Supply Chain Management of PepsiCo

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Case Details:


Case Code : OPER102 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 +Shipping & Handling Charges extra


Supply Chain Management/ Distribution Model

Case Length : 14 pages
Period : 2005-2011
Organization : PepsiCo.
Pub Date : 2012
Teaching Note : Not Available
Countries : US; Global
Industry : Food and Beverages


In 2010, PepsiCo Beverage Company (PBC), an operating unit of PepsiCo Inc. (PepsiCo), the second largest food and beverage company in the world, received the supply chain innovation award from the Council of Supply Chain Management Professionals (CSCMP). PepsiCo was given this award for its innovative distribution strategy, the “Direct to Store Delivery model”, that reduced system-wide inventory, eliminated warehouse space constraints, enhanced the potential for unlimited SKU growth, and delivered warehouse cost savings. After showing spectacular growth in the 1990s and early2000s, PBC found it difficult to manage its distribution centers and warehouses.

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The case looks at how the company tried to optimize cramped warehouses and how it revived its distribution strategy using automation technology. The case also highlights the benefits of total supply chain transformation for PepsiCo. This case can be used by MBA / MS students studying Operations Management as part their curriculum.


To understand the supply chain process of PepsiCo.
To understand and discuss PepsiCo’s innovative distribution strategy, the “Direct to Store Delivery model”.
To examine the benefits of the “Direct to Store Delivery model";.
To discuss PepsiCo’s collaborative supplier relationship.


  Page No.
Introduction 1
About Pepsico 2
Supply Chain Management at Pepsico 4
Procurement of Raw Materials 4
Manufacturing Operations 5
Distribution Network And Logistic Management 6
Pepsico's Relationship with Retailers 8
Road Ahead 9
Exhibit 10


Operations Management, Supply Chain Management, Supplier Network, Operational Strategies, Distribution Model, Direct to Store Delivery model, Automation Technology, Inventory Management, Collaborative Supplier Relationship, Continuous Improvement, Supply Chain, Low Cost manufacturing, PepsiCo, Quality.

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