PepsiCo Pops the Top on a Streamlined Supply Chain As the world’s second-leading beverage and snack food company, PepsiCo’s streamlined supply chain strategy is a key aspect of the company’s success.
To maintain steady growth, PepsiCo has focused heavily growth,
on acquisition. The soda giant has become much more than its signature
PepsiCo built its success on an ecient and robust supply chain strategy that ensures its beverage and snack products are always available on store shelves.
drink; it now owns Frito-Lay, Gatorade, Tropicana, Lipton, and Quaker Foods, among other brands. With so many brands under its umbrella, it has mastered supply chain operations and production processes and has even aimed for sustainability measures along the way. MANAGING THE FLOW As a vast, multinational company, Pepsi must input, analyze, and act on an enormous amount of data to properly manage the ow of its food and beverage products—each with its own speci c needs. For instance, some products require cold chain logistics, while others involve sourcing ingredients from multiple regions around the world. In addition to coordinating numerous suppliers, manufacturers, shippers, warehousing managers, and retailers, PepsiCo’s supply chain strategies also must account for potential disruptions. These disruptions to the supply chain could be for a variety of reasons, such as seasonal sourcing requirements, weather and climate change, and shifts in demand. Regardless of what happens, the company needs an on-time delivery network to get products on store shelves. PepsiCo has been increasingly focused on investing in digital tools and advanced technologies to create a more ef cient, streamlined supply chain. Speci cally, the company is zeroing in on data integration to create a clearer picture of the individuals and households
Zara Fashions a Responsive Supply Chain
buying PepsiCo products. Not only could this help the business meet consumer demand in the short term, but it could also allow for better long-term strategizing and forecasting. More sophisticated data analytics also helps PepsiCo’s distributors and retailers track inventory. By improving ordering algorithms, stores can put in much more accurate orders, accounting for sales histories and purchasing trends. This helps create a streamlined, cost- ef cient chain.
Operating nearly 3,000 stores around the world and present in 96 countries, with European stores making up a large percentage of this, Zara is one of the world’s leading fashion retailers. While the clothing giant’s success can be accredited to various factors—from its keen eye for emerging trends to its laser- sharp focus on customer experience—its highly responsive supply chain is what gives Zara its competitive edge and intriguing business model. JUST IN TIME PRODUCTION This fast fashion business model is easy to see in action. Walking into Zara stores makes it evident. In a matter of weeks, shoppers will nd fresh oor designs and new clothes that weren’t available for purchase several days prior. The company manages to stay ahead of the trends thanks to a constant ow of new goods that come about through its supply chain strategies. Zara changes its apparel designs every two weeks on average; most of its competitors and other fashion supply chain giants do so every 10 to 14 weeks. To maintain this lightning pace, the fast fashion retailer utilizes just-in- time (JIT) production methods to keep turnaround times as tight as possible.
DEALING WITH DISRUPTIONS PepsiCo is used to dealing with
supply chain disruptions; as a major international corporation, natural disasters are par for the course. But the pandemic was something else entirely that completely ipped the supply chain process on its head all across the beverage industry. To ensure a streamlined, ef cient supply chain, PepsiCo taps into lean methodologies—but during the pandemic, every link in its supply chain was being tested. For global actors such as PepsiCo, the crisis presented unique challenges and opportunities to identify areas for improvement. Going forward, PepsiCo may choose to keep more inventory on hand, allowing for quicker responses in the event of future disruptions.
108 Inbound Logistics • January 2024
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