PepsiCo's Distribution and Logistics Operations
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Case Details:
Case Code : OPER031
Case Length : 12 Pages
Period : 1991 - 2003
Organization : PepsiCo.
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Food & Beverages
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Pepsico's Distribution Operations
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Since its inception, PepsiCo attached a lot of importance to its distribution
operations. Each day, the company's products such as snack foods and beverages,
were distributed through various retail channels in the US and across the world.
PepsiCo's distribution system was aimed at making available all or most of the
products in its portfolio within a distance easily reachable by consumers.
PepsiCo was conscious of the need to adapt its distribution systems according to
the needs and preferences of global customers. Based on its experience, PepsiCo
had developed various distribution models to offer its products and services to
customers in the US. These included the Direct Store Delivery (DSD), Broker
Warehouse Distribution (BWD) and Vending & Food Service (V&FS) systems...
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Pepsico's Logistics Operations
In order to manage its distribution systems effectively, PepsiCo had put in
place advanced logistics systems. PepsiCo sold beverage concentrate to
bottlers, who added carbon dioxide, sweetener and water to make beverages
and beverage syrup. Syrup was either sold directly to the fountain accounts
or was combined with carbonated water for bottling. Bottling companies were
(with a few exceptions) owned and operated by local companies in the
countries where PepsiCo operated...
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The Efforts Continue
Through their use of the most modern technology in recent years, PepsiCo
and its bottlers were able to improve their distribution and logistics
management operations significantly. To further improve the market
penetration of its products globally, PepsiCo launched two new
distribution methods in the initial years of the new millennium. These
were the chilled DSD system and the hybrid system.
The chilled DSD system was a relatively small distribution method,
created for items which required continuous refrigeration. This was
primarily created for the fruit juices product line... |
Exhibits
Exhibit I: Pepsico Group of Companies
Exhibit II: Pepsico's Financials
Exhibit III: Pepsi Cola - Soft Drink Distribution Channels in the US
(1998-2002)
Exhibit IV: Frito Lay - Snack Foods Distribution Channels in the US
(1998-2002)
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