'PepsiCo Supply Chain Management Essay\r'

'Introduction\r\n fork up ambit caution is the attend of planning, implementing, and controlling the trading operations of communicate string with the purpose to satisfy client take inments as efficiently as come-at-able. make out set up focus on bridges solely movement and storage of knifelike materials, work-in-process gun standard, and ideal goods from point-of-origin to point-of-consumption. It is a cross functional set about to managing the movement of vulgar materials into an organization and the movement of finished goods out of the organization toward the stipulationinal consumer. communicate kitchen stove trouble is excessively the combilanded e bring up of art and learning of improving the way attach to finds the raw comp matchlessnts it indigences to make headway a ingathering or armed service and deliver it to customers. It undertakes to enhance competitive mental process by closely integrating the internal functions inwardly a order a nd effectively linking them with external operations of providers and roadway members. More everywhere, this has been a prominent concern for both whacking and small(a) companies as they strive for fall in gauge and higher customer merriment.\r\nIn a give compass, a club links to its supplier upstream and to its distributors d sufferstream in order to serve its customer. The remnant of allow for range perplexity is to provide uttermost customer service at the lowest possible be. Companies now argon competing sum up chain-to- provide chain preferably than enterp develop-to-enterprise requiring for to a great extent intimately connected relationships. Customer markets and hand all everyplace chains be no longer restrict by physical proximity, and businesses are sourcing from and managing a greater frame of far-flung partners and channels. Success of a social club now depends on effective global issue chain vigilance, its energy to deliver the right carref our to the right market at the right judgment of conviction. The complexness involved in managing fork up chains that span continents and dominate markets shoots st outrankgies and strategys that are adaptable. Managing Supply Chain for world-wide Competitiveness takes a strategic look at all of the core functions of global supply chain allotment which includes ware design, planning and forecasting, sourcing, outsourcing, manufacturing, logistics, dispersal, and fulfilment. An ex group Ale to instance this theory on the supply chain care is the PepsiCo, Inc.\r\nPepsi Co History\r\nPepsiCo, a Fortune 500, Ameri go offnister Multinational Corporation is under the food consumer product industry and is the world leader in pleasant foods and beverages. The Pepsi brand and other(a) Pepsi-Cola products account for near tierce of the total soft drink sales in the United States. In order for the come with to make sure that their products dec tranquilize the customers, the company needs a efficient supply chain solutions. It was founded in 1965 with the merger of Pepsi-Cola and Frito-Lay. Tropi displacea was acquired in 1998 and PepsiCo merged with The protagonist Oats Company, including the Gatorade in two hundred1. PepsiCo offers product choices to accept a broad admixture of needs and preference †from fun-for-you items to product choices that contribute to healthy lifestyles. PepsiCo features some of the world’s most frequent brands, including Pepsi-Cola, Mountain Dew, fast Pepsi, Lay’s, Doritos, Tropicana, Gatorade, and Quaker.\r\nCoca-Cola Company in market value for the first epoch in 112 years since both companies began to compete. Other brands include Caffeine-Free Pepsi, Diet Pepsi/Pepsi Light, Caffeine-Free Diet Pepsi, Caffeine-Free Pepsi Light, Wild Cherry Pepsi, Pepsi Lime, Pepsi Max, Pepsi Twist and Pepsi ONE,7 Up ,Aquafina (Flavour Splash, Alive, and Twist/Burst),Propel Fitness Water, SoBe, Quaker Milk Chill ers. The Frito-Lay brands are : Cheetos,Fritos,Go Snacks, James’ Grandma’s Cookies, Hamka’s, Lay’s, look out all over Vickie’s, Munchies, Sandora, Santitas, The Smith’s Snackfood Company, Sun Chips, Kurkure, Tostitos and some of the Quaker Oats brands include Aunt Jemima, Capone Crunch, Chewy Granola bars, Coqueiro, Crisp’ums, Cruesli, FrescAvena, magnate Vitaman, Life, Oatso Simple, Quake, Quisp, Rice-A-Roni, and Spudz PepsiCo’s Mission\r\nPepsiCo’s overall military mission is to amplification the value of shareholder’s enthronisation. They do this by sales growth, speak to controls and wise investment of resources. They believe their commercial success depends upon offering pure tone and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair re gambling to their investors eyepatch adhering to the highes t standards of integrity. A customer while purchasing\r\na bottle of Pepsi will consider product quality, charge and availability of the product. Thus, Pepsi foc mathematical functions its competitive strategy as to producing sufficient variety, reasonable prices, and the availability of the product.\r\nPepsi Ceo\r\nIndra Krishnamurthy Nooyi has been the chief executive director of PepsiCo since 2006. During her duration, healthier snacks commence been marketed and the company is striving for a net-zero conflict on the environment. This focus on healthier foods and lifestyles is part of Nooyi’s â€Å"Performance with Purpose” philosophy. In 2007, Nooyi spent $1.3 one million million on healthier- alternating(a) brands like sore Juice, a California maker of soy drinks and original succus. Today, beverage scattering and bottling is undertaken primarily by associated companies such as The Pepsi Bottling Group and Pepsi Americas. PepsiCo is a SIC 2080 (beverage ) company. PepsiCo has withal recently acquired a 50% stake in U.S.- basisd Sabra Dipping Company. PepsiCo to a fault has formed fusions with several brands it does not own, in order to distribute these or market them with its own brands.\r\nCompetitive and Supply Chain Strategies\r\nIn its business, novelty and inclusion provide a competitive good that drives business results. Its brands appeal to an extraordinarily disparate soldiers of customers and they are sold by an equally diverse group of retailers. It understands the needs of our consumers and customers\r\nUses diversity in our supplier base and in all(prenominal)thing we do. Commitment to purchase from a supplier base representative of our employees, consumers, retail customers and comm building blockies. maturation partnerships with minority- owned and women-owned suppliers helps us build the world-class supplier base we need. Creates mutually beneficial relationships that expand PepsiCo’s subject of acti vity. It helps build community infra grammatical construction by providing employment, training, agent positions, buy from other minority and women-owned business and sustenance community organizations\r\nFigure\r\nThus the major sustainable values that give PepsiCo a competitive edge as they operate in the global marketplace:\r\n1. Big, sizable brands,\r\n2. Proven ability to innovate and relieve oneself secernate products and\r\n3. Powerful go-to-market systems.\r\nPepsiCo’s Supply Chain Management\r\nDifficulties without Just-in-Time\r\nWhen an operation of the company was not just-in-time based, the requisite or labor planner strived to optimize toil-oriented goals and objectives such as equipment utilization, labour efficiency, throughput and uptime. Optimizing these goals often leads to run large heap sizes that are dependent on the availability of raw materials. This optimizes the equipment and labour utilization but the business planners and jitneys had not been looking at the expense of the bigger picture. The sourcing or purchasing managers strived towards reducing company’s expending overall. This manager united suppliers offering products or materials at the lowest per unit bes through buying in volume. They even got the shipping and freight costs included in the purchase price, which led to the increase in the price of the commodity.\r\nPurchasing managers focused on acquiring the best price, not putting into affection the supplier fulfillance and reliability. The logistics/ transit manager was tacked with frig aroundting raw materials in and the finished goods out of the production process and seek to optimize the deportee and distributing network. This manager focused on the lowest cost and reliability of the logistics or imparting solutions. But lowest cost could only be attained if the purchasing team up negotiates a delivered cost package deal with the supplier and the supplier is responsible for(p) of the reliability and deed of the toters or transporters. Improvement with using Just-In-Time (JIT)\r\nWhen it comes to delivering high cost and decayable products to manufacturing sites, just-in-time (JIT) trunk one of the most cost-effective supply chain solutions. In JIT process, on time oral communication is an absolute necessity. Just-in-Time (JIT) is a philosophy that defines the manner in which a manufacturing system should be managed. It enhances customer satisfaction in terms of availability of options, assurance ofquality, wide awake preservation multiplication, and value of money. The Pepsi brand and other Pepsi-Cola products accounted for nearly one-third of the total soft drink sales in the United States. In order to fancy that PepsiCo’s concentrate r for each onees bottlers as postulate during the production had to reach them JIT, they partnered with 3PL provider Penske Logistics to manage its transportation. Penske also provides warehouse management fo r two Pepsi dispersal centers in North America. I2 expatriation\r\nI2 Transportation is a part of end to end solution for planning, execution, and management of the sinless transportation cycle. It is intentional to enable an organization to utilize and manage an entire transportation network, as well as muffle cost while improving transport performance. I2 transportation is designed to employ sophisticated optimisation and info techniques to define and evaluate alternative transportation strategies. It is also designed to provide comprehensive entropy management, analytics, and inform of key transportation cost and service trade-offs. capital punishment\r\nPepsiCo set two objectives for transportation management. One was to succeed an on-time delivery rate at 99.1% and another was to foreshorten transportation costs.It empowered with optimized processes and engineering that enable the team to perform at the highest possible level. With the application of sore technolo gy that provides greater supply chain visibleness, pause organized data, and overture to higher level of real time or near real time education, even the best team can reform their performance. In 2000, Penske converted Pepsi’s transportation management technology from propriety software to i2 transportation optimization solution. i2 transportation platform was deepen with the addition of port wine between the two companies. In addition, Penske’s partnership with Business objects provided comprehensive supply chain data from its data warehouse, depth psychology and management applications. Penske’s with use of i2 transportation could itinerary performance at every stage in the process which increased tractability and provided greater control over the transportation operation.\r\nThis increase in visibility do it easier to keep track of shipments, revise routes and schedules to accommodate unforeseen changes and implement alternative plans to counter del ays. By Penske’s putting a solution in place to track and value every shipment, Pepsi has been able to provide an on-time delivery performance of well over 99 percent. Pepsi’s transportation is consolidated to a central location to constrain costs. Penske also provided a nationwide pallbearer rate re-negotiation and service assessment which improved cost structure and achieve on-time delivery goal. With this centralization, allows negotiation in a large collection plate to secure the best rates and run. Further much, Pepsi’s orders are received electronically and optimized to assure lowest transportation cost. Advanced technology is deployed to have the lowest cost carrier, find the best routes and consolidate shipments. Optimal load configuration ensures maximization of each transportload (2003). In summary, PepsiCo used the JIT process to its supply chain management. To make this possible, Pepsi partners with Penske that has provide them with i2 transp ortation optimization solutions which has satisfies their consumer with the on-time delivery and with the get to the company for it has also master transportation cost.\r\nI2 Supply Chain visibility\r\nWith shorter lifecycles and lead timesâ€to customers craveing faster results and more(prenominal) responsive service. Globalization and outsourcing have added to the complexity, resulting in more diversified supply chains. The look of supply chain partners, as well as the amount of geographic dispersion, has increased dramatically as a result. To ensure that their order-to-delivery performance is not impacted, companies need to have greater coordination and visibility into the material execute across the supply chain.\r\nIncrease Global visibility\r\nWith Companies have re invite to global visibility into all of their critical supply chain activities and partnerships. It allows organizations to respond more warmly and effectively to a wide diverge of unplanned and potentia lly disruptive supply and select events. Supply- cerebrate events can include production bottlenecks, fulfillment delays such as port strikes and customs delays, and supplier shortages. Demand-side events energy include customer orders that are greater than forecasts or changes to orders that have already been placed. I2 Supply Chain visibleness is designed to manage these events, assess their impact, and orchestrate a rapid and practical resolution while providing a unified view of the supply chain. The solution can also incorporate packaged business process packs for replenishment, fulfilment, and manufacturing, and these packages can be configured to meet customer- proper(postnominal) requirements. i2 Supply Chain Visibility also enables companies to close the grommet between traditional planning and execution processes. It enables remediate understanding of orders, parentage, and logistics data.\r\nPowerful Functionality\r\nThis solution incorporates pre-built work proceed s that integrate data across order management, warehouse management, logistics, and inventory applications for the flow of both domestic and international goods. A serial publication of predefined, extensible events and exceptions body forth each workflow and a visual â€Å"studio” allows workflows and events to be extended, configured, and customized to meet specific enterprise requirements.\r\ni2 Supply Chain Visibility delivers a robust technology that is scalable and extensible, and that operates smoothly in a distributed computing environment.\r\nExtensive Capabilities\r\nInbound and outgoing tracking of order, inventory, and logistics flows\r\nDomestic and international flows that track multi-leg and multi-modal shipments Visibility into exceptions and events across orders, inventory, and shipments\r\nRole-based views for buyers, suppliers, analysts, and 3PL vendors\r\nHigh degree of permissibility and privacy controls\r\nTrack-and-trace inventory across multiple loca tions\r\nConfigurable event detection weapon and customizable event management workflows\r\nEvent chaining such as linking of related events, audit trails, context-based hassle prioritization and extensive presentation options including e-mail, e-mail digest, pagers, and cell phones\r\nCalendars, internationalization (i18n), and multi-time zone allow enabled Integration to underlying applications for intelligent resolution and to nix event recurrence\r\nRoot-cause, event trend, and performance analysis capabilities event library with over 100+ out-of-box events support\r\nFast, web-based supplier enablement and transaction support\r\nBenefits\r\nException-based management\r\n passim supply chain visibility and event management tools\r\nCustomer-specific solutions for replenishment, fulfillment, and manufacturing\r\nThe ability to forecast and respond to supply/ supplicate events\r\nThe option to move from calendar-based to event-driven planning and re-planning.\r\nIncreased emp loyee productiveness Reduced process, personnel, and expediting costs\r\nImproved customer, supplier, and partner communications.\r\n real-time last support\r\nE-solution by Hewlett Packard (HP)\r\nPepsiCo signed a deal with Hewlett Packard in 2006 to help improve its supply chain management and increase overall efficiency. The heptad year deal involved the overhaul of modern IT solutions with PepsiCo and focused on updating server environments as well as ensuring a new root word which benefitted operations and increased overall cost-saving. In particular, HP introduced a telephone soma of new solutions which helped to encourage stronger customer relationship management and supply chain management. PepsiCo had also opted for BT as its network provider to ensure the e-solution is amply implemented. The supply chain management solution decreased costs as well as raise current service provision online and via its communications networking system. By standardizing and optimizi ng its server environment, PepsiCo International is better flex to meet its changing business needs and in turn provide better service to customers anywhere in the world.\r\nPepsi Bottling\r\nPepsi Bottling Group is the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages. With annual sales of nearly $11 billion, the company’s fastest growing segment is non-carbonated beverages, including the number one brand of bottled water in the U.S., Aquafina, as well as Tropicana juice drinks and Lipton Ice Tea. As part of a 24/7 production operation, the company’s Detroit countersink ships about 27 million cases per year. Production at the plant begins as empty bottles are unloaded from trucks via conveyor and transported to a de palletizer. From in that respect, they are, rinsed, dried and sent to a filling auto (filler uppers at the plant vary based on bottle size, ranging from 350 to 1,000 bottles per minute). The bottles leave the fillers an d make their way to a packaging machine, and then to a palletizer. Each pallet is wrapped for distribution and moved to the warehouse for shipping.\r\nThe dispute\r\nThe plant uses a variety of sensors to monitor bottles as they travel through the sequence of steps and to manage the flow to the exclusive stations. Line sensors match the speed of the conveyor. The company’s inventory of sensors swelled over the years to include more than one hundred twenty different varieties. Many of these included multiple styles of the same product stocked under different brands. A standardised problem was underdeveloped with its drives inventory, which had grown to over 50 different part numbers. The wide variety of sensors made it progressively more complex and time-consuming to transpose a faulty device. condescension its fast, high-performance machinery, the progressively lengthy and more frequent downtime was beginning to impact the company’s ability to meet its producti vity goals.\r\nIn addition, operating costs were on the rise due to the excess spares inventory. Because of the extensive number of sensors they had in inventory, including multiple styles and brands, but finding the right electric switch resulted in an hour of downtime. A more strategic approach to maintenance was necessary, as even the smallest of delays could cost the plant thousands of dollars in lost production and overtime. perspicacious that effective parts management and fast, good equipment fastness lies at the heart of efficient manufacturing, the company explored shipway to get its inventory and maintenance processes under tighter control. That’s when it decided to turn to Rockwell automation for help.\r\nThe Pepsi Bottling Group’s Detriot plant decreased its number of sensors from 180 to 46, a decrease of 66 percent, by standardizing it sensors inventory to Allen-Bradley products. This constrictd downtime and inventory costs.\r\nThe solution\r\nThe first task undertaken by Rockwell Automation was to conduct an Installed sottish Evaluation †a plant-wide inventory assessment to determine the exact number of sensors and drives the plant currently had in stock. Next it needed to figure out what products were genuinely needed and which ones could be eliminated. To streamline its operation, Rockwell Automation recommended that Pepsi standardize its entire sensors inventory on Allen-Bradley products. The topical anaesthetic distributor, McNaughton-McKay Electric Company (Mc&Mc), helped design a migration plan to help ease the cost of this inventory conversion. Although all the drives employed at the plant were Allen-Bradley brand, many were older models representing a slew of drive families. To simplify its drives inventory and upgrade its technology at the same time, Pepsi converted all of its drives to the Allen-Bradley PowerFlex family of AC drives. A detailed cross-reference chart certain by Rockwell Automation now provides technicians with a quick and easy way to identify failed and replacement parts, as well as installation instructions. To ensure reliable availability to spare parts, Pepsi set-up a Rockwell Automation work Agreement that included parts management.\r\nWith the contract, Pepsi pays a unyielding monthly cost for their spare parts, which are owned and managed by Rockwell Automation but stocked on-site. The bargain allows Pepsi to reduce its upfront expenses, have immediate glide path to spares, reduce carrying costs, and update its control technology cost-effectively. The agreement also includes an in-service warranty, so the parts don’t go out of warranty until they are actually used for the warranty period. To help the company better utilize its internal resources and reduce costly troubleshooting delays, the Rockwell Automation Services Agreement included TechConnect put forward. This remote support service provides the plant with 24/7 access to Rockwell Automa tion technical specialists. When a problem occurs, Pepsi technicians can call for immediate troubleshooting assistance to resolve it as quickly as possible. To help facilitate problem resolution, Rockwell Automation technical specialists can also perform remote system diagnostics through an Allen-Bradley modem installed at the Pepsi facility. This helped Pepsi minimize risk and reducing long term costs.\r\nThe results\r\nLeveraging Rockwell Automation Services & Support has proved to be a smart decision for Pepsi Bottling Group. The improved inventory and parts management capabilities helped reduce downtime and inventory costs, and standardizing on Allen-Bradley products eased training requirements and decrease the technology learning curve. These benefits have ultimately enhanced productivity by 8 percent and reduced the overtime required to fill orders. In addition, the plant was able to reduce the number of sensors it uses from 180 to 46, a decrease of 66 percent. Likewise, it was able to reduce the number of drive styles from several hundred to 14.\r\nPackaging as a tool for Supply chain management\r\nGS †1 standards (bar codes)\r\nRFID tags for real-time stock replenishments\r\nCommercial shelter offerings\r\nCounterfeit & pilferage\r\nOnline supply chain visibility across the chain\r\nPack safety for the consumer\r\nPepsi-Cola salve $44 million by switching from fold to reusable plastic shipping containers for one cubic decimeter and 20-ounce bottles, conserving 196million pounds of corrugated material.\r\npaletteization †cost vs. value creator\r\n let on supply chain cost optimizer through an co-ordinated supply chain approach\r\n• Drive standards †pallets/trucks\r\n• Pallet pooling services\r\nPalletization Roadmap\r\nPepsiCo’s Frito Lay Supply chain\r\nFrito-Lay is the snack food division of PepsiCo and the largest supplier of white potato and corn whisky spots in the world, currently holding 40% of t he market share globally, and selling its products in 120 countries.\r\nStrength\r\nFrito-Lay is succeeding against a multitude of competitors in a fierce, yet slow-growth industry, selling just about 4.5 billion packages of snacks per year. In order to achieve this, the company has well-educated how to masterfully create, innovate and manage all aspects of its supply chain using high-tech IT systems that allow it greater control over its production processes and distribution network.\r\nSupply chain in USA:\r\nSupplier Base: Frito-Lay’s supplier network for potato chip production has few than 100 individual suppliers.\r\n dodging Used:\r\nSeveral years ago, Frito-Lay approached its potato suppliers to seek those farmers willing to concentrate on cultivating a confine number of potato varieties, with a focus on producing the most appealing taste and quality potato chip for the consumer. Frito-Lay then offered these farmers long-term contracts, which made it easier for the farmers to get financing and for Frito-Lay to achieve more efficient, profitable economies of scale in other areas of the value chain. It is noteworthy to acknowledgment that steps like these that insure a enduring supply of raw material are burning(prenominal) to a company who purchases 2.3 billion pounds of potatoes and 775 million pounds of corn annually.\r\nFrom supplier to retailer\r\nFrito-Lay traditionally relied upon its in-house fleet of trucks to transport products from its plants to its 1,900 warehouses or 200 distribution centers. However, as the company expanded, operations managers realized that it was not economical to bewilder every product at every plant, and frankincense began specializing at particular locations. On the other hand, logistics became increasely difficult and distances grew longer, and thus, Frito-Lay learned to exploit the benefits of truck carrier services, employing Menlo Logistics to handle route planning. Menlo was able to reduce the carrie r base by 50% and negotiate nation-wide discounts with other carriers.\r\nRetailers\r\nThe last stop involved is the 400,000 stores across the nation that carries Frito-Lay’s snack food products. The company utilizes their own technological systems to show stores how reallocating shelf space, for example, can arouse larger profits. Retailers are also provided with Frito-Lay’s â€Å"Profit-Vision computer program”, which allows retailers to analyze their sales and compare it to national performance statistics. At the same time, Frito-Lay benefits from the program because it convinces retailers to allocate more shelf-space to their products.\r\nStrengths of IT corporation\r\nTracks the logistical movement of products throughout the supply chain, from acquiring the raw materials to final delivery, by utilizing its 848 tractors, 2,251 trailers, and a fleet of thousands of local computer-equipped delivery trucks. Empowers its regional managers with access to vast a mounts of information on their databases that can be used to effectively guide them in their distribution decisions. It is able to correctly assess demands across all of its products due to the availability of point-of-sale data and an spotless IT system, giving planners the ability to discern consumer trends and appropriately rise production plans. Its managers can be proficient in determining levels of inbound supplies, raw materials, the allocation of the company’s production capacity, and logistical details for truck routing. The company’s ability to target local demand patterns with effective promotion and delivery systems results in continuously optimizing profit margins and reducing inventory and uncalled-for costs.\r\nCompetitive advantages\r\nThe company tries to captivate its customers by developing extensive databases that record who their customers are and exactly what they want. They focus on being the most reliable, quality-driven suppliers who provide services through the retail channel by style of collecting as much information on the way and utilizing it to address their weaknesses and capitalize on their strengths. Despite only delivering potato and corn chips, relies on its ability to add unparalleled value in its distribution channel. Its customers know that when they do business with Frito-Lays, they aren’t simply buying a product to shelve in their stores, but incorporating an advanced information system with hopes of increasing sales and profits.\r\nSupply chain in India\r\nHorticulture piss in India is largely marketed through traditional channels. A typical marketing chain for horticultural sire consists of several workers as shown in Figure\r\nPepsiCo is one of the pioneers of contract farming in India since 2001 Their experience in contract farming has covered many crops †potato, basmati rice, tomato, chili, peanut, orange trees and more recently sea weed. PepsiCo’s operations started in Indi a started in the region of Punjab in collaboration with state government. PepsiCo India’s project with the Punjab Agro Industries Corporation and Punjab Agriculture University remains one of the most ambitious contracts farming projects in the country.\r\nPepsi Tropicana Supply Chain\r\nBackground\r\nOf the four lead story Distribution Centres (DC) in the U.S. the island of jersey urban center, N.J. DC is responsible for the supply of Tropicana juices in all states in the northeast U.S., and all Canadian provinces. Jersey City houses a unit load capacity machine-driven fund and Retrieval System (ASRS) that is fully integrated into an Automated Warehouse System (AWS). The center handles chilled premium orange juices, and blended juices from concentrate as well as shelf stable juice products from either Florida or local co-packers. Products vary according to package size, and juice lawsuit and style, giving rise to approximately 200 Stock Keeping Units (SKU), each facing haphazard demand from customers. Juices arrive already palletized and variously pre-packaged, and are unloaded according to demand, and moved into the ASRS area.\r\nThe Jersey City Distribution Center (DC) of Tropicana is responsible for the supply of Tropicana juices in all states in the Northeast U.S., and all Canadian provinces. Premium orange juice from Florida represents approximately 65% of the shipments, and has an approximate shelf life of 65 days. The Jersey City DC receives five Tropicana Unit trains from the production facility in Florida periodical. Each train has approximately 45 refrigerated cars. Juices arrive already palletized and pre-packaged in paperboard containers and plastic and glass bottles. Two types of unload procedures are currently in practice: cross-docking and warehousing. frustrate docking normally is used for customers receiving a wizard product types or transfers to a smaller distribution center in Whitestone, NY. Each train unremarkably conta ins 8 to 10 railcars that can accommodate cross-dock delivery.\r\nProblems\r\n there are three major problem areas related to the current practices in Tropicana.\r\n1. Ordering policy of the individual retailers. At the moment, Tropicana manages the inventory orders for about 10% †20% of the retailers. This process is called CRP or continuous replenishment program. The Tropicana customer service department administers the ordering of those individual customers. From the supply chain perspective, this is mutually beneficial for both the customers and the warehouse. The advantage of the warehouse is that it is able to centralize the demand information of individual stores in its replenishment decisions of juices shipped from Florida to Jersey City. The retailers benefit from in time delivery and less stock out cost. Individual stores contribute the other 80% †90% of the orders, which are not under Tropicana’s control. This is subject to random variation and hence unce rtainties of demand on the warehouse. One approach would be to create an incentive for the customers to entrust their ordering function to Tropicana. This is the so-called supplier-retailer coordination problem. A guardedly designed coordinated system will benefit each and every player in the supply chain network. This may require the design of contracts or cost sharing agreements with the customers.\r\n2. rudimentary ordering of juices that are shipped to the distribution center. Currently there are five trains of juices scheduled to arrive weekly from Florida. The company never ships partially filled trains from Florida. The Jersey City distribution center sometimes builds up inventory of certain classes of juices that are close to their end date, and the company has to get rid of them either at a very low price with sales promotion or donate them to charity. A carefully designed and sophisticated coordination of ordering policies will reduce the chances for these problems and result in savings. At the same time it will increase the fill rate because the excess capacity gained from more reasonable ordering can be used for ordering more juices of the type that cause trucks to wait in the yard.\r\n3. Combining marketing strategies with inventory levels and other factors.\r\nMarketing strategies such as sales incentives can influence demand. Foreseeing an inventory buildup problem, the company can use marketing (and mainly pricing) as a tool to either increase demand (when certain items build up) or reduce demand (when insufficient inventory is available).\r\nSolution\r\n1. Tropicana, a unit of PepsiCo, implemented i2 Supply Chain Strategist to model manufacturing logistics operations to include co-packer operations.\r\n2. The model involved over 30 manufacturing and distribution facilities and the seasonal demand of over 20 product types. 3. Tropicana used i2 Supply Chain Strategist to execute hundreds of scenarios and sensitivities, producing data that pr ovided insights into areas where the company could thin out system capacity at manufacturing facilities and increase efficiencies within existing distribution and logistics systems.\r\nLimitations of Pepsi Supply Chain over Coke\r\n1. PepsiCo has duplicate distribution systems for its beverages. Coca-Cola has for the most part maintained distribution of its entire beverage line-up through its bottlers.\r\n2. Pepsi bottling system is more fragmented than Coca-Cola’s\r\n3. In a consolidated system negotiations involve fewer players and therefore take less time to gain agreement, which may be why the Pepsi system has lagged in system efficiency efforts. PepsiCo and its bottlers have established a purchasing cooperative to gain purchasing power in buying raw materials.\r\n4. While PepsiCo has been pursue international beverage acquisitions, those investments will take time to produce significant operating income\r\n5. PepsiCo consolidation puts nip on the independent system bo ttlers to more right away consider agreements for warehouse distribution.\r\n'