Pepsi-Cola was incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. PepsiCo's product portfolio includes a wide range of foods and beverages, including many iconic brands that generate more than $1 billion each in estimated annual retail sales. Through its operations, authorized bottlers, contract manufacturers, and other third parties make, market, distributes, and sells a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories. However, after conducting annual audits for the financial year 2021 - 2022, the board of directors noted anomalies in three functional areas (Stock out, Demand Plan, and Production plan) of its Jamaican subsidiary. The aim of the Managing Director of the Jamaican subsidiary is to align best practices to its Parent company in meeting global standards. It was also noted that sales for Diet Pepsi in the Latin America and Caribbean region were 3 million cases while Pepsi Co Jamaica recorded sales of 1 million cases. The following provides a breakdown of stockouts, demand plans, and production plans for the Jamaica arm of the company. Stockouts: Pepsi Co Jamaica 8% in comparison to Pepsi Cola’s global operation = 4% Demand Plan: Pepsi Co Jamaica 77% in relation to Pepsi Cola's global operation = 87% Production plan: Pepsi Co Jamaica 78% in relation to Pepsi Cola's global operation = 85% Observations There is no clear supply plan. There is no raw materials inventory policy, The raw materials delivery lead time from the supplier to the Pepsi Co Jamaica plant is 3 months. There is insufficient storage for raw material. The supply time that Pepsi Co Jamaica offers to its clients is four 4 days. Pepsi Co Jamaica plant efficiency is 55%. Instructions: Explain the most appropriate distribution system that can be used by Pepsi Co Jamaica to reduce order lead time and client delivery lead time. Please provide a justification for your response. Discuss which supplier control strategy Pepsi Co Jamaica should implement to remain competitive with Pepsi Global.
Pepsi-Cola was incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. PepsiCo's product portfolio includes a wide range of foods and beverages, including many iconic brands that generate more than $1 billion each in estimated annual retail sales. Through its operations, authorized bottlers, contract manufacturers, and other third parties make, market, distributes, and sells a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories. However, after conducting annual audits for the financial year 2021 - 2022, the board of directors noted anomalies in three functional areas (Stock out, Demand Plan, and Production plan) of its Jamaican subsidiary. The aim of the Managing Director of the Jamaican subsidiary is to align best practices to its Parent company in meeting global standards.
It was also noted that sales for Diet Pepsi in the Latin America and Caribbean region were 3 million cases while Pepsi Co Jamaica recorded sales of 1 million cases. The following provides a breakdown of stockouts, demand plans, and production plans for the Jamaica arm of the company.
Stockouts: Pepsi Co Jamaica 8% in comparison to Pepsi Cola’s global operation = 4%
Demand Plan: Pepsi Co Jamaica 77% in relation to Pepsi Cola's global operation = 87%
Production plan: Pepsi Co Jamaica 78% in relation to Pepsi Cola's global operation = 85%
Observations
There is no clear supply plan.
There is no raw materials inventory policy,
The raw materials delivery lead time from the supplier to the Pepsi Co Jamaica plant is 3 months.
There is insufficient storage for raw material.
The supply time that Pepsi Co Jamaica offers to its clients is four 4 days.
Pepsi Co Jamaica plant efficiency is 55%.
Instructions:
- Explain the most appropriate distribution system that can be used by Pepsi Co Jamaica to reduce order lead time and client delivery lead time. Please provide a justification for your response.
- Discuss which supplier control strategy Pepsi Co Jamaica should implement to remain competitive with Pepsi Global.
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