Supply Chain Doctors The Supply Chain Doctors Supply Chain Management Kimball Bullington, Ph.D. .
19653663 Project Document Supply Chain PEPSI
-
Upload
waqar-ali-khan -
Category
Documents
-
view
230 -
download
1
Transcript of 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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 2/169
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
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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 5/169
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
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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 8/169
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 $FFRXQWLQJDQG)LQDQFH +XPDQ5HVRXUFH
6WRUHDQGZDUHKRXVHPDQDJHPHQW
Start
Liquidation of Sugar
Start
PEPSI Concentrate
Carbonated Filtering Syrup Tank
Put Into the FillingMachine
Filing Process
Capping and
Coding Process
Put Bottles in Cratesthrough Machine
Filling of crates with
24 bottles
Figure 2 Production process of beverages [Source: Pepsi Haidri Beverages Production Department]
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 10/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 10
7KHGHWDLOVRI WKHVHPRGXOHVDQGKRZWKH\KHOSLQ WKHEXVLQHVVSURFHVVHVLV SURYLGHGDV
XQGHU
6DOHVRU6KLSPHQW0RGXOH
7KH VDOHV PRGXOH HQFDSVXODWHV DOO LQIRUPDWLRQ UHJDUGLQJ GLVWULEXWRU GDWD
PDQDJHPHQWNH\DFFRXQWVPDQDJHPHQW VDOH FDVK LQIORZDQGVKLSPHQWHWF7KH
GLVWULEXWRULQIRUPDWLRQLVFDSWXUHGZLWKUHJDUGVWRWKHDUHDLW LVFRYHULQJLQWKHORFDO
PDUNHWWKHORFDWLRQRIWKHGLVWULEXWRUQDPHFRQWDFWQXPEHUVFRQWDFWSHUVRQVHWF
.H\ DFFRXQWV DUH WKRVH UHWDLOHUV WR ZKLFK WKH FRPSDQ\ GLVWULEXWHV WKH SURGXFW
GLUHFWO\ 7KLV KDSSHQV LQ WKH FDVH RI IRXQWDLQ IUHVK 3HSVL SURGXFWV ZKLFK DUH
GHOLYHUHGWRWKHFXVWRPHUXVLQJWKHSRVWPL[F\OLQGHUVGHOLYHUHGE\FRPSDQ\RZQHG
YHKLFOHV6XFKFXVWRPHUVLQFOXGH.)&3L]]D+XW6DYRXU)RRGVDQGRWKHUV6DOHV
DUHGRQHRQFDVKSD\PHQWVZKLFKDUHGHSRVLWHGLQDGYDQFHE\WKHGLVWULEXWRU7KH
SURGXFWVDUHWKHQVKLSSHGWKHGLVWULEXWRU8VXDOO\WKHGLVWULEXWRUVEULQJDORQJWKHLURZQYHKLFOHVWRORDGWKHVKLSPHQW$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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 11/169
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\
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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 14/169
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
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
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
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
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
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
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
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\
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
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,'
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
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
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
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
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
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
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
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
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
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\ $V WKH PRVW PHWULF
LQWHQVLYH SRUWLRQRI WKHVXSSO\ FKDLQPHDVXUHTXDOLW\ OHYHOV SURGXFWLRQRXWSXW DQG
ZRUNHUSURGXFWLYLW\
'HOLYHU7KLVLVWKHSDUWWKDWPDQ\LQVLGHUVUHIHUWRDVORJLVWLFV&RRUGLQDWHWKHUHFHLSW
RI RUGHUV IURP FXVWRPHUV GHYHORS D QHWZRUN RI ZDUHKRXVHV SLFN FDUULHUV WR JHW
SURGXFWVWRFXVWRPHUVDQGVHWXSDQLQYRLFLQJV\VWHPWRUHFHLYHSD\PHQWV
5HWXUQ 7KH SUREOHP SDUW RI WKH VXSSO\ FKDLQ &UHDWH D QHWZRUN IRU UHFHLYLQJ
GHIHFWLYH DQG H[FHVVSURGXFWV EDFN IURPFXVWRPHUV DQG VXSSRUWLQJ FXVWRPHUV ZKR
KDYHSUREOHPVZLWKGHOLYHUHGSURGXFWV
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 35/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 35
6&0)ORZV
6XSSO\FKDLQPDQDJHPHQWIORZVFDQEHGLYLGHGLQWRWKUHHPDLQIORZV
7KH3URGXFW)ORZ
,W LQFOXGHV WKH PRYHPHQW RI JRRGV IURP D VXSSOLHU WR D FXVWRPHU DV ZHOO DV DQ\FXVWRPHUUHWXUQVRUVHUYLFHQHHGV
7KH,QIRUPDWLRQ)ORZ
,WLQYROYHVWUDQVPLWWLQJRUGHUVDQGXSGDWLQJWKHVWDWXVRIGHOLYHU\
7KH)LQDQFHV)ORZ
,W FRQVLVWV RI FUHGLW WHUPV SD\PHQW VFKHGXOHV DQG FRQVLJQPHQW DQG WLWOH RZQHUVKLS
DUUDQJHPHQWV
,I WKH JRDO RI 6&0 LV WR SURYLGH KLJK SURGXFW DYDLODELOLW\ WKURXJK HIILFLHQW DQG WLPHO\IXOILOOPHQWRIFXVWRPHUGHPDQGWKHQKRZLVWKHJRDODFFRPSOLVKHG"
Figure 17 A view of different flows in a supply chain [Source: http://www.careersinsupplychain.org/what-is-
scm/flows.asp]
2EYLRXVO\ \RX QHHGHIIHFWLYH IORZV RI SURGXFWV IURP WKH SRLQW RI RULJLQ WR WKH SRLQW RI
FRQVXPSWLRQ%XWWKHUHVPRUHWRLW&RQVLGHUWKHGLDJUDPRIWKHIUHVKIRRGVXSSO\FKDLQ$
WZRZD\IORZRILQIRUPDWLRQDQGGDWDEHWZHHQWKHVXSSO\FKDLQSDUWLFLSDQWVFUHDWHVYLVLELOLW\
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
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
- $OLJQLQJRYHUDOORUJDQL]DWLRQDOVWUDWHJ\ZLWKVXSSO\VWUDWHJ\
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 38/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 38
Figure 18 Hierarchy of Supply Chain Decisions [Source: http://www.eil.utoronto.ca/profiles/rune/node5.html]
6XSSO\&KDLQ3ODQQLQJ
)RUGHFLVLRQVPDGH GXULQJ WKLVSKDVH WKH WLPH IUDPH FRQVLGHUHG LVD TXDUWHU WRD
\HDU7KHUHIRUHWKHVXSSO\FKDLQVFRQILJXUDWLRQGHWHUPLQHGLQWKHVWUDWHJLFSKDVHLV
IL[HG7KLVFRQILJXUDWLRQHVWDEOLVKHVFRQVWUDLQWVZLWKLQZKLFKSODQQLQJPXVWEHGRQH
7KH JRDO RI SODQQLQJ LV WR PD[LPL]H WKH VXSSO\ FKDLQ SURILWDELOLW\ WKDW FDQ EH
JHQHUDWHG RYHU WKH SODQQLQJ KRUL]RQ JLYHQ WKH FRQVWUDLQWV HVWDEOLVKHV GXULQJ WKH
VWUDWHJLFRUGHVLJQSKDVH&RPSDQLHVVWDUWWKHSODQQLQJSKDVHZLWKDIRUHFDVWIRUWKH
FRPLQJ\HDURUDFRPSDUDEOHWLPHIUDPHRIGHPDQGLQGLIIHUHQWPDUNHWV
3ODQQLQJ LQFOXGHVPDNLQJGHFLVLRQVUHJDUGLQJZKLFKPDUNHWVZLOOEHVXSSOLHGIURPZKLFK ORFDWLRQV WKH VXEFRQWUDFWLQJ RI PDQXIDFWXULQJ WKH LQYHQWRU\ SROLFLHV WREH
IROORZHG DQG WKH WLPLQJ DQG VL]H RI PDUNHWLQJ DQG SULFH SURPRWLRQV 3ODQQLQJ
HVWDEOLVKHV SDUDPHWHUVZLWKLQ ZKLFK D VXSSO\ FKDLQZLOO IXQFWLRQ RYHU D VSHFLILHG
SHULRGRIWLH
,Q WKH SODQQLQJ SKDVH FRPSDQLHVPXVW LQFOXGH XQFHUWDLQW\ LQ GHPDQG H[FKDQJH
UDWHVDQGFRPSHWLWLRQRYHUWKLVWLPHKRUL]RQLQWKHLUGHFLVLRQV*LYHQDVKRUWHUWLPH
IUDPHDQGEHWWHUIRUHFDVWVWKDQWKHGHVLJQSKDVHFRPSDQLHVLQ WKHSODQQLQJSKDVH
WU\WRLQFRUSRUDWHDQ\IOH[LELOLW\EXLOWLQWRWKHVXSSO\FKDLQLQWKHGHVLJQSKDVHDQG
H[SORLW LW WRRSWLPL]H SHUIRUPDQFH$V D UHVXOW RI WKH SODQQLQJ SKDVH FRPSDQLHVGHILQHDVHWRIRSHUDWLQJSROLFLHVWKDWJRYHUQVKRUWWHUPRSHUDWLRQV
'HFLVLRQVPDGHGXULQJWKLVSKDVHLQFOXGH
- 6RXUFLQJFRQWUDFWVDQGRWKHUSXUFKDVLQJGHFLVLRQV
- 3URGXFWLRQ GHFLVLRQV LQFOXGLQJ FRQWUDFWLQJ VFKHGXOLQJ DQG SODQQLQJ SURFHVV
GHILQLWLRQ
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
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
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
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
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
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
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
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
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
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
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
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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 51/169
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 $YHUDJHSXUFKDVHTXDQWLW\PHDVXUHVWKHDYHUDJHDPRXQWSXUFKDVHGSHURUGHU7KH
JRDO LV WR LGHQWLI\ ZKHWKHU D VXIILFLHQW OHYHO RI DJJUHJDWLRQ LV RFFXUULQJ DFURVV
ORFDWLRQVZKHQSODFLQJDQRUGHU
y )UDFWLRQRQWLPHGHOLYHULHVPHDVXUHVWKHIUDFWLRQRIGHOLYHULHVIURPWKHVXSSOLHUWKDW
ZHUHRQWLPH
y 6XSSO\TXDOLW\PHDVXUHVWKHTXDOLW\RISURGXFWVXSSOLHG
y 6XSSO\IXQGWLPHPHDVXUHVWKHDYHUDJHWLPHEHWZHHQZKHQDQRUGHULVSODFHGDQG
WKHSURGXFWDUULYHV
&RPSRQHQWVRI3ULFLQJ'HFLVLRQV
7KHIROORZLQJNH\ FRPSRQHQWVRISULFLQJ GHFLVLRQVDUH LGHQWLILHG WKDW DIIHFW VXSSO\FKDLQ
SHUIRUPDQFH
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 53/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 53
3ULFLQJDQG(FRQRPLHVRI6FDOH
0RVW VXSSO\ FKDLQ DFWLYLWLHV GLVSOD\ HFRQRPLHV RI VFDOH &KDQJHRYHUV PDNH VPDOO
SURGXFWLRQUXQVPRUHH[SHQVLYHSHUXQLWWKDQODUJHSURGXFWLRQUXQV/RDGLQJDQGXQORDGLQJ
FRVWVPDNHLW FKHDSHU WRGHOLYHU D WUXFNORDG WRRQH ORFDWLRQ WKDQ IRXU ,QHDFKFDVH WKH
SURYLGHURIWKHVXSSO\FKDLQDFWLYLW\PXVWGHFLGHKRZWRSULFHLWDSSURSULDWHO\WRUHIOHFWWKHVH
HFRQRPLHVRIVFDOH$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
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
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
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
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\
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
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 $PD]RQ IRU H[DPSOH SURFHVVHV DOO
ZDUHKRXVHVWRUHG LWHPV ZLWKLQ D GD\ DQG LW WKHQ WDNHV EXVLQHVV GD\V XVLQJ JURXQG
WUDQVSRUWDWLRQIRU WKHRUGHUWRUHDFKWKHFXVWRPHU*UDLQJHUSURFHVVHVFXVWRPHURUGHUVRQ
WKH VDPH GD\ DQGKDV HQRXJKZDUHKRXVHV WRGHOLYHUPRVWRUGHUV QH[W GD\XVLQJ JURXQG
WUDQVSRUW:DUHKRXVHVWRUDJHZLOOOLPLWWRVRPHH[WHQWWKHYDULHW\RISURGXFWVWKDWFDQEH
RIIHUHG *UDLQJHU GRHV QRW VWRUH YHU\ ORZ YROXPH LWHPV DW LWV ZDUHKRXVH UHO\LQJ RQ
PDQXIDFWXUHUVWRGURSVKLSVWKRVHSURGXFWVWRWKHFXVWRPHU&XVWRPHUFRQYHQLHQFHLVKLJK
ZLWKGLVWULEXWRUVWRUDJHEHFDXVHDVLQJOHVKLSPHQWUHDFKHVWKHFXVWRPHULQUHVSRQVHWRDQ
RUGHU2UGHU YLVLELOLW\EHFRPHV HDVLHU WKDQ ZLWKPDQXIDFWXUHU VWRUDJH EHFDXVH WKHUH LV D
VLQJOHVKLSPHQWIURPWKHZDUHKRXVHWRWKHFXVWRPHUDQGRQO\RQHVWDJHRIWKHVXSSO\FKDLQ
LV GLUHFWO\ LQYROYHG LQ ILOOLQJ WKH FXVWRPHU RUGHU 5HWXUQ DELOLW\ LV EHWWHU WKDQ ZLWK
PDQXIDFWXUHU VWRUDJH EHFDXVH DOO UHWXUQV FDQ EH SURFHVVHG DW WKH ZDUHKRXVH LWVHOI 7KH
FXVWRPHU DOVR KDV WR UHWXUQ RQO\ RQH SDFNDJH HYHQ LI WKH LWHPV DUH IURP VHYHUDO
PDQXIDFWXUHUV
7KHSHUIRUPDQFHRIGLVWULEXWRUVWRUDJHZLWKFDUULHUGHOLYHU\LVVXPPDUL]HGLQ7DEOH
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 60/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 60
'LVWULEXWRU VWRUDJHZLWK FDUULHU GHOLYHU\ LVZHOO VXLWHG IRU PHGLXP WR IDVW PRYLQJ LWHPV
'LVWULEXWRUVWRUDJHDOVRPDNHVVHQVHZKHQFXVWRPHUVZDQWGHOLYHU\IDVWHUWKDQRIIHUHGE\
PDQXIDFWXUHU VWRUDJH EXW GR QRW QHHG LW LPPHGLDWHO\ 'LVWULEXWRU VWRUDJH FDQ KDQGOH
VRPHZKDWORZHUYDULHW\WKDQPDQXIDFWXUHUVWRUDJHEXWFDQKDQGOHDPXFKKLJKHUOHYHORI
YDULHW\WKDQDFKDLQRIUHWDLOVWRUHV
'LVWULEXWRU6WRUDJHZLWK/DVW0LOH'HOLYHU\
/DVWPLOHGHOLYHU\UHIHUVWRWKHGLVWULEXWRUUHWDLOHUGHOLYHULQJWKHSURGXFWWRWKHFXVWRPHUV
KRPHLQVWHDGRIXVLQJDSDFNDJHFDUULHU:HEYDQ3HDSRGDQG$OEHUWVRQVKDYHXVHGODVW
PLOH GHOLYHU\ LQ WKH JURFHU\ LQGXVWU\ 8QOLNH SDFNDJH FDUULHU GHOLYHU\ ODVWPLOH GHOLYHU\
UHTXLUHVWKHGLVWULEXWRUZDUHKRXVHWREHPXFKFORVHUWRWKHFXVWRPHULQFUHDVLQJWKHQXPEHU
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
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
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
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
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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 66/169
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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)
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
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
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
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\
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
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
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
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
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?"
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
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\
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
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\
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 99/169
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\
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
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
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
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
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
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$VDILUPVDELOLW\WRVHUYH
WKH FXVWRPHUV GHSHQGV RQ KRZ HIILFLHQWO\ DQG TXLFNO\ WKH RUGHUV DUH GHOLYHUHG
WUDQVSRUWDWLRQPDQDJHPHQW EHFRPHV RQH RI WKH LPSRUWDQW RSHUDWLRQV LQ D VXSSO\ FKDLQ
7KHUH DUH WZR LPSRUWDQW IXQFWLRQV SHUIRUPHG E\ WUDQVSRUWDWLRQ SURGXFW PRYHPHQW DQG
SURGXFW VWRUDJH :KLOH SURGXFW PRYHPHQW LV WKH SULPDU\ IXQFWLRQ RI WUDQVSRUWDWLRQ
WHPSRUDU\SURGXFWVWRUDJHEHFRPHVLWVVHFRQGDU\IXQFWLRQ7KHUHDUHILYHNH\SDUWLFLSDQWV
LQ WUDQVSRUWDWLRQ HQYLURQPHQW WKH VKLSSHU WKH FDUULHU WKH UHFHLYHU RU FRQVLJQHH WKH
JRYHUQPHQWDQGWKHSXEOLF
7KHFRPSOH[LW\RIWUDQVSRUWDWLRQGHFLVLRQVGHPDQGVWRXVHRI,7V\VWHPV
,7VRIWZDUHFDQDVVLVWLQ
,GHQWLILFDWLRQRIRSWLPDOURXWHVE\PLQLPL]LQJFRVWVVXEMHFWWRGHOLYHU\FRQVWUDLQWV
2SWLPDOIOHHWXWLOL]DWLRQ
*36DSSOLFDWLRQV5LVNPDQDJHPHQWLQWUDQVSRUWDWLRQ
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 107/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 107
7KHJRDORIDWUDQVSRUWDWLRQULVNPDQDJHPHQWSURJUDPLVWRUHGXFHWKHULVNVRIWUDQVSRUWLQJ
KD]DUGRXVPDWHULDOV4XDOLWDWLYHRUTXDQWLWDWLYHWUDQVSRUWDWLRQULVNDQDO\VLV75$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
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
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
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
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
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
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
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
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
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
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 [ [ [ [
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
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
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
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
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
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
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
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\
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 $GYLVRU\
%RDUGEULQJVWRJHWKHUWKRXJKWOHDGHUVDQGLQWHUQDWLRQDOUHVHDUFKHUVIURPRXWVWDQGLQJ
DFDGHPLFLQVWLWXWLRQVVXFKDV0,7&ROXPELD8QLYHUVLW\DQG*HRUJLD7HFKWRGLVFXVV
DGYDQFHV LQ WKH XQGHUO\LQJ VFLHQFH DGGUHVV QHZ HFRQRPLF GHYHORSPHQWV DQG
LGHQWLI\IUXLWIXODUHDVRIUHVHDUFK
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 127/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 127
- 0DQKDWWDQ$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
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 128/169
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
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
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
$GYDQFHG(OHFWURQLF'DWD,QWHUFKDQJH(', DQG:HE(QDEOHG6ROXWLRQ
,QIRU6506XSSO\:HE
3URGXFWLRQ,QYRLFLQJ
3XUFKDVH2UGHU&ROODERUDWLRQ
6XSSOLHU&XPXODWLYH4XDOLW\0DQDJHPHQW)OH[)LHOGV
5HFHLSW5HFRQFLOLDWLRQ
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 132/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 132
-'$
-'$ 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
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
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
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
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
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
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
$VDQ(53VRIWZDUHVROXWLRQ0LFURVRIW'\QDPLFVIRUGLVWULEXWRUVPDQDJHVLQYHQWRU\DQG
JRRGVWRNHHSGLVWULEXWLRQPRYLQJVPRRWKO\
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 139/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 139
0DLQWDLQV WLJKWFRQWURO RYHUGLVWULEXWLRQ DQGVWUHDPOLQHV WKH SLFNSDFNVKLS F\FOH WR JDLQ
FRPSHWLWLYHDGYDQWDJH
)URP IRUHFDVWLQJ WR GHOLYHU\ 0LFURVRIW '\QDPLFV *3 FDQ KHOS DFFHOHUDWH VDOHV RUGHU
SURFHVVHVDQGUHGXFHFRVWVSHUWUDQVDFWLRQ,QWHJUDWHGDSSOLFDWLRQVKHOSPDQDJHLQYHQWRU\
PRUHHIIHFWLYHO\ILOORUGHUVIDVWHUDQGLPSURYHFXVWRPHUVHUYLFHZLWKHFRPPHUFH
(QDEOHVDFRPSDQ\WRPHHWFXVWRPHUGHPDQGHIILFLHQWO\ZLWKLQYHQWRU\DQGRUGHUPDQDJHPHQWWKDWUHGXFHVFRVWLPSURYHVDFFXUDF\DQGVSHHGVIXOILOOPHQW
0LFURVRIW'\QDPLFV6/
0LFURVRIW'\QDPLFV 6/ IRUPHUO\0LFURVRIW %XVLQHVV 6ROXWLRQV6RORPRQRIIHUV V\VWHPV
IRUWKHGLVWULEXWLRQLQGXVWU\,QWHJUDWHGDSSOLFDWLRQVKHOSHIILFLHQWO\PDQDJHLQYHQWRU\RUGHU
DQGSXUFKDVLQJPDQDJHPHQWVDOHVIRUHFDVWLQJHFRPPHUFHDQGZDUHKRXVHPDQDJHPHQW
7KHVHDSSOLFDWLRQVFRQQHFWGLUHFWO\ZLWKGR]HQVRIRWKHUEXVLQHVVPDQDJHPHQWV\VWHPVWR
KHOS RUJDQL]DWLRQVPHHW WKHGLYHUVHQHHGVRI WKHLU EXVLQHVV LQFOXGLQJDFFRXQWLQJ&50
KXPDQUHVRXUFHVDQGSD\UROOVXSSO\FKDLQPDQDJHPHQWPDQXIDFWXULQJDQGPRUH
0LFURVRIW'\QDPLFV6XSSO\&KDLQ0RGXOHV
0LFURVRIW'\QDPLFV$ ;
&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
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
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
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$WWXQLW\*ROGHQ*DWH+XPPLQJELUG ,%0DQG
,QIRUPDWLFD
8OWLPXV
8OWLPXVLVWKHILUVW%30&RPSDQ\ZLWKFRPSOHWHJOREDOFDSDELOLWLHVLQFOXGLQJRIILFHVLQ
FRXQWULHVDQGFXVWRPHUVLQFRXQWULHV7KH8OWLPXVSURGXFWLVDYDLODEOHLQODQJXDJHV
DQG LV VXSSRUWHG E\ D ZRUOGZLGH SURIHVVLRQDO VHUYLFHV WHDP DQG D VXSSRUW FHQWHU
:LWK RYHU FXVWRPHUV ZRUOGZLGH 8OWLPXV KDV GHSOR\HG %30 SURFHVVHV IRU PRUH
FXVWRPHUVWKDQDQ\RWKHU%30FRPSDQ\2YHU/DUJH(QWHUSULVHFXVWRPHUVZLWKDQQXDO
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 143/169
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 144/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 144
y 3URGXFH0RUH$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
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
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"
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
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
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
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.
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
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
$VKRUWZRUGWKDWFRYHUVDKXJHUDQJHRIEHQHILWVLWVHOILVFROODERUDWLRQ:HE6&0
RIIHUV D JUHDW OHYHO RI FROODERUDWLRQ DPRQJ DOO SDUWQHUV RI WKH VXSSO\ FKDLQ E\
H[FKDQJLQJUHDOWLPHLQIRUPDWLRQZLWKHDFKRWKHUDJRRGVWDUWLQJSRLQWLVWRWKLQNRI
WKH QXPEHU RI ZD\V LQ ZKLFK \RXU FRPSDQ\ LQWHUDFWV ZLWK ERWK FXVWRPHUV DQG
VXSSOLHUV7KHVHLQWHUDFWLRQVFDQEHFDWHJRUL]HGDVRQHRIWKHIROORZLQJH[HFXWLQJD
WUDQVDFWLRQ GHWHUPLQLQJ RSWLPDO SULFHV GLVFRYHULQJ DYDLODEOH VXSSO\ DQG XQPHW
GHPDQG DQG VXSSO\ FKDLQ SODQQLQJ IRU QHZ DQG H[LVWLQJ SURGXFWV 7KXV WKUHH
GLVWLQFWFDWHJRULHVHPHUJHZKHUH%%HFRPPHUFHFDQEHDSSOLHGWRH[WUDFWYDOXHy 5HGXFHGWUDQVDFWLRQFKDUJHV
y ,PSURYHGPDUNHWHIILFLHQFLHV
y (QKDQFHGVXSSO\FKDLQEHQHILWV
3ULRUWRPDNLQJDQ\LQYHVWPHQWLQ%%HFRPPHUFHDFRPSDQ\KDVWRLGHQWLI\WKHYDOXH
FUHDWHG DQG WKH HIIRUW UHTXLUHG IRU LPSOHPHQWDWLRQ XQGHU HDFK RI WKHVH FDWHJRULHV 7KH
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 153/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 153
UHODWLYHSRVLWLRQRIWKHVHFDWHJRULHVZLOOQRWEHWKHVDPHIRUDOOILUPVEXWZLOOYDU\EDVHGRQ
WKHVXSSO\FKDLQVWUDWHJ\DQGFRPSHWLWLYHHQYLURQPHQW$FRPSDQ\PXVWWDLORUHFRPPHUFH
LPSOHPHQWDWLRQWRVXSSRUWFDWHJRULHVZKHUHWKHYDOXHFUHDWHGLVKLJKUHODWLYHWRWKHFRVWRI
LPSOHPHQWDWLRQ
1HWZRUN'LDJUDPRI3URSRVHG6\VWHP
Figure 30 Network Diagram of the Proposed System
$VLPSOHGLDJUDPRIWKHQHWZRUNVHWXSKDVEHHQGHYHORSHGZKLFKGHSLFWVKRZWKHVXSSOLHUV
DQGGLVWULEXWRUVDUHFRQQHFWHGWRWKHLQWHUQHW7KHZHEDSSOLFDWLRQLVKRVWHGE\WKHFRPSDQ\
LWVHOIZKLFKLVFRQQHFWHGWRWKHLQWHUQHWZLWKDILUHZDOOLQVWDOOHG7KHZHEEDVHGDSSOLFDWLRQ
LVDFFHVVLEOHE\WKHVXSSOLHUVDQGGLVWULEXWRUVYLDLQWHUQHW)XUWKHUPRUHLOOXVWUDWLYHGLDJUDP
LVJLYHQDVIROORZV
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 154/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 154
Pepsi Manufact
Distributor/Wholesaler
Dist
Distributor/Wholesaler
Suppliers
Figure 31 Detailed Network Diagram of Proposed System
&RUH0RGXOHVRI3URSRVHG6\VWHP
7KHIROORZLQJPRGXOHVKDYHEHHQLGHQWLILHGDVWKHFRUHVXSSO\FKDLQPDQDJHPHQWV\VWHP
PRGXOHVWREHLPSOHPHQWHGSKDVHE\SKDVHLPSOHPHQWDWLRQRIRSHUDWLRQVVXSSRUWHG736
PRGXOHVLQWKHILUVWSKDVH
'HPDQG0DQDJHPHQW
6XSSO\&KDLQ$QDO\WLFV 9HQGRU0DQDJHG,QYHQWRU\
,QYHQWRU\0DQDJHPHQW
7UDQVSRUWDWLRQ0DQDJHPHQW
6XSSOLHU5HODWLRQVKLS0DQDJHPHQW
0DQXIDFWXULQJ([HFXWLRQ
)DFLOLW\0DQDJHPHQW
6RXUFLQJ 6DOHVDQG&XVWRPHU6XSSRUW
)LQDQFLDO0DQDJHPHQW
'HPDQG0DQDJHPHQW
'HPDQGPDQDJHPHQWPRGXOHFRQWDLQVWZRPDMRULWHPV
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
$JJUHJDWH3ODQQLQJ,QWKLVVHFWLRQWKHIRUHFDVWZLOOEHGLYLGHGLQWRELDQQXDOO\
TXDUWHUO\PRQWKO\ZHHNO\DQGGDLO\IRUHFDVWWRPDNHLWHDVLHUIRUWKHVWDIIWRSODQWKH
GHPDQGDQGVXSSO\7KHDJJUHJDWHSODQZLOOEHPDGHLQDFFRUGDQFHZLWKWKHXVHU
VSHFLILFDWLRQWKDWLVWRZKDWH[WHQWKHZDQWVWRGLYLGHWKHIRUHFDVW7KHDJJUHJDWHSODQQLQJ
PRGXOHZLOOWKHQEHDEOHWRJHQHUDWHWKHIROORZLQJSODQV
L 6DOHV)RUHFDVWLQJ
LL 3URFXUHPHQW)RUHFDVWLQJ
LLL
3URGXFWLRQ)RUHFDVWLQJ
Figure 32 Data Input and Output Diagarm - Data generated from demand forecast will be used as input for
Aggregate Planning subsystem
7KHGDWDJHQHUDWHGIURPGHPDQGIRUHFDVWWKDWLVWKHIRUHFDVWGDWDZLOOEHXVHGDVLQSXWE\
WKHDJJUHJDWHSODQQLQJPRGXOHWRJHQHUDWHWLPHVSHFLILFSODQV
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 156/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 156
6XSSO\&KDLQ$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
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
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
L
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
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
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
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
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
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
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
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
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
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\
$VIRU3HSVL+DLGUL%HYHUDJHVLQRUGHUWRVXUYLYHLQWKHFXUUHQWHFRQRPLFFRQGLWLRQVDVZHOODV WKHLQFUHDVHG FRPSHWLWLRQ LQEHYHUDJH LQGXVWU\ZLWKWKHHYHUJURZLQJFRPSHWLWRUV OLNH
&RFD &ROD DGRSWLQJ QHZ WHFKQLTXHV RI H[SDQGLQJ WKHLU VXSSO\ FKDLQ DQG UHDFKLQJ WKHLU
FXVWRPHUV LQ D PXFK PRUH HIILFLHQW PDQQHU DQG SURGXFLQJ EHYHUDJHV DFFRUGLQJ WR
FRQVXPHUGHPDQGLWLVPRUHDGYLVDEOHWR3HSVL+DLGUL%HYHUDJHVWRFRQGXFWWKHEXVLQHVVLQ
DVWUDWHJLFZD\ZLWKWHFKQRORJLFDOVXSSRUWDQGHIILFLHQWGHPDQGDQGVXSSO\QHWZRUNZKLFK
VHHPVLPSRVVLEOHZLWKRXWVXSSO\FKDLQFROODERUDWLRQDQGLQIRUPDWLRQWHFKQRORJ\VXSSRUW
8/6/2019 19653663 Project Document Supply Chain PEPSI
http://slidepdf.com/reader/full/19653663-project-document-supply-chain-pepsi 168/169
[ T y p e t h e c o m p a n y a d d r e s s ] Page 168
5HIHUHQFHV
&KRSUD60HLQGO36XSSO\&KDLQ0DQDJHPHQW6WUDWHJ\3ODQQLQJDQG
2SHUDWLRQ9RO
6XPQHU0(QWHUSULVH5HVRXUFH3ODQQLQJ6\VWHPV 6XSSO\&KDLQ0DQDJHPHQW:LNLSHGLD>RQOLQH@$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
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