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
 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.
• 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.
 DIRECT STORE
DELIVERY
(DSD)

MAJOR
DISTRIBUTION
SYSTEMS

VENDING & FOOD BROKER

SERVICE SYSTEMS (V WAREHOUSE
& FS) DISTRIBUTION
(BWD)
 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

ADVANTAGES:-
•Employees at the stores handled the products
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’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.
 Beverage manufacturing unit to
bottlers
• 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 objective
1. Timely delivery(99.1% accuracy).
2. Reduce transportation cost.
• 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.
 Bottlers to retail outlets
• 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.
 Modern technology
 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.
THANK YOU