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Introduction A. Background of the Study Having limited information about operations management, this study would just include the basic knowledge we learned and how is the knowledge being applied in the real world. This study would enable us to understand the usefulness of the course in businesses especially in the production of goods and/or the rendering of services. B. Objectives of the Study 1. To apply the lessons we learned inside the classroom and to know how are these information used in real businesses 2. To learn more things about Operations Management which are not included in the lessons we ve already discussed 3. To enable us analyze, evaluate, and solve management problems which are concerned with the operations function 4. To know how a company implements its strategies for cost minimization to achieve maximum profit 5. To know how the company adjusts its operations given economic, legal, financial, and other constraints which could affect production C. Scope and Limitations of the Study Pepsi Cola Products Philippines, Incorporated (PCPPI) is well known internationally for offering drinking beverages which are of the best value for every drinking occasion. They had a lot of plants situated here in the Philippines,

since the company is too big for us to study its whole operating processes; we limited our scope to the plant situated in San Jose, San Miguel, Iloilo. The company is also offering different beverage products which also have different features. But not all of these are available for production in that plant; therefore, we are limited to those products available for production. Our group is also limited to our objectives and the requirements needed for this paper since we can t create a very complex study due to time constraints. As students, we are limited only to the knowledge we acquired in taking up this course. D. Methodology


Company Background A. Company History and Evolution PepsiCo which is an international company has made its way and become one of the most successful business companies in food and beverage market in the worldwide. It was ranked as the world s second largest business which offers wholesome products to its different consumers in over 200 countries, including the Philippines.

The company originated during 1896 in New Berlin, North Carolina, USA as a drug store with its founder Caleb Davis Bradham, a pharmacist, who wanted to create a fountain drink that was tasty and nutritious. The drugstore happens to be a place for socialization of the clients wherein Bradham would offer its latest soda fountain. The store also featured a kind of primitive jukebox, where a nickel would entertain the listener from the latest violin or piano selections. Over time, one of his recipes became known as Brad's Drink. In 1898, it was sold in the market and a member of the press who tasted it declared that the drink "has sparkle and just enough acidity to make it pleasant." That same year, Bradham joined hands with some partners to sell Brad's Drink to other drugstores and renamed it Pepsi-Cola. It is believed that Pepsi was derived from pepsin, an enzyme that aids digestion. However, it is not because Pepsi-Cola contained pepsin, but because it was believed that the beverage likewise aided the digestive process. Contrary to the implication of the word cola, the original formulation of Pepsi-Cola did not contain the kola nut, only a refreshing cola taste, which many believed revitalized them whenever they are tired. At the close of World War II, John Clarkin, a native of Minnesota, USA came with the American forces and introduced Pepsi-Cola to the Philippines. He became president and the first general manager of Pepsi-Cola Bottling Company of the Philippine Islands Ltd. upon acquiring a franchise to bottle Pepsi in the Philippines on October 16, 1946.

For the first one year, Pepsi was imported from the U.S. until the first bottling plant was put up in Quezon City in 1947. In 1957 PepsiCo International took over Pepsi s operation in the country when Clarkin decided to return to the U.S. and Pepsi became a branch of the New York PCI Office and its name was changed to Pepsi Co Inc. (Philippine Branch) in1983. Under PCI s administration, Pepsi dominated the market with a share of more than 60%. The success of Pepsi was due to an aggressive marketing program dubbed Have a Pepsi Day and the launching of Mountain Dew. In 1985, Pepsi Philippines became a Filipino corporation when the Escaler led Pepsi-Cola Distributors of the Philippines Inc. and acquired its franchising and bottling rights. In 1989, premier beverages which was led by Luis Lorenzo Sr. and the AFP-RSBS, assumed majority ownership of the firm, and gave it a new name: Pepsi Cola Products Philippines Inc. (PCPPI). Under the Lorenzo's, PCPPI introduced the plastic returnable bottle which is the first of its kind in the industry and produced its first house brand in Premier bottled water. In April 1997, the Lorenzo group invited Guoco Holdings (Philippines) Inc., a Hongkong-based holdings firm, to infuse the needed capital into PCPPI. As the majority owners, Guoco has not only brought in fresh capital but also installed a seasoned management team. Under this new leadership, PCPPI's sales volume has been on the rise. 2002 is an important milestone in PCPPI s history since it is the year when PCPPI registered dramatic business growth and made a turnaround. In 2004, the

company introduced non-carbonated beverage to the market transforming itself into a total beverage company. PCPPI was named as the Best Bottler of the Year for Asia by PepsiCo Inc. during 2006 and in 2008 PCPPI had successfully launched its initial public offering. Currently, it has 14 plant distributed all through out in the region. Plants in Luzon includes Muntinlupa Plant ( Tunasan, muntinlupa City); Central Luzon Operations ( Sindalan, San Francisco, Pampanga); Cagayan Valley Operations ( Turingan St., Dubinan East, Santisgo City, Isabela); North Luzon Operations ( udiao, Rosario, La Union); Modern Trade Operations (United St. Corner, West Capitol drive, Capitolyo, Pasig); Southern Tagalog Region operations (Fusion St. LISP1, Brgy. Dierzmo, Cabuyao, Laguna) ; and Naga Plant (Conception Grande, Naga City). Plants in Mindanao are Cagayan de Oro Plant (Tin-ao, Cagayan de Oro city); Davao Plant ( Dumoy, toril, davao City ); and Zamboanga Plant ( Mercedes, Zamboanga City) with a total of three plants. Four plants are located in Visayas which includes Cebu Plant ( Minglanilla, Cebu); Tanauan Plant ( Sto. Nio, Tanauan, Leyte); Bacolod Plant ( Bata Subd., Mandalagan, baciolod City); and Iloilo Plant (San Jose, San Miguel, Iloilo). We say that almost in every city, there is an existing Pepsi Plant which produce and cater the needs of its customers. These constructed plants are based according on the research made by the company. They plan it very well to minimize cost while dominating the market.

Among the cities here in region six, they are able to determine that Iloilo serve as the regional center of the Western Visayas, and the center of the IloiloGuimaras Metropolitan Area. So there are plenty of opportunities at stake for the company to dominate the market in Western Visayas if they are able to put up a plant in Iloilo. However, choosing a site for the plant to materialize is never been easy. They would be confronted with different problems and strict regulations if they put the plant at the heart of the city. So, they decided to find another place and found a vacant lot at Brgy. San Jose, San Miguel, Iloilo. The Iloilo Plant which is the subject of our study covers the whole Panay and Palawan Operation. It is the most accessible place since the place offers a good location. There is an ample supply of water in the area which gives the assurance for a continuous productivity of the plant. The place is far from the city proper so there is no rules and regulation to hold back the production process. The plant management insures to maintain the good condition of their facilities and safeguard the quality of water that they are using. They are also improving their facilities and this 2009, a new assembly line was installed to increase the production and counter the high demand especially during the peak season. B. Organizational Structure 1. Organizational Chart

2. Functions and Responsibilities of Personnel The company exhibits a functional organizational structure in its plant level. The general manager is the head of the plant. The four functions are the following: Sales Department, Administrative, Manufacturing Department, and Human Resource Department. The Sales Department is headed by a Sales Manager who delegates tasks to the sales force. They are responsible for product deliveries and marketing. The Administrative Department is headed by a Finance Manager who delegates duties to his respective staff. They are the ones in charge of the accounts of customers, suppliers, and third parties. The Manufacturing Department is headed by the Operations Manager. Under him is the Productions Manager who heads the sub-department, Productions. They also have their respective staff. They are responsible for the manufacturing and production of the beverage products. The Human Resource (HR) Department is headed by an HR Manager. He also has his respective staff. They are the ones in charge of hiring and laying off employees. 3. Qualifications of Personnel Most of the employees with higher positions are young. 4. Salary Scale of Personnel Salary bracket for the respective employees are not given. III. Description of the Company s Operations A. Designing the System 1. Product and service Design

The company, as a whole, has been well known in investing on carbonated soft drinks, cola and non-cola. Now, it is entering into another field of producing non-carbonated drinks which is complementary wit