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 115

Chapter 6

Supply Chain Management Systemsand the Marketplace

Page 116: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 116/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 116

&KDSWHU

6XSSO\&KDLQ0DQDJHPHQW6\VWHPVDQGWKH0DUNHWSODFH

,IDFRPSDQ\H[SHFWVWRDFKLHYHEHQHILWVIURPWKHLUVXSSO\FKDLQPDQDJHPHQWSURFHVVWKH\

ZLOO UHTXLUH VRPH OHYHO RI LQYHVWPHQW LQ WHFKQRORJ\ 7KH EDFNERQH IRU PDQ\ ODUJH

FRPSDQLHVKDVEHHQWKHYDVWO\H[SHQVLYH(QWHUSULVH5HVRXUFH3ODQQLQJ(53VXLWHVVXFK

DV6$3DQG2UDFOH

6LQFHWKHZLGHDGRSWLRQRI,QWHUQHWWHFKQRORJLHVDOOEXVLQHVVHVFDQWDNHDGYDQWDJHRI:HE

EDVHGVRIWZDUHDQG,QWHUQHWFRPPXQLFDWLRQV,QVWDQWFRPPXQLFDWLRQEHWZHHQYHQGRUVDQG

FXVWRPHUV DOORZV IRU WLPHO\ XSGDWHV RI LQIRUPDWLRQ ZKLFK LV NH\ LQPDQDJHPHQW RI WKH

VXSSO\FKDLQ

7KLVFKDSWHUSUHVHQWVDOLVWRIPDUNHWJLDQWVZLWKUHVSHFWWR6&0VROXWLRQVVRUWHGE\WKH

WRWDOPDUNHWVKDUHRIWKHLUVROXWLRQVZRUOGZLGH

/HDGLQJ6&06RIWZDUH3URYLGHUV)LQDQFLDO6FRUHFDUG

7KHZRUOGZLGHPDUNHW IRUVXSSO\FKDLQPDQDJHPHQW6&0VRIWZDUHWRSSHGDQHVWLPDWHG

ELOOLRQODVW\HDUDQGLVH[SHFWHGWRUHDFKRUH[FHHGELOOLRQE\DFFRUGLQJWRWKH

PRVW FXUUHQW HVWLPDWHV IURP $05 5HVHDUFK DQG $5& $GYLVRU\*URXS

7KDWVDVHJPHQWWKDWLQFOXGHVVXSSO\FKDLQSODQQLQJ6&3DSSOLFDWLRQVDVZHOODVVXSSO\

FKDLQ H[HFXWLRQ V\VWHPV LQFOXGLQJ WUDQVSRUWDWLRQ PDQDJHPHQW 706 ZDUHKRXVH

PDQDJHPHQW:06DQGPDQXIDFWXULQJH[HFXWLRQ0(6

/HDGLQJDW WKH WRSDUH WKUHH (QWHUSULVH 5HVRXUFH3ODQQLQJ (53YHQGRUV 6$3 DW

PLOOLRQ2UDFOHDWPLOOLRQDQG,QIRUDWPLOOLRQ2WKHUVLQFOXGHWZREHVWRIEUHHG

VXSSOLHUV0DQKDWWDQ$VVRFLDWHVZLWKPLOOLRQDQGL7HFKQRORJLHVZLWKPLOOLRQ

ERWKSURYLGHUVRIVXSSO\FKDLQSODQQLQJDQGH[HFXWLRQVROXWLRQV

'ULYLQJWKDWJURZWKDFFRUGLQJWR-RKQ)RQWDQHOOD$05VYLFHSUHVLGHQWRIUHVHDUFKLVWKH

QHHG WRPDQDJH SFRPSOH[ JOREDO VXSSO\ FKDLQV WKDW LQFOXGH D PL[ RI JOREDO VXSSOLHUV

FRQWUDFWPDQXIDFWXUHUVDVZHOODVFRPSDQ\RZQHGSODQWVWKLUGSDUW\ORJLVWLFVSURYLGHUVDQG

DQHWZRUNRIWUDQVSRUWDWLRQSURYLGHUV.

,QIDFW$05VUHVHDUFKIRXQG WKDWWKH W\SLFDO86PDQXIDFWXUHU LVPDQDJLQJRQDYHUDJH

PRUHWKDQFRQWUDFWUHODWLRQVKLSV6XSSO\FKDLQPDQDJHPHQWVROXWLRQVDOORZHQWHUSULVHV

WRKDQGOHWKDWFRPSOH[LW\ZKLOHVWLOOUHVSRQGLQJWRLQFUHDVLQJO\GHPDQGLQJFXVWRPHUV

7RS6XSSO\&KDLQ0DQDJHPHQW6RIWZDUH9HQGRUV

Page 117: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 117/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 117

7KHOLVWRIWRS6&0YHQGRUVZDVSXEOLVKHGLQE\$055HVHDUFK

DQG $5& $GYLVRU\*URXS ZKR HYDOXDWHG WKH IROORZLQJ YHQGRUV ZLWK UHVSHFW WR UHYHQXH

HDUQHGLQSUHYLRXV\HDUVDQGTXDOLW\RIEHQHILWVVHUYLFHVRIIHUHGWRWKHLUFXVWRPHUV

6XSSOLHU

UHYHQXHLQPLOOLRQ

:HEVLWH 6&3:06 0(6053 706

6$3 ZZZVDSFRP [ [ [ [

2UDFOH ZZZRUDFOHFRP [ [ [ [

,QIRU ZZZLQIRUFRP [ [ [ [

0DQKDWWDQ

$VVRFLDWHV

ZZZPDQKFRP [ [ [

L7HFKQRORJLHV ZZZLFRP [ [

-'$6RIWZDUH ZZZMGDFRP [ [

5HG3UDLULH ZZZUHGSUDLULHFRP [ [ [

,%6 ZZZLEVXVFRP [ [ [ [

(SLFRU ZZZHSLFRUFRP [ [ [

$OGDWD ZZZDOGDWDVROXWLRQFRP [ [ [

6ZLVVORJ ZZZVZLVVORJFRP [ [ [

+LJK-XPS ZZZKLJKMXPSVRIWZDUHFRP [ [ [

%URRNV6RIWZDUH

$SSOLHG

0DWHULDOV

ZZZEURRNVVRIWZDUHFRP [

&OLFN&RPPHUFH ZZZFOLFNFRPPHUFHFRP [ [

0LFURVRIW ZZZPLFURVRIWFRP [ [

4$' ZZZTDGFRP [ [ [ [

Page 118: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 118/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 118

6XSSOLHU

UHYHQXH

LQPLOOLRQ

:HEVLWH 6&3:06 0(6053 706

,)6 ZZZLIVZRUOGFRPXV [ [

'HVFDUWHV

6\VWHPV*URXS ZZZGHVFDUWHVFRP [ [

&DWDO\VW ZZZFDWDO\VWZPVFRP [ [ [

/RJLOLW\ ZZZORJLOLW\FRP [ [ [

,QGXVWU\HVWLPDWH&RPELQHG,QIRU66$*OREDO3URYLD6RIWZDUH6ZLVVORJ,QGXVWU\

HVWLPDWHIRU:06:&6DQGVXSSO\FKDLQSODQQLQJ

6&36XSSO\FKDLQSODQQLQJ:06:DUHKRXVHPDQDJHPHQWV\VWHP0(60530DQXIDFWXULQJ

H[HFXWLRQV\VWHP7067UDQVSRUWDWLRQPDQDJHPHQWV\VWHP

*LYHQEHORZLVDOLVWRIVRPHRIWKHWRS6&0VRIWZDUHYHQGRUVDORQJZLWKWKHLUSURILOHDQGD

EULHIKLVWRU\WRKHOSGHYHORSDEHWWHUXQGHUVWDQGLQJRIWKHYHQGRUVWKHPVHOYHVDVZHOODVWKH

V\VWHPRIIHUHGE\WKHP

6$36&0

6$3$PHULFDVLVDVXEVLGLDU\RI6$3$*WKHZRUOGVODUJHVWEXVLQHVVVRIWZDUHFRPSDQ\

DQG WKH WKLUGODUJHVW VRIWZDUH VXSSOLHU RYHUDOO 6$3$PHULFDV FRUSRUDWH KHDGTXDUWHUV LV

ORFDWHG LQ 1HZWRZQ 6TXDUH 3$ D VXEXUE RI 3KLODGHOSKLD 7KH FRPSDQ\V RIILFHUV DQG

H[HFXWLYHVOHDGDWHDPRISURIHVVLRQDOVGHGLFDWHGWRGHOLYHULQJKLJKOHYHOFXVWRPHUVXSSRUW

DQGVHUYLFHV

)RXQGHGLQDV6\VWHPV$SSOLFDWLRQVDQG3URGXFWVLQ'DWD3URFHVVLQJ6$3KDVDULFKKLVWRU\ RI LQQRYDWLRQ DQG JURZWK WKDW KDV PDGH LW WKH UHFRJQL]HG OHDGHU LQ SURYLGLQJ

FROODERUDWLYH EXVLQHVV VROXWLRQV IRU DOO W\SHV RI LQGXVWULHV LQ HYHU\ PDMRU PDUNHW 7KH

FRPSDQ\KHDGTXDUWHUHGLQ:DOOGRUI*HUPDQ\HPSOR\VPRUHWKDQSHRSOHLQPRUH

WKDQFRXQWULHVDQGVHUYHVPRUHWKDQFXVWRPHUVZRUOGZLGH

Page 119: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 119/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 119

:LWK D PLVVLRQ VWDWHPHQW WKDW HPSKDVL]HV H[SHULHQFH NQRZOHGJH DQG WHFKQRORJ\ IRU

PD[LPL]LQJEXVLQHVV6$3KDVVXFFHVVIXOO\OHYHUDJHGLWVH[WHQVLYHH[SHULHQFHWRGHOLYHUD

FRPSUHKHQVLYH UDQJH RI VROXWLRQV WR HPSRZHU HYHU\ DVSHFW RI EXVLQHVV RSHUDWLRQV

2UJDQL]DWLRQVRIDOOVL]HVFDQXVH6$3VROXWLRQVLQFOXGLQJVPDOOEXVLQHVVVROXWLRQVDQG

VROXWLRQV IRU PLGVL]H FRPSDQLHV WR UHGXFH FRVWV LPSURYH SHUIRUPDQFH DQG JDLQ WKH

DJLOLW\WRUHVSRQGWRFKDQJLQJEXVLQHVVQHHGV%\GHSOR\LQJWKHEHVWWHFKQRORJ\VHUYLFHVDQGGHYHORSPHQWUHVRXUFHV6$3KDVGHOLYHUHG

D EXVLQHVV SODWIRUP WKDW XQORFNV YDOXDEOH LQIRUPDWLRQ UHVRXUFHV LPSURYHV VXSSO\ FKDLQ

HIILFLHQFLHV DQG EXLOGV VWURQJ FXVWRPHU UHODWLRQVKLSV $QG WKURXJK WKH *OREDO 6ROXWLRQ

&HQWHU 6$3 $PHULFDV LGHQWLILHV FXVWRPHU QHHGV DQG GHYHORSV VROXWLRQV WR PHHW WKHVH

QHHGV

6$3LVOLVWHGRQVHYHUDOH[FKDQJHVLQFOXGLQJWKH)UDQNIXUW6WRFN([FKDQJHDQGWKH1HZ

<RUN6WRFN([FKDQJHXQGHUWKHV\PERO6$3

6$3.H\6WUHQJWKV

-  7KH 6$3 6XSSO\ &KDLQ 0DQDJHPHQW 6$3 6&0 DSSOLFDWLRQ FDQ KHOS DQ

RUJDQL]DWLRQWUDQVIRUPD OLQHDUVXSSO\FKDLQLQWRDQDGDSWLYHVXSSO\FKDLQQHWZRUN

LQ ZKLFK FRPPXQLWLHV RI FXVWRPHUFHQWULF GHPDQGGULYHQ FRPSDQLHV VKDUH

NQRZOHGJH LQWHOOLJHQWO\ DGDSW WR FKDQJLQJ PDUNHW FRQGLWLRQV DQG SURDFWLYHO\

UHVSRQGWRVKRUWHUOHVVSUHGLFWDEOHOLIHF\FOHV

-  7KH6$3VROXWLRQV\QFKURQL]HVVXSSO\WRGHPDQGUREXVWFRQILJXUDEOHFRPSRQHQWV

DOORZ FXVWRPHUV WR EDODQFH SXVK DQG SXOO QHWZRUN SODQQLQJ SURFHVVHV UHSOHQLVK

LQYHQWRU\TXLFNO\DQGH[HFXWHSURGXFWLRQEDVHGRQDFWXDOGHPDQG

-

  &XVWRPHUVFDQVHQVHDQGUHVSRQGWRFKDQJLQJHQYLURQPHQWVZLWKDQDGDSWLYHVXSSO\FKDLQQHWZRUNDQGGULYHGLVWULEXWLRQWUDQVSRUWDWLRQDQGORJLVWLFVSURFHVVHVWKDWDUH

LQWHJUDWHGZLWKUHDOWLPHSODQQLQJSURFHVVHV

-  6$3V 6&0 VROXWLRQ VXLWH SURYLGHV QHWZRUN ZLGH YLVLELOLW\ FROODERUDWLRQ DQG

DQDO\WLFV DV ZHOO DV IXOO FDSDELOLW\ WRPRQLWRU DQG DQDO\]H WKH H[WHQGHG VXSSO\

FKDLQ

-  0RUH WKDQ VPDOO DQG PLGVL]H FRPSDQLHV KDYH VHOHFWHG 6$3 WR GULYH

RSHUDWLRQDOHIILFLHQF\DQGSURILWDEOHJURZWK

6$37HFKQRORJ\

7KH6$3VROXWLRQVVXLWHFRPSULVHVOLFHQVHGDQGRQGHPDQGDSSOLFDWLRQVDQGVHUYLFHV7KH

FRPSDQ\V(QWHUSULVH6HUYLFH2ULHQWHG$UFKLWHFWXUH(QWHUSULVH62$LVDEOXHSULQWIRUDQ

DGDSWDEOHIOH[LEOHDQGRSHQ,7DUFKLWHFWXUHIRUGHYHORSLQJVHUYLFHVEDVHGHQWHUSULVHVFDOH

EXVLQHVVVROXWLRQV:LWK6$31HW:HDYHUDVDWHFKQLFDOIRXQGDWLRQHQWHUSULVH62$PRYHV

,7DUFKLWHFWXUHVWRKLJKHUOHYHOVRIDGDSWDELOLW\DQGPRYHVFRPSDQLHVFORVHUWRWKHYLVLRQ

RIUHDOWLPHHQWHUSULVHVE\HOHYDWLQJ:HEVHUYLFHVWRDQHQWHUSULVHOHYHO

Page 120: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 120/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 120

6$36XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV

6$3%XVLQHVV2QH

-  $IIRUGDEOH HDV\WRXVH EXVLQHVV PDQDJHPHQW VRIWZDUH GHVLJQHG VSHFLILFDOO\ IRU

VPDOODQGPLGVL]HEXVLQHVVHV

-  (QDEOHV FXVWRPHUV WR PDQDJH WKHLU FULWLFDO EXVLQHVV IXQFWLRQV DFURVV VDOHV

GLVWULEXWLRQDQGILQDQFLDOVDOOLQDVLQJOHLQWHJUDWHGV\VWHP

-  :LWK6$3%XVLQHVV2QHFRPSDQLHVFDQLQVWDQWDQHRXVO\DFFHVVDFRPSOHWHDQGXS

WRWKHPLQXWHYLHZRIWKHEXVLQHVVVRWKH\FDQUHVSRQGWRFXVWRPHUVIDVWHUDQGJURZ

WKHEXVLQHVVPRUHSURILWDEO\

6$3%XVLQHVV%\'HVLJQ

-  6WUHDPOLQHVSURFHVVHVDQGHOLPLQDWHVGHSDUWPHQWDOVLORV

-  ,PSURYHVWKHHIILFLHQF\DQGHIIHFWLYHQHVVRIHPSOR\HHV

-  +HOSVFXVWRPHUVPDNHEHWWHUPRUHSURDFWLYHGHFLVLRQV

-  $GDSWVWRFKDQJLQJPDUNHWUHTXLUHPHQWVTXLFNHUWKDQFRPSHWLWRUV

-  /HWVFXVWRPHUVJDLQFRQWURODQGYLVLELOLW\RYHUWKHLUHQWLUHEXVLQHVV

-  6LPSOLILHV,7E\DOORZLQJ6$3WRPDQDJHVRIWZDUHDVDVHUYLFH

6$3%XVLQHVV$OOLQ2QH

-  &RQILJXUDEOHDQGH[WHQVLEOHEXVLQHVVVROXWLRQIRUPLGVL]HFRPSDQLHV

-  )DVW6WDUW 3URJUDP SURYLGHV LQQRYDWLRQV WKDW OHW FXVWRPHUV FRQILJXUH WKHLU 6&0

VROXWLRQ RQOLQH DQG UHFHLYH DQ LPPHGLDWH FRVW HVWLPDWH IRU D FRVWHIIHFWLYH

GHSOR\PHQW

-  'HOLYHUVUDSLG WLPHWR YDOXHDQG WKHIOH[LELOLW\ WRDGDSWDVDQRUJDQL]DWLRQV QHHGV

FKDQJH %HVW RIDOO 6$3%XVLQHVV$OOLQ2QH LV DQ DIIRUGDEOH DQG VDIH ORQJWHUP

LQYHVWPHQW

6$36XSSOLHU5HODWLRQVKLS0DQDJHPHQW6$3650

-  3URYLGHVVWUDWHJLFYDOXHWKURXJKVXVWDLQDEOHFRVWVDYLQJVFRQWUDFWFRPSOLDQFHDQG

TXLFNWLPHWRYDOXH

-  (TXLSVFXVWRPHUVZLWKWRROV WRRSWLPL]HSURFXUHPHQWRSHUDWLRQVDQGGULYHVXSHULRUUHVXOWVWKURXJKDQHQGWRHQGVRXUFHWRSD\SURFHVV

-  $FWLYLWLHV VXFK DV VSHQG DQDO\VLV FDWHJRU\PDQDJHPHQW UHTXLVLWLRQLQJ VRXUFLQJ

RSHUDWLRQDOFRQWUDFWVLQYRLFLQJDQGVXSSOLHUPDQDJHPHQWDUHSDUWRIDQ LQWHJUDWHG

SODWIRUP

6$36XSSO\&KDLQ0RGXOHV

Page 121: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 121/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 121

6$36XSSO\&KDLQ0DQDJHPHQW

6$3%XVLQHVV2QH6$36PDOO%XVLQHVV6 R OXWLR Q

-  6DOHVRSSRUWXQLW\PDQDJHPHQW

-  %XVLQHVVSDUWQHUPDQDJHPHQW

-  ,QYHQWRU\-  3URGXFWLRQ

-  0DWHULDOUHTXLUHPHQWVSODQQLQJ053

-  6HUYLFHPDQDJHPHQW

-  5HSRUWLQJ

6$3%XVLQHVV%\'HVLJQ6$30LGVL]H%XVLQHVVVROXWLRQ

-  6XSSO\&KDLQ0DQDJHPHQW

-  6XSSO\&KDLQ6HWXS0DQDJHPHQW

o 6XSSO\&KDLQ'HVLJQ

o  3URGXFWLRQ0RGHOLQJ

o  5HVRXUFH3ODQQLQJDQG$OORFDWLRQ

-  6XSSO\&KDLQ3ODQQLQJDQG&RQWURO

o  'HPDQG3ODQQLQJ

o  'HPDQG0DQDJHPHQWDQG2UGHU&RQILUPDWLRQ

o  ([FHSWLRQ0RQLWRULQJDQG&RQWURO

o  6XSSO\3ODQQLQJ

o  6XSSO\DQG/RJLVWLFV&RQWURO

-  0DQXIDFWXULQJ:DUHKRXVLQJDQG/RJLVWLFV

o ,QERXQGDQG2XWERXQG/RJLVWLFV

o  ,QWHUQDO/RJLVWLFV

o  ,QYHQWRU\0DQDJHPHQW

o  3URGXFWLRQ

o  4XDOLW\$VVXUDQFH

o  7UDFNLQJ7UDFLQJDQG,GHQWLILFDWLRQ

o  7DVN0DQDJHPHQWDQG$XWRPDWLRQ

6XSSOLHU5HODWLRQVKLS0DQDJHPHQW

-  6$3(6RXUFLQJDSSOLFDWLRQ

-  6$3(6RXUFLQJRQGHPDQGVROXWLRQ

-  6$36SHQG$QDO\WLFV

-  6$3&RQWUDFW/LIHF\FOH0DQDJHPHQW

-  6$3&RVWDQG4XRWDWLRQ0DQDJHPHQW

2UDFOH

Page 122: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 122/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 122

$IWHU\HDUVRISURYLGLQJOHDGLQJHGJHVROXWLRQVWRDYDVWDQGJURZLQJEDVHRIFXVWRPHUV

2UDFOH UHPDLQVWKHJROG VWDQGDUGIRUGDWDEDVHWHFKQRORJ\DQGDSSOLFDWLRQV LQHQWHUSULVHV

WKURXJKRXW WKH ZRUOG 7KH FRPSDQ\ LV WKH ZRUOGV OHDGLQJ VXSSOLHU RI VRIWZDUH IRULQIRUPDWLRQPDQDJHPHQW DQG WKHZRUOGV VHFRQG ODUJHVW LQGHSHQGHQW VRIWZDUH FRPSDQ\

2UDFOHWHFKQRORJ\FDQEHIRXQGLQQHDUO\HYHU\LQGXVWU\DQGLQWKHGDWDFHQWHUVRIRIWKH

)RUWXQH FRPSDQLHV2UDFOHLV WKHILUVW VRIWZDUHFRPSDQ\WRGHYHORSDQG GHSOR\

SHUFHQW LQWHUQHWHQDEOHG HQWHUSULVH VRIWZDUH DFURVV LWV HQWLUH SURGXFW OLQH GDWDEDVH

EXVLQHVVDSSOLFDWLRQVDQGDSSOLFDWLRQGHYHORSPHQWDQGGHFLVLRQVXSSRUWWRROV

,WLVLQQRYDWLRQWKDWGULYHV2UDFOHVVXFFHVV:LWKWKHUHOHDVHRI2UDFOH)XVLRQ0LGGOHZDUH

2UDFOHKDVEHJXQGHEXWLQJQHZSURGXFWVDQGIXQFWLRQDOLW\WKDWUHIOHFWWKHFRPSDQ\VJRDO

FRQQHFWLQJDOOOHYHOVRIHQWHUSULVHWHFKQRORJ\WRKHOSFXVWRPHUVDFFHVVWKHNQRZOHGJHWKH\

QHHGWRUHVSRQGWRPDUNHWFRQGLWLRQVZLWKVSHHGDQGDJLOLW\7RGD\2UDFOH5HDO$SSOLFDWLRQ

&OXVWHUV2UDFOH(%XVLQHVV6XLWH2UDFOH*ULG&RPSXWLQJVXSSRUWIRUHQWHUSULVH/LQX[DQG2UDFOH)XVLRQDOOIXHODFRPPLWPHQWWRLQQRYDWLRQDQGUHVXOWVWKDWKDVGHILQHG2UDFOHIRU

WKLUW\\HDUV

/RRNLQJDKHDG2UDFOHZLOOVWULYHWREHFRPHQXPEHURQHLQPLGGOHZDUHDQGQXPEHURQHLQ

VRIWZDUH DSSOLFDWLRQV MXVW DV WKH FRPSDQ\ KDV GRQH LQ GDWDEDVH DSSOLFDWLRQV 7KH

RUJDQL]DWLRQVJRDOLVWRFRQWLQXHWRLQQRYDWHDQGWROHDGWKHLQGXVWU\ZKLOHDOZD\VPDNLQJ

VXUHWKDWLWVWD\VIRFXVHGRQVROYLQJWKHSUREOHPVRIWKHFXVWRPHUVZKRUHO\RQLWVVRIWZDUH

7KHFRPSDQ\VVXFFHVVVSHDNVIRULWVHOI2UDFOHDSSOLFDWLRQVUXQLQPRUHWKDQSXEOLF

VHFWRU RUJDQL]DWLRQV RI WKH ZRUOGV WRS EDQNV RI WKHZRUOGV WRS WHOHFRP

FRPSDQLHVDQGRIWKHWRSDFDGHPLFXQLYHUVLWLHVZRUOGZLGH

2UDFOH.H\6WUHQJWKV

-  2UDFOH6XSSO\&KDLQ0DQDJHPHQW 6&0 LV WKH FRPSOHWH LQWHJUDWHGVROXWLRQWKDW

SRZHUVLQIRUPDWLRQGULYHQVXSSO\FKDLQV:LWK2UDFOH6&0FRPSDQLHVFDQSUHGLFW

PDUNHW UHTXLUHPHQWV LQQRYDWH LQ UHVSRQVH WRYRODWLOHPDUNHWFRQGLWLRQVDQGDOLJQ

RSHUDWLRQVDFURVVJOREDOQHWZRUNV

-  2UDFOH6&0SURYLGHVLQGXVWU\VSHFLILFVROXWLRQVEDVHGRQEHVWLQFODVVDSSOLFDWLRQV

WKDWVSDQSURGXFWGHYHORSPHQWGHPDQGPDQDJHPHQWVDOHVDQGRSHUDWLRQVSODQQLQJ

WUDQVSRUWDWLRQPDQDJHPHQWDQGVXSSO\PDQDJHPHQW

-  2UDFOH SURYLGHV EHVWLQFODVV JOREDO WUDQVSRUWDWLRQ PDQDJHPHQW DQG VXSSO\PDQDJHPHQWDQGLQWHJUDWHGPDQXIDFWXULQJH[HFXWLRQV\VWHPV0(6

-  2UDFOH GHOLYHUV EHVW LQ FODVV FDSDELOLWLHV LQFOXGLQJ GHPDQG PDQDJHPHQW SURGXFW

GHVLJQ DQDO\WLFV DQG RSWLPL]DWLRQ YLD VWUDWHJLF DFTXLVLWLRQV LQFOXGLQJ 'HPDQWUD

$JLOHDQG&RPPHUFH

-  $PRQJ WKH KRQRUV DQG DZDUGV EHVWRZHG RQ2UDFOH IRU LWV ZRUOGFODVV HQWHUSULVH

VROXWLRQV LQFOXGH %HVW 6XSSO\ &KDLQ 0DQDJHPHQW 6\VWHP ,QWHOOLJHQW (QWHUSULVH

Page 123: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 123/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 123

5HDGHUV &KRLFH $ZDUG 7KH 6XSSO\ &KDLQ 6RIWZDUH $ZDUG :LQQHU RI

6XSSO\ &KDLQ$VLD /RJLVWLFV $ZDUGV %HVW 6XSSO\ &KDLQ6RIWZDUH 6ROXWLRQ

3URYLGHU DQGZLQQHURI WKH6XSSO\&KDLQ([FHOOHQFH$ZDUGV RUJDQL]HG E\ 6&0

/RJLVWLFV:RUOG

2UDFOH7HFKQRORJ\

-  2UDFOH$SSOLFDWLRQ,QWHJUDWLRQ$UFKLWHFWXUHLV DFRPSUHKHQVLYHVHWRISURGXFWV WKDW

GHOLYHU VXVWDLQDEOH EXVLQHVV SURFHVV EDVHG LQWHJUDWLRQV DFURVV 2UDFOH WKLUG SDUW\

DQG FXVWRP DSSOLFDWLRQV :LWK LWV RSHQ VWDQGDUGVEDVHG IRXQGDWLRQ 2UDFOH

$SSOLFDWLRQ ,QWHJUDWLRQ $UFKLWHFWXUH HQDEOHV \RX WR FUHDWH VWUHDPOLQHG EXVLQHVV

SURFHVVHVWKDWVSDQDSSOLFDWLRQERXQGDULHVZKLOHJUHDWO\VKRUWHQLQJWLPHWRYDOXH

-  2 UDFOH  )XVLRQ  0LGGOHZ DU H  I R U $SSOL FDWLRQ V DSSOLH V 2 UDFOH V PDUNHW OH DGLQ J

PLGGOHZ DU H SR U WIROLR WR W KH OH DGLQ JEXVLQH VVDSSOL FDWLRQ V([WHQG W KH EXVLQH VVYDOXH 

RI   \RX UDSSOL FDWLRQ VDFU R VVX VH U FR PPXQLWLH V OLQH VRI  EX VLQH VVDQG R UJDQL ]DWLRQ V7KH RQO \FR PSU H KHQ VL YH DQG LQWH JUDWHG PLGGOHZ DU H IRXQG DWLRQ FH U WLILHG ZLW K2 UDFOH 

+&0&50ILQ DQ FL DO PDQ DJH PHQW DQG RW KH UEX VLQH VVDSSOL FDWLRQ V

2 UDFOH 6XSSO \&KDLQ 0DQ DJH PHQW 6ROXWLRQ V

-  2 UDFOH (%X VLQH VV6XLWH 6XSSO\ &K DLQ 0DQ DJH PHQW 

o  ,QWHJUDWHVDQGDXWRPDWHVDOONH\VXSSO\FKDLQSURFHVVHV IURPGHVLJQSODQQLQJ

DQGSURFXUHPHQWWRPDQXIDFWXULQJDQGIXOILOOPHQWSURYLGLQJDFRPSOHWHVROXWLRQ

VHWWRHQDEOHFRPSDQLHVWRSRZHULQIRUPDWLRQGULYHQYDOXHFKDLQV

o  &RPSDQLHVFDQDQWLFLSDWHPDUNHWUHTXLUHPHQWVDQGULVNVDGDSWDQG LQQRYDWHWR

UHVSRQG WR YRODWLOH PDUNHW FRQGLWLRQV DQG DOLJQ RSHUDWLRQV DFURVV JOREDO

QHWZRUNV

o  $ XQLILHG GDWD PRGHO SURYLGHV D VLQJOH DFFXUDWH YLHZ RI D FXVWRPHUV HQWLUH

VXSSO\ FKDLQ &RPSDQLHV FDQ LPSOHPHQW OHDQ GHPDQG GULYHQ SULQFLSOHV DQG

PDQDJHWKHLULQFUHDVLQJO\FRPSOH[JOREDOVXSSO\FKDLQV

-  2 UDFOH 6H UYL FH 2  SWL PL] DWLRQ 6XLWH 

o  7KH2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH262IHDWXUHVDEHVWRIEUHHGPRGXODU

FRQILJXUDEOHGHVLJQ WKDW DOORZV FXVWRPHUV WRFKRRVH WKHULJKW FRPSRQHQWV WKDW

PHHWWKHLUXQLTXHEXVLQHVVUHTXLUHPHQWV

o  7KHKLJKO\FRQILJXUDEOHQDWXUHRI262HQDEOHVLWWREHGHSOR\HGLQDEURDGUDQJH

RI VXSSO\ FKDLQ VHFWRUV VXFK DV +RPH 'HOLYHU\ )LHOG 6HUYLFH DQG )DFLOLWLHV

0DQDJHPHQW

o  )URPFDSDFLW\SODQQLQJWKURXJKYHKLFOHWHFKQLFLDQDQGFXVWRPHUVFKHGXOLQJWR

GLVSDWFKPDQDJHPHQWDQGPRELOHRSHUDWLRQV2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH

FDQ KHOS FXVWRPHUV WDNH WKHLU VHUYLFH GHOLYHU\ EXVLQHVV WR WKH QH[W OHYHO RI

RSHUDWLRQDOHIILFLHQF\DQGFXVWRPHUVDWLVIDFWLRQ

-  3 HRSOH6RIW (QWH U  S U L VH 6XSSO\ &K DLQ 0DQ DJH PHQW 

Page 124: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 124/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 124

o  3URYLGHV D FRKHVLYH \HW IOH[LEOH VROXWLRQ IRU WKH V\QFKURQL]HG VXSSO\ FKDLQ

GULYLQJHIILFLHQFLHVLQFRVWVDYLQJVRYHUWKHHQWLUHVXSSO\FKDLQLQFOXGLQJSODQ

WRSURGXFHDQGRUGHUWRFDVKEXVLQHVVSURFHVVHV

o  3HRSOH6RIW(QWHUSULVH6XSSO\&KDLQ0DQDJHPHQW LVD IDPLO\RIDSSOLFDWLRQV LQ

2UDFOHV3HRSOH6RIW(QWHUSULVHSURGXFWVXLWH

o  ([WHQGV D FRPSDQ\V VXSSO\ FKDLQ LQ UHDO WLPH E\ FRQQHFWLQJ VXSSOLHUV DQGFXVWRPHUVZLWKFRPSDQ\EXVLQHVVSURFHVVHV

o  3URYLGHVLQWHJUDWHGVSHQGPDQDJHPHQWIRUDOOFDWHJRULHVRIJRRGVDQGVHUYLFHV

o  'HOLYHUVHPEHGGHGDQDO\WLFVWRPRQLWRUVXSSO\FKDLQSHUIRUPDQFHDQGDGMXVWDV

FRQGLWLRQVDQGEXVLQHVVJRDOVVKLIW

-  -'(GZDUGV(QWHUSULVH2QH6XSSO\&KDLQ0DQDJHPHQW

o  7KHVH VRIWZDUH PRGXOHV SURPRWH UHYHQXH JURZWK DQG FRVW UHGXFWLRQ E\

LPSURYLQJ IXOILOOPHQW UDWHV DOORZLQJ EHWWHU DVVHW DQG FDSDFLW\ XWLOL]DWLRQ DQG

H[SDQGLQJPDUNHWGRPLQDQFHZKLOHUHGXFLQJLQYHQWRU\VKULQNLQJOHDGWLPHVDQG

DFKLHYLQJRYHUDOOFRVWRIJRRGVLPSURYHPHQWVo  -' (GZDUGV 6XSSO\ &KDLQ 0DQDJHPHQW LV SDUW RI 2UDFOHV -' (GZDUGV

(QWHUSULVH2QHIDPLO\RIDSSOLFDWLRQV

-  2UDFOH7UDQVSRUWDWLRQ0DQDJHPHQW

o  'HOLYHUVUREXVWWUDQVSRUWDWLRQSODQQLQJDQGH[HFXWLRQFDSDELOLWLHVWRVKLSSHUVDQG

WKLUGSDUW\ORJLVWLFVSURYLGHUV

o  ,QWHJUDWHVDQGVWUHDPOLQHVWUDQVSRUWDWLRQSODQQLQJH[HFXWLRQIUHLJKWSD\PHQW

DQGEXVLQHVVSURFHVVDXWRPDWLRQRQDVLQJOHDSSOLFDWLRQDFURVVDOOPRGHVRI

WUDQVSRUWDWLRQIURPIXOOWUXFNORDGWRFRPSOH[PXOWLOHJDLURFHDQDQGUDLO

VKLSPHQWV

o  /RZHUVWUDQVSRUWDWLRQFRVWVLPSURYHVFXVWRPHUVHUYLFHDQGDVVHWXWLOL]DWLRQDQGSURYLGHVIOH[LEOHJOREDOIXOILOOPHQWRSWLRQV

2UDFOH6XSSO\&KDLQ0RGXOHV

-  2 UDFOH 6XSSO\ &K DLQ 0DQ DJH PHQW 6XLWH 

o  $GYDQFHG3URFXUHPHQW

o  /RJLVWLFV7UDQVSRUWDWLRQ

o  3URGXFW/LIHF\FOH0DQDJHPHQW

o  $VVHW/LIHF\FOH0DQDJHPHQW

o  0DQXIDFWXULQJo  6XSSO\&KDLQ3ODQQLQJ

o  2UGHU)XOILOOPHQW

o  2UGHU0DQDJHPHQW

-  2 UDFOH 6H UYL FH 2  SWL PL] DWLRQ 6XLWH 

o  2UDFOH5HDO7LPH$SSRLQWPHQW6FKHGXOHU

o  2UDFOH5HDO7LPH'LVSDWFK0DQDJHU

Page 125: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 125/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 125

o  2UDFOH5HDO7LPH5HVRXUFH0DQDJHU

o  2UDFOH5HDO7LPH5HVRXUFH6FKHGXOHU

-  3 HRSOH6RIW (QWH U  S U L VH 6XSSO\ &K DLQ 0DQ DJH PHQW 

o  &XVWRPHU2UGHU0DQDJHPHQW

o  6XSSO\&KDLQ3ODQQLQJ

o  ,QYHQWRU\DQG)XOILOOPHQW0DQDJHPHQWo  0DQXIDFWXULQJ6ROXWLRQ

-  -' (GZ DU G V(QWH U  S U L VH 2 QH 6XSSO\ &K DLQ 0DQ DJH PHQW 

o  )RRGDQG%HYHUDJH3URGXFHUV

o  0DQXIDFWXULQJ

o  6XSSO\&KDLQ([HFXWLRQ/RJLVWLFV

o  6XSSO\&KDLQ3ODQQLQJ6&3

o  6XSSO\0DQDJHPHQW3URFXUHPHQW

-  25$&/( 7 UDQ V SR U W DWLRQ 0DQ DJH PHQW 

o  )RUZDUGLQJDQG%URNHUDJH2SHUDWLRQV

o  )UHLJKW3D\PHQW%LOOLQJDQG&ODLPVo  )XVLRQ7UDQVSRUWDWLRQ,QWHOOLJHQFH

o  /RJLVWLFV,QYHQWRU\9LVLELOLW\

o  7UDQVSRUWDWLRQ2SHUDWLRQDO3ODQQLQJ

o  7UDQVSRUWDWLRQ6RXUFLQJ

  0DQKDWWDQ$VVRFLDWHV

0DQKDWWDQ$VVRFLDWHVLV DOHDGLQJVXSSO\FKDLQVROXWLRQVSURYLGHU7KHFRPSDQ\VVXSSO\

FKDLQSODQQLQJVXSSO\FKDLQH[HFXWLRQEXVLQHVVLQWHOOLJHQFHDQGEXVLQHVVSURFHVVSODWIRUP

FDSDELOLWLHV HQDEOH LWV PRUH WKDQ FXVWRPHUV ZRUOGZLGH WR HQKDQFH SURILWDELOLW\

SHUIRUPDQFHDQGFRPSHWLWLYHDGYDQWDJH

)URP IOH[LEOHLQWXLWLYHSODQQLQJWR DGYDQFHG IRUHFDVWLQJDQG UHSOHQLVKPHQWWR LQWHJUDWHG

VXSSO\FKDLQH[HFXWLRQ0DQKDWWDQ$VVRFLDWHVSURYLGHVDFRPSUHKHQVLYHUDQJHRIHDV\WR

XVH VROXWLRQV7KHVH VROXWLRQVDUHGHVLJQHG WR KHOSFXVWRPHUV UXQWKHLU EXVLQHVVHVPRUH

HIILFLHQWO\JURZSURILWVGHOLJKWFXVWRPHUVDQGEHDWFRPSHWLWRUV7KHFRPSDQ\VWHDPRI

H[SHUWVRIIHUV\HDUVRIUHDOZRUOGH[SHULHQFHDQGLVFRPPLWWHGWRKHOSLQJFRPSDQLHVVROYH

WKHHYHU\GD\SUREOHPVWKH\IDFH

%\FRPELQLQJSODQQLQJDQGH[HFXWLRQH[SHUWLVHZLWKWKHKLJKHVWOHYHORIFXVWRPHUVHUYLFH

0DQKDWWDQ$VVRFLDWHVKHOSV FRPSDQLHVPDQDJH WKHLU HQWLUH VXSSO\FKDLQPRUH HIILFLHQWO\

Page 126: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 126/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 126

WKDQHYHUEHIRUH7KHLUFXVWRPHUVKDYHWKHRSSRUWXQLW\WROHYHUDJHDVLQJOHVROXWLRQSURYLGHU

IRUDOOWKHLUVXSSO\FKDLQQHHGVWRPDNHWKHLUMREVHDVLHUDQGVHUYHWKHLUFXVWRPHUVEHWWHU

*OREDOO\ VLQFH 0DQKDWWDQ $VVRFLDWHV KDV KHOSHG FXVWRPHUV XVH WHFKQRORJ\ WR

LGHQWLI\WKHZHDNOLQNVLQWKHLUVXSSO\FKDLQVUHFRQILJXUHWKHLUSURFHVVHVDQGRSWLPL]HWKHLU

SHUIRUPDQFH6KRUWO\DIWHULWVLQFHSWLRQLQLQ0DQKDWWDQ%HDFK&DOLIRUQLD0DQKDWWDQ

$VVRFLDWHVJDLQHGDUHSXWDWLRQIRUSURYLGLQJZRUOGFODVVZDUHKRXVHPDQDJHPHQWVROXWLRQV6LQFHWKDWWLPHWKHFRPSDQ\KDVFRQWLQXDOO\H[SDQGHGLWVSURGXFWVDQGDGGHGFDSDELOLWLHV

WR EHWWHU VHUYH LWV FXVWRPHUV 7RGD\0DQKDWWDQ $VVRFLDWHV RIIHUV D KROLVWLF DSSURDFK WR

VXSSO\FKDLQZLWK6&23(6XSSO\&KDLQ2SWLPL]DWLRQ3ODQQLQJWKURXJK([HFXWLRQZKLFK

EULQJVWRJHWKHUDOOWKHWRROVEXVLQHVVHVQHHGWRLQWHJUDWHXSJUDGHVDQGRSWLPL]HWKHLUVXSSO\

FKDLQ

/RRNLQJWRWKHIXWXUH0DQKDWWDQ$VVRFLDWHVLVDJJUHVVLYHO\SXUVXLQJWKHG\QDPLFOHYHORI

JURZWKLWPXVWDFKLHYHWRPHHWWKHQHHGVRILWVJOREDOFXVWRPHUV,QDORQH0DQKDWWDQ

$VVRFLDWHV DGGHG HPSOR\HHV WR KHOS LW LQLWLDWH LPSOHPHQWDWLRQV7KHFRPSDQ\V

LQYHVWPHQWLQUHVHDUFKDQGGHYHORSPHQWFRQWLQXHVWRH[FHHGDQ\RWKHUVDQGKDVLQFUHDVHG

LQWKHODVWILYH\HDUVWRDWRWDORIPLOOLRQ

0DQKDWWDQ$VVRFLDWHV.H\6WUHQJWKV

-  7KHFRPSDQ\V VRIWZDUH SRUWIROLR LQFOXGHV ILYHNH\6XSSO\&KDLQ 6ROXWLRQ6XLWHV

3ODQQLQJ DQG )RUHFDVWLQJ ,QYHQWRU\ 2SWLPL]DWLRQ 2UGHU /LIHF\FOH 0DQDJHPHQW

7UDQVSRUWDWLRQ/LIHF\FOH0DQDJHPHQWDQG'LVWULEXWLRQ0DQDJHPHQW7KHVHVROXWLRQ

VXLWHVDUHHQKDQFHGE\3ODWIRUP$SSOLFDWLRQVLQFOXGLQJ6XSSO\&KDLQ,QWHOOLJHQFH

6XSSO\&KDLQ9LVLELOLW\DQG6XSSO\&KDLQ(YHQW0DQDJHPHQW WKDW RUJDQL]HDQG

GHOLYHU WKH LQIRUPDWLRQ DQG SURFHVVHV QHHGHG WR RSWLPL]H VXSSO\ FKDLQV DFURVV

IXQFWLRQVDQGORFDWLRQVZLWKLQDQGRXWVLGHDQHQWHUSULVH-  )RU \HDUV 0DQKDWWDQ $VVRFLDWHV KDV FRQFHQWUDWHG H[FOXVLYHO\ RQ KHOSLQJ

FRPSDQLHVVWUHDPOLQHWKHLUVXSSO\FKDLQVWRDFKLHYHORZHUFRVWVKLJKHUSURILWVDQG

KDSSLHUFXVWRPHUV9LUWXDOO\DOORI WKHFRPSDQ\VHPSOR\HHVIRFXVRQVXSSO\

FKDLQRSWLPL]DWLRQ 7KH\ZRUN GLUHFWO\ WREULQJ YDOXH WRFXVWRPHUV WKURXJK

UHVHDUFKDQGGHYHORSPHQWWUDLQLQJLPSOHPHQWDWLRQDQGRQJRLQJVXSSRUW

-  0DQKDWWDQ$VVRFLDWHVEXLOGVLWVNQRZOHGJHRIVXSSO\FKDLQRSWLPL]DWLRQHYHU\GD\VR

WKDWLW FDQEULQJLWVFXVWRPHUVWKHEHVWSRVVLEOHVROXWLRQVIRUWKHLUQHHGV(DFK\HDU

0DQKDWWDQ$VVRFLDWHVLQYHVWVPRUHLQVXSSO\FKDLQUHVHDUFKDQGGHYHORSPHQWWKDQ

DQ\RWKHUFRPSDQ\LQWKHZRUOGLQH[FHVVRIPLOOLRQLQ-  ,QDGGLWLRQ WR LWV PDQ\3K'V DQG RWKHUH[SHUWV WKH0DQKDWWDQ 6FLHQFH $GYLVRU\

%RDUGEULQJVWRJHWKHUWKRXJKWOHDGHUVDQGLQWHUQDWLRQDOUHVHDUFKHUVIURPRXWVWDQGLQJ

DFDGHPLFLQVWLWXWLRQVVXFKDV0,7&ROXPELD8QLYHUVLW\DQG*HRUJLD7HFKWRGLVFXVV

DGYDQFHV LQ WKH XQGHUO\LQJ VFLHQFH DGGUHVV QHZ HFRQRPLF GHYHORSPHQWV DQG

LGHQWLI\IUXLWIXODUHDVRIUHVHDUFK

Page 127: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 127/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 127

-  0DQKDWWDQ$VVRFLDWHV LV FRPPLWWHG WRRIIHULQJ WKH EHVWDQG GHHSHVW VXSSO\ FKDLQ

VROXWLRQVWRLWVFXVWRPHUV

0DQKDWWDQ$VVRFLDWHV7HFKQRORJ\

0DQKDWWDQ$VVRFLDWHV6XSSO\&KDLQ3URFHVV3ODWIRUPSURYLGHVDXQLI\LQJDUFKLWHFWXUHWKDWIRVWHUV DJLOLW\ DQG VFDODELOLW\ ZKLOH PLQLPL]LQJ VROXWLRQ LPSOHPHQWDWLRQ HYROXWLRQ DQG

VXSSRUWFRVWV0RUHWKDQFXVWRPHUVZRUOGZLGHXVH0DQKDWWDQ$VVRFLDWHVJOREDORQ

GHPDQGDQGOLFHQVHGVXSSO\FKDLQVROXWLRQVWRHQKDQFHSURILWDELOLW\DQGEXLOGVXVWDLQDEOH

FRPSHWLWLYHDGYDQWDJH

0DQKDWWDQ$VVRFLDWHV6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV

0DQKDWWDQV6&2 3( 6XSSO\&KDLQ2 SWLPL]DWLRQ

-  3ODQQLQJ WKURXJK([HFXWLRQ RSWLPL]HV DOO WKH OLQNV LQ WKH VXSSO\ FKDLQ IURPRUGHU

SODFHPHQWWRGHOLYHU\-  3ODQQLQJDQG)RUHFDVWLQJSURYLGHVWKHFUXFLDOIURQWHQGWRDQRUJDQL]DWLRQVVXSSO\

FKDLQWKDWWDNHVDFXVWRPHUVEXVLQHVVWRDKLJKHUOHYHO

-  'HPDQG )RUHFDVWLQJ OHWV GHFLVLRQ PDNHUV SUHGLFW GHPDQG DW DQ\ FRPELQDWLRQ RI

SURGXFWDQG ORFDWLRQQRGHV'HPDQG )RUHFDVWLQJ LV GHVLJQHGDQG V\QFKURQL]HG WR

SURGXFHWKHRSWLPDOIRUHFDVWLQSXWIRU,QYHQWRU\2SWLPL]DWLRQILQDQFLDORUDVVRUWPHQW

SODQQLQJ

-  0XOWL&KDQQHO3ODQQLQJ LQWHJUDWHVSODQQLQJIRU WKHRUJDQL]DWLRQVZHEFDWDORJDQG

VWRUHFKDQQHOV WR UHGXFHUHGXQGDQF\DQGLQFUHDVHHIILFLHQF\ZKLOH VWLOOUHVSHFWLQJ

WKHXQLTXHFKDUDFWHULVWLFVRIHDFKFKDQQHO

-  )LQDQFLDO3ODQQLQJGHOLYHUVWRSGRZQRUERWWRPXSSODQQLQJZLWKDQHDV\WRXVHEXWSRZHUIXO VROXWLRQ WKDW PDQDJHV PXOWLSOH YHUVLRQV RI SODQV DFURVV FDWHJRULHV

FKDQQHOVDQGWLPHSHULRGV

-  $VVRUWPHQW 3ODQQLQJ FXVWRPL]HV DVVRUWPHQWV E\ FKDQQHO /HWV FXVWRPHUV VHH

EX\HUVFKDQJHVLPPHGLDWHO\VRWKH\ FDQUHDFK WKHLU EXVLQHVVJRDOVZLWKWKH ULJKW

PL[RISURGXFWV

-  ,WHP 3ODQQLQJ V\QFKURQL]HV ZLWK DVVRUWPHQW SODQQLQJ WR VXSSRUW WLPHSKDVHG

SODQQLQJDQGWUDFNLQJIRUPXOWLSOHNH\SHUIRUPDQFHLQGLFDWRUV

-  3URPRWLRQ3ODQQLQJFRRUGLQDWHVDOODVSHFWVRISURPRWLRQVIURPRQHVROXWLRQ

0DQKDWWDQ$VVRFLDWHV6XSSO\&KDLQ0RGXOHV

0DQKDWWDQV6&2 3( 6XSSO\&KDLQ2 SWLPL] DWLRQ

-  3ODQQLQJDQG)RUHFDVWLQJ

o  'HPDQG)RUHFDVWLQJ

o  0XOWL&KDQQHO3ODQQLQJ

Page 128: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 128/169

Page 129: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 129/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 129

XQGHUVWDQGWKDWWKHLUFXVWRPHUVZDQWWR UHGXFHWKHQXPEHURIYHQGRUVWKH\ZRUNZLWKDQG

,QIRU VWULYHV WR FRQWLQXHDV WKHLU WUXVWHG YHQGRU RI FKRLFH ,QIRU KDV D FRQVLVWHQW

FXVWRPHUUHWHQWLRQUDWHRQHRIWKHKLJKHVWLQWKHLQGXVWU\DQGRILWVOLFHQVHUHYHQXHV

DUHJHQHUDWHGE\LWVFXUUHQWFXVWRPHUV$GGLWLRQDOO\RYHUQHZFXVWRPHUVFKRVH,QIRU

ODVW\HDU IRU LWVXQSDUDOOHOHGDSSOLFDWLRQEUHDGWK RSHQ WHFKQRORJ\ DQG JOREDO UHDFK7KH

FRPSDQ\LVFRPPLWWHGWRFRQWLQXLQJLWVJURZWKE\EURDGHQLQJLWVEHVWLQFODVVIRFXVDQGE\SURYLGLQJWKHPRVWLQQRYDWLYHVROXWLRQVDQGVHUYLFHVJOREDOO\

&XVWRPHUV FDQ H[SHFW ,QIRU WR FRQWLQXH DGGLQJ VROXWLRQV EDVHG RQ PDUNHW QHHG DQG

FXVWRPHUGHPDQG ,QIRU LVDXQLTXH VRIWZDUH FRPSDQ\ IRXU \HDUV ROGZLWKPRUH WKDQ

WKLUW\ \HDUV H[SHULHQFH ,W KDV WKH VWDELOLW\ WKH DJLOLW\ DQG WKH UHVRXUFHV WR PHHW WKH

EXVLQHVVGHPDQGVRIDUDSLGO\FKDQJLQJZRUOG

,QIRU.H\6WUHQJWKV

%DFNHG E\ GRPDLQ H[SHUWV ZKR XQGHUVWDQG WKH VXSSOLHU FROODERUDWLRQ UHTXLUHPHQWV RI

PDQXIDFWXUHUV ,QIRU 650 6XSSOLHU 5HODWLRQVKLS 0DQDJHPHQW HQDEOHV UDSLG GHPDQGIXOILOOPHQWDQGSHUIRUPDQFH HYDOXDWLRQ E\SUHVHQWLQJDVLQJOH IDFH WRVXSSOLHUVEDVHGRQ

LQIRUPDWLRQ FRPELQHG IURP GLVSDUDWH HQWHUSULVH UHVRXUFH SODQQLQJ V\VWHPV ,QIRU 650

FUHDWHV D UHDOWLPH VXSSOLHU FROODERUDWLRQ HQYLURQPHQW 7KLV DGYDQFHG HOHFWURQLF GDWD

LQWHUFKDQJH(', DQGZHEHQDEOHG VROXWLRQGHOLYHUVIDVWHUPRUHDFFXUDWH LQVLJKW LQWRDQ

RUJDQL]DWLRQVVXSSO\FKDLQ7KHFRPSDQ\VVROXWLRQVXLWHFRPSOHPHQWVDFXVWRPHUV(53

VRIWZDUHV\VWHPZLWKHOHFWURQLFFRPPXQLFDWLRQRIGHPDQGWRDOOVXSSOLHUVDQGKHOSVGHSOR\

OHDQ UHSOHQLVKPHQW PHWKRGV ZLWK LWV HOHFWURQLF .DQEDQ DQG VXSSOLHUPDQDJHG LQYHQWRU\

FDSDELOLWLHV %XVLQHVVHV UXQ PRUH HIILFLHQW VXSSO\ RSHUDWLRQV UHGXFH LQYHQWRU\ OHYHOV

LQFUHDVH RUGHU DFFXUDF\ DQG JDLQ WKH IOH[LELOLW\ WR UHVSRQG LPPHGLDWHO\ WR FKDQJHV LQ

FXVWRPHUGHPDQG

,QIRU6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV

,QIRU6&06XSSO\&KDLQ0DQDJHPHQW

,QIRU 6&0V VXSSO\ FKDLQ ORJLVWLFV DQG LQYHQWRU\ PDQDJHPHQW VRIWZDUH VROXWLRQV KHOS

FRPSDQLHV UHGXFH VXSSO\ FKDLQ RSHUDWLRQDO FRVWV IRU LQFUHDVHG SURILWDELOLW\ LPSURYH

FXVWRPHU VHUYLFH WR HQKDQFH FRPSHWLWLYHQHVV DQG PDQDJH JURZWK DQG H[SDQVLRQ WR

LPSURYHUHYHQXHVDQGPDUNHWVKDUH,QIRU6XSSO\&KDLQ0DQDJHPHQWLVDJOREDOVROXWLRQ

ZLWK LPSOHPHQWDWLRQV DWRYHU FXVWRPHU VLWHV LQ FRXQWULHV ,QIRU 6&0 GHOLYHUVD

VPDUW VROXWLRQ VXLWH WKDW FRPSULVHV 6WUDWHJLF 1HWZRUN 'HVLJQ 'HPDQG 3ODQQLQJ'LVWULEXWLRQ3ODQQLQJ0DQXIDFWXULQJ3ODQQLQJ3URGXFWLRQ6FKHGXOLQJ7UDQVSRUWDWLRQDQG

/RJLVWLFV3ODQQLQJ:DUHKRXVH0DQDJHPHQWDQG(YHQW0DQDJHPHQW

5),',QIRU 6&0 SURYLGHV D FRPSUHKHQVLYH 5),'HQDEOHPHQW IUDPHZRUN GHOLYHULQJ

EXVLQHVVYDOXHWKURXJKSURFHVVRSWLPL]DWLRQIRUPDQXIDFWXUHUVDQGRWKHUFRPSDQLHVDVZHOO

DV FRPSOLDQFH VROXWLRQV IRU UHWDLO SKDUPDFHXWLFDOV WKH 86 'HSDUWPHQW RI'HIHQVH DQG

RWKHUV

Page 130: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 130/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 130

 ,QIR U6 50 6XSSOLH U5 HO DWLRQ VKLS 0 DQ DJH PHQW 

7KL VDGYDQ FH GHOH FW U RQL FGDW D LQWH UFK DQJH (',  DQ GZH EHQ DEOH GVROXWLRQ GHOL YH UVI  DVWH U

PR U H DFFX UDWH LQ VLJKW LQWR WKH VXSSO \FK DLQ  LQ VLJKW WK DW HQ DEOH VFX VWR PH UVWR VDYH PLOOLRQ V

RI   GROO DUVE\ U HSO DFLQJ  I  D[ DQ GYDOXH DGGH GQHW ZR UN 9$1   FR PPXQL FDWLRQ V PLQL PL ]LQJ 

 S U H PLX P I  U HLJKW  FK DU JH V L P S U R YLQJ  VXSSOLH U  SH U IR UPDQ FH  DQ G OR ZH U LQJ  DGPLQL VW UDWL YH 

H [ SHQ VH V

,QIR UV 6 50  VROXWLRQ  KHOS V FR P S DQLH V DFKLH YH  WH FKQRORJ \HQ DEOH G EX VLQH VV  S U R FH VV

H [FHOOHQ FH LQ FU H DVH  S U R GX FWL YLW \DQ GFDVK IOR ZL P S U R YH RSH UDWLRQ DO HIIL FLHQ F\DQ GTX DOLW \

DQ GLQ FU H DVH VXSSOLH UYL VL ELOLW \

7KH  FR P S DQ \V VROXWLRQ V VXLWH  DOOR ZV R U J DQL ]DWLRQ V WR  U H V SRQ G I  DVWH U WR  FK DQJH  DQ G

RSSR U WXQLW \HQ DEOH LQQR YDWLRQ DQ G S U RILW I  U R PDVW U RQJ IOH [L EOH OH DQ VXSSO \FK DLQ 

,QIR U6 &0 FR P SOH PHQW VDQ H [L VWLQJ (5 3VRIW ZDU H V\VWH PZLWK HOH FW U RQL FFR PPXQL FDWLRQ RI  

GH PDQ G WR  DOO  VXSSOLH UVDQ GKHOS V GHSOR \ OH DQ  U HSOHQL VK PHQW  PHWKR GVZLWK  LW VHOH FW U RQL F

.DQ EDQ DQ GVXSSOLH UPDQ DJH GLQ YHQWR U\FD S DELOLWLH V

:LWK  ,QIR U6 &0 EX VLQH VVH VU XQ PR U H HIIL FLHQW VXSSO \RSH UDWLRQ VU H GX FH  LQ YHQWR U\ OH YHO V

LQ FU H DVH  R UGH U DFFX UDF\ DQ G J DLQ  WKH  IOH [L ELOLW \ WR  U H V SRQ G L PPH GL DWHO \ WR  FK DQJH V LQ 

FX VWR PH UGH PDQ G

 ,QIR U6 50 6XSSO \:H E

,QIR U6 50 6XSSO \:H E L V WKH  OH DGLQJ  VXSSOLH U U HO DWLRQ VKLS PDQ DJH PHQW  6 50    VROXWLRQ  LQ 

WKH DXWR PRWL YH LQ GX VW U\,QIR U6 50 6XSSO \:H EYH UVLRQ LQ FOX GH VQH ZIH DWX U H VWR L P S U R YH 

FROO DER UDWLRQ  EHW ZHHQ  FX VWR PH UVDQ G VXSSOLH UV S U R YL GLQJ QH Z WRRO V GH VLJQH G WR HQK DQ FH 

GDW DDFFX UDF\DQ GGH PDQ G DQ GR UGH UPDQ DJH PHQW 6XSSO \:H ERIIH UVPDQXI  DFWX U H UV WKH 

EHQHILW VRI  D S U R YHQ 6 50 VROXWLRQ  WK DW  L VH DVLO \ LQWHJ UDWH G LQWR  WKHL UH [L VWLQJ (5 3V\VWH P

)R UFX VWR PH UVWKL VQH ZYH UVLRQ RI  6XSSO \:H EGH PRQ VW UDWH V,QIR UVFR PPLW PHQW WR HQ U L FK 

WKH  YDOXH  RI   WKHL U FX UU HQW  LQ YH VW PHQW V H [WHQ G WKHL U FR U H  (5 3 D SSOL FDWLRQ V ZLWK  QH ZEX VLQH VVV SH FLIL F VROXWLRQ V DQ G H YRO YH  WKH  ,QIR U S U R GX FW  OLQH  WR  S U R GX FH  QH [W JHQH UDWLRQ 

VROXWLRQ V

6XSSO \:H EVLJQLIL FDQWO \VW U HQJWKHQ VWKH U HO DWLRQ VKLS EHW ZHHQ VXSSOLH UVLQ WKH VXSSO \FK DLQ 

ZLWK WKH DGGLWLRQ RI  QH ZPR GXOH V3U R GX FWLRQ ,Q YRL FLQJ DQ G3X UFK DVH 2UGH U

&ROO DER UDWLRQ ZKL FK DXWR PDWH V SH FLIL FEX VLQH VVIXQ FWLRQ VU HO DWH GWR R UGH U S U R FH VVLQJ 

3U R GX FWLRQ  ,Q YRL FLQJ  L P S U R YH VGDW DDFFX UDF\ EHW ZHHQ  FX VWR PH UVDQ G VXSSOLH UV HOL PLQ DWH 

GL VFU HS DQ FLH V LQ   S U L FLQJ  DQ G  S D\DEOH V DQ G DOOR Z IR U PR U H  WL PHO \  S D\PHQW V I  U R P WKH 

FX VWR PH U3X UFK DVH 2UGH U &ROO DER UDWLRQ  I  DFLOLW DWH VD SX UFK DVH  R UGH U QHJRWL DWLRQ  S U R FH VV

DOOR ZLQJ FX VWR PH UVDQ GVXSSOLH UVWR VHW WH UPVEHIR U H FR PPLWWLQJ WR DQ R UGH U

 ,QIR U6XSSO \&K DLQ 0 DQ DJH PHQW 0 R GXOH V

 ,QIR U6 &0 6XSSO \&K DLQ 0 DQ DJH PHQW 

6W UDWHJL F1HW ZR UN'H VLJQ 

'H PDQ G3O DQQLQJ 

'L VW U L EXWLRQ 3O DQQLQJ 

Page 131: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 131/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 131

0DQXIDFWXULQJ3ODQQLQJ

3URGXFWLRQ6FKHGXOLQJ

7UDQVSRUWDWLRQDQG/RJLVWLFV3ODQQLQJ

:DUHKRXVH0DQDJHPHQW6\VWHP

5),'

(YHQW0DQDJHPHQW

 ,QIRU6506XSSOLHU5HODWLRQVKLS0DQDJHPHQW  

'HPDQG)XOILOOPHQWDQG3HUIRUPDQFH(YDOXDWLRQ

(OHFWURQLF.DQEDQDQG6XSSOLHU0DQDJHG,QYHQWRU\&DSDELOLWLHV

$GYDQFHG(OHFWURQLF'DWD,QWHUFKDQJH(',  DQG:HE(QDEOHG6ROXWLRQ

 ,QIRU6506XSSO\:HE

3URGXFWLRQ,QYRLFLQJ

3XUFKDVH2UGHU&ROODERUDWLRQ

6XSSOLHU&XPXODWLYH4XDOLW\0DQDJHPHQW)OH[)LHOGV

5HFHLSW5HFRQFLOLDWLRQ

Page 132: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 132/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 132

-'$

-'$ 6RIWZDUH *URXS ,QF LV D JOREDO OHDGHU LQ GHOLYHULQJ LQWHJUDWHG VRIWZDUH DQG

SURIHVVLRQDOVHUYLFHVIRU WKHUHWDLOGHPDQGFKDLQ%\FDSLWDOL]LQJRQ LWVVXEVWDQWLDOPDUNHW

SRVLWLRQDQGILQDQFLDOVWUHQJWK-'$FRPPLWVVLJQLILFDQWUHVRXUFHVWRDGYDQFLQJLWVEHVWRI

FODVVFROOHFWLRQRIVROXWLRQVWKDWDGGUHVVDZLGHDUUD\RIFULWLFDOEXVLQHVVIXQFWLRQVLQFOXGLQJ

PHUFKDQGLVHDQG LQYHQWRU\PDQDJHPHQWVWRUHRSHUDWLRQVDQGSRLQW RIVDOH VXSSO\FKDLQ

FROODERUDWLRQDQGEXVLQHVVDQDO\VLV

$FURVV WKH JOREDO (53 ODQGVFDSH -'$6RIWZDUH*URXS VXSSOLHV WKH OLQNV LQ WKH VXSSO\

FKDLQ7KHFRPSDQ\VVXSSO\DQGGHPDQGRSWLPL]DWLRQ6'2VRIWZDUHKHOSVUHWDLOHUVDQG

RWKHUEXVLQHVVHVPDQDJHVXSSO\DQGGHPDQGFKDLQVDVZHOODVEXVLQHVVSURFHVVHVUDQJLQJIURPSODQQLQJDQGIRUHFDVWLQJWRHFRPPHUFHDQGVWRUHRSHUDWLRQV

7KHFRPSDQ\DOVRRIIHUVSRLQWRIVDOHDSSOLFDWLRQVWRKDQGOHEDFNRIILFHIXQFWLRQVLQFOXGLQJ

LQYHQWRU\PDQDJHPHQW UHFHLSWVDQG UHWXUQV2WKHUSURGXFWV LQFOXGHDQDO\WLFDSSOLFDWLRQV

IRUGHFLVLRQVXSSRUWDQGFROODERUDWLYHWRROVIRUPDLQWDLQLQJSURGXFWDQGFDWDORJLQIRUPDWLRQ

ZLWKSDUWQHUVGLVWULEXWRUVDQGVXSSOLHUV-'$ERDVWVPRUHWKDQFXVWRPHUVZRUOGZLGH

:LWK1RUWK$PHULFDQRSHUDWLRQVHVWDEOLVKHG LQ-'$ LVKHDGTXDUWHUHGLQ6FRWWVGDOH

$UL]RQDDQGHPSOR\VPRUHWKDQDVVRFLDWHVRSHUDWLQJIURPRIILFHV LQPDMRUFLWLHV

WKURXJKRXW1RUWK$PHULFD6RXWK$PHULFD(XURSH$VLDDQG$XVWUDOLD

-'$.H\6WUHQJWKV

-'$KDVEHHQVHUYLQJ WKH VXSSO\ DQGGHPDQGFKDLQIRUQHDUO\\HDUV7KH FRPSDQ\V

6XSSO\ 'HPDQG 2SWLPL]DWLRQ VROXWLRQ VHW LV SRZHUHG E\ D FROOHFWLRQ RI EHVWLQFODVV

SURGXFWV GHVLJQHG WR HQDEOH UHWDLOHUV PDQXIDFWXUHUV DQG ZKROH VDOHGLVWULEXWRUV WRPRUH

SURILWDEO\DQWLFLSDWHFUHDWHDQGVDWLVI\FXVWRPHUGHPDQG

7KLVFRPSUHKHQVLYH VROXWLRQ LQWHJUDWHV -'$VSURYHQSODQQLQJDQDO\VLVRSWLPL]DWLRQDQG

H[HFXWLRQ FDSDELOLWLHV ZLWK FROODERUDWLYH ZRUNIORZ IRU VHDPOHVV LQWHJUDWLRQ DQG

LQWHURSHUDWLRQ VSDQQLQJ D ZLGH UDQJH RI SURFHVVHV DFURVV WKH &XVWRPHU'ULYHQ 9DOXH

&KDLQ

:LWK 6XSSO\ 'HPDQG 2SWLPL]DWLRQ GHFLVLRQ PDNHUV FDQ ZRUN WRJHWKHU WR UHGXFH

RSHUDWLRQDOFRVWVDQGLQFUHDVHWRSOLQHUHYHQXHVDFURVVWKHHQWHUSULVHDQGGRZQWRWKHVWRUHOHYHO -'$ FXVWRPHUV UHSUHVHQWPRUH WKDQ RI VRIWZDUH OLFHQVH VDOHV HDFK TXDUWHU D

WHVWDPHQW WR WKH UHDO GHPDQG FKDLQ UHVXOWV WKDW -'$ UHSHDWHGO\ GHOLYHUV -'$ DFTXLUHG

0DQXJLVWLFVLQ-XO\7KLVSURYLGHURIGHPDQGDQGVXSSO\FKDLQVROXWLRQVHQDEOHG-'$

WRJURZ LWVSURGXFW OLQHZLWK VXSSO\PDQDJHPHQW GHPDQGPDQDJHPHQWDQG SULFLQJ DQG

WUDQVSRUWDWLRQDQGORJLVWLFVDSSOLFDWLRQV

Page 133: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 133/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 133

-'$LVXQLTXHO\SRVLWLRQHGWRVXSSRUWDQRSWLPL]HG&XVWRPHU'ULYHQ9DOXH&KDLQ,WFDQ

KHOSLWVFXVWRPHUVWRRSWLPDOO\SODQYDULRXVDVSHFWVRIWKHLUEXVLQHVVIURPUDZPDWHULDOV

DFTXLVLWLRQWKURXJKPDQXIDFWXULQJDQGUHSOHQLVKPHQWWRWKHVKHOI

-'$7HFKQRORJ\

-'$ RIIHUV VHYHUDO KRVWLQJ DQG RQGHPDQG PDQDJHG VHUYLFHV WR HQVXUH D ILW WDLORUHG

VSHFLILFDOO\WRWKHQHHGVRILWVFXVWRPHUV:KHWKHUDQRUJDQL]DWLRQVQHHGVDUHDVVLPSOHDV

KDUGZDUH KRVWLQJ RUDVVXEVWDQWLDODVFRPSOHWH DSSOLFDWLRQPDQDJHPHQW -'$ SURYLGHV D

IXOOVSHFWUXPWHFKQRORJ\SODWIRUPDQGVXSSRUW

-'$6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV

-'$6XSSO\'HPDQG2 SWLPL]DWLRQ

(QWHUSULVH3ODQQLQJ

$ FROODERUDWLYHDQG FRQILJXUDEOH ZRUNIORZGULYHQ SODQQLQJ VROXWLRQ WKDW V\QFKURQL]HV DOO

SODQQLQJ PHWULFV LQFOXGLQJ VDOHV PDUJLQV RU WXUQV DFURVV IXQFWLRQDO RUJDQL]DWLRQV DQG

UHFRQFLOHVWKHPXSDQGGRZQWKHHQWHUSULVHKLHUDUFKLHV

(QWHUSULVH 3ODQQLQJ HQVXUHV WKDW VWUDWHJLF JRDOV DQG REMHFWLYHV DUH PHW E\ SURYLGLQJ DOO

SDUWLFLSDQWVZLWKYLVLELOLW\WRFRUSRUDWHJRDOVVRWKDW WKH\FDQDOLJQWKHLUSODQVDFFRUGLQJO\

(QDEOHVUDSLGUHVSRQVHWRFKDQJLQJPDUNHWFRQGLWLRQVOHYHUDJLQJDSURDFWLYHHYHQWGULYHQ

HQYLURQPHQW VR WKDW FXVWRPHUV FDQ LPSURYH SURGXFWLYLW\ 6XSSRUWV DQG RSWLPL]HV WKH

VWUDWHJLF ILQDQFLDO DQG RSHUDWLRQDO SODQQLQJ DFWLYLWLHV DFURVV WKH&XVWRPHU'ULYHQ9DOXH

&KDLQVRWKDWFXVWRPHUVDUHEHWWHUHTXLSSHGWRPHHWVDOHVDQGUHYHQXHWDUJHWV

3URYLGHVDVLQJOHLQWHJUDWHGVROXWLRQIRUILQDQFLDOPHUFKDQGLVHFKDQQHODQGNH\LWHP

SODQQLQJVRWKDWFXVWRPHUVFDQEHWWHUPDQDJHWKHLULQYHQWRU\

6SDFH&DWHJRU\0DQDJHPHQW

(QDEOHVUHWDLOHUVDQGPDQXIDFWXUHUV WRSODQDQGH[HFXWH FDWHJRU\DQGPHUFKDQGLVHSODQV

GHVLJQHGWRDFKLHYHGHPDQGEDVHGSUHFLVLRQPHUFKDQGLVLQJ7DLORUVDVVRUWPHQWVLQFOXGLQJ

SURGXFWODXQFKHVDQGJURXSVSHFLILFJRWRPDUNHWVWUDWHJLHVVRWKDWFXVWRPHUVFDQLPSURYH

FOXVWHU UHVXOWVDQGPHHW WUXH ORFDO GHPDQG LQFUHDVHVPRYHPHQW DW IXOO UHWDLOYDOXHZKLOH

ORZHULQJ FDUU\LQJ FRVWV DQG GHFUHDVLQJ RXWRIVWRFNV DQG H[FHVV LQYHQWRU\ VR WKDW

FXVWRPHUVFDQHQKDQFHWKHLURYHUDOOSURILWDELOLW\

3ULFH3URPRWLRQ0DQDJHPHQW

2 SWLPL]HVSULFLQJWDNLQJDFRPSHWLWRUVSULFLQJLQWRDFFRXQWDQGSURPRWLRQVSODQQLQJDQG

H[HFXWLRQ WRJHQHUDWHPD[LPXP VDOHVDQGPDUJLQ GROODUV WREHWWHU VKDSH GHPDQG DQG

PDWFKVXSSO\XOWLPDWHO\WDNLQJWKHJXHVVZRUNRXWRISULFHVHWWLQJDQGSURPRWLRQVSODQQLQJ

GHOLYHU\DQGPHDVXUHPHQW,PSURYHVILQDQFLDOSUHGLFWDELOLW\UHVSRQVLYHQHVVDQGDFFXUDF\

VR WKDW FXVWRPHUV FDQ GHWHUPLQH WKHEHVWPL[ RISULFH DQGSURPRWLRQ WRKHOS WKHPGULYH

UHYHQXHVDQGEHWWHUXQGHUVWDQGLPSDFWRQWKHIRUHFDVWV,PSURYHVXWLOL]DWLRQRISURPRWLRQDO

Page 134: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 134/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 134

GROODUV DW DOO OHYHOV RI WKH RUJDQL]DWLRQ VR WKDW FXVWRPHUV FDQ PD[LPL]H WKHLU UHWXUQ RQ

SURPRWLRQDOVSHQG*HQHUDWHVPD[LPXPYDOXHIURPHQGRIOLIHHQGRIVHDVRQDQGH[FHVV

LQYHQWRU\VRWKDWFXVWRPHUVFDQGULYHXSRYHUDOOPDUJLQV

-'$6XSSO\&KDLQ0RGXOHV-'$6XSSO\'HPDQG2 SWLPL]DWLRQ

(QWHUSULVH3ODQQLQJ

6SDFH&DWHJRU\0DQDJHPHQW

3ULFH3URPRWLRQ0DQDJHPHQW

'HPDQG3ODQQLQJ

$OORFDWLRQ5HSOHQLVKPHQW

6XSSO\0DQXIDFWXULQJ0DQDJHPHQW

1HWZRUN,QYHQWRU\2 SWLPL]DWLRQ

&ROODERUDWLRQ

Page 135: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 135/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 135

  (SLFRU

(SLFRU 6RIWZDUH LV D JOREDO OHDGHU GHOLYHULQJ EXVLQHVV VRIWZDUH VROXWLRQV WR WKH

PDQXIDFWXULQJGLVWULEXWLRQUHWDLOKRVSLWDOLW\DQGVHUYLFHVLQGXVWULHV:LWKFXVWRPHUV

LQ RYHU FRXQWULHV (SLFRU SURYLGHV LQWHJUDWHG HQWHUSULVH UHVRXUFH SODQQLQJ (53

FXVWRPHUUHODWLRQVKLSPDQDJHPHQW&50VXSSO\FKDLQPDQDJHPHQW6&0DQGHQWHUSULVH

UHWDLO VRIWZDUHVROXWLRQV WKDWHQDEOH FRPSDQLHV WRGULYH LQFUHDVHGHIILFLHQF\ DQG LPSURYH

SURILWDELOLW\

)RXQGHGLQ(SLFRUFHOHEUDWHV\HDUVRI WHFKQRORJ\LQQRYDWLRQGHOLYHULQJEXVLQHVV

VROXWLRQV WKDW SURYLGH WKH VFDODELOLW\ DQG IOH[LELOLW\ EXVLQHVVHV QHHG WR EXLOG FRPSHWLWLYH

DGYDQWDJH (SLFRU SURYLGHV D FRPSUHKHQVLYH UDQJH RI VHUYLFHV ZLWK D VLQJOH SRLQW RI

DFFRXQWDELOLW\ WKDW SURPRWHV UDSLG UHWXUQ RQ LQYHVWPHQW DQG ORZ WRWDO FRVW RIRZQHUVKLSZKHWKHURSHUDWLQJEXVLQHVVRQDORFDOUHJLRQDORUJOREDOVFDOH

$WWKHFRUHRI(SLFRULVDQDGDSWDEOHFROODERUDWLYHDUFKLWHFWXUHWKDWVDWLVILHVWKHQHHGVRI

DQ\PDQXIDFWXUHU UHJDUGOHVV RI FRXQWU\ LQGXVWU\ RU GHYLFH HQDEOLQJ EXVLQHVV DQ\ZKHUH

EXVLQHVVZLWKRXWEDUULHUV(SLFRUGHOLYHUVXQSUHFHGHQWHGEXVLQHVVPDQDJHPHQWSURYLGLQJ

UHDOWLPHLQFRQWH[WEXVLQHVVLQVLJKWWKURXJKRXWDQ\PDQXIDFWXULQJHQYLURQPHQW

(SLFRU LV DPXOWLGLPHQVLRQDO VROXWLRQ XQLTXHO\ HTXLSSHGZLWK ULFK IHDWXUHVHWV VXSSRUWLQJ

DQ\ HQYLURQPHQW LQFOXGLQJ PDNHWRRUGHU 072 HQJLQHHUWRRUGHU (72 FRQILJXUHWR

RUGHU&72PL[HGPRGHPDNHWRVWRFNDQGGLVFUHWHPDQXIDFWXULQJ%XLOWRQWKHVHFRQG

JHQHUDWLRQVHUYLFHRULHQWHGDUFKLWHFWXUH62$,QWHUQHW&RPSRQHQW(QYLURQPHQW,&(

(SLFRU IXVHV PRGHUQ :HE WHFKQRORJLHV ZLWK 7UXH 62$ GHOLYHULQJ XQSUHFHGHQWHGIOH[LELOLW\ DQG YLVLELOLW\ DFURVV PXOWLSOH GHSDUWPHQWV (SLFRUV (53 VROXWLRQV JR EH\RQG

WUDGLWLRQDO(53HQFRPSDVVLQJSURFHVVHVRXWVLGHWKHSURGXFWLRQDQGGLVWULEXWLRQF\FOH ,Q

DGGLWLRQWRDIXOOUDQJHRIPDQXIDFWXULQJFDSDELOLWLHV(SLFRUH[WHQGVWRROVDFURVVEDFNRIILFH

SURFHVVHV LQFOXGLQJ ILQDQFLDOPDQDJHPHQW FXVWRPHUUHODWLRQVKLSPDQDJHPHQWVDOHV DQG

FXVWRPHU VHUYLFHSURYLGLQJ UHDOWLPH LQFRQWH[W LQIRUPDWLRQ WRHPSOR\HHV IURP WKHVKRS

IORRUWRWKHWRSIORRU

(SLFRU.H\6WUHQJWKV

(SLFRULVDJOREDOOHDGHUGHGLFDWHGWRSURYLGLQJEXVLQHVVVRIWZDUHVROXWLRQVWRFRPSDQLHV

DURXQGWKHJOREH:LWKFRPSUHKHQVLYHVROXWLRQVVHUYLFHDQG VXSSRUW WKHFRPSDQ\KHOSV

PRUH WKDQ RI WKH ZRUOGVEHVW FRPSDQLHV UXQ WKHLU EXVLQHVVPRUHHIILFLHQWO\ DQG

HIIHFWLYHO\ (SLFRUV (53 VROXWLRQV DXWRPDWH DQG RSWLPL]H EXVLQHVV RSHUDWLRQV E\

LQWHJUDWLQJGDWDDQGSURFHVVHVLQWRDVLQJOHXQLILHGVROXWLRQWRPD[LPL]HSURILWDEOHJURZWK

(SLFRUGHOLYHUVDVLQJOHHQGWRHQGVRIWZDUHVROXWLRQIRUEXVLQHVV

Page 136: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 136/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 136

7KH FRPSDQ\ RIIHUV D FRPSUHKHQVLYH UDQJH RI SURIHVVLRQDO VHUYLFHV ZLWK LWV VROXWLRQV

SURYLGLQJDVLQJOHSRLQWRIDFFRXQWDELOLW\WRSURPRWHUDSLGUHWXUQRQLQYHVWPHQWDQGORZHU

WRWDOFRVWRIRZQHUVKLS,QDGGLWLRQWRDZDUGZLQQLQJILQDQFLDOLQYHQWRU\DQGPDQXIDFWXULQJ

PDQDJHPHQW FDSDELOLWLHV (SLFRUV (53 VROXWLRQ GHOLYHUV LQGHSWK VXSSO\ FKDLQ

PDQDJHPHQW FXVWRPHU UHODWLRQVKLS PDQDJHPHQW EXVLQHVV LQWHOOLJHQFH DQG HQWHUSULVH

SHUIRUPDQFHPDQDJHPHQWIXQFWLRQDOLW\(SLFRUVROXWLRQVDUHEXLOWWRFRPSO\ZLWKORFDOJRYHUQPHQWDODQGLQGXVWULDOUHTXLUHPHQWVLQD

PDMRULW\RIFRXQWULHVDURXQGWKHJOREH

(SLFRU6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV+LJKOLJKWV

(SLFRU

7KHODWHVW(SLFRU(53VROXWLRQ(SLFRUUHSUHVHQWVWKHFRQYHUJHQFHRI(SLFRUVULFKWRRO

VHWVLQWRDVLQJOHSURGXFW$VWKHILUVWVROXWLRQEXLOWRQ,&((SLFRUUHGHILQHVWKH(53

H[SHULHQFHFRPELQLQJDIXOOUDQJHRIHQWHUSULVHPDQXIDFWXULQJDQGGLVWULEXWLRQIXQFWLRQDOLW\

ZLWK WKH PRVW FROODERUDWLYH IOH[LEOH VHUYLFH RULHQWHG DUFKLWHFWXUH DYDLODEOH (SLFRU HOLPLQDWHV WKH WHFKQRORJLFDO DQG LQGXVWULDO ERXQGDULHV WKDW VWLIOH SURGXFWLYLW\ HQDEOLQJ

EXVLQHVVDQ\ZKHUHEXVLQHVVZLWKRXWEDUULHUV

(SLFRU0DQXIDFWXULQJ

(SLFRU 0DQXIDFWXULQJ LV GHVLJQHG WR PHHW WKH QHHGV RI SURJUHVVLYH PDQXIDFWXUHUV

UHJDUGOHVVRIVKRSHQYLURQPHQW(SLFRU0DQXIDFWXULQJGHOLYHUVEXLOWLQZRUNIORZSURFHVVHV

WR PDQDJH WKH HQWLUH RUGHU F\FOH IURP PDUNHWLQJ VDOHV DQG FXVWRPHU UHODWLRQVKLS

PDQDJHPHQW WKURXJK SURGXFWLRQ SODQQLQJ VRXUFLQJ DQG SURFXUHPHQW WR LQVWDOODWLRQ

VHUYLFHDQG ILQDQFLDO UHFRJQLWLRQ&RPSOLPHQWHG E\D IXOOUDQJHRIHQWHUSULVHFDSDELOLWLHV

(SLFRU 0DQXIDFWXULQJ KHOSV DFKLHYH PD[LPXP HIILFLHQF\ DW HDFK SODQW ZKLOH SURYLGLQJLQQRYDWLYHWHFKQRORJ\WRVSDQWKHHQWLUHHQWHUSULVH

(SLFRU' LVWULEXWLRQ

(SLFRU' LVWULEXWLRQLVDQHQGWRHQGVROXWLRQSURYLGLQJWRROVWRHIILFLHQWO\DVVHPEOHVKLSDQG

GHOLYHU WKH ILQLVKHG JRRGV (SLFRU' LVWULEXWLRQ RIIHUV D IXOO UDQJH RI RUGHUPDQDJHPHQW

VXSSO\ FKDLQ DQGZDUHKRXVLQJ FDSDELOLWLHV EXLOW RQ D VLQJOH EXVLQHVV SODWIRUPEDVHG RQ

LQGXVWU\OHDGLQJ :HE VHUYLFHV DUFKLWHFWXUH &RPSOLPHQWHG E\ D IXOO VXLWH RI HQWHUSULVH

IXQFWLRQDOLW\(SLFRU' LVWULEXWLRQVXSSRUWVWKHQHHGVRIWUXO\DJLOHGLVWULEXWRUV

0LFURVRIW' \QDPLFV

Page 137: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 137/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 137

)RXQGHG LQ 0LFURVRIW %XVLQHVV 6ROXWLRQV ,QF LV D JOREDO SURYLGHU RI HQWHUSULVH

EXVLQHVV VROXWLRQV IRU WKH PLGPDUNHW 0LFURVRIW %XVLQHVV 6ROXWLRQV RIIHUV HEXVLQHVV

DSSOLFDWLRQV IRU ILQDQFLDOV GLVWULEXWLRQ SURMHFW DFFRXQWLQJ HOHFWURQLF FRPPHUFH KXPDQ

UHVRXUFH PDQDJHPHQW PDQXIDFWXULQJ VDOHV DQG PDUNHWLQJ PDQDJHPHQW DQG FXVWRPHU

VHUYLFHDQGVXSSRUW

1DPHGIRUWKHWKLUGWLPHWRWKH7RS&RPSDQLHVWR:RUNIRULQ$PHULFDOLVW0LFURVRIW%XVLQHVV 6ROXWLRQV HPSOR\V PRUH WKDQ HPSOR\HHV ZRUOGZLGH 7KH FRPSDQ\V

SURGXFWVDQGVHUYLFHVDXWRPDWHHVVHQWLDOEXVLQHVVIXQFWLRQVDQGHQKDQFHWKHVWUDWHJLFYDOXH

RIILQDQFLDODQGRSHUDWLRQDOLQIRUPDWLRQ

 0LFURVRIW%XVLQHVV6ROXWLRQV

3URGXFWVDUHVROGDQGLPSOHPHQWHGE\DXQLTXHZRUOGZLGHQHWZRUNRILQGHSHQGHQWSDUWQHU

RUJDQL]DWLRQVWKDWVKDUHWKHFRPSDQ\VFRPPLWPHQWWRODVWLQJFXVWRPHUUHODWLRQVKLSV

0LFURVRIWV UHVHDUFK DQG GHYHORSPHQW IDFLOLWLHV DUH ORFDWHG SULPDULO\ LQ 5HGPRQG:DVKLQJWRQ ZLWK VPDOOHU IDFLOLWLHV ORFDWHG LQ 0RXQWDLQ 9LHZ &DOLIRUQLD )DUJR 1RUWK

'DNRWD%HLMLQJ&KLQD'XEOLQHWF$VRI-XQH0LFURVRIWHPSOR\HGDSSUR[LPDWHO\

SHRSOH

/LNHLWVVL]H0LFURVRIWVDPELWLRQVDUHDQ\WKLQJEXWVPDOO7KHZRUOGVQXPEHURQHVRIWZDUH

FRPSDQ\ SURYLGHV D YDULHW\ RI SURGXFWV DQG VHUYLFHV LQFOXGLQJ LWV :LQGRZV RSHUDWLQJ

V\VWHPVDQG2IILFHVRIWZDUHVXLWH7KHFRPSDQ\KDVH[SDQGHGLQWRPDUNHWVVXFKDVYLGHR

JDPHFRQVROHVVHUYHUVDQGVWRUDJHVRIWZDUHDQGGLJLWDOPXVLFSOD\HUV,QHDUO\WKH

FRPSDQ\PDGHDQXQVROLFLWHGELGWRDFTXLUH<DKRRIRUDERXWELOOLRQ

6XFFHVVLQFOXGHVWKHIOH[LELOLW\WRUHVSRQGWRHPHUJLQJPDUNHWVVXFKDVWRGD\VJURZWK

RSSRUWXQLWLHVLQ&KLQDDQG(DVWHUQ(XURSHDQGWRWKHHYHUFKDQJLQJQHHGVRIFXVWRPHUV

,Q UHVSRQVH WR WKHVH JOREDO FKDOOHQJHV 0LFURVRIW RIIHUV 0LFURVRIW '\QDPLFV D VXLWH RI

LQWHJUDWHGDGDSWDEOHEXVLQHVVDSSOLFDWLRQV IRUVPDOO DQGPHGLXPVL]HGRUJDQL]DWLRQVDQG

GLYLVLRQV RI ODUJH HQWHUSULVHV7KHVH LQWHJUDWHG VROXWLRQVGHOLYHUHG WKURXJKDZRUOGZLGH

QHWZRUNRIH[SHULHQFHG0LFURVRIW&HUWLILHG3DUWQHUVZRUNOLNHDQGZLWKIDPLOLDU0LFURVRIW

VRIWZDUHDQGKHOSDXWRPDWHDQGLPSURYHILQDQFLDOFXVWRPHUUHODWLRQVKLSDQGVXSSO\FKDLQ

PDQDJHPHQW

0LFURVRIW'\QDPLFV.H\6WUHQJWKV

:LWK 0LFURVRIW '\QDPLFV DQ RUJDQL]DWLRQ FDQ FRQQHFW LWV HQWLUH VXSSO\ FKDLQ LQ D

SURGXFWLYH IDVWPRYLQJ IORZ 7KH EXVLQHVV YDOXH RI YHQGRUV DQG EXVLQHVV SDUWQHUUHODWLRQVKLSV LV HQKDQFHG VLJQLILFDQWO\ $QG WKHVH LQFUHDVHG HIILFLHQFLHV LQ GLVWULEXWLRQ

WUDQVODWHWRLPSURYHGFXVWRPHUVDWLVIDFWLRQDQGUHGXFHGFRVWRIGRLQJEXVLQHVV

$ 0LFURVRIW '\QDPLFV VROXWLRQ SURYLGHV HPSOR\HHV ZLWK D PXOWLWXGH RI ZD\V WR SODQ

FRRUGLQDWHDQG H[HFXWLYH GHOLYHU\RIJRRGVDQGVHUYLFHVSURGXFWLYHO\&RPSDQLHV UHDOL]H

VWURQJ UHWXUQ RQ LQYHVWPHQW DV D UHVXOW RI EHWWHU LQGLYLGXDO DQG WHDP SURGXFWLYLW\

VWUHDPOLQHGRSHUDWLRQVDQGPRUHHIIHFWLYHFROODERUDWLRQ

Page 138: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 138/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 138

8VLQJ 0LFURVRIW '\QDPLFV SHRSOH FDQ HIIHFWLYHO\ LPSURYH VXSSO\ FKDLQ HIILFLHQF\ ZLWK

PLQLPDO WLPH VSHQW RQ SURGXFW WUDLQLQJ DQG OHDUQLQJ 7KH XVHU LQWHUIDFH LV IDPLOLDU

FRQVLVWHQWDQGFRPIRUWDEOHMXVWOLNHWKDWRIRWKHU0LFURVRIWSURJUDPVSHRSOHZRUNZLWK

0LFURVRIW'\QDPLFVJLYHVSHRSOHDFURVVWKHVXSSO\FKDLQYLVLELOLW\LQWRFXVWRPHUGHPDQG

DQGWKHGHOLYHU\RIJRRGVKHOSLQJWKHPPDNHIDVWHUEHWWHUEXVLQHVVGHFLVLRQVDQGWDNHWKH

EHVWFRXUVHRIDFWLRQZKHQDGMXVWPHQWVDUHQHFHVVDU\:LWKIHDWXUHVVXFKDVDXWRPDWLFQRWLILFDWLRQDWHDPFDQHDVLO\FDQNHHSWDEVRQLQYHQWRU\

KHOSLQJVXVWDLQRSWLPDOLWHPOHYHOVZLWKRXWW\LQJXSIXQGVLQWKHZDUHKRXVH

7KH\FDQSODQSXUFKDVLQJDWIDYRUDEOHWHUPVDQGLQDWLPHO\PDQQHUFRQWUROOLQJFRVWVDQG

HQVXULQJ WKDW WKH RUJDQL]DWLRQ PHHWV LWV FXVWRPHU FRPPLWPHQWV $QG WKH\ FDQ FRQQHFW

FORVHO\ZLWKRSHUDWLRQV WRPDNHVXUHPDQXIDFWXULQJKDV WKHPDWHULDOV LWQHHGV WRGHOLYHU

SURGXFWVRQWLPH

0LFURVRIW'\QDPLFVVXSSO\FKDLQVWUHQJWKVFDQKHOSWKHWHDPIXOILOOFXVWRPHUFRPPLWPHQWV

ZLWKJUHDWHUUHOLDELOLW\DQGDFFRXQWDELOLW\DQGGHOLYHUWKHSURGXFWVDQGVHUYLFHVFXVWRPHUV

ZDQWZKHQWKH\QHHGWKHP

0LFURVRIW'\QDPLFV7HFKQRORJ\

7KH0LFURVRIW'\QDPLFVOLFHQVHGVXLWHRIVRIWZDUHSURGXFWVDQGDSSOLFDWLRQVEXLOWRQ

IDPLOLDUDQGZLGHO\XVHG0LFURVRIWWHFKQRORJLHVRIIHUVDZLGHDUUD\RIIXOOVSHFWUXP(53

VROXWLRQVIRU6XSSO\&KDLQ0DQDJHPHQW

0LFURVRIW'\QDPLFV6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV

0LFURVRIW'\QDPLFV$;

$XWRPDWHV VDOHV DQG SXUFKDVLQJ DQG VWUHDPOLQHV LQWHUFRPSDQ\RSHUDWLRQV(QDEOHV:HEDFFHVVVRWKDWWKHVDOHVWHDPWRH[FKDQJHDFFXUDWHDQGXSWRGDWHLQIRUPDWLRQZLWKYHQGRUV

VHOOSURGXFWVDQG VHUYLFHVH[FKDQJHLQIRUPDWLRQZLWKFRQVXOWDQWVDQGFRQILJXUHFRPSOH[

SURGXFWVFRPSDQ\LQIRUPDWLRQDQ\WLPHDQ\ZKHUH

+HOSVPDQDJHDEURDGUDQJHRIRWKHUEXVLQHVVDUHDVPLQLPL]LQJWKHQHHGIRUPXOWLSOH

V\VWHPV

0LFURVRIW'\QDPLFV1$9

'HOLYHUV WKHWRROV DEXVLQHVVQHHGV WR UHVSRQGTXLFNO\ WRFXVWRPHUVUDSLGO\ SXUVXHQHZ

PDUNHWRSSRUWXQLWLHVDQGLPSURYHSURILWDELOLW\E\ZRUNLQJHIILFLHQWO\ZLWKWUDGHSDUWQHUV

7LJKWHQVWKHGLVWULEXWLRQSURFHVVHVDQGLPSURYHVLQYHQWRU\PDQDJHPHQWIRUVLQJOHRUPXOWLVLWHZDUHKRXVHVDQGKDQGOHVRUGHUSURFHVVLQJDQGGHPDQGSODQQLQJ

+HOSVPDQDJHDEURDGUDQJHRIRWKHUEXVLQHVVDUHDVDFFRUGLQJWRWKHSDUWLFXODUQHHGVRIWKH

RUJDQL]DWLRQ

0LFURVRIW'\QDPLFV*3

$VDQ(53VRIWZDUHVROXWLRQ0LFURVRIW'\QDPLFVIRUGLVWULEXWRUVPDQDJHVLQYHQWRU\DQG

JRRGVWRNHHSGLVWULEXWLRQPRYLQJVPRRWKO\

Page 139: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 139/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 139

0DLQWDLQV WLJKWFRQWURO RYHUGLVWULEXWLRQ DQGVWUHDPOLQHV WKH SLFNSDFNVKLS F\FOH WR JDLQ

FRPSHWLWLYHDGYDQWDJH

)URP IRUHFDVWLQJ WR GHOLYHU\ 0LFURVRIW '\QDPLFV *3 FDQ KHOS DFFHOHUDWH VDOHV RUGHU

SURFHVVHVDQGUHGXFHFRVWVSHUWUDQVDFWLRQ,QWHJUDWHGDSSOLFDWLRQVKHOSPDQDJHLQYHQWRU\

PRUHHIIHFWLYHO\ILOORUGHUVIDVWHUDQGLPSURYHFXVWRPHUVHUYLFHZLWKHFRPPHUFH

(QDEOHVDFRPSDQ\WRPHHWFXVWRPHUGHPDQGHIILFLHQWO\ZLWKLQYHQWRU\DQGRUGHUPDQDJHPHQWWKDWUHGXFHVFRVWLPSURYHVDFFXUDF\DQGVSHHGVIXOILOOPHQW

 0LFURVRIW'\QDPLFV6/

0LFURVRIW'\QDPLFV 6/ IRUPHUO\0LFURVRIW %XVLQHVV 6ROXWLRQV6RORPRQRIIHUV V\VWHPV

IRUWKHGLVWULEXWLRQLQGXVWU\,QWHJUDWHGDSSOLFDWLRQVKHOSHIILFLHQWO\PDQDJHLQYHQWRU\RUGHU

DQGSXUFKDVLQJPDQDJHPHQWVDOHVIRUHFDVWLQJHFRPPHUFHDQGZDUHKRXVHPDQDJHPHQW

7KHVHDSSOLFDWLRQVFRQQHFWGLUHFWO\ZLWKGR]HQVRIRWKHUEXVLQHVVPDQDJHPHQWV\VWHPVWR

KHOS RUJDQL]DWLRQVPHHW WKHGLYHUVHQHHGVRI WKHLU EXVLQHVV LQFOXGLQJDFFRXQWLQJ&50

KXPDQUHVRXUFHVDQGSD\UROOVXSSO\FKDLQPDQDJHPHQWPDQXIDFWXULQJDQGPRUH

 0LFURVRIW'\QDPLFV6XSSO\&KDLQ0RGXOHV

 0LFURVRIW'\QDPLFV$ ;

&RPPHUFH*DWHZD\

(QWHUSULVH3RUWDO

/RJLVWLFV

0DVWHU3ODQQLQJ

3URGXFW%XLOGHU

3URGXFWLRQ

6XSSO\&KDLQ9LVLELOLW\7UDGH

:DUHKRXVH0DQDJHPHQW:06

 0LFURVRIW'\QDPLFV1$9

,QYHQWRU\0DQDJHPHQW

:DUHKRXVH0DQDJHPHQW

6XSSO\3ODQQLQJ

%XVLQHVV1RWLILFDWLRQV

6DOHVDQG3XUFKDVH'RFXPHQW:RUNIORZ$SSURYDOV

 0LFURVRIW'\QDPLFV*3

'LVWULEXWLRQ,,

 0LFURVRIW'\QDPLFV6/

$GYDQFHG6KLSSLQJ0DQDJHU

%LOORI0DWHULDOV

,QYHQWRU\0DQDJHPHQW5HSOHQLVKPHQW

Page 140: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 140/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 140

/DQGHG&RVW

2UGHU0DQDJHPHQW

2UGHUWR3XUFKDVH

3XUFKDVLQJ

:RUN2UGHU

'RPHVWLF9HQGRUVRI6&06\VWHPV

0DQ\3DNLVWDQLVRIWZDUHFRPSDQLHVRIIHULQIRUPDWLRQV\VWHPVZLWKGDWDEDVHVXSSRUW:KLOH

PRVWRIWKHVRIWZDUHFRPSDQLHVLQ3DNLVWDQDUHUHJLVWHUHGDVDIUDQFKLVHIRU6$3DQG2UDFOH

SURGXFWV RQO\ D IHZ DPRQJ WKHP RIIHU (53 V\VWHPV RI WKHLU RZQ 2QH RI WKH ELJJHVW

IUDQFKLVHVRI6$3 DQG2UDFOHSURGXFWV LQ ,VODPDEDG FLW\ LV(536RIW:KLOHPRVWRI WKH

FRPSDQLHVFRQVLGHUSXUFKDVLQJVRIWZDUHIURPORFDOYHQGRUV6$3DQG2UDFOHVWLOOKDYHJRW

DKXJHPDUNHWVKDUHLQ3DNLVWDQLVRIWZDUHLQGXVWU\ZKHQLWFRPHVWR(53V\VWHPVRU6XSSO\

&KDLQ0DQDJHPHQW6\VWHPV6&06

&RPSDQLHV WKDW FDQDIIRUG KXJHEXGJHWVZKLOHQRW VDFULILFLQJTXDOLW\ JR IRU SXUFKDVLQJ

6$3RU2UDFOHSURGXFWV ,W LVVXUSULVLQJKRZHYHU WKDWPDQ\ IRUHLJQFRPSDQLHVLQFOXGLQJ

FRPSDQLHVIURP,QGLDDQG8$(RIIHUH[FHOOHQW(53&50DQG6&0V\VWHPVWKDWRIIHUD

ZLGH UDQJH RI IXQFWLRQDOLW\ ZLWKRXW DQ\ PDMRU VHWEDFNV LQ WKH V\VWHP DQG FRVWLQJ

XQSUHGLFWDEO\OHVVHUWKDQWKRVHGHYHORSHGE\GRPHVWLFVRIWZDUHLQGXVWU\

&RPSDQLHV OLNH 7HUD'DWD 1&5 8OWLPXV '36 HWF KDYH GHYHORSHG WKHLU RZQ (53

V\VWHPV JLYLQJ LW GLIIHUHQW WHUPLQRORJLHV OLNH%XVLQHVV3URFHVV0DQDJHPHQW%30%%

V\VWHPV %XVLQHVVWR%XVLQHVV(QWHUSULVH&ODVVHWF6RPHRI WKHVHV\VWHPV SURYLGHIXOO

VXSSO\FKDLQVXSSRUWZKLOHRWKHUVRQO\VXSSRUWKDOIRIWKHIXQFWLRQDOLW\HOLPLQDWLQJWKHNH\

EXVLQHVVSODQQLQJVRIWZDUHIHDWXUHV

6RPHRIWKHVXSSO\FKDLQPDQDJHPHQWV\VWHPVYHQGRUVLQ3DNLVWDQDUHOLVWHGEHORZDORQJ

ZLWKWKHIHDWXUHVRIIHUHGE\WKHV\VWHPV

7HUDGDWD1&5

7HUDGDWDLVWKHZRUOGVODUJHVWFRPSDQ\VROHO\IRFXVHGRQUDLVLQJLQWHOOLJHQFHWKURXJKGDWD

ZDUHKRXVLQJDQGEXVLQHVVDQDO\WLFV7HUDGDWDGHOLYHUVDZDUGZLQQLQJLQWHJUDWHGSXUSRVH

EXLOWSODWIRUPVEDVHGRQWKHPRVWSRZHUIXOVFDODEOHDQGUHOLDEOHWHFKQRORJ\SODWIRUPLQWKH

LQGXVWU\7KHLUDVVHWVLQFOXGH

Page 141: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 141/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 141

y  $SSUR[LPDWHO\DVVRFLDWHVLQPRUHWKDQFRXQWULHV

y  6WURQJGLYHUVLILHGFOLHQWEDVHRIRYHUFXVWRPHUVZRUOGZLGHDQGFRPSDQLHVRIDOO

VL]HV

y  LPSOHPHQWDWLRQVZRUOGZLGH

7ULOOLRQV RI E\WHV RI GDWD GRQW ID]H 7HUDGDWD 7KH FRPSDQ\ GHVLJQV DQG LPSOHPHQWVHQWHUSULVH GDWD ZDUHKRXVLQJ V\VWHPV WKDW VWRUH LQIRUPDWLRQ DERXW FXVWRPHUV ILQDQFHV

RSHUDWLRQVDQGRWKHUEXVLQHVVGDWD,WVVRIWZDUHLQFOXGHVLWVFRUHGDWDEDVHV\VWHPDVZHOO

DVDSSOLFDWLRQVIRUPDQDJLQJGDWDGHPDQGDQGVXSSO\FKDLQVFXVWRPHUVFRPSOLDQFHDQG

ULVNDQGSHUIRUPDQFH7KHFRPSDQ\DOVRRIIHUVFRQVXOWLQJVXSSRUWDQGWUDLQLQJVHUYLFHV

7HUDGDWD WDUJHWV FRPSDQLHV LQ WKH HQWHUWDLQPHQW ILQDQFLDO VHUYLFHV JRYHUQPHQW KHDOWK

FDUHLQVXUDQFHPDQXIDFWXULQJUHWDLOWHOHFRPDQGWUDQVSRUWDWLRQVHFWRUV

3URGXFWV

y  &XVWRPHU5HODWLRQVKLS0DQDJHPHQW7HUDGDWD5HODWLRQVKLS0DQDJHUy  'DWD:DUHKRXVLQJ

y  'HPDQG&KDLQ0DQDJHPHQW

y  )LQDQFLDO0DQDJHPHQW

y  ,QGXVWU\6ROXWLRQV

y  3URILWDELOLW\$QDO\WLFV

y  6XSSO\&KDLQ,QWHOOLJHQFH

y  0DVWHU'DWD0DQDJHPHQW

$FWLYH(QWHUSULVH,QWHOOLJHQFH

6WD\LQJDKHDGRI\RXUFRPSHWLWLRQPHDQVWKDW\RXFUHDWHDQGGHSOR\FRQVLVWHQWDQGXSWR

GDWHLQWHOOLJHQFHWKURXJKRXW\RXUHQWHUSULVHHQDEOLQJ\RXWRDFKLHYHSHUYDVLYHEXVLQHVV

LQWHOOLJHQFH0DVWHULQJWKLVUHTXLUHVDV\QHUJLVWLFFRPELQDWLRQRIWZRSRZHUIXOIRUPVRI

EXVLQHVVLQWHOOLJHQFH%,

y  6WUDWHJLF ,QWHOOLJHQFH IRU EDFN RIILFH NQRZOHGJH ZRUNHUV 3ODQQHUV ILQDQFLDO

DQDO\VWVPDUNHWLQJPDQDJHUVDQGRWKHUVXVHKLVWRULFDOWUHQGVDQGLQVLJKWVWRPDNH

LQIRUPHG GHFLVLRQV FRQFHUQLQJ FXVWRPHUV LQYHQWRU\ VXSSOLHUV SURGXFWV DQG

SDUWQHUV

y  2SHUDWLRQDO,QWHOOLJHQFHIRUIURQWOLQHZRUNHUVDQGV\VWHPV7KLVH[WHQGVWKHYDOXH

RI\RXUHQWHUSULVHGDWDZDUHKRXVHWRFXVWRPHUVHUYLFHUHSUHVHQWDWLYHVUHWDLOFDVKLHUV

DQGFDOOFHQWHUDJHQWVDQ\RQHZKRPDNHVGD\WRGD\GHFLVLRQV

7HUDGDWDVVWUDWHJ\ IRUSHUYDVLYH%,NQRZQDV$FWLYH (QWHUSULVH ,QWHOOLJHQFH SURYLGHV

WKH IRXQGDWLRQ IRU QHDU UHDOWLPH VPDUWHU GHFLVLRQV WKURXJKRXW \RXU RUJDQL]DWLRQ :H

Page 142: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 142/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 142

GHOLYHU$FWLYH(QWHUSULVH ,QWHOOLJHQFHVROXWLRQV WKURXJKRXU$FWLYH'DWD:DUHKRXVLQJ

WHFKQRORJ\SURIHVVLRQDOVHUYLFHVH[SHUWLVHDQGSDUWQHUSURGXFWV

(QWHUSULVH'DWD:DUHKRXVLQJ

%XVLQHVVOHDGHUVDUHSDUWQHULQJZLWKWKHLU,7RUJDQL]DWLRQVWRKHOSGULYHVDOHVUHGXFHULVN

DQGPDQDJHJURZLQJUHJXODWRU\FRPSOLDQFH7KH\DUHDOVR UHO\LQJRQ,7 WRSURYLGHWKHP

ZLWK D GHJUHH YLHZ RI FXVWRPHUV VXSSO\ FKDLQ DQG ILQDQFLDO DQG SHUIRUPDQFH

PDQDJHPHQW

7R GHOLYHU RQEXVLQHVV UHTXLUHPHQWV DQG WHFKQLFDO UHTXLUHPHQWV VXFK DV SUHGLFWDEOH

SHUIRUPDQFH,7RUJDQL]DWLRQVPXVWOHYHUDJHEHVWRIEUHHGWHFKQRORJLHV7KHVHWHFKQRORJLHV

PXVW HYROYH DQG JURZ ZLWK WKH EXVLQHVV $Q (QWHUSULVH 'DWD :DUHKRXVH (': IURP

7HUDGDWD DOORZV \RX WR EHWWHU DQDO\]H EXVLQHVV RSHUDWLRQV DQG GULYH VPDUWHU IDVWHU

GHFLVLRQVSURYLGLQJ\RXZLWKDVLQJOHYLHZRI\RXUEXVLQHVV

$WWKHKHDUWRIRXUVROXWLRQVLVDSODWIRUPRISURGXFWVWKDWJURZZLWK\RXDQGDZRUOGFODVV

GDWDEDVH7HUDGDWD7HUDGDWDRIIHUVDQHZIDPLO\RISXUSRVHEXLOWSODWIRUPVWKDWVSDQWKH

EXVLQHVV DQG DQDO\WLFDO GDWD ZDUHKRXVH QHHGV RI \RXU HQWLUH RUJDQL]DWLRQ 7KH (':

SODWIRUPLVWKH7HUDGDWD$FWLYH(QWHUSULVH'DWD:DUHKRXVHDQGLVVXUURXQGHGE\DIXOOVXLWH

RIGDWDPDQDJHPHQWWRROVDQGUREXVWGDWDPLQLQJVRIWZDUH3OXV\RXOOUHFHLYHH[SHUWGDWD

ZDUHKRXVH DGYLFH IURP WKH LQGXVWU\V PRVW H[SHULHQFHG GDWD ZDUHKRXVH FRQVXOWLQJ

SURIHVVLRQDOV7KHVHDUH MXVWD IHZRI WKHUHDVRQVZK\LQGXVWU\OHDGHUVZRUOGZLGHFKRRVH

7HUDGDWDVROXWLRQVDQGVHUYLFHV

7HUDGDWDSDUWQHUVDQGLQWHJUDWHVZLWKOHDGLQJEXVLQHVVLQWHOOLJHQFHFRPSDQLHVVXFKDV6$66$32UDFOH0LFURVRIWDQG0LFURVWUDWHJ\7HUDGDWDDOVRUHOLHVRQLWVZRUOGFODVVSDUWQHUV

WRGHOLYHUNH\VROXWLRQVEXLOWRQWKH7HUDGDWD(':LQFOXGLQJGDWDDFTXLVLWLRQDQGLQWHJUDWLRQ

VHUYLFHVIURPFRPSDQLHVVXFKDV$E,QLWLR$WWXQLW\*ROGHQ*DWH+XPPLQJELUG ,%0DQG

,QIRUPDWLFD

8OWLPXV

8OWLPXVLVWKHILUVW%30&RPSDQ\ZLWKFRPSOHWHJOREDOFDSDELOLWLHVLQFOXGLQJRIILFHVLQ

FRXQWULHVDQGFXVWRPHUVLQFRXQWULHV7KH8OWLPXVSURGXFWLVDYDLODEOHLQODQJXDJHV

DQG LV VXSSRUWHG E\ D ZRUOGZLGH SURIHVVLRQDO VHUYLFHV WHDP DQG D VXSSRUW FHQWHU

:LWK RYHU FXVWRPHUV ZRUOGZLGH 8OWLPXV KDV GHSOR\HG %30 SURFHVVHV IRU PRUH

FXVWRPHUVWKDQDQ\RWKHU%30FRPSDQ\2YHU/DUJH(QWHUSULVHFXVWRPHUVZLWKDQQXDO

Page 143: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 143/169

Page 144: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 144/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 144

y  3URGXFH0RUH$FFXUDWH4XRWHV

y  $FFHOHUDWH&RQWLQXRXV3URFHVV,PSURYHPHQW,QLWLDWLYHVVXFKDV6L[6LJPD

y  *DLQ(QGWRHQG9LVLELOLW\,QWR0LVVLRQ&ULWLFDO3URFHVVHVy  5HGXFH/DWHQFLHVLQ3URGXFWLRQ3URFHVVHV

y  6WUHQJWKHQ5HODWLRQVKLSVZLWK&XVWRPHUVDQG3DUWQHUV

'36

$PRQJ ,7 FRQVXOWLQJ ILUPV '36 LV XQLTXH LQ LWV HPSKDVLV RQ GHYHORSLQJ FRPSDWLEOH

VROXWLRQVIRULWVFOLHQWVQRWRQO\LQWHUPVRIWHFKQRORJ\EXWLQWHUPVRIFRUSRUDWHFXOWXUHDV

ZHOO ,QIRUPDWLRQ VROXWLRQV FRQVLVW QRW PHUHO\ RI VRIWZDUH RU KDUGZDUH EXW RI D ZD\ RIWKLQNLQJDQGPDNLQJGHFLVLRQVDVDJURXS$FOHYHUWHFKQLFDOVROXWLRQLVQRWHQRXJKLWZLOO

VXFFHHGRQO\LILWPDWFKHVWKHFOLHQWVORQJWHUPEXVLQHVVJRDOVDQGYDOXHV:HWDNH\RXDV

RXUSDUWQHUILUVW DQG RXUFOLHQWDIWHUZDUGV:HSDUWQHUZLWKRXUFOLHQWV ,7GHSDUWPHQWDQG

SURYLGHWKHPVXSSRUWDWDOOWKHWKUHHOHYHOVVWUDWHJLFWDFWLFDODQGRSHUDWLRQDO

:H EHOLHYH LQSHRSOHEHIRUH VRIWZDUH DQG VWUDWHJ\ EHIRUHV\VWHPV:HYHZRUNHG DW WKH

KLJKHVWOHYHOVRIWKHFRUSRUDWHHQYLURQPHQWIURPWKHLQVLGH:HUHVHQVLWLYHWRWKHFXOWXUDO

DVSHFWVRIFKDQJHMXVWDVVXUHO\DVZHUHDOHUWWRWKHODWHVWWUHQGVLQ,7GHYHORSPHQW:H

FUHDWHHIIHFWLYHVSRQVRUVKLSDVZHOODVHIIHFWLYHFRGH

%XVLQHVVWR%XVLQHVV%%

6XSSO\&KDLQ%HQHILWLQJERWK%X\HUVDQG6XSSOLHUV

6XSSO\FKDLQPDQDJHPHQWWKURXJKLWVLPSDFWRQUHVRXUFHVGLUHFWO\DIIHFWVERWKWKHERWWRP

OLQH DQG FXVWRPHU VDWLVIDFWLRQ 1RWKLQJ LVPRUH FUXFLDO WR \RXU VXFFHVV WKDQ HIIHFWLYHO\

PDQDJLQJWKHVXSSO\FKDLQ5HO\LQJRQRXWGDWHGPHDQVRISURFXUHPHQWSURYLGHVDQRSHQ

LQYLWDWLRQWRFRPSHWLWRUVWRWDNHDZD\HYHUODUJHUVKDUHVRI\RXUPDUNHW

7KH'36%WR% SDFNDJH RIIHUVPHGLXPDQG ODUJH HQWHUSULVHVDVHFXUHRQOLQH YHQXH IRU

SURFXUHPHQWDYHQXHFRPSOHWHO\XQGHU\RXUFRQWURO$VWUHDPOLQHGVXSSO\FKDLQHQDEOHVHFRQRPLHV IRU EX\HUV DQG YHQGRUV EHWWHU VHUYLFH WR FXVWRPHUV DQG WKH RSSRUWXQLW\ WR

H[SDQGLQWRQHZPDUNHWVDQGIRUJHQHZUHODWLRQVKLSV

'36%%3DFNDJHV

Page 145: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 145/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 145

)RUWKHFKDLQWKHEURZVHUEDVHGLQWHUIDFHOHWV\RXPDLQWDLQYHQGRUVDQGVWRUHVUHYLHZDQG

XSGDWH SURGXFWV DQG SXUFKDVH FRQWUDFWV DVVLJQ UHWDLO SULFHV FRQWURO GHOLYHU\ VFKHGXOHV

SODFHDQGWUDFNRUGHUVDQGUHYLHZSURILWPDUJLQVRQDSURGXFWE\SURGXFWEDVLV

)RUWKHVWRUH'36%WR%OHWV\RXUHYLHZLQIRUPDWLRQIRUSURGXFWVSULFHVSXUFKDVHVDQG

GHOLYHU\ VFKHGXOHV DV ZHOO DV SULQW LQYRLFHV DQG SODFH DQG WUDFN RUGHUV

)RUWKHYHQGRU'36%WR%OHWV\RXPDQDJHSURGXFWRIIHULQJVDQGSULFHVPDQDJHFRVWVPDLQWDLQH[LVWLQJFRQWUDFWVQHJRWLDWHGHOLYHU\VFKHGXOHVDQGYLHZDQGFRQILUPRUGHUV

%%3URGXFW)HDWXUHV

,Q WHFKQLFDO WHUPV '36 %WR% LV D PRGXODU SDFNDJH FRQVLVWLQJ RI -DYD VHUYOHWEDVHG

EXVLQHVV ORJLFDQG DFXVWRPL]DEOH+70/FOLHQW7KHSDFNDJH FDQEHLQWHJUDWHGZLWK DQ\

HQWHUSULVHVWUHQJWK EDFN HQG LQFOXGLQJ 2UDFOH '% RU 64/ 6HUYHU '36 %WR% LV

GHVLJQHGIRUUREXVWSHUIRUPDQFHLQDKLJKYROXPHHQYLURQPHQW\HWLVHDVLO\VFDODEOHWRVXLW

PHGLXPVL]HGHQWHUSULVHVDVZHOO

Page 146: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 146/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 146

;DYRU &RUSRUDWLRQ

 ;DYRULVDQ,UYLQH&DOLIRUQLDEDVHG0DQDJHPHQW7HFKQRORJ\6ROXWLRQVILUPZLWK*OREDO

FOLHQWV FRPSOHWH ZLWK DQ RXWVRXUFLQJ VHWXS ;DYRU XVHV D SURSULHWDU\ ZRUNVKRS

GULYHQFRQVXOWDWLYHDSSURDFKWRKHOSFOLHQWVZLWK

y  (VWDEOLVKLQJWHDPGULYHQ/HDGHUVKLSDQG2ZQHUVKLS

y  'HILQHDQ2UJDQL]DWLRQ0RGHO

y  'HILQH3ROLFLHV

y  'HILQH3URFHVVHVy  %XLOG7HFKQRORJ\6\VWHPV

y  'HILQHDQGEXLOG0HWULFV

y  'HILQH5ROHV5HVSRQVLELOLWLHV

y  'HVLJQ0DQDJHPHQW6\VWHPV

y  %XLOGDVXVWDLQDEOH,QIUDVWUXFWXUH

9HQGRU0DQDJHG,QYHQWRU\6ROXWLRQ

;DYRUV 90, 9HQGRU 0DQDJHG ,QYHQWRU\   6X SS O\ & K DLQ ,QWHJUDWLRQ 6ROXWLRQ D

 S URFHVV PDQDJHPHQW HQDEOHPHQW DFFRP S OLVK HG E\ D VFDODEOH LQIRUPDWLRQ WHFK QRORJ\VROXWLRQWK DWDOORZVPDQXIDFWXUHUVVX SS OLHUVRIJRRGVWRPRQLWRUWK HLUVDOHVFRQVXP S WLRQE\

OLQNLQJGLUHFWO\ZLWK UHWDLOHUUHVHOOHUVVWRUHOHYHO S RLQWRIVDOHGDWDXVLQJLQGXVWU\VWDQGDUG

 ;0/ GDWD LQWHUFK DQJH%% VWDQGDUGV VXFK  DV (', RU 5RVHWWD1HW 5H S OHQLVK PHQW RUGHU

GHFLVLRQVDUHPDGHXVLQJVWRUHDQG S URGXFWFRPERLQIRUPDWLRQE\DQDO\]LQJLQYHQWRU\GDWD

VWDWLVWLFDOO\LQRUGHUWRPD[LPL]HWK HFXVWRPHUVHUYLFHOHYHOZK LOHPLQLPL]LQJLQYHQWRU\DQG

ORJLVWLFDOFRVWV

90,6X SS O\& K DLQ,QWHJUDWLRQ3 ODWIRUP S URYLGHV 

%XVLQHVV7REXVLQHVV,QWHJUDWLRQ

(IILFLHQF\E\LQYHQWRU\LQWHJUDWLRQZLWK  S DUWQHUV

,QGXVWU\VWDQGDUG S URWRFROVDQGFXVWRPL]HG S URWRFROVIRURXUFOLHQWV

+RZLVLWGRQH"

Page 147: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 147/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 147

6XSSO\FKDLQ DQDO\VWVZRUN FORVHO\ZLWK WKHFXVWRPHU LQRUGHU WRXQGHUVWDQGWKHUHOHYDQW

YHQGRU DQG VXSSOLHU LQYHQWRU\ UHODWHG SURFHVVHV 7KH DQDO\VW EXLOGV D 90, LQWHJUDWLRQ

SURFHVVPRGHOZLWKUHSOHQLVKPHQWUXOHV;DYRUV6\VWHPV,QWHJUDWLRQ$QDO\VWVZRUNFORVHO\

ZRUNLQJZLWKWKHFXVWRPHUVWHFKQRORJ\WHDPWRLPSOHPHQWWKHWHFKQRORJ\RIWKHFXVWRPHUV

FKRRVLQJVXFKDV6WHUOLQJ%L]7DONRU7LEFR;DYRUVWHDPRIDQDO\VWVFXVWRPL]HVDVROXWLRQ

WKDWVXIILFHVFXVWRPHUVEXVLQHVVSURFHVVUHHQJLQHHULQJDQGDXWRPDWLRQQHHGV

 %HQHILWV

y  ,QWHJUDWHGGHOLYHU\VROXWLRQ

y  &RPELQHGIRUHFDVWDQGEHWWHUEXVLQHVVVROXWLRQV

y  *DSUHGXFWLRQEHWZHHQFOLHQWDQGYHQGRUPDWHULDOPDQDJHPHQW

 

Page 148: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 148/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 148

Chapter 7

Proposed System for Pepsi Haidri Beverages

Page 149: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 149/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 149

&KDSWHU

3URSRVHG6\VWHPIRU3HSVL+DLGUL%HYHUDJHV

7KLVFKDSWHUSUHVHQWVDGHWDLOHGKLJKOHYHO6&0V\VWHPGHVLJQIRU3HSVL+DLGUL%HYHUDJHV

,W DOVR LGHQWLILHVZKLFK SDUW RI WKH V\VWHPVQHHG FXVWRPL]DWLRQ DQG ZKLFK RI WKHPQHHG

UHHQJLQHHULQJ 7KH FKDSWHU VWDUWV E\ SURYLGLQJD FRPSOHWH MXVWLILFDWLRQ DV WRZK\ VXSSO\

FKDLQPDQDJHPHQW V\VWHP LVQHHGHG DQGZKDWEHQHILWV WKH FRPSDQ\H[SHFWV WRJDLQE\

DGRSWLQJVXFKV\VWHPV

:K\6&0"

8S XQWLO RU \HDUV DJR WKH WHUP VXSSO\ FKDLQ GLG QRW HYHQ H[LVW %DFN WKHQSXUFKDVLQJ ZDV SXUFKDVLQJ ZDUHKRXVLQJ ZDV ZDUHKRXVLQJ WUDQVSRUWDWLRQ ZDV

WUDQVSRUWDWLRQDQGHDFKIXQFWLRQRSHUDWHGLQUHODWLYHLVRODWLRQIURPRQHRWKHU7RGD\PRVW

FRPSDQLHV DUHORRNLQJ IRUZD\V WR LQWHJUDWHWKHVHDQGDGGLWLRQDOIXQFWLRQV LQWRDKROLVWLF

VXSSO\FKDLQVWUDWHJ\6XSSO\FKDLQH[HFXWLRQLQYROYHVKRZZHOOWKLQJVPRYHWKURXJKWKH

VXSSO\FKDLQWKHRSHUDWLRQVWKDWRFFXUIURPWKHUDZPDWHULDOVGHOLYHUHGWRDPDQXIDFWXUHU

WKHQWRWKHGLVWULEXWRUDQGILQDOO\WRWKHFXVWRPHU

:KLOHPRUHDQGPRUHFRPSDQLHVDUHVHHNLQJZD\VWRFRRUGLQDWHDQGVWUHDPOLQHWKHLUVXSSO\

FKDLQVWKHRYHUDOOWDVNFDQEHLQWLPLGDWLQJ&RPSDQLHVIDFHQXPHURXVFKDOOHQJHVLQFOXGLQJ

LQFUHDVLQJ WUDQVSRUWDWLRQFRVWVJURZLQJUHWDLOHU LQIOXHQFHWLJKWHQLQJ UHTXLUHPHQWVIRU IDVWRUGHU IXOILOOPHQW 6.8 SUROLIHUDWLRQ SK\VLFDO ODERU FRQVWUDLQWV DQG WKH GHPDQG IRU

FRQVLVWHQWO\SHUIHFWRUGHUV

,QGHHG WKHVH YHU\FKDOOHQJHV DUH ZKDWPDNH VXSSO\ FKDLQPDQDJHPHQW VR LPSRUWDQW WR

HPEUDFH 1DWH 5RVLHU GLUHFWRU VXSSO\ FKDLQ SUDFWLFH IRU VXSSO\ FKDLQ FRQVXOWLQJ ILUP

&,%(5 ,QF *UHHQZRRG9LOODJH&286$ VSHFLDOL]HV LQ VXSSO\FKDLQ LQLWLDWLYHV IRU WKH

EHYHUDJHLQGXVWU\$ORWRIEHYHUDJHGLVWULEXWRUVKDYHLQYHQWRU\PDQDJHPHQWFKDOOHQJHV

KHSRLQWVRXW)RUH[DPSOHDORWRIRXUFOLHQWVLPSRUWSURGXFWVIURPDURXQGWKHZRUOGRU

EX\ IURPVPDOOHUVXSSOLHUV WKDWVWLOOGRQWHYHQSODFHEDUFRGHVRQ WKHLUSURGXFWVRUVHQG

DGYDQFHVKLSPHQWQRWLILFDWLRQV,QDGGLWLRQ5RVLHUVD\VWKDWDORWRIEHYHUDJHGLVWULEXWRUVDUHVWLOOEHKLQGWKHFXUYHZKHQLWFRPHVWRWKHLPSOHPHQWDWLRQDQGXVDJHRIVXSSO\FKDLQ

WHFKQRORJ\

*HWWLQJ6WDUWHG

Page 150: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 150/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 150

7KH ILUVW VWHS LQ FUHDWLQJ DQGRU LPSURYLQJ \RXU VXSSO\ FKDLQ LV WR LGHQWLI\ \RXU JRDOV

2YHUDOO JRDOV RI VXSSO\ FKDLQPDQDJHPHQW SURFHVVHV IRU GLVWULEXWRUV JHQHUDOO\ IRFXV RQ

HIILFLHQW DQG DFFXUDWH UHFHLYLQJ LQYHQWRU\ DFFXUDF\ HIIHFWLYH VORWWLQJ IOH[LEOH

UHSOHQLVKPHQWPXOWLSOHSLFNLQJRSWLRQVLQFUHDVHGZDUHKRXVHSURGXFWLYLW\UHGXFHGUHWXUQV

DQGIOH[LEOHH[FHSWLRQKDQGOLQJ

:KHQORRNLQJDWVXSSO\FKDLQLQYHVWPHQWLWLVLPSRUWDQWWRGHWHUPLQHZKDW\RXUJRDOVDUH

WKHQ GHYHORSDQHIIHFWLYH URDGPDS IRU LQYHVWLQJ LQ \RXU VXSSO\ FKDLQ VWDWHV&DO 3HWW\

GLUHFWRU RI VXSSO\ FKDLQ SUDFWLFH IRU &,%(5 ZKR VSHFLDOL]HV LQ DSSOLFDWLRQV DQG

LPSOHPHQWDWLRQ $GYDQFHG SODQQLQJ FDQQRW EH RYHUHPSKDVL]HG 7KHUH LV D VWRU\ RI D

VXSHUPDUNHWFKDLQWKDWLPSOHPHQWHGDQH[SHQVLYHURXWLQJDQGVFKHGXOLQJVRIWZDUHSDFNDJH

LQ LWV HLJKW GLVWULEXWLRQ FHQWHUV 7KHQ D \HDU ODWHU LW EHJDQ WR TXHVWLRQ MXVW KRZPDQ\

GLVWULEXWLRQFHQWHUVLWQHHGHGLQWKHILUVWSODFH

1H[WGHFLGHZKHWKHU\RXUVXSSO\FKDLQLPSURYHPHQWSURMHFWLVRQH\RXFDQKDQGOHRQ\RXU

RZQRUZKHWKHU\RXQHHGDFRQVXOWDQW,WVDWUDGHRIIEHWZHHQFRVWDQGLQWHUQDOUHVRXUFHV:KLOHFRQVXOWDQWVFDQEHH[SHQVLYH\RXURUJDQL]DWLRQPD\QRWKDYHWKHLQWHUQDOH[SHUWLVH

QHFHVVDU\WRKDQGOHWKHSURMHFWRQLWVRZQ$QGHYHQLI\RXGR\RXPD\QRWEHDEOHWRSXOO

WKHVHSHRSOHDZD\IURPWKHLUUHJXODUMREV,I\RXGRRSWWRKLUHDFRQVXOWDQWILQGRQHZKR

KDVVSHFLILFH[SHULHQFHLQWKHEHYHUDJHLQGXVWU\

:KHWKHURUQRW\RXKLUHDFRQVXOWDQWLWLVLPSRUWDQWWRFUHDWHDQLQWHUQDOVWHHULQJFRPPLWWHH

WRRYHUVHHWKHSURMHFWSOXVDGHVLJQWHDPWRDFWXDOO\LPSOHPHQWWKHSURMHFW

7HFKQRORJ\8VHG

7KHWHFKQRORJ\WREHXVHGIRULPSOHPHQWDWLRQRIWKHSURSRVHGV\VWHPLV(53,,(53,,FDQ

EH GHILQHG DV WKH QH[W JHQHUDWLRQ RI HQWHUSULVH UHVRXUFH SODQQLQJ VWUDWHJLHV DQG

DSSOLFDWLRQV(53,,IRFXVVHVQRWMXVWRQLQIRUPDWLRQXVDJHEXWDOVRXSRQGHOLYHULQJLWWRWKH

LQGLYLGXDOZKRUHTXLUHVLWDQGLQDZD\WKDWEHVWVXLWVWKHLUQHHGV(53,,VXSHUVHGHG(53

DQGLWVWZROHVVHUNQRZQLWHUDWLRQVFDOOHGH[WHQGHG(53DQG(QWHUSULVH$SSOLFDWLRQ6 XLWH

($6 7KHPRVWDSSDUHQWFKDQJHIURP(53WR(53,,LVDFKDQJHLQIRFXVIURPRQHWKDWLV

WRWDOO\ HQWHUSULVHFHQWULF DQG SUHRFFXSLHG ZLWK LQWHUQDO UHVRXUFH RSWLPL]DWLRQ DQG

WUDQVDFWLRQDOSURFHVVLQJWRDQHZIRFXVRQSURFHVVLQWHJUDWLRQDQGH[WHUQDOFROODERUDWLRQ

(53,,DSSOLFDWLRQGHSOR\PHQWVWUDWHJLHVUHODWHV WRLQIRUPDWLRQWKDWLVH[FKDQJHGEHWZHHQ

WZRRUPRUHEXVLQHVVHVRYHUWKH,QWHUQHW 7KLVH[FKDQJHRILQIRUPDWLRQHOHFWURQLFDOO\YLDWKH,QWHUQHWLVNQRZQDVFROODERUDWLYHFRPPHUFHRUFFRPPHUFH6 RLWFDQEHFRQFOXGHG

WKDW(53,,KDVFFRPPHUFHIHDWXUHV(53,,KDVDOVRH[SDQGHGWRLQFOXGHDUHDVVXFKDV

 2

Collaborative Commerce, also referred to as c-commerce, involves the collaborative, electronically enabled

business interactions among enterprises internal personnel, business partners and customers throughout a

trading community. The trading community can be an industry, industry segment, supply chain or supply chain

segment.

Page 151: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 151/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 151

6XSSO\  & K DLQ  0 DQ DJH PHQW  6&0  & X VWR PH U 5 HO DWLRQ VKLS  0 DQ DJH PHQW  &50 

.QR ZOH GJH 0 DQ DJH PHQW .0 EX VLQH VVLQWHOOLJHQ FH %,DQ GLQYHQWR U \ RSWL PL] DWLRQ ,2

7KH I H DWX U H VLQ (5 3,,L VYH U \ PX FK LQ OLQH ZLWK WKH *DU WQH UU H VH DUFK  S D SH UZKL FK  S U H GL FWH G

WK DW (5 3,,ZRXO GW DNH (5 3I RXQ GDWLRQ DQ GH [WHQ GLW RXW ZDUG WR  SR VLWLRQ WKH HQWH U  S U L VH LQ 

WKH VXSSO\ FK DLQ 

'HSOR\ PHQW R I(5 3,,LQ D& X VWR PL]H G:D\ 

7KH  S U RSR VH GV\ VWH PDVDI L UVW  VWHS ZLOO FX VWR PL]H  WKH  FX UU HQW  W UDGLWLRQ DO (5 3V\ VWH P LQ 

VX FK  D ZD\  WK DW  LW  VXSSR U W V ERWK  OHJ DF\  (5 3 V\ VWH P DV ZHOO  DV WKH  VXSSO\  FK DLQ  DQ G

FX VWR PH UU HO DWLRQ VKLS PDQ DJH PHQW V\ VWH PVGHSOR\H GRYH UZHE D SSOL FDWLRQ 

7KH  S U RSR VH G(5 3,,6&0 I R FX VH VPR U H RQ VXSSO\ FK DLQ H [H FXWLRQ UDWKH UWK DQ VXSSO\ FK DLQ 

 SO DQQLQJ 7KH  U H DVRQ  L VTXLWH REYLRX V3HS VL +DL GU L %HYH UDJH V L VTXLWH DPDWX U H FR P S DQ\ 

ZKH U H   SO DQQLQJ  R I VXSSO\  FK DLQ  QHW ZR UN L V DO U H DG\  GRQH  DQ G WKH  OR FDWLRQ  R I IDFLOLW\ 

LQ VW DOO DWLRQ  K DV DO U H DG\  EHHQ  FKR VHQ  7KH U H  L V QR  FK DQ FH  R I H [ S DQ VLRQ  VLQ FH  WKH  RWKH UEX VLQH VVXQLW VR I3HS VL PDQX IDFWX U LQJ DU H DO U H DG\ RSH UDWLQJ LQ WKHL UU H V SH FWLYH DU H DVDQ GWKH 

DU H DVR IU H V SRQ VLELOLW\ K DVEHHQ GLYL GH GDQ GZHOO PDQ DJH G

$FKLHYLQJ 7DU JHW 'HSOR\ PHQW 

7KH (5 3,,GHSOR\ PHQW L V SO DQQH GLQ WKH I ROOR ZLQJ ZD\ V

y  $VDILUVWVWHS(53,PRGXOHVZLOOUXQLQSDUDOOHOZLWK(53,,PRGXOHVZKLFKLQFOXGH

6XSSO\&KDLQ0DQDJHPHQWDQG&XVWRPHU5HODWLRQVKLS0DQDJHPHQW7KLVLVZLOOEH

GRQH E\ PDNLQJ FKDQJHV LQ WKH GDWDEDVH VR WKDW WKH OHJDF\ VRIWZDUH ZLOO QRW EHDIIHFWHG E\ WKRVH FKDQJHV DQG HYHQ LI LW GRHV LWZRXOG EH VR PLQRU WKDW D OLWWOH

FXVWRPL]DWLRQZLOORYHUFRPHWKHFKDQJHVPDGHWRWKHGDWDEDVH0DMRUFKDQJHVOLNH

FUHDWLRQ RI QHZ VFUHHQV UHSRUWV DQG DOO ZRUN UHODWHG WR EXVLQHVV SURFHVV

UHHQJLQHHULQJZLOOEHGRQHLQVXFKDZD\WKDWLWZRXOGQRWGLVWXUEWKHFXUUHQWOHJDF\

V\VWHP$ QHZGDWDEDVHZLOO EH FUHDWHG IRU WKLVSXUSRVHDQG GHYHORSPHQWRIQHZ

V\VWHPZLOOJRKHDGWRKHDGZLWKWKHROGV\VWHP$IWHUFRPSOHWLRQRI(53,,V\VWHP

WKHROGGDWDEDVHZLOOEHPHUJHGLQWRWKHQHZV\VWHPVRWKDWWKHSUHYLRXVRQJRLQJ

RSHUDWLRQVZRXOGQRWJHWLQWHUUXSWHG

y  7KHDLPRIFUHDWLQJDQHZDSSOLFDWLRQLVWRVKLIWWKHZKROHDSSOLFDWLRQWRDZHEEDVHG

VROXWLRQVRWKDWSHUVRQQHOZKRDUHZRUNLQJRXWVLGHWKHFRPSDQ\VERXQGDU\FDQDOVRDFFHVVWKHLQIRUPDWLRQDQGRSHUDWHWKHV\VWHPDVSHUWKHLUUROHDQGUHTXLUHPHQW

y  6HFXULW\LVDQRWKHUPDMRULVVXHUHJDUGLQJVXFFHVVIXOLPSOHPHQWDWLRQDQGGHSOR\PHQW

RIZHEEDVHG(53DSSOLFDWLRQ)RUWKLVSXUSRVHVSHFLDOHQFU\SWLRQDQGGHFU\SWLRQ

DOJRULWKPZLOOEHFUHDWHGDQGLQFRUSRUDWHGLQDOOWKRVHDUHDVRIVRIWZDUHWKDWGHDOV

ZLWK LQIRUPDWLRQ WUDQVIHU IURP WKH XVHU WR WKH KRVW DSSOLFDWLRQ RU YLFH YHUVD DQG

VSHFLILFDOO\ WKRVH ZKLFK FRQWDLQ VHQVLWLYH LQIRUPDWLRQ OLNH SURGXFW LQJUHGLHQWV

Page 152: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 152/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 152

FXVWRPHU DQG VXSSOLHU WUDQVDFWLRQV LQYHQWRU\ LQIRUPDWLRQ VKLSPHQW DQG VDOHV

LQIRUPDWLRQ HWF )RU WKLV SXUSRVH WKH LQIRUPDWLRQ FRPLQJ IURPHLWKHU RI WKH WKUHH

VXSSO\ FKDLQ SDUWLFLSDQWV ZLOO EH ILUVW HQFU\SWHG XVLQJ KDVK IXQFWLRQV ZKLFK DUH

HPEHGGHGWRVXSSRUWGLJLWDOVLJQDWXUHVIRUWKHYHULILFDWLRQRIVHQGHU7KHLQIRUPDWLRQ

ZLOO WKHQ IXUWKHU EH HQFU\SWHG XVLQJ GLIIHUHQW WHFKQLTXHV DQG GHFU\SWHG DW WKH

UHFHLYHUVHQG7KHHQFU\SWLRQDQGGHFU\SWLRQSURFHVVZLOOEHNHSWKLGGHQIURPWKHXVHUVWRHQVXUHHDVHRIXVH

%HQHILWVRI8VLQJ:HE6&0V\VWHPV

$PRQJ FRXQWOHVVEHQHILWV RIZHEEDVHG 6&0 V\VWHPVD IHZ RI WKHP LGHQWLILHGDVPRVW

EHQHILFLDOWR3HSVL+DLGUL%HYHUDJHVDUHDVIROORZV

  7KHELJJHVWEHQHILWRIZHE6&0LVWKHHDV\DQGHTXDODFFHVVWRDOOSDUWLFLSDQWVRI

WKH VXSSO\ FKDLQRI +DLGUL %HYHUDJHV ,WZRXOG QRW FRVW WKHPHYHQ D VLQJOH H[WUD

SHQQ\WRJLYHDFFHVVRIWKHVROXWLRQWRGLVWULEXWRUVDQGVXSSOLHUVZKLOHWKHEHQHILWVDUHIDUUHDFKLQJ

  7KHUH LV QR QHHG WR LQVWDOO WKH ZKROH RU DQ\ SDUW RI WKH ZHEEDVHG VROXWLRQ DWLQGLYLGXDOSDUWLFLSDQWVORFDWLRQ7KHZHEEDVHGVROXWLRQDOORZVDOOSDUWLHVWRDFFHVV

LQIRUPDWLRQ IURP D VLQJOH GDWDEDVH RU GLVWULEXWHG GDWDEDVHV SURSRVHG IRU IXWXUH

GHYHORSPHQWV 7KH RWKHU NH\ EHQHILW H[WUDFWHG IURP LW LV WKH HOLPLQDWLRQ RI (',

(OHFWURQLF'DWD,QWHUFKDQJH$TXHVWLRQPD\DULVHDVWRZKDWPDNHVWKH,QWHUQHW

GLIIHUHQW IURPHOHFWURQLFGDWDLQWHUFKDQJH(',D WHFKQRORJ\WKDWKDVEHHQDURXQG

IRUPRUHWKDQ\HDUV(VVHQWLDOO\WKH,QWHUQHWSHUIRUPVWKHVDPHIXQFWLRQDV(',DW

D IUDFWLRQ RI WKH FRVW 0RUHRYHU LW KDV FDSDELOLWLHV WKDW (', GRHV QRW SRVVHVV

QDPHO\ UHDOWLPH YHUVXV EDWFK SURFHVVLQJ WUDQVPLVVLRQ RI XQOLPLWHG GDWD W\SHVLQFOXGLQJ JUDSKLFV IRUHFDVWV DQG DQ RSHQ QRQSURSULHWDU\ QHWZRUN ,I FDUHIXOO\

H[SORLWHGWKHVH,QWHUQHWFKDUDFWHULVWLFVFDQOHDGWRVLJQLILFDQWYDOXHFUHDWLRQ

  $VKRUWZRUGWKDWFRYHUVDKXJHUDQJHRIEHQHILWVLWVHOILVFROODERUDWLRQ:HE6&0

RIIHUV D JUHDW OHYHO RI FROODERUDWLRQ DPRQJ DOO SDUWQHUV RI WKH VXSSO\ FKDLQ E\

H[FKDQJLQJUHDOWLPHLQIRUPDWLRQZLWKHDFKRWKHUDJRRGVWDUWLQJSRLQWLVWRWKLQNRI

WKH QXPEHU RI ZD\V LQ ZKLFK \RXU FRPSDQ\ LQWHUDFWV ZLWK ERWK FXVWRPHUV DQG

VXSSOLHUV7KHVHLQWHUDFWLRQVFDQEHFDWHJRUL]HGDVRQHRIWKHIROORZLQJH[HFXWLQJD

WUDQVDFWLRQ GHWHUPLQLQJ RSWLPDO SULFHV GLVFRYHULQJ DYDLODEOH VXSSO\ DQG XQPHW

GHPDQG DQG VXSSO\ FKDLQ SODQQLQJ IRU QHZ DQG H[LVWLQJ SURGXFWV 7KXV WKUHH

GLVWLQFWFDWHJRULHVHPHUJHZKHUH%%HFRPPHUFHFDQEHDSSOLHGWRH[WUDFWYDOXHy  5HGXFHGWUDQVDFWLRQFKDUJHV

y  ,PSURYHGPDUNHWHIILFLHQFLHV

y  (QKDQFHGVXSSO\FKDLQEHQHILWV

3ULRUWRPDNLQJDQ\LQYHVWPHQWLQ%%HFRPPHUFHDFRPSDQ\KDVWRLGHQWLI\WKHYDOXH

FUHDWHG DQG WKH HIIRUW UHTXLUHG IRU LPSOHPHQWDWLRQ XQGHU HDFK RI WKHVH FDWHJRULHV 7KH

Page 153: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 153/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 153

UHODWLYHSRVLWLRQRIWKHVHFDWHJRULHVZLOOQRWEHWKHVDPHIRUDOOILUPVEXWZLOOYDU\EDVHGRQ

WKHVXSSO\FKDLQVWUDWHJ\DQGFRPSHWLWLYHHQYLURQPHQW$FRPSDQ\PXVWWDLORUHFRPPHUFH

LPSOHPHQWDWLRQWRVXSSRUWFDWHJRULHVZKHUHWKHYDOXHFUHDWHGLVKLJKUHODWLYHWRWKHFRVWRI

LPSOHPHQWDWLRQ

1HWZRUN'LDJUDPRI3URSRVHG6\VWHP

 

Figure 30 Network Diagram of the Proposed System

$VLPSOHGLDJUDPRIWKHQHWZRUNVHWXSKDVEHHQGHYHORSHGZKLFKGHSLFWVKRZWKHVXSSOLHUV

DQGGLVWULEXWRUVDUHFRQQHFWHGWRWKHLQWHUQHW7KHZHEDSSOLFDWLRQLVKRVWHGE\WKHFRPSDQ\

LWVHOIZKLFKLVFRQQHFWHGWRWKHLQWHUQHWZLWKDILUHZDOOLQVWDOOHG7KHZHEEDVHGDSSOLFDWLRQ

LVDFFHVVLEOHE\WKHVXSSOLHUVDQGGLVWULEXWRUVYLDLQWHUQHW)XUWKHUPRUHLOOXVWUDWLYHGLDJUDP

LVJLYHQDVIROORZV

Page 154: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 154/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 154

Pepsi Manufact

Distributor/Wholesaler

Dist

Distributor/Wholesaler

Suppliers

 

Figure 31 Detailed Network Diagram of Proposed System

&RUH0RGXOHVRI3URSRVHG6\VWHP

7KHIROORZLQJPRGXOHVKDYHEHHQLGHQWLILHGDVWKHFRUHVXSSO\FKDLQPDQDJHPHQWV\VWHP

PRGXOHVWREHLPSOHPHQWHGSKDVHE\SKDVHLPSOHPHQWDWLRQRIRSHUDWLRQVVXSSRUWHG736

PRGXOHVLQWKHILUVWSKDVH

  'HPDQG0DQDJHPHQW

  6XSSO\&KDLQ$QDO\WLFV  9HQGRU0DQDJHG,QYHQWRU\

  ,QYHQWRU\0DQDJHPHQW

  7UDQVSRUWDWLRQ0DQDJHPHQW

  6XSSOLHU5HODWLRQVKLS0DQDJHPHQW

  0DQXIDFWXULQJ([HFXWLRQ

  )DFLOLW\0DQDJHPHQW

 6RXUFLQJ 6DOHVDQG&XVWRPHU6XSSRUW

 )LQDQFLDO0DQDJHPHQW

'HPDQG0DQDJHPHQW

'HPDQGPDQDJHPHQWPRGXOHFRQWDLQVWZRPDMRULWHPV

Page 155: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 155/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 155

D  'HPDQGDQGVXSSO\IRUHFDVWLQJDQG

E  $JJUHJDWHSODQQLQJ'HPDQGDQG6XSSO\)RUHFDVWLQJ,QGHPDQGDQGVXSSO\IRUHFDVWLQJWKHIRUHFDVWVZLOO

EH EDVHG RQ WLPH VHULHV TXDOLWDWLYH DQG FDXVDO PHWKRGV 'DWD IRU WLPH VHULHV ZLOO EH

DFTXLUHGIURPSUHYLRXV\HDUVVDOHVUHFRUGV2WKHUIHDWXUHVLQFOXGH

L  )RUHFDVWKRUL]RQLL  )UHTXHQF\RIXSGDWH

LLL  )RUHFDVWHUURULY  6HDVRQDOIDFWRUVY  3URFXUHPHQWIRUHFDVWEDVHGRQSUHYLRXVSURGXFWLRQDQGVWRUHGDWD

YL  9DULDQFHIURPSODQ

YLL  5DWLRRIGHPDQGYDULDELOLW\WRRUGHUYDULDELOLW\

6HH,QIRUPDWLRQUHODWHGPHWULFVIRUVWXG\RIGHWDLOVRIWKHLQFOXGHGIHDWXUHV

$JJUHJDWH3ODQQLQJ,QWKLVVHFWLRQWKHIRUHFDVWZLOOEHGLYLGHGLQWRELDQQXDOO\

TXDUWHUO\PRQWKO\ZHHNO\DQGGDLO\IRUHFDVWWRPDNHLWHDVLHUIRUWKHVWDIIWRSODQWKH

GHPDQGDQGVXSSO\7KHDJJUHJDWHSODQZLOOEHPDGHLQDFFRUGDQFHZLWKWKHXVHU

VSHFLILFDWLRQWKDWLVWRZKDWH[WHQWKHZDQWVWRGLYLGHWKHIRUHFDVW7KHDJJUHJDWHSODQQLQJ

PRGXOHZLOOWKHQEHDEOHWRJHQHUDWHWKHIROORZLQJSODQV

L  6DOHV)RUHFDVWLQJ

LL  3URFXUHPHQW)RUHFDVWLQJ

LLL 

3URGXFWLRQ)RUHFDVWLQJ

 

Figure 32 Data Input and Output Diagarm - Data generated from demand forecast will be used as input for

Aggregate Planning subsystem

7KHGDWDJHQHUDWHGIURPGHPDQGIRUHFDVWWKDWLVWKHIRUHFDVWGDWDZLOOEHXVHGDVLQSXWE\

WKHDJJUHJDWHSODQQLQJPRGXOHWRJHQHUDWHWLPHVSHFLILFSODQV

Page 156: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 156/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 156

6XSSO\&KDLQ$QDO\WLFV

7KLVPRGXOHGHDOVZLWKWKHDQDO\VLVRI3HSVL+DLGUL%HYHUDJHVVXSSO\FKDLQ7KLVPRGXOH

SHUIRUPVWKHIROORZLQJWDVNV

L  'HILQHDQGVHOHFW.H\3HUIRUPDQFH,QGLFDWRUV.3,VLL  0RQLWRULQJDQGDQDO\VLVRI.3,V

LLL  6DIHW\VWRFNSODQQLQJ

LY  6XSSOLHUGHOLYHU\SHUIRUPDQFHUDWLQJVLQFOXGLQJOHDGWLPHVTXDOLW\RISURGXFW

GHOLYHUHGLWHPVUHWXUQHGLWHPVIRXQGGDPDJHGQRQXVDEOHDQGGXUDELOLW\RI

GHOLYHUHGSURGXFW

9HQGRU0DQDJHG,QYHQWRU\

9HQGRU0DQDJHG,QYHQWRU\90,LVDIDPLO\RIEXVLQHVVPRGHOVLQZKLFKWKHEX\HURID

SURGXFWSURYLGHVFHUWDLQLQIRUPDWLRQWRDVXSSOLHURIWKDWSURGXFWDQGWKHVXSSOLHUWDNHVIXOOUHVSRQVLELOLW\ IRU PDLQWDLQLQJ DQ DJUHHG LQYHQWRU\ RI WKH PDWHULDO XVXDOO\ DW WKH EX\HUV

FRQVXPSWLRQORFDWLRQXVXDOO\DGLVWULEXWRUZDUHKRXVH$WKLUGSDUW\ORJLVWLFVSURYLGHUFDQ

DOVR EH LQYROYHG WR PDNH VXUH WKDW WKH EX\HU KDYH WKH UHTXLUHG OHYHO RI LQYHQWRU\ E\

DGMXVWLQJWKHGHPDQGDQGVXSSO\JDSV

7KH90,PRGXOHZLOOSURYLGHWKHIROORZLQJIHDWXUHV

L  ,QYHQWRU\PDQDJHPHQWDWGLVWULEXWRUHQG

LL  6WRFNLQDQGVWRFNRXW

LLL  6HFRQGDU\VDOHVLY  'DLO\RSHQLQJDQGHQGLQJUHSRUW

Y  5HRUGHUOHYHOV

YL  2WKHUNH\IHDWXUHVLQFOXGHWUDFNLQJRI

D  4XDQWLW\GDPDJHG

E  0D[LPXPLQYHQWRU\TXDQWLW\

F  5HWXUQVIURPFXVWRPHU

G  0D[LPXPTXDQWLW\GDLO\TXDQWLW\DJUHHGXSRQ

,QYHQWRU\0DQDJHPHQW6\VWHP

7KRXJK LWHPV DUH WKH VDPH WKH LQYHQWRU\ PDQDJHPHQW V\VWHP ZLOO EH LQ XVH E\ WKH

FRPSDQ\RQO\7KLVPRGXOHSURYLGHVIXOOVXSSRUWIRUWKHPDQDJHPHQWRIUDZVHPLILQLVKHG

DQGILQLVKHGPDWHULDO7KHUDZDQGVHPLILQLVKHGPDWHULDOUHFRUGVZLOOEHNHSWVHSDUDWHIURP

ZDUHKRXVH RU ILQLVKHG JRRGV LQYHQWRU\ UHFRUGV WR VXSSRUW FXVWRPL]DWLRQ 7KH IHDWXUHV

LQFOXGHGIRULQYHQWRU\PDQDJHPHQWV\VWHPDUH

L  &RXQWLQJDQGPDLQWHQDQFHRIVWRFNDQGLQYHQWRU\LWHPV

Page 157: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 157/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 157

D  )LQLVKHGSURGXFW

E  6HPLILQLVKHGUDZPDWHULDOVWRUHPDQDJHPHQW

LL  3URGXFWOLIHPDQDJHPHQWH[SLU\GDWHWUDFNLQJ

LLL  *ODVVERWWOHWUDFNLQJ

LY  ,WHPFDWHJRUL]DWLRQ

Y  3ULFLQJ

YL  6WRFNLQDQGVWRFNRXW

YLL  *51DQGUHWXUQQRWHPDQDJHPHQW

YLLL  &\FOHLQYHQWRU\PDLQWHQDQFH

L[  6DIHW\LQYHQWRU\PDLQWHQDQFH

[  6HDVRQDOLQYHQWRU\PDLQWHQDQFH

[L  5HRUGHUOHYHOV

[LL  %LOORIPDWHULDOV

[LLL  $YHUDJHLQYHQWRU\

[LY  3URGXFWVZLWKPRUHWKDQDVSHFLILHGQXPEHURIGD\VRILQYHQWRU\

[Y  $YHUDJHUHSOHQLVKPHQWWLPHVL]H

[YL  )LOOUDWH

[YLL  )UDFWLRQRIWLPHRXWRIVWRFN

[YLLL  5HTXLVLWLRQJHQHUDWLRQ

[L[  5HSRUWV

D  ,WHPOLVW

E  3ULFHOLVWF  6WRFNVWDWXV

G  ,WHPUHTXLVLWLRQKLVWRU\

H  ,QYHQWRU\WXUQRYHU

I  ,QYHQWRU\RSHQLQJFORVLQJ[[  1RWLILFDWLRQV

D  :KHQLWHPUHDFKHVUHRUGHUOHYHO

E  :KHQLWHPUHDFKHVH[SLU\GDWH

F  :KHQDJODVVERWWOHUHDFKHVPD[LPXPQXPEHURIWLPHVLWFDQEHILOOHG

Page 158: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 158/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 158

7UDQVSRUWDWLRQ0DQDJHPHQW

7KLVPRGXOHVXSSRUWVDOO IHDWXUHVUHODWHGWRWUDQVSRUW)ROORZLQJDUHWKHIHDWXUHVSURSRVHG

IRUWUDQVSRUWPDQDJHPHQWPRGXOH

7UDQVSRUWDWLRQ0RGHV0DQDJHPHQW7KLVLVDPDVWHUILOHZKLFKFRQWDLQVDOOPRGHVDYDLODEOHIRUWUDQVSRUWDWLRQ

LL  7UDQVSRUWDWLRQ )DFLOLWLHV 0DQDJHPHQW 7KLV PRGXOH PDLQWDLQV UHFRUGV RI DOO

WUDQVSRUWDWLRQ IDFLOLWLHV KHOG E\ WKH FRPSDQ\ 7KLV ZLOO LQFOXGH YHKLFOH QXPEHU

HQJLQHDQGFKDVVLVQXPEHUVW\SHRIYHKLFOHORDGFDSDFLW\HWF

LLL  5RXWLQJ 0DQDJHPHQW 7KLV IHDWXUH FRQWDLQV URXWLQJ WDEOHV DQG WD[ GHWDLOV )RU

H[DPSOH WKHURXWHIRULPSRUWLQJ3HSVLFRQFHQWUDWHIURP1HZ<RUNFDQEH GHILQHG

DV

5RXWH 0RGH 'LVWDQFHNP 7D[5V

1HZ<RUNWR.DUDFKL 6HD

.DUDFKLWR/DKRUH /DQG

/DKRUHWR+DWWDU /DQG

+DWWDUWR5DZDOSLQGL /DQG

LY  5HSRUWLQJDQG&DOFXODWLRQV

D $YHUDJHLQERXQGWUDQVSRUWDWLRQFRVW

E  $YHUDJHLQFRPLQJVKLSPHQWVL]H

F  $YHUDJHLQERXQGWUDQVSRUWDWLRQFRVWSHUVKLSPHQW

G  $YHUDJHRXWERXQGWUDQVSRUWDWLRQFRVWH  $YHUDJHRXWERXQGVKLSPHQWVL]H

I  $YHUDJHRXWERXQGWUDQVSRUWDWLRQFRVWSHUVKLSPHQW

J  )UDFWLRQWUDQVSRUWHGE\PRGHLQERXQGRXWERXQG

6XSSOLHU5HODWLRQVKLS0DQDJHPHQW

7KLVPRGXOHLV UHVSRQVLEOH IRUPDLQWHQDQFHRI VXSSOLHU UHFRUGV LQFOXGLQJPDVWHUGDWD DV

ZHOO DV VXSSOLHU KLVWRU\ 7KLV ZLOO DOVR DOORZ FROODERUDWLRQ DPRQJ VXSSOLHU DQG +DLGUL

EHYHUDJHV E\ VHWWLQJ XSZKLFKPRGXOHVDQG VFUHHQV WKH VXSSOLHUFDQ DFFHVVE\ GHILQLQJ

Page 159: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 159/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 159

DFFHVVULJKW LQFRUSRUDWHGLQ VXSSOLHUPDVWHUGDWD)ROORZLQJDUHWKH IHDWXUHVVXSSRUWHGE\

WKLVPRGXOH

L  6XSSOLHU0DVWHU'DWD0DQDJHPHQW

LL  6XSSOLHU+LVWRU\0DLQWHQDQFH

D  /HDG7LPH

E  )UHTXHQF\RISXUFKDVHVF  &UHGLWKLVWRU\

G  3HUIRUPDQFHKLVWRU\

  2UGHUGHOLYHUHGRQWLPH

  3ULFLQJ  7HUPVDQGFRQGLWLRQVIOH[LELOLW\

  6XSSOLHUUDQNLQJLLL  6XSSOLHU6HOHFWLRQ

LY  6XSSOLHUFODVVLILFDWLRQ

Y  5HSRUWV

D  'D\V3D\DEOHRXWVWDQGLQJE  $YHUDJHSXUFKDVHSULFHF  3URGXFWJURXSHGYHQGRUVOLVW

G  5DQNLQJH  $YHUDJHSXUFKDVHTXDQWLW\YHQGRUZLVHI  6XSSO\TXDOLW\

J  6XSSO\OHDGWLPH

K  )UDFWLRQRQWLPHGHOLYHULHV

L  6XSSOLHUVFRULQJ

0DQXIDFWXULQJ([HFXWLRQ6\VWHP

7KLV PRGXOH DOORZV IXOO PRQLWRULQJ DQG SODQQLQJ RI SURGXFWLRQ SURFHVV 7KH IROORZLQJ

IHDWXUHVDUHSURSRVHGIRUWKLVPRGXOH

L  3URGXFWLRQVFKHGXOLQJ

LL  /DERUVKLIWVPDQDJHPHQW

Page 160: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 160/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 160

LLL  :DVWHPDQDJHPHQW

LY  3URGXFWLRQVXPPDU\

Y  &RVWRIJRRGVPDQXIDFWXUHG

YL  %LOOVRIPDWHULDO

YLL  0DSSLQJSURGXFWLRQWRIDFLOLWLHV

YLLL  0DQXIDFWXULQJRSHUDWLRQVPDQDJHPHQW

L[  3URFHVV&RVWLQJ

[  5HSRUWV

D  3URGXFWLRQ3ODQ

E  3URGXFW&RVWLQJF  3URFHVV&RVWLQJ5HSRUW

G  3URGXFWLRQ'D\(QG5HSRUWH  )DFLOLWLHV(QJDJHPHQW5HSRUW

I  1XPEHURIKRXUVFRQVXPHGE\HDFKIDFLOLW\DWGD\HQG

J  $YHUDJHPDQXIDFWXULQJWLPHIRUHDFKLWHP

K  $YHUDJHFRVWRIJRRGVPDQXIDFWXUHG

L  &RVWRIJRRGVDYDLODEOHIRUVDOH

)DFLOLW\0DQDJHPHQW

7KLVPRGXOH RIIHUV IXOO VXSSRUW IRU PDQDJHPHQW RI DOO IDFLOLWLHV LQVWDOOHG DW3HSVL+DLGUL

%HYHUDJHVDVZHOODVWKRVHZKLFKDUHXVHGIRURSHUDWLQJSXUSRVHVOLNHYHKLFOHVFRPSXWHU

V\VWHPVSKRWRFRS\PDFKLQHVSULQWHUVID[PDFKLQHVVHFXULW\JDWHORDGHUVIRUNOLIWHUVHWF

7KHIROORZLQJIHDWXUHVDUHVXSSRUWHGE\WKLVPRGXOH

L  )DFLOLWLHV0DVWHU'DWD

D  7\SHE  &DSDFLW\F  0D[LPXPQXPEHURIZRUNDEOHKRXUV

Page 161: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 161/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 161

G  /RFDWLRQLL  2SHUDWLRQDOFRVWV

LLL  0DSSLQJHPSOR\HHVWRIDFLOLW\

LY  8WLOL]DWLRQ

Y  3URGXFWYDULHW\

YL  0DSSLQJSURGXFWLRQVFKHGXOHVWRIDFLOLWLHV

YLL  5HSRUWVDQG&RPSXWDWLRQV

D  &DSDFLW\E  8WLOL]DWLRQF  &\FOHWLPHRISURGXFWLRQ

G  $FWXDO$YHUDJHIORZF\FOHWLPH

H  )ORZWLPHHIILFLHQF\

I  3URGXFWYDULHW\

J  3URFHVVLQJVHWXSGRZQLGOHWLPH

K  $YHUDJHSURGXFWLRQEDWFKVL]HL  3URGXFWLRQVHUYLFHOHYHO

6RXUFLQJ

6RXUFLQJUHIHUVWRDOODFWLYLWLHVLQYROYHGLQSXUFKDVLQJUDZDQGVHPLILQLVKHGPDWHULDOVIURP

VXSSOLHUVRUWKLUGSDUWLHV7KHNH\IHDWXUHVRIWKLVPRGXOHDUH

L  6XSSOLHU7HQGHUVPDQDJHPHQW

LL  5HTXHVWIRU4XRWDWLRQV

LLL  6XSSOLHUTXRWDWLRQV

LY  6XSSOLHUVHOHFWLRQ

Y  3XUFKDVHRUGHUPDQDJHPHQW

YL  *RRGVUHFHLSW1RWH0DQDJHPHQW

YLL  ,QYRLFLQJ

Page 162: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 162/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 162

YLLL  0DWHULDOUHWXUQVPDQDJHPHQW

L[  5HSRUWVDQG&DOFXODWLRQV

D  'D\VSD\DEOHRXWVWDQGLQJE  $YHUDJHSXUFKDVHSULFHF  5DQJHRISXUFKDVHSULFH

G  $YHUDJHSXUFKDVHTXDQWLW\H  )UDFWLRQRQWLPHGHOLYHU\

I  6XSSO\TXDOLW\

J  6XSSO\OHDGWLPH

K  3XUFKDVHV+LVWRU\6DOHVDQG6XSSRUW

7KHPRGXOHVXSSRUWVWKHIROORZLQJIHDWXUHV

L  'LVWULEXWRU,QIRUPDWLRQPDQDJHPHQW

D  6WRUDJH&DSDFLW\E  /RFDWLRQF  'LVWULEXWRUVUHWDLOFKDQQHO

LL  .H\DFFRXQWVPDQDJHPHQW

LLL  6DOHVRUGHUSURFHVVLQJ

LY  6DOH2UGHUWUDFNLQJ

Y  6DOHVLQYRLFLQJ

YL  6HFRQGDU\6DOHV0DQDJHPHQW

YLL  7'03HUVRQQHO0DQDJHPHQW

YLLL  7DUJHWGHILQLWLRQDQGWUDFNLQJ

L[  5HSRUWV

D  'LVWULEXWRU'DWD

Page 163: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 163/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 163

E  6HFRQGDU\6DOHV7UDFNLQJF  7DUJHWWUDFNLQJ

G  'LVWULEXWRUUDQNLQJH  $YHUDJHOHDGWLPH

I  3URGXFWVDOHVDQDO\VLV

J  )RUHFDVWYDULDELOLW\

)LQDQFLDO0DQDJHPHQW

7KLVPRGXOHFRQWUROVD ZLGH UDQJH RIDFWLYLWLHV$OOPDWWHUV UHODWLQJWRPRQH\ DUHGHDOW

KHUH7KHNH\IHDWXUHVRIWKLVPRGXOHLQFOXGH

L  &DSLWDO%XGJHWLQJ

LL  3RVWLQJRI7UDQVDFWLRQV

LLL  &DVKSD\PHQWVDQGUHFHLSWV

LY  7UDQVDFWLRQ$XGLW6\VWHP

Y  5HSRUW*HQHUDWLRQ

D &RVWRI*RRGV6ROG

E  &DVK)ORZ6WDWHPHQW

F  3D\PHQW6FKHGXOHV

G  $QDO\VLVRI)LQDQFLDO6WDWHPHQWV

 

Page 164: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 164/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 164

Chapter 8

Limitations and Future Recommendations

Page 165: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 165/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 165

&KDSWHU

/LPLWDWLRQVDQG)XWXUH5HFRPPHQGDWLRQV

/LPLWDWLRQVRI6WXG\

7KHIROORZLQJOLPLWDWLRQVZHUHLGHQWLILHGGXULQJVWXG\

  5RXJKFXW0HWKRG7KHVXSSO\FKDLQPDQDJHPHQWV\VWHPSURSRVHGIRU3HSVL+DLGUL

%HYHUDJHVZDV LQ WKH ILUVW VWDJH KDV EHHQ GHVLJQHG XVLQJ WKH 5RXJKFXWPRGHO

RQO\7KHVHPRGHOVW\SLFDOO\DVVXPHDVLQJOHVLWHLHLJQRUHWKHQHWZRUNDQGDGG

VXSSO\FKDLQFKDUDFWHULVWLFVWR LWVXFKDVH[SOLFLWO\FRQVLGHULQJWKHVLWHVUHODWLRQWRWKH RWKHUV LQ WKH QHWZRUN 7KHUHIRUH WKH VXSSO\ FKDLQ V\VWHP SURSRVHG IRU WKH

FRPSDQ\ ZRXOGRQO\ FRQWDLQ VXSSOLHUVDQG GLVWULEXWRUVRI 3HSVL+DLGUL %HYHUDJHV

,VODPDEDGRQO\7KHRWKHUIUDQFKLVHRZQHUVRI3HSVLZLOOEHFRQQHFWHGWRWKHVXSSO\

FKDLQLQIXWXUHDVPHQWLRQHGLQDUWLFOH

  5),'7HFKQRORJ\5),'WHFKQRORJ\KDVQRWEHHQSURSRVHGGXHWRWKHKXJHEXGJHW

UHTXLUHGWR LPSOHPHQW WKLV WHFKQRORJ\0RUHRYHU WKHFRPSDQ\GRHVQRWQHHG WKLV

WHFKQRORJ\VLQFHILUVWO\WUDFNLQJRIWKHLWHPVEHLQJVROGLVDOUHDG\VXSSRUWHGE\WKH

6&0IHDWXUHVDQGVHFRQGO\WKHGLVWULEXWLRQDUHDLVOLPLWHGWRXUEDQDQGUXUDODUHDV

RI5DZDOSLQGLDQG,VODPDEDGGLVWULFWRQO\

  6XSSOLHU&RQQHFWLYLW\WKHQXPEHURIVXSSOLHUVFRQQHFWLQJWRWKHSURSRVHGV\VWHPLV

H[SHFWHGWREHPRUHRUOHVV)RU WKLVSXUSRVHWKHFRPSDQ\LVH[SHFWLQJWR

FRQQHFWRQO\ WKRVHVXSSOLHUVZKR VXSSO\PDMRULWHPVOLNHFRQFHQWUDWH FDQVVXJDU

DQGSODVWLFVVXSSOLHUV

&XVWRPL]DWLRQYV5HHQJLQHHULQJ

0RVWRIWKHPRGXOHVSURSRVHGLQWKHVXSSO\FKDLQV\VWHPDUHUHHQJLQHHUHGWKDWLVWKH\

QHHG PDMRU FKDQJHV LQ WKH FRUH EXVLQHVV SURFHVVHV 7KH PRGXOHV ZKLFK QHHGHG VRPH

FXVWRPL]DWLRQLQFOXGHWKHIROORZLQJ

y  )RUHFDVWLQJ

y  6DOHV

y  'LVWULEXWRUDQGPDQXIDFWXUHULQYHQWRU\

y  3URGXFWLRQVFKHGXOLQJDQGFRQWURO

Page 166: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 166/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 166

)URPWKHDERYHPRGXOHVVDOHVPRGXOHLVWKHPRGXOHWKDWQHHGVPD[LPXPFXVWRPL]DWLRQ

7KH SD\PHQW PRGHV DUH SURSRVHG WR EH FKDQJHG DOWKRXJK WKH SD\PHQW PHWKRG ZRXOG

UHPDLQ WKH VDPH WKDW LV DGYDQFHG SD\PHQW 7KH UHTXLUHPHQWV IRU GLVWULEXWRU DQG

PDQXIDFWXUHULQYHQWRU\PDQDJHPHQWV\VWHPUHPDLQWKDWVDPHZLWKVRPHDGGLWLRQLQILHOGV

WRVXSSRUWGHFLVLRQPDNLQJSURFHVV

)XWXUH5HFRPPHQGDWLRQV

7KHIROORZLQJHQKDQFHPHQWV DQGXSJUDGHVDUH UHFRPPHQGHG IRUWKHSURSRVHG V\VWHP LQ

IXWXUH

  ([SDQVLRQ RI VXSSO\ FKDLQ PDQDJHPHQW V\VWHP WR FXVWRPHUV DQG LQ WKLV FDVH

UHWDLOHUVWRZKRPWKHGLVWULEXWRUVVHOORXWWKHSURGXFW5HWDLOHUVZLOODOVREHSURYLGHG

D IDFLOLW\ WRFRQQHFW WR WKH V\VWHP IURPZKHUH GDWD UHODWLQJ WR WKH DFWXDO VDOHV WR

FRQVXPHUVFDQEHFROOHFWHG

  3RLQWRI6DOHV\VWHPIRUGLVWULEXWRUV7KHGLVWULEXWRUZLOOEHSURYLGHGDSRLQWRIVDOH

DSSOLFDWLRQFRQQHFWHGWRWKHV\VWHPIURPZKHUHUHDOWLPHGDWDZLOOEHFDSWXUHG

  'LVWULEXWHG GDWDEDVH DSSURDFK 7KH GDWDEDVH VXSSRUWHG E\ WKH V\VWHP ZLOO EHGLVWULEXWHGWKDWLVUHSOLFDVRIGDWDEDVHZLOOEHFUHDWHGDWDQXPEHURIKRVWVLWHVWKH

RWKHU IUDQFKLVH RZQHUV RI 3HSVL /RFDO GDWDEDVHV WR GLVWULEXWRUV ZLOO DOVR EH

SURYLGHGWRVXSSRUWHIILFLHQW326V\VWHP7KLVGDWDEDVHZLOOEHKLJKO\V\QFKURQL]HG

ZLWKPDVWHUGDWDEDVHVDUUDQJHGLQDSHHSWRSHHUQHWZRUNDUUDQJHPHQWRIGLVWULEXWHG

V\VWHP

  1HWZRUNVHFXULW\  'DWDPLQLQJ

  &RQQHFWLQJRWKHUPDQXIDFWXULQJORFDWLRQVWR+DLGULEHYHUDJHV5DZDOSLQGL

  &RPSOHWHWUDQVIRUPDWLRQRIOHJDF\V\VWHPVWR(53,,V\VWHPV

&RQFOXVLRQ

6XSSO\ FKDLQPDQDJHPHQW LV DQ H[SORGLQJ ILHOG ERWK LQ UHVHDUFK DQG LQSUDFWLFH0DMRU

LQWHUQDWLRQDO FRQVXOWLQJ ILUPV KDYH GHYHORSHG ODUJH SUDFWLFHV LQ WKH VXSSO\ FKDLQ ILHOG7KURXJK EHWWHU LQIRUPDWLRQ HQJLQHHULQJ VXSSO\ FKDLQ LPSURYHPHQWV KDYH UHVXOWHG LQ D

UHGXFHG EXOOZKLS HIIHFW ORZHU LQYHQWRU\ OHYHOV UHGXFHG ORJLVWLFV FRVWV DQG VWUHDPOLQHG

SD\PHQWV 7KHVH LPSURYHPHQWV DSSHDU WR KDYH KHOSHGPDFURHFRQRPLFEHQHILWV VXFK DV

PRUHVWDEOHHFRQRPLFRXWSXWDQGKLJKHUSURGXFWLYLW\JURZWK+RZHYHU)LUPVZKRRSHUDWH

LQ JOREDO HQYLURQPHQW DQG GHDO ZLWK PXOWLSOH VXSSOLHUV DQG FXVWRPHUV DUH UHTXLUHG WR

PDQDJH LQYHQWRULHV LQ QHZ DQG LQQRYDWLYH ZD\V DQG DUH IDFHG ZLWK SRVVLEOH FKDQQHO

Page 167: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 167/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 167

UHVWUXFWXULQJ7KHILHOGSURPLVHVWRFRQWLQXHJURZLQJDVWKHUHVHDUFKDGYDQFHVDQGDVILUPV

FRQWLQXH WR DSSO\ NQRZOHGJH LQ WKHLU JOREDO QHWZRUNV )LQDOO\ DV WKH LQWHUQHW FKDQJHV

IXQGDPHQWDODVVXPSWLRQVDERXWEXVLQHVVILUPVRSHUDWLQJLQVXSSO\FKDLQVZLOOEHUHTXLUHG

WRXQGHUVWDQGWKLVQHZSKHQRPHQRQDQGUHVSRQGDFFRUGLQJO\

$VIRU3HSVL+DLGUL%HYHUDJHVLQRUGHUWRVXUYLYHLQWKHFXUUHQWHFRQRPLFFRQGLWLRQVDVZHOODV WKHLQFUHDVHG FRPSHWLWLRQ LQEHYHUDJH LQGXVWU\ZLWKWKHHYHUJURZLQJFRPSHWLWRUV OLNH

&RFD &ROD DGRSWLQJ QHZ WHFKQLTXHV RI H[SDQGLQJ WKHLU VXSSO\ FKDLQ DQG UHDFKLQJ WKHLU

FXVWRPHUV LQ D PXFK PRUH HIILFLHQW PDQQHU DQG SURGXFLQJ EHYHUDJHV DFFRUGLQJ WR

FRQVXPHUGHPDQGLWLVPRUHDGYLVDEOHWR3HSVL+DLGUL%HYHUDJHVWRFRQGXFWWKHEXVLQHVVLQ

DVWUDWHJLFZD\ZLWKWHFKQRORJLFDOVXSSRUWDQGHIILFLHQWGHPDQGDQGVXSSO\QHWZRUNZKLFK

VHHPVLPSRVVLEOHZLWKRXWVXSSO\FKDLQFROODERUDWLRQDQGLQIRUPDWLRQWHFKQRORJ\VXSSRUW

Page 168: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 168/169

 [ T y p e t h e c o m p a n y a d d r e s s ] Page 168

5HIHUHQFHV

  &KRSUD60HLQGO36XSSO\&KDLQ0DQDJHPHQW6WUDWHJ\3ODQQLQJDQG

2SHUDWLRQ9RO

  6XPQHU0(QWHUSULVH5HVRXUFH3ODQQLQJ6\VWHPV   6XSSO\&KDLQ0DQDJHPHQW:LNLSHGLD>RQOLQH@$YDLODEOHDW

KWWSHQZLNLSHGLDRUJZLNL6XSSO\BFKDLQBPDQDJHPHQW

  7HUDGDWD3DNLVWDQ>RQOLQH@$YDLODEOHDWKWWSZZZWHUDGDWDFRPWDFWLYHHQWHUSULVH

LQWHOOLJHQFHDQGKWWSZZZWHUDGDWDFRPWWKHPHDVS["LG

  8OWLPXV3URILOH/LQNHG,Q&RPSDQLHVSURILOHV>RQOLQH@$YDLODEOHDW

KWWSZZZOLQNHGLQFRPFRPSDQLHVXOWLPXV

  8OWLPXV%30VROXWLRQVIRUVXSSO\FKDLQ0DQDJHPHQW>RQOLQH@$YDLODEOHDW

KWWSZZZXOWLPXVFRPSDJHV6XSSO\&KDLQ0DQDJHPHQW6&0

  7KHJRDORIVXSSO\FKDLQPDQDJHPHQW>RQOLQH@$YDLODEOHDWKWWSZZZPD[LPDO

XVDFRPVOLGHV$WO3URILWSWVOGKWP

  .H\3HUIRUPDQFH,QGLFDWRUV>RQOLQH@$YDLODEOHDWKWWSZZZPD[LPDO

XVDFRPVOLGHV$WO3URILWSWVOGKWP

  :KDWLV6XSSO\&KDLQ0DQDJHPHQW"$GHILQLWLRQIURPZKDWLV$YDLODEOHDW

ZZZZKDWLVFRP

  $%DQNRI$PHULFD:KLWH3DSHU)RFXVRQ(IIHFWLYH,QWHUQDWLRQDO6XSSO\&KDLQ0DQDJHPHQW

  -RKQVRQ0(3\NH')6XSSO\&KDLQ0DQDJHPHQW+DQRYHU

  6LHPV7)6XSSO\&KDLQ0DQDJHPHQW7KH6FLHQFHRI%HWWHU)DVWHU

&KHDSHU>RQOLQH@$YDLODEOHDW

KWWSZZZGDOODVIHGRUJUHVHDUFKSDSHUVZSSGI 

  &KRRPULW1/RFDWLRQ'HFLVLRQLQ'LVWULEXWLRQ&HQWHUV

  +DUULVRQ73$Q,QWURGXFWLRQWR6XSSO\&KDLQ0DQDJHPHQW

  KWWSZZZHQWHJUHDWFRPHJBLQGXVWU\VROXWLRQVBEHYHUDJHB6&0KWP

  http://www.i2.com/solutions/tmm/features_and_benefits.cfm

  'HPDQG)RUHFDVWLQJ

http://www.cio.com/article/30381/Supply_  hain _Management _  uru _Hau _Lee _ on _Dema

nd _Forecasting

Page 169: 19653663 Project Document Supply Chain PEPSI

8/6/2019 19653663 Project Document Supply Chain PEPSI

http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 169/169

  )RUHFDVWLQJDSSURDFKHVKWWSZZZLQIRV\VEORJVFRPVXSSO\

FKDLQZKDWVBWKHBULJKWBIRUHFDVWLQJBDSKWPO

  +DPPHG6+RZ6KRXOG:H'HILQH6&0

  KWWSORJLVWLFVDERXWFRPRGVXSSO\FKDLQLQWURGXFWLRQ,QWURGXFWLRQBWRB6XSSO\B&KDLQKW

P

  KWWSORJLVWLFVDERXWFRPRGVXSSO\FKDLQLQWURGXFWLRQD/HDQB6&0KWP

  6$3FDVHVWXGLHV0\6$3DW&ROJDWH3DOPROLYH

  $QGHUVRQ'DYLG /%ULWW )UDQN( DQG )DYUH'RQDYRQ - 7KH VHYHQ SULQFLSOH RI

6XSSO\&KDLQ0DQDJHPHQW/RJLVWLFV0DQDJHPHQW

  %HDUQRQ %0 6XSSO\ &KDLQ GHVLJQ DQDO\VLV 0RGHOV 0HWKRGV

,QWHUQDWLRQDO-RXUQDORI3URGXFWLRQ(FRQRPLFV9ROSS

  &RFN07KH&RPSOH[LW\RI0DQDJLQJ&RPSOH[LW\7UDQVSRUWDWLRQDQG'LVWULEXWLRQ

0DJD]LQH

  .LQJ-%%H[FKDQJHV7LJKWHQ%X\HUVHOOHU'DWD/LQNV&RPSXWHUZRUOG

9ROSS0DUFK