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?  

These questions are specific to PepsiCo and Operations and Supply Management. Some research may be required. Any help is appreciated it is due at 3PM EST 12/4/17. Thank you.

Explanation / Answer

Distribution of product basically involves storage and transporation. The major challenge in this segment for products of Pepsico are the changing demand of the product, shelf life of the product. Pepsico being beverage has seasonality in their products. Some products are more saleable during summer season. While some others like Tropicana has almost constant demand and it may vary based on the impact of their campiagns. Thus effect of distribution has various significance from the after market and before market factors. Thus in a supplychain the overall efficiency of distribution needs co-ordination from inbound and outbound of services. Pepsico has strong network across global and they reduce the overall transportation cost through effective supplychain netwrok re design. They map their products based on the demand and arrange hubs for storage and they are called as cross docks. Consolidation of shipments based on the routes ( route optimisation), opportunity of mode shift ( from less than a truck load to full truck load, air to sea mode etc). Thus with the leverage of the various opportunities and hub rationalisation can reduce their size of warehous and minised the storage cost. Company go to market through effective lastmile delivery, By forward integration Pepsico can directly distribute their products to retailers. This will helps them to reduce the overall spend in distribution, better negotiation with transporters to get the competitive rates,. They mostly sell their products through brick and mortar and through corporate tieups. This is majorly because of their limited shelflife of the product. They do also online shop via vendors like reatilers and sponsorship sot various sports and corporate events.

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