INFORMATION SYSTEM BASED SUPPLY CHAIN MANAGEMENTOF PEPSICO. HYDERABAD.

Subject MIS

Teacher: Muhammad Memon

AN OVER VIEW OF PEPSICO INC.

In late 1880’s when an American Pharmacist Caleb Bradham created a Cola Soft drink by combining natural ingredients.

The drink became so popular that they decided to expand it and laid down foundation of Pepsi-Cola company in 1898 with sales of $500 million and 19,000 employees.

Later in 1965 Pepsi-Cola Company and Frito-Lay Inc. the new Company named PepsiCo Inc. in North Carolina, U.S.A.

annual revenue more than $65 Billion, and 297,000 employees

product portfolio includes 22 brands each generates more than $1 billion each in annual

retail sales.

PEPSICO INC. IN PAKISTAN:

In Pakistan the PepsiCo Inc. is doing business on franchising basis the head quarter of Franchisee is situated at Islamabad.

the company performs manufacturing processes in 5 plants situated at Quetta, Karachi and Hyderabad, with annual growth rate of last 5 years 25%.

VISIT DETAILS:

Address: : PepsiCo Inc. Factory C-7, Mirpurkhas Road, S.I.T.E Hyderabad.

Date: 14-Febuarary-2013 Timing: 10 am to 12 pm Processes Guided By: Resident

Director “Mr. Isamail Zara”.

WHY SUPPLY CHAIN MANAGEMENT?

Supply chain management SCM is the integration and management of complete supply chain from supplier to store, from store to Manufacturing Department, From Manufacturing Department to Store, and again from store to agent, wholesaler and ultimate Consumer.

The System Development Life Cycle comprises of following steps:

- Planning Phase- Analysis phase- Design Phase- Implementation Phase- Use or Operation Phase

PLANNING PHASE:

Recognize Problem: During our visit at PepsiCo we come to know

that PepsiCo was not equipped with any special system to cater for their supply chain management specially, the information system they were following was generally focusing on whole organization like finance problems, HR Problems, employee attendance, wage problems, salary system, financial reporting etc. but most of work was being performed manually focusing more on paper work and less use of information system.

The PepsiCo order, receives, processes and dispatches thousands of units of inventory on daily basis and the flow of inventory was almost manually controlled.

Inventory reporting was made manually. Orders to suppliers and from customers were

received manually which was time consuming and incurring cost.

No proper check and balance for losses made during manufacturing process.

PepsiCo Hyderabad was not equipped with web base system in order to made transactions online.

Returns of unapproved inventory were manually controlled.

DEFINING PROBLEMS

After recognizing the problem carefully and making logical analysis we come to know about basic problems of PepsiCo Supply Chain system which are:

- Lack of Information System based Inventory Flow.

- Manually Order System.

SET SYSTEM OBJECTIVES:

MIS based Vehicle flow MIS Based Inventory Flow System Online Order System: MIS Based purchase system Management Support System Creates Added-Value for Customers

CONCLUSION:

Reduce wastage of time incurred during material flow.

More secure and reliable data. Increases sale and non-economic returns Reduces excessive paper and ordering cost Customer satisfaction Demand forecast and planning based on more

reliable data Online payment system increase receivable

collections Timeliness in delivery of products Intimacy with creditors/suppliers High inventory turnover

ESTABLISH SYSTEM CONSTRAINTS:

The basic system constraints are consist of i- System Development Constraintsii- After Development of System Constraints

System Development Constraints:Main system Development constraints are as

follow:- Project Scope- Time period- Budget

PROJECT SCOPE: The project scope is the definition of what the project is supposed to

accomplish with the specified features and functions in a project.- Identify Criteria - Identify Output Information Requirements - Identify Input Data Requirements - Prepare a new system documentation - Design network - Design Database - Review Design - Prepare Program Documentation- Code Program- Approved Program - Prepare Database - Educate Users

- Cutover to Model - Test Program

 

TIME PERIOD:

The suitable time period constraint for this project is determined as following:

Planning Phase 01 month

Analyzing Phase 01 month

Design phase 1.5 month

Implementation phase 2.5 months

Use or operate phase 5 months

Total time constraint set for project: 10 months

BUDGET:

The budgeting of system after having careful analysis of system turnover, forecasted returns, and projected cash inflows and out flows with consent of System Analysis the following budgeting plane is announced:

Phase Estimated Budget

Planning Phase Rs 100,000 Analysis Phase Rs 200,000 Design Phase Rs 100,000 Implementation Phase Rs 250,000 Use/Operation Phase Rs 300,000 Total Budget Rs 950,000

AFTER DEVELOPMENT OF SYSTEM CONSTRAINTS:

After development constraints can best be defined on 2 points:

- User Information Satisfaction- Organizational Impact

User Information Satisfaction:Satisfaction of user information is very much

important, user information satisfaction is best parameter to measure assessment of Information System Implementation, it is defined as “Degree to which users rely on usefulness of Information System”.

ORGANIZATIONAL IMPACTS:

The organizational impact of SCM Information System is very wide.

It will completely takeover the current system which is almost manual system.

It increases employees understanding with modern Supply Chain Management.

Increases Organizations ability to respond change.

Inventory wastages will be reduced

FEASIBILITY STUDY:

Feasibility study is performed on following points:

- Technical Objectives- Economic Return- Non Economic Return- Legal and Ethical - Operational- Schedule

TECHNICAL FEASIBILITY: Technical feasibility considers the technical requirements

of projects, the technical feasibility depends upon system analyst expertise and knowledge to estimate wither technically this system will be feasible to operate or not?

Technical feasibility of this Information System will be tested from following points.

Is the project feasible within the limits of current technology? Does the technology exist at all? Is it available within given resource constraints?Is it a practical proposition?Manpower- programmers, testers & debuggersAre the current technical resources sufficient for the new

system?Can they be upgraded to provide to provide the level of

technology necessary for the new system?

ECONOMIC RETURN

The new Information System will make organization more cost effective, it reduces excessive paper work cost, sales volumes will ultimately increase, with keeping track records of inventory flow management can keep records of rejected supplies from quality Department and Returns made, also losses incurred during manufacturing process, these cost can best be adjusted under new Information System.

NON-ECONOMIC RETURN:

Information system will provide competitive advantage.

Customer satisfaction will increase. It will help in make accurate sales forecasting

and demand forecasting on the basis of previous demand track.

Employees will be trained and more competitive, and will be able to see situations more clearly than now.

It increases supplier/customer intimacy, organization will be able to make quick response to queries made by management and customers and suppliers.

LEGAL AND ETHICAL:

Legally new information system will be securing the data base from un-authorized access.

Operational Feasibility: Operational feasibility is a measure of how

well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development.

SCHEDULE:

Schedule feasibility is to assess the duration of the project determined by analyst, whether it is too long to be complete before it is useful. System analysts have to estimate how long the system will take to develop, and whether all potential timeframes and the completion date schedules can be met, as well as whether meeting these date will sufficient for dealing with the needs of the organization.

CONTROL MECHANISM:

DETAILED DESCRIPTION OF SDLC CYCLE:

PERT CHART DEFINING SCHEDULE:

FROM CHART:For path 1-3 , For Path 4 – 18:

T.E=0.25 Month T.E=0.25 Month

T.L= 1.50 Month T.L= 3 Month For Path 7-9 :For Path 10-11:

T.E= 0.25 Months T.E=0.7 5Month

T.L= 1.25 Month T.L=2.25 Month

  For Path 14-15: For Path 16-17:

T.E=0.50 Month T.E=0.5 Months T.L= 1.0 Month T.L=2 Month

 For Path 19-20: T.E= 0.50 Month TL= 1 Month

ANALYSIS PHASE:

Announce The System: - After completion of planning phase and

arranging various meetings the MIS Steering Committee announces the system study in which committee announces about the detailed outline of project.

User’s Feedback:- Not all the employee will be ready and adaptable to

change. The announcement of new Information system can create disturbance in working environment as psychologically most of employees in any organizations are against the change .

- -To know there ideas about new system and resolving any issue they are having with new system. The MIS Steering committee will be collecting feedback from employees

ORGANIZE THE PROJECT TEAM

The project team organized for developing Information based Supply Chain Management will consist of following team members:

Project Manager  System Analyst  Software Architect  Designer Software Developer  Software Tester 

CONDUCT SYSTEM STUDY (DEFINE INFORMATION NEEDS)

The system study will be based on following points:

- Authorization: -Online Ordering Systems:- Controlled Vehicle Movement: - Inventory flow:- Track Records Of Losses During Process:

DEFINE SYSTEM PERFORMANCE CRITERIA:

The Supply Chain Performance Criteria will be based on following points:

Customer Services: Quality: Agility: Supply Chain Cost:

THE DESIGN PHASE:ORDER TO SUPPLIER:

PAYMENT TO SUPPLIERS:

REPORT GENERATION:INPUTS:

PROCESS:

OUTPUT:

ADD CUSTOMER:

PROCESS:

SEARCH PROFILE:

PROCESS:

OUTPUT:

ADD SUPPLIERS:

PROCESS:

SEARCH SUPPLIER:

PROCESS:

OUTPUT:

INVENTORY REPORTS:

PROCESS:

OUTPUT:

GRAPHICAL REPRESENTATION

PROCESS:

IDENTIFY ALTERNATIVE SYSTEM CONFIGURATIONS:

While determining system configuration we have to consider:

- Web server configuration - Data Base System Configuration- Client machine hard ware and software

requirement

HARD WARE REQUIREMENT: WEB SERVER CONFIGURATION:

Data Base System Configuration: The ideal system configurations for Data Base are following: Small data base: Processor: 1 processor of 3 G Hz minimum

recommended Ram: 2 GB RAM minimum recommended Hard disk: 240 GB minimum Recommended Medium Size Database: Processor 2 processor of 3 G Hz minimum

recommended RAM: 4 GB RAM minimum Recommended Hard disk: 500 GB hard disk minimum

recommended Large Size Database: Processor: 3 Processor of 3 G Hz minimum

recommended Ram: 6 GB RAM minimum Recommended Hard Disk: 800 GB Hard disk minimum

recommended

Client Machine Hardware Requirement: The recommended Hardware requirement for

client machine is as under:   Processor: I processor

with minimum 2.5 GHz recommended RAM: 1 GB Ram

minimum recommended Hard Disk: 120 GB Hard

disk Minimum Recommended

SOFTWARE REQUIREMENT: 

for Data base: Operating System: Windows Operating System,

UNIX, Linux Internet Browser: Google Chrome, Internet

Explorer, Mozilla Firefox Data base: IBM® DB2 Version 9.1, IBM DB2

for z/OS® Version 9.1, IBM DB2 Version

9.5, Oracle 10g, Oracle 11g   For Client/User: Operating System: Windows Operating System,

UNIX Operating System Internet Browser: Internet explorer, Google

Chrome, Mozilla Firefox

EVALUATING ALTERNATIVE SYSTEM CONFIGURATION:

Web Hosting service Evaluation: Some basic and important features someone

should check before signing up for any hosting package.

Affordable Prices Unlimited Bandwidth Unlimited Disk Space Unlimited Domains could be hosted 24 Hours Uptime Data Backups More Secure & Reliable 24 Hours support (Through Ticket or Live Chat)

Following are the top 5 web hosting websites in Pakistan

Hostgator: Just host: Hostmonster : iPage : Bluehost:

HARD WARE REQUIREMENT EVALUATION:

For data base server: Small size Data base: Small size data base will no doubt be economic to obtain,

and will require less IT Staff personnel to operate and maintain, but this type of database will lead managers to problems of especially data storage

Large Size Data Base: Large Size database are difficult to operate, it requires an

additional IT staff to look after for Database, further more it increases operational cost.

Medium Size Data base Medium size Database can prove to be Ideal for medium

organizations as it will not impose excessive operational costs as compared to large Data base systems, neither find difficult to retrieve and store large piece of information like Small Database.

CLIENT/USER’S MACHINE HARDWARE REQUIREMENT EVALUATION:

Evaluation of user’s system hardware configuration is easy it requires no more expensive hardware with high configurations, a standard configuration set up is recommended, following brands are available in market:

HP IBM LENOVO ACER APPLE DELL OPTIPLEXAnd so on.

SOFTWARE REQUIREMENT EVALUATION:

Database Software Evaluation: database software evaluation will be made on recommendation of System evaluation, many database software are available including, IBM , SQL, ORACLE, MS ACCESS and so on.

User’s Software Evaluation: user’s system needs are straight forward, Evaluations are based on standard requirement of Personal computer.

Popular Operating systems are Microsoft’s Windows, UNIX, LINUX and so on.

SELECT BEST CONFIGURATION:

Web Server Hosting Configuration: The web server hosting selected by MIS Steering Committee is

Just host web hosting service. Database System Configuration: Hardware Configuration: Hardware configuration selected

for Database System is as follows, Processor 2 processor of 3 G Hz

minimum recommended RAM: 4 GB RAM minimum

Recommended Hard disk: 500 GB hard disk minimum

recommended Software Configuration: Software Configuration selected to

operate Database Management is : Operating System: UNIX Operating System, Internet Browser: Mozilla Firefox Data base: Oracle 11g

USER’S SYSTEM CONFIGURATION

Hardware Configuration: Hardware Configuration needed for User’s Configuration are as follow:

Processor: I processor with minimum 2.5 GHz

RAM: 1 GB Ram minimum

Hard Disk: 120 GB Hard disk Software Requirement: Software

Requirements selected for User’s system configuration are as follow:

Operating System: Window’s 7 Internet Browser: Mozilla Firefox