LOGISTICS MANAGEMENT

Presented By:Mudit Trikha, Sachin Dang, Ashish Bhadoria, Himanshu Pandita,

Uday Airun, Gaurav Tyagi, Sudhir Sharma

What Is LOGISTICS?

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers.

The procurement, maintenance, distribution, and replacement of personnel and material

-- Webster's Dictionary

• Classic example of logistics operations

• Has significantly brought down its costs

• One of the best departmental integrations

• Perfect inventory management

BACKGROUND OF PEPSICO

• PepsiCo, Inc. is a Fortune 500, American MNC headquartered in New York.

• The Pepsi Cola Company began in 1898 in New York by a Pharmacist and Industrialist Caleb Bradham, but it only became known as PepsiCo when it merged with Frito Lay in 1965.

• PepsiCo is one of the world’s leading beverage and snacks food companies with revenues of more than $43 billion.

• PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab govt. owned Punjab Agro industrial Corporation and Voltas India Limited.

• PepsiCo bought out its partners and ended the joint venture in 1994.

BACKGROUND OF PEPSICO

• Besides the Pepsi-Cola brands, the company owns various brands like Tropicana, Mountain Dew, Frito-Lay, Mirinda, Gatorade & 7-Up outside USA.

• PepsiCo is manufacturing and marketing a wide variety of carbonated and non- carbonated beverages, as well as salty, sweet and grain-based snacks, and other foods.

MAJORDISTRIBUTION

SYSTEMS

DIRECT STORE DELIVERY(DSD)

BROKER WAREHOUSE DISTRIBUTION (BWD)

VENDING & FOOD SERVICE SYSTEMS (V & FS)

DIRECT STORE DELIVERY (DSD)

• Direct order from grocery and convenience stores and delivery of previous orders.

• Orders are taken manually in this system.

• PepsiCo ensured that the products reached the stores in time and also arranged them properly on the stores’ shelves.

• Products were arranged such that they attracted maximum visibility for passers by .

DSD Contd…• PepsiCo often used the DSD system in

order to launch new products in pretty quick time (in some cases, within a week).

• Market response for a particular product could be determined more easily.

• The retailers also benefited from the DSD system.

• Retailers didn't have to incur labor costs required for unloading the trucks & placing the products on shelves.

BROKER WAREHOUSE DISTRIBUTION (BWD)

• Employed third party distributors

• This system adopted for less delicate & perishable products (e.g.- Pepsi Cola, Mountain Dew)

• “IMPULSIVE BUYING” products were not included

•Employees at the stores handled the products ADVANTAGES:-

No additional employees

Economical

Vending & Food Service System (V&FS)

• PepsiCo’s sales personnel distributed product through third party V&FS.

• Through this product system, product was made available to school, colleges, canteen, stadiums, offices, restaurants etc.

• Huge potential of distribution channel developed the largest vending and food service sales forces in the US, comprising 600 people.

V&FS Contd…• Through this Pepsi generated revenues of over

$1 billion every year through this channel.• PepsiCo distributed its beverages in the US

through five retail channels – supermarkets/retail stores, fountain/restaurant, convenience stores, vending, and others.

• There were also other distribution channels for beverages including restaurants, caterers and institutional buyers such as airlines.

• PepsiCo(beverage concentrate)-bottlers(carbon dioxide, sweetener, water-beverages and beverage syrup)

• Syrup either sold to fountains or combined with carbonated water for bottling.

• Bottling companies are owned and operated by local companies of the country.

• PepsiCo’s leading bottlers are Pepsi bottling venture, Pepsi bottling group and Pepsi Americas.

PepsiCo’s logistics operations

• Bottlers are allowed regions and are supposed to operate in the countries with in those regions

• PepsiCo’s logistics two main phases are:1. Giving syrup to the bottlers.2. Distribution of bottles canes to retail outlet.

• PCNA produces and sells beverages & concentrate to bottling units in the US and Canada.

• 50 plants, 450 licensed territory accounts for 60% distribution in north America.

• PCNA’S objective1. Timely delivery(99.1% accuracy).2. Reduce transportation cost.

Beverage manufacturing unit to bottlers

• PCNA tied up with 3rd party logistics company Penske logistics.

• Penske offers transport solution and warehouse management services.

• It uses a i2 transportation optimization system software which helps in monitor movement of products and makes necessary changes in routes and schedule to tackle unexpected situations.

• Thus PCNA achieves more than 99.1% accuracy.

• PCNA has centralized transportation to single location.

• It also employs six sigma quality process.• With help of Penske it negotiates shipping rates and

evaluate services.• TOS provides order optimization, electronic receipt of

orders, lowest shipping cost, quick routes and consolidate shipment.

• Thus it reduces cost.

• Pepsi Americas (PAS) one of the largest bottlers of PepsiCo. PAS distributes the products in the countries where it operates.

• 100 distribution centers in US• PAS objectives timely dispatch, full capacity utilization, quicker

inventory replenishment.• Sales- ASMs delivery- delivery agents.• It uses ERP for integration of operations like sales,

merchandising, CRM, procurement and so on.• It also employs mobile computing system using WLAN

WWAN.

Bottlers to retail outlets

Chilled DSD system:• Relatively small distribution method.• Created for the items require continuous

refrigeration.

Hybrid system:• Formed by pooling the various distribution system.• To serve large no. of retailers in emerging markets

like China and India.

Modern technology

THANK YOU