Describe the challenges faced by the company from a global perspective in distri

Question

Describe the challenges faced by the company from a global perspective in distributing its products or services. How is the company going to minimize cost and maximize profits through warehousing and transportation cost? What are the options? Which is the best option? Make recommendations to resolve the challenges.

how does the company go to market? Do they have distributors or reps? Do they go to the customers directly? Do they sell products online and in brick-and-mortar stores?

Can you help me answer any of these questions about the PepsiCo company? I need specifics related to operations management, some research may need to be done. Thank you for any help.

Explanation / Answer

The XYZ compnay mentioned is one of the gobal leaders in Beverages and ready to eat food and snacks.

The nature of products as expected makes a complex distribution network inevitable.

Challenges faced by the distribution can include:-

a) Demand-Supply gaps partly due to Bullwhip effect where an artificial inflation of demand due to anticipation occur.

b) Complex channel conflict- Some products are directly fulfilled to retailers, some are taken care by local distributors as in the case of cold drinks and some to customer warehouses

Cost minimization can be achieved through proper product segmentation and rationalizing the vendor base for transportation by effectively selecting dedicated transporters for a particular segment of products in a certain geography. Warehousing in customer locations for certain food and beverages for hyermarket, supermarket kind of customers will not only full availability but will also reduce costs and increase serviceability. Stockout of any particular product will lso be rare.

The rarely go to customers directly and in most geographies outside USA there are local distributors attached to bottling plants who make the products reach the retailers. The company has started to venture into online sales with precaution as many are perishable food items and quality is paramount. By selling online food and beverages this may not be ensured.However, reaching direct to customer is also important as per the company's leadership. Although it may not be profitable to sell to retail customers online, purpose is to provide convenience and garner a better market share.Much of the consumption is through common stores as well as supermarkets,hypermarkets.

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