Inventory Management at Frito Lay

Problem Statement: Should Frito-Lay’s, the sales leader in the shelf-stable dip category, take an aggressive approach promoting its “chip dips”, or pursue the vegetable dip category?

Attracts customers with other preferences and may compete broadly in the industry by branching out in new locations

Procurement of raw material and sub contractor labour is also the direct responsibility of the operations manager. This is to allow for the seamless arrival of the right raw materials and subcontracted components in to the production process so that there are no wasted time delays and rework of parts and components. Materials and subcontracted labour/parts must be supplied at the right quality, in the right quantity at the right price for the project to be successful.

3. Using the variable costing method, which of the following costs are assigned to inventory?

(b) Cost of Finished Goods Sitting Idle in the Warehouse: They are able to ship out   finished products effectively.

Product Costs. In Chapter 3, you were introduced to three types of costs associated with a manufactured product – direct materials, direct labor, and manufacturing overhead. Explain how these costs are associated with the manufactured product. Why are some of these costs allocated to the product through costing

Frito Lay, a division of PepsiCo Inc, has just purchased the Cracker Jack brand from Borden Inc. The company is a worldwide leader in the manufacturing and marketing of snacks, with products such as Ruffles Potato Chips, Fritos Corn Chips and Doritos found among its product mix. These well known company brands have seen it capture over 50 percent of the retail sales, and company officials envisage Cracker Jack can only but add to the richness of its product line and profits. Borden, because of its strategic decision to concentrate resources elsewhere, discontinued aggressive

Office Depot uses multiple inventory strategies to order products. 90% to 95% of goods are ordered through automatic replenishment, manual replenishment, pull replenishment, and global sourcing are also used depending on channel, volume, velocity and cost. (Office Depot, 2015). The accuracy of the inventory from both a DC and store perspective is critical to the organizations success. Heizer and Render (2014) state that record accuracy is a prerequisite to inventory management, production scheduling, and sales. Accuracy is maintained by either periodic or perpetual systems (p.479). In Office Depot, the stores are required to cycle-count technology items such as laptops, desktops computers, and tablets five days a week. Discrepancies are entered in the system and bounced off the local DC’s on-hand inventory discrepancies. Office Depot is a “blind receive” organization meaning the stores receive pallets of products and simply unwrap and put them away. The only way a store knows if a product is missing is through the cycle-count program. This system was put into place to speed up the receiving process and eliminate unnecessary steps once the product was received at the store level. Office Depot conducts a full physical inventory once a year through a third party and trues up the inventory shrink at this time.

The primary reason for the Borden Foods to divert itself from snacks is to emphasis its efforts and resources in the growth of their whole-wheat meal segments. Because of this valuation they had and a growth plan they had they decided to announce sale of Cracker Jack in 1997. The management team of Broaden also recognized that with the increase in competition they have not been able to successfully grow the sales figure in past five years. Also because the Cracker Jack brand has various packaging options and has been maintaining a huge product line of 32 Stock-Keeping Units (SKUs). However, currently Broaden production facility had only 32 percent of space allocated to Cracker Jack Products and has been operating at 32% of its

[By doing so, customers ultimately get better value, therefore each member of the supply chain gains competitive advantage.] Pars Food Ltd currently outsources their raw materials, therefore they have looked at sourcing their own potatoes with their own transport. Due to high amounts of quality rejection of frozen chips, they would like to reduce this, thus, having their own transport means they are now in control of how their raw materials get to their factories and therefore can monitor quality more closely, ultimately improving it. In terms of investing in storage and improving customer satisfaction and zero complaint levels; Jane William’s Idea of using the Just in Time method may achieve this, by having their own transport they have control over how reliable the supply is and communication should not be a problem. Therefore products can be made as they are needed and their won’t be as much need for storage e.g. “Stake Cut Chips” which have been left in storage for 2 months and not shifted.

Frito-Lay is a national brand and a worldwide leader in the manufacturing and marketing of snack chips. Frito-Lay accounts for 13 percent of sales in the US snack food industry. Frito-Lay’s

Because the product was leaving the warehouse and getting to stores quicker, I was able to reduce the storage space which was an initial problem so the increase of costs because of it decreased. The stores showed a moderate increase in profit.

Proximity to raw materials gives benefits on distribution channel which is already organized by formers. This also gives an added advantage in reducing transportation costs

Frito-Lay uses Product focused process strategy for its food manufacturing operations in terms of process.

The director of logistics at Happy Chips Incorporated had recently circulated a letter that came from the only mass merchandiser, Buy 4 Less, complaining of poor performance. Buy 4 Less is looking for Happy Chips to increase deliveries by one per