Managing Operations in PepsiCo.

Managing Operations in Pepsi-Cola1INTRODUCTION OF PEPSI COLA:3VISION / MISSION STATEMENT:3ABOUT SHAMIM & CO. PEPSI COLA MULTAN:3Objectives:4HISTORY OF PEPSI-COLA:4Setup of Pepsi-Cola:4CURRENTLY OFFERING PRODUCTS:4Products Manufacturing in Multan:5PEST ANALYSIS5Political Analysis of PepsiCo.5Economic Analysis of PepsiCo.5Social Analysis of PepsiCo.6Technological Analysis of PepsiCo.6PEST Analysis of Multan Branch7SWOT ANALYSIS OF PEPSICO.7Strengths:7Weaknesses:7OPPORTUNITIES:8THREATS:8SWOT Analysis of PepsiCo. Multan9CONCEPT APPLICATION9Systems of Operation Prevailing in PepsiCo:9Supplier Qualification System:9Food Safety System:10Training System:10Standard and Specification System:11Quality Management System:11Validation System:11SCADA System:11Feedback System:12Processes involved in making a Complete Product13Filling Process13External and Internal Suppliers14Capacity14Demand Forecasting15Competitive Priorities and Capabilities15In-House Core Processes15Out-Source Core Processes16Order Winners and Order Qualifiers of PepsiCo.16Processing Cycle of Pepsi:17Core Competencies:18Effective Supplier Relationship:19Bottleneck:19Global Strategies:19CONCLUSION:20QUESTIONS:22References and Bibliography:23

INTRODUCTION OF PEPSI COLA:Pepsi-Cola is a carbonated beverage that is produced and manufactured by PepsiCo. The drink was first made in the 1980s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since 1903, including Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil, Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, and Pepsi Ice Cucumber in Japan.The company is registered in New York stock exchange U.S.A. to make a better control over the business the company has given the manufacturing rights to different companies. Now, these companies are producing the products on the behalf of the company by using their trademark. To maintain their goodwill in the market the company has a strict policy while granting the manufacturing rights Pepsi-Cola have standardized products all over the world (e.g., same in size, shape and quality). The franchises have to follow all the standards as given by the company. Even they have the mobile team, which check the company after 2 or 3 months. Either company is producing products according to the standards given by the Pepsi Cola international.VISION / MISSION STATEMENT:We aspire to make Pepsi Company the worlds premier consumer Products Company, focused on convenient beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for the growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity.ABOUT SHAMIM & CO. PEPSI COLA MULTAN:Pepsi Multan was incorporated in 1963 but it started its production in 1967.Allah Nawaz Khan Tareen(Ret.DIG) got license of 7-Up. But in 1973, it became Pepsi Cola franchise. Now a day MD of Pepsi Cola Multan is Alamgeer Khan Tareen son of Allah Nawaz Khan Tareen. At start Pepsi Multan was having only one production plant made by Netherlands, and was only producing 7-Up because it was the only brand produced by Parent Company. In 1973, PEPSI acquired 7-Up in Canada so the Multan franchise started producing PEPSI and Mirinda along with 7-Up & became PEPSI franchise. In Pakistan, Shamim & Company is among top of three out of eleven companies. When franchise cross a certain volume, plant is classified as, mega plant status Pepsi Cola has achieved in 2000. Coke was already operating in the market at the time when Pepsi Multan established. At that time Coke was market leader but with the passage of time, Pepsi Multan kept focusing on gaining the market share. Then, Pepsi has launched a new brand with the name of mountain Dew. Now Pepsi Multan is working with five production plants capable of producing 100,000 cases per day. Installation arrangements for two new plants are in process. The plant which was installed at the time of establishment has now been grounded. Pepsi Multan's currently market leader with more than 80% of market share. The company is properly serving all these areas with quality products. Pepsi Multan is not an ISO certified company because it is an international drink having their own standards and there's no export.

Objectives:

Objective of Pepsi is to maintain market leadership and increase market sales. Pepsi Cola is in Pakistan as compared to its competitors according to Shamim & Company we have to place our position on top. Whenever we make policies, leaders kept in mind that we are number one in current market position.

HISTORY OF PEPSI-COLA: In 1893, Caleb Bradham, a young pharmacist from New Bern, North Karolina, begins experimenting with many different soft drinks. In 1898, one of Caleb's formulation, known as Brad's Drink a combination of carbonated water, sugar, vanilla, rare oils and coca nuts, is renamed Pepsi-Cola. On August 28, 1898, Pepsi-Cola received its first logo. In 1902, he applied for a trademark with the U. S. Patent office, Washington D.C., and formed the first Pepsi-Cola company. In 1905, Pepsi-Cola's first bottling franchises were established in Charlotte and Durham, North Karolina. In 1906, Pepsi gets another logo change, the third in eight years. The modified script logo is created with the slogan, The original pure food drink. In 1920, Pepsi theme line speaks to the consumer with Drink Pepsi-Cola, it will satisfy you. In 1923, Pepsi-Cola was declared bankrupt and its assets were sold to a North Karolina concern, Carven Holding Corporation, for $30,000.

Setup of Pepsi-Cola:

The head office is situated in New York (USA) with units operating in different regions of the world. These are called business units and Pakistan is in MENAP (Middle East, North, America and Pakistan). The head office of MENAP is situated in Dubai (UAE). The local head offices for each country are situated in the respective capitals.

CURRENTLY OFFERING PRODUCTS:The first product of Shamim & Company was 7-up. But the Company is producing following products. Pepsi Cola Diet Pepsi Mirinda 7-up 7-up Free Mountain Dew Sting Gold Rush Sting Berry BlastProducts Manufacturing in Multan:1. Pepsi 2. Diet Pepsi3. 7-up4. Diet 7-up5. Mountain Dew6. MirindaPEST ANALYSISPest analysis study the changes caused by political, economical, social and technological factors.Political Analysis of PepsiCo.In the FDA (United State food and drug), non alcoholic beverages fell in the food group. In terms of regulation, the government shows responsibility in the process of manufacturing all these products. For example, if they do meet a standard law, there are possible fines lay down by government on companies.Following are the factors that could make PepsiCo. actual result to be changed from the expected result discussed in their original companys forward report. Changes in regulations and laws: This comprise changes in accounting standards, taxation requests which are (new tax laws, tax rate changes and revised tax law interpretations) in addition to ecological laws in foreign and domestic jurisdictions. This is going to affect our product selling price. Political Conditions: This is mainly in our international markets, which include civil unrest, change in government and restriction on the possession to transfer capital across borders. For example the civil unrest in Gaza is going to affect our market in the Middle East. Ability to enter developing markets: This mainly depends on both political and economic situation and how fine they are capable of forming strategic business alliances and make essential infrastructure enhancements. This might be difficult in some countries because of some strict laws set by their government e.g. existence of monopolies, employing 95% of the citizen and so on. This is going to affect our international market penetrating to developing countries. Changes in the non-alcoholic industry environment: These consist of competitive product, without limitation and pricing pressures and their capacity to achieve or keep share of sales in the global market because of other competitors. The government affect all these changes by setting rules like barriers to entry i.e. making it difficult for new company to come up, price fixing, this is going to affect our share value in the global market because our product are not sold at our desirable price.

Economic Analysis of PepsiCo. Global Recession: Few years ago, the united state economy was very good and almost every part of it was rising and was going fine. Though, lot things have change. Economists often describe recession as a negative GDP growth or two consecutive quarters of contraction. Recently, the government officially confirmed that united state has been experiencing recession for the past few months. However, the forceful action by Federal Reserve and congress has helped the economy in going back to sustained positive growth in the next few months. The Federal Reserve is trying their best to help the economy recover. Interest Rate: Interest rate has been cut down ten times recently. The rate has now fall between 40 years low of 3%. Reducing the interest rates will definitely stimulate customer demand in the economy. Companies will have the opportunity to enlarge and increase by collecting loans as an outcome of low interest rates on borrowings. PepsiCo can easily loan money to invest in new products because the interest rates are now reduced. The loan collected can also be used on research of new products. As researching for new product would cost less, PepsiCo will sell its product at a cheaper price and people will spend because they will get Pepsi product at a cheap rate. Fear for inflation: The United States is on the course to achieve its economic levels back. Recently, consumers are now continuing their normal way of life i.e. going shopping, eating out at eatery and so on. Thou many are still careful with their money because they still have the believed that lower inflation is still coming. Consumer will recover their full confidence shortly and will have impact in our sales figures.According to the Standard and Poor`s Industry surveys, non-alcoholic beverage industry has high sales in most countries outside the united state. For major soft drink companies, there has really been improvement in the economic in major international markets. Such as Brazil, Japan etc. These markets will keep on playing a major role in the steady and success growth for most non-alcoholic beverage industry.Social Analysis of PepsiCo.A lot of United States citizens are now practicing healthier way of life. The impact of this on the non alcoholic beverage industry is that many people are now changing to pure water and diet cola with zero sugar compare to coke, beer and other alcoholic beverages. The necessity for pure water and products that are healthier are now very important in the standard day to day life. Most consumers between the ages of 40-55 are gradually more worried with nourishment. As many are growing older, they are more worried in increasing their prolonged existence. This will keep having impact on the non alcoholic beverage industry by rise in demand for healthier beverages.Technological Analysis of PepsiCo.The following are some of the factors that affect the companys actual result to differ from the result expected. The usefulness of company marketing, advertising and promotional programs. The recent development in technology of TV and internet e.g. the latest use of HD graphics. They make product look more attractive especially if the HD is used on the television. This help in convincing the customers and selling the products. The introduction of vending machines, plastic bottles and cans have helped to increase sales for PepsiCo. This is mainly because they can easily be carried and disposed after use. The introduction of vending machine has also helped to increase sales because it will save labor cost. As technology is growing everyday and getting more advance, there has been overture of new machineries which will enable PepsiCo product to increase tremendously than it was years before. PepsiCo has over 10 factories in the United States which use most state of the art of drink technology to make sure top product quality and very fast delivery. The biggest factory is in New York opened in 1990. This factory has a machine with the latest technology which can manufacture cans of PepsiCo drinks faster than bullets from a machine gun.

PEST Analysis of Multan Branch

Political:No IssuesEconomical:Power outages cause great impact on operational cost.Social:Being present in city center we face difficulties in transportation of material.Technological:Away from tech-centerslike Karachi & Lahore we sometimes have to get expensive support from these cities. 100% solutions are available.SWOT ANALYSIS OF PEPSICO.Strengths:1.Company Image:It is a reputable organization and is well known all over the world with the image of producing a high quality product.2.Quality Conscious:They maintain a high quality as Pepsi Cola International collect sample from its different production facilities and send them for lab test in Tokyo.3.Good Relation with Franchise:Throughout its history it has a good relation with franchisers working in different areas of the world where they have the production facilities.4.Production Capacity:It has the highest production capacity i.e. 60,000 cases per day is not only in Pakistan but also in all over the world this trend is observed.Weaknesses:1. Short Term Approach:They have a lack of emphasis on this in their advertising such as currently when they lost the bid for official drink in the 96 cricket world cup. They started a campaign in which they highlight the factor such as nothing official about it.2.Weak Distribution:They lack behind in catering the rural areas and just concentrating in the urban areas.3.Low consumer knowledge:They are unable to enhance local consumers knowledge.4.Lack of soft drink:Lack of soft drink know-how as a result of diversified business units and generalist managersOPPORTUNITIES:1.Increase Population:As almost in all over the world growth rate is increasing which in turn increases the demand of products and necessities and especially in Asia the market is growing at a faster rate as compare to other continents. So they have to attract new entrants.2.Changing social trend:As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product.3.Diversification:They may enter in garments business in order to promote their brand name, by making sports cloths for players which represent their name by wearing their clothes.4.Distribution of snack foods:They have opportunity of distributing Pepsi snack foods in the world.THREATS:1.Imitators:They also have a problem of imitators as receives complaints from customers that they find take product in disguised of Pepsis product.2.Government Regulation:They face problem if government employ taxes on them which force them to raise the price of their product.3.Corporations shortage problem:Again this is also a serious threat from it suppliers as if supplier is unhappy with the company. He may reduce the supply and exploit the company. This action will surely affect the production process.4.Non-carbonated substitutes:Non-carbonated substitutes, such as juices and tea brands are maintaining a strong foothold in the market.5.Political instability:The big threat to Pepsi in Pakistan is Political instability and civil unrest.6. Threat of labor strikes:They have external threat of labor strikes and power outages in Pakistan.SWOT Analysis of PepsiCo. Multan

Strengths: Leadership, Extensive Training System, Validated Quality & Food Safety Systems (Four National Quality Awards & Two International Food Safety Awards).Weaknesses: Illiterate Trade (Product Handling Issues)Opportunities & Threats: Majority is of Price Focused Customers(Can bedeceivedby LowPriced; Low Quality products).

CONCEPT APPLICATIONSystems of Operation Prevailing in PepsiCo:

There are some systems of operation prevailing in PepsiCo. These systems mainly constitute major part of operations being performed within the organization. These systems are organized and formulated in such a way so as to provide a best quality product to customers. Few of systems are as follows, Supplier Qualification System Food Safety System (SOP) Training System Standards and Specifications System Quality Management System Validation System SCADA System Feedback SystemSupplier Qualification System:

Supplier qualification system describes how a supplier qualifies for the availability of raw material to the PepsiCo. This system has a complete check on the purity of the material. It can be analyzed through this fact that Pepsi Cola International (PCI) itself gives approval to the suppliers through different procedures of testing the raw material.Raw MaterialSuppliers

SugarLayyah, Shakar Ganj (JDW)

CO2Pak Arab, Supreme, BOD

Concentrate/ FlavorPCI (Hattar Chemicals)

Water is extracted from the turbines which are 300 meter below the surface level of earth. Now, samples of each raw material are collected and sent to the PCI for testing and approving the quality of raw material. Only those suppliers qualify who are able to fulfill the PCI standards and measures.Food Safety System:Food safety system involves SOP which is acronym of Standard Operating Procedure. This procedure is specialized for maintaining the safety of product and food delivered by PepsiCo. Each step in SOP is documented step and is approved by Top Management.Training System:Training system involves the following steps: Training Need Analysis Training Analysis Training Refresher

Above mentioned hierarchy determines that how the training is performed within the hierarchy and it also determines the frequency that which member of hierarchy is being trained after which time of interval. For example, labor is the person in hierarchy who is being trained most frequently and general managers are being trained after 1 or 1.5 years.

Training Need Analysis determines need of training that where the training is required. This involves all of the Top Managers, Managers, Executives, Chemists/Operators, and labor. Only the difference is of time span that after how much time, training is needed. For example, Top Managers require training after 2 years and chemists and labors require training after 3-6 months. Training Analysis determines that how properly training is being performed and what is the outcome of training either outcome is positive or negative. Training Refresher actually refreshes the training system overall prevailing within the organization, and it identifies where the training required now. Through training refresher training need analysis is performed. Hence, it makes a cyclic process of training system. Training system is important for performing the operations in a smooth and flawless way.Standard and Specification System:

Standard and specification system plays important role for maintaining the previous record of the product. Standard and specification system deeply analyzes that how the operations are to be performed. Lets take the example of sugar. Sugar is raw material of Pepsi, 7-up, Mountain Dew and Mirinda. For maintaining the quality of product the factors like Amount of sugar Color of sugar, and Quality of sugar All are taken into consideration that each product requires a specific amount of each raw material and quality, quantity and color for making a product according to its standards and specifications.Quality Management System:

Quality management system assures the quality of product. HACCP is a system which is recognized and specialized for QMS. HACCP is the acronym of Hazard Analysis and Critical Core Processes. It is actually approach towards improving the quality of product through different methods, strategies and policies. After ISO 9001, HACCP is mandatory in PepsiCo.In Pepsi, processes run in the following way Raw Material Processing Packaging WarehousingSo, from raw material to warehousing HACCP is applied in all processes for maintaining the quality of product.Validation System:

Validation system is also called as verification system in PepsiCo. This system verifies the overall processes that either they are being performed in a proper way or not. R & R Gauge supports the validation system because it actually measures the Repetitiveness and Reproduction of a process that how a process is producing a reproductive and consistent result as its outcome. This system is periodic and is successful for forming the process flow in linear and smooth way and it actually causes the processes to streamline in a single and regular path.SCADA System:

SCADA is acronym of Supervisory Control and Data Acquisition. SCADA system is used to monitor, control, and alarm plant or regional operating systems from central location. In Pepsi Multan, this system was introduced before 6-7 years nearly in 2006. It is actually a quick and intelligent check on the overall performance of operators and labors working within the organization. This system gives the real time analysis and clear picture of performance of workers, machinery, equipment and operating tools. This system has the advantage that if any person tries to be careless or indifference about any process then through this system he would easily be caught and would be punished by his supervisors.

Feedback System:

Feedback system in Pepsi is of two types Direct Customer Feedback PCI Method of FeedbackDirect Customer Feedback involves direct complaints and problems of customers related to product, its delivery, and taste of the product. A proper Quality Complaint Management System is prevailing in the PepsiCo. which is designed for customers complaints regarding Pepsi Products. Through this method Pepsi receives direct feedback from the customers and then plan further improvement and tries to sort out the complaints of customers.PCI Method of Feedback is unique and different from other companies. Pepsi Cola International silently collects bottles from different shops and markets and then checks the quality of bottles, taste of product and then analyze the results of bottles collected from the shops. By checking the taste and quality of product PCI gives feedback to that franchise of which the bottles have been collected. If that franchise meets the standards of PCI then that franchise is awarded on quarterly, semiannually or annually basis. Processes involved in making a Complete Product

All of the processes involved in manufacturing a bottle are depicted in the flow diagram given below. It is clear for the diagram that how the processes are performed in a significant manner and in a sequence to get the desired outcome of processes.

Filling Process

Filling process involves several steps. First there is a syrup room for preparing syrup of product i.e Pepsi, 7-up, Mirinda etc. then there is a filtration room and then there is a finished syrup room where syrup is ready for further processing. This prepared syrup mixes with CO2 and concentrate of a specific product. Each product has specific flavor/concentrate for its manufacturing. When these three components are mixed in tanks then a cool temperature product is ready and from here it is filled in glass or pet bottles depending on the machinery which is specified for pet or glass bottles.

External and Internal Suppliers

For this particular process, there are specified suppliers for each component contributing in manufacturing of a product. Syrup is prepared from water and sugar. For water there are internal suppliers and water is brought from 300 meter below the surface level. Suppliers of sugar are external because they are provided by Layyah and Shakar Ganj (JDW). For CO2, Pak Arab and Supreme are the suppliers and these are external suppliers. For flavor/concentrate, PCI is supplier of it and it is external supplier of this raw material.Capacity

Capacity is the limiting capability of a productive unit to produce within a stated time period, normally expressed in terms of output units per unit of time. This is actually the intensity with which a facility is used. This intensity is increased through overtime. Other way of increasing the capacity is to engage in subcontracting when it is feasible.In Pepsi, the capacity measure in output form is the number of crates produced. There are two production units having different lines. The first unit contains 3 lines and allocated for 250 ml. Pepsi, 7UP, Dew & Mirinda. The second unit contains 2 lines and produces 1 & 1.5 liter bottles. These lines are flexible in a sense that through one line you can produce multiple brands having a set-up time of 2 hrs. They are not fully utilized. The capacity of one line is 1100 bottles per minute but it is being operated at 800 to 900 bottles per minute. The reason is that, the bottles move very fast that may cause serious accidents by breaking into small pieces. There are 3 shifts working in Pepsi cola. The total capacity of 5 lines is 160,000 crates per day. But the average utilization of 5 lines is 100,000 crates per day in peek season.Demand ForecastingPlanning and control for operations requires an estimate of the demand for the product or the service that an organization expects to provide in the future. Since forecasting should be an integral part of planning and decision making, the choice of a forecasting horizon (a week or a month, for example), a forecasting method with desired accuracy, and the unit of forecasting (dollar sales, individual product demand.) should be based on a clear understanding of how the output of the forecast will be used in the decision process.SHAMIM & COMPANY (PVT) LTD uses the historical data for forecasting demand. As the company has seasonal business so the demand is high in the month of March, April, May, June, July, August and September. Sixty percent sale of the company takes place in these months. This is the peak season for the company.Company makes the sales forecast on the basis of historical data. For example, if a company wants to forecast the sale for June 2012. They will take the data of last five year in order to forecast the sale for June 2012. They also take into account the current trend factors.Level of ForecastThe Pepsi cola forecast the demand for their products on aggregate level. Then they forecast demand for Pepsi, 7up, Mountain Dew and Miranda individually.Competitive Priorities and CapabilitiesThe competitive priorities are the operating advantages that firms processes must possess to outperform its competitors. Shamim & Co. has the competitive priorities of high-performance design and consistent quality.High-Performance DesignActually Pepsi is getting the competitive edge in our region on the basis of its quality and the quality is its taste. Through a complete marketing research they found that sweet taste is liked more by this region. Thats why in Pakistan Pepsi is dominant soft drink and it has almost 75% shares in this market. On the other hand when we look internationality then Coca Cola is the leading company. So Pakistan is a big market for the Pepsi, where Pepsi is generating a lot of revenues.Consistent QualityAnother major and the strong aspect of the Pepsi in Multan is that they are producing a consistent quality according to the PCI standards. The low quality bottles and the damaged bottles are not dispatched towards the market. Pepsi has a lot of checks and balances on its output level.In-House Core ProcessesIn Pepsi following are the Core Processes which are being performed In-House, Customer Relationship Process Supplier Relationship Process Order Fulfillment ProcessOut-Source Core Processes

Out-Source core process is only one process which is managed outside the organization and that is New Product/Service Development. This is planned by PCI and other franchises only follow their instructions.Order Winners and Order Qualifiers of PepsiCo.

In case of Material all suppliers who qualify the PepsiCo. standards matrix for supplier qualification and the relevant audits are order winners and qualifiers for PepsiCo.In case of Product only those distribution and retail outlets qualify who have proper storage and supply guidelines of PepsiCo. products along with specific commercial clauses.Hierarchy of Project Managers in PepsiCo.Project Managers are in the following hierarchy in Pepsi,Plant Lead Team Project Manager Project In charge Project Execution TeamFirst of all project lead team is selected for a specific project. This team actually designs the project team and decides who is to perform specific functions. Project manager, project in charge and project execution team all are selected by project lead team. And then according to the strategy all of the tasks are performed.Elements required for Project Life Cycle:For Project Life Cycle following elements are required,Master Plan Plan B Resources Technical Details SpecificationsSME Execution Validation Sign off.A master plan is designed for a project to be acted upon. Plan B is prepared as an alternative of master plan and it is also of equivalent to the first plan. Then resources are allocated according to the need and requirement of the project. Technical details are listed down that which technology is going to be used for the particular project. Then specifications are settled for the project that which resource is allocated to the specific path of project. Then there is Subject Matter Expert who critically analyzes the whole project and then tells about possible solution of the problem which is being faced during the project completion.After a complete analysis of SME there is execution of the project in which project is performed actually. Validation of the project is checked through R & R Gauge that how the processes are producing consistent and repetitive results. After verification of the project there is phase of sign off in which project is completed and all the tasks have been performed according to the plan.Processing Cycle of Pepsi:Processing cycle of Pepsi includes different steps through which a product is passed out. From raw materials processing till the bottle in customers hand all of the steps are given in the following diagram,

Project Team Selection Criterion:Plant Lead Team decides criterion for selection of project team members respective to the subject project. Project leader is the SME (subject matter expert) of that area. Team members must possess relevant experience and successful track record. Internees are attached for future skill pool development.Market Analysis and Competitive Priorities:In Pepsi market analysis includes only market segmentation. They just set their target markets and then apply their marketing strategies upon that specific area. They believe that need is automatically determined through these market segments and there for there is no specialized need assessment criterion. Competitive priorities include a consistent quality and customized product range. They believe on their consistent quality of products and this is actually an award winning situation for the organization. Their products are customized i.e according to the demand of the customers. Hence, we can observe a trend of Pepsi that they very rarely launch new products and mainly they produce specialized and customized products for their customers. Although they are producing their products in bulk and there is line flow but there is no versatility in their products. So, they compete on these grounds with their competitor i.e Coca Cola.New Product/Service Development:In Pepsi there is development of new products only in PCI and it gives the approval of new product/service development. Lets take the example of PepsiCo. Multan, it is manufacturing only four products as these are Pepsi, Mountain Dew, 7-Up and Mirinda and diet Pepsi and 7-Up are also being manufactured in the PepsiCo. Multan. So, PepsiCo. Multan is not manufacturing all of the products of Pepsi because PCI has control over it.Improvement of Processes:In Pepsi there is no re-engineering of processes instead processes are improved through annual maintenance of the processes. There is improvement of machinery which is being used through whole of the year within the organization. During annual maintenance all parts of machinery are separated and each part is cleansed with great care. If any part requires renovation then that part is renovated and this is how they improve their processes.Strategies for Competitor Analysis:For analyzing the competitors behavior, Pepsi usually make strategies for consistent quality, prices and marketing strategy. Consistent quality is actual tool for their reputation in the market and they have strong grounds for their quality. Prices they charge for their products are also according to the competitors prices. Actually prices are set by the Pepsi and its competitors have to keep their products prices according to it because their product will not be able to sell in the market. They have a strong marketing strategy for competing with its competitors. They make segments for their products and then distribute it according to the settled prices and plan. So, these are the tools of Pepsi for competing with the competitors in the world market.Core Competencies:In Pepsi, there are specialized 19 Key Elements which constitute the core competencies of Pepsi. Few of key elements are given below Leadership Trainings Specs and Standards Validation/Verification QMS/HACCP Feedback System Maintenance for Production Regular AuditsPepsi Multan has strong Leadership and they compete with others due to this factor. They have won many awards and they are actually quality achievers because there are audits which take place on quarterly, semiannually and annually basis. These audits are of different types and performance of each franchise is observed keenly in these audits. Pepsi Multan has won the awards of consistent quality on quarterly basis and this is possible only due to strong leadership. Training system and all other competencies have been explained earlier except Regular Audits. Regular Audits are performed in Pepsi and they are actually performed by PCI. PCI send their foreign agents to check the performance of processes and performance of franchises working in different countries. One example of these audits is that a person from Canada came to Pepsi Multan for surprise audit and he started checking the performance of employees, workers and machinery working in the organization. After a complete audit session, he has given scores to the Pepsi Multan and they scored 875/1000. So, this score is clear depiction of their strong leadership, training system and other elements which are prevailing within the organization.Employees Working Schedules:In Pepsi, employees are working in proper timings and work schedules. Timing of employee entry and exit is fixed and they have to work for specific time. If, in case of emergency or in any uncertain condition, employees can take leave and go for vacations. There is a complete HR Department which is responsible for such type of cases and they are performing their tasks for this purpose. They handle all the matters very carefully that the employees of Pepsi are very much happy and content with their performance and with their organization.Effective Supplier Relationship:Effective supplier relationship is observed in Pepsi. All of the suppliers are recognized by PCI and they are assured for providing a best quality raw material for the Pepsi. As we have mentioned above that raw material constitute of sugar, water, CO2 and concentrate or flavor. Sugar and CO2 are provided by authorized suppliers and PCI checks the quality of raw material. This builds effective relationship of Pepsi with its suppliers that they trust their suppliers and raw material provided by them.Bottleneck:Bottleneck for Pepsi are Distribution Area Illiterate Distributors Area LimitationsDistribution area is bottleneck for Pepsi because sometimes they face problems regarding distribution of products and their sales of products get limited due to narrow distribution area.Illiterate distributors are also bottleneck for Pepsi because these distributors do not deliver products on time to the retailers and this is the reason of spoiled products which are delivered to the customers. By holding the products for a longer period the taste of products can be spoiled and it would cause the image of Pepsi can be destroyed through this indifference attitude.Pepsi Multan is facing problem regarding area because it is considered as backward area where there is no such population and usually people of low class live there. So, Pepsi has uncertainty that at any moment they can move from this place and arrange their set up to other place. This is also a bottleneck for Pepsi.Global Strategies:As we have observed earlier that Pepsi is following different international standards and policies to achieve global position in the world market. They are following specialized systems by adopting different ways like leadership, training system, HACCP, ISO 9001, and franchise based system all are approaches towards achieving Global Position in the world market. Hence, by following these international guidelines and rules for food safety Pepsi is moving ahead for Global Position.CONCLUSION:Through above discussion it can be concluded that, Pepsi has a complete and well-settled systems of operations through which it is easily for them to perform their functions in a proper and arranged manner. Several systems which are prevailing in Pepsi are building its pillars very strong internally and externally. For example, they have very strong and competent workforce working for their organization and outside the organization they have very strong image of their company. So, it is beneficial for them to run their processes in an organized way. Pepsi is maintaining its quality through following rule of HACCP and applying QMS in the organization. Food safety system actually provides a hygiene factor for its customers. This system is actually specialized and provides accuracy to the processes being performed within the organization. Pepsi is using different systems for its processes and operations. One of the important systems which we have observed in Pepsi is SCADA system and we have actually seen the whole SCADA system application and its proper use in their production area where Pepsi and its co-products were being manufactured. This system is actually a real depiction of what is being performed inside the processing house. Most fascinating thing about Pepsi is that they take care of cleanliness at a greater level. Every department and processing house which we have visited was very much neat and clean from inside. This assures the quality of their product that how they take care of their customers health. Training System, as mentioned above is specialized and it concerns the cleanliness of labors who work inside the processing houses and rooms. For example, they gain the training of their dresses, their nails, their hair and other factors of cleanliness to ensure that nobody is causing problem in their processes due to his personal cleanliness. Therefore, time span of training of labors is very frequent and it is performed repeatedly after 3-6 months. Pepsi has strong supplier and customer relationship and it is getting stronger day by day through consistent quality and providing the product which meets the standards of PCI. Advertisements are also causing their relationship to be stronger because new customers get attracted and old customers are retained through following the parameters of quality of product. Pepsi Multan is trying to overcome its bottlenecks which are causing hindrance in its product distribution and product delivery. Pepsi is a renowned company and it has competed other brands and established the number 1 position by understanding the customer psychology, by assuring quality of product, by introducing ingenuity in products, by enlarging its product base, by intense and jazzy advertisements, and by sponsoring the sports in Pakistan. The word for marketing success is to remain in spotlight and that is what Pepsi is doing. Pepsi has tense competition with Coca Cola for about 80 years and it has overtaken it. Purpose of this project is to study the operations which are being performed in the organization and the strategies which Pepsi is applying in Pakistani market for its product Pepsi Cola. Pepsi has aggressive marketing plan and quick diversity in creating new ideas and attracting new customers. They are actually customer focused instead of business focused. Parent company takes major steps to maximize and continue with the consistent quality of products. Quality complaint management system (QCMS) is working with 25 employees to get customer complaints. So, all these explained proves that Pepsi is a top quality product and it is working on the organized operations and these operations are responsible for producing a high quality product and for achieving customer satisfaction from the product.

QUESTIONS:1. What are the systems of operation strategy in Pepsi?2. Which of the core processes are being performed in house and which are outsourced in PepsiCo?3. How processes get improved in PepsiCo? Either they are improved or re-engineered?4. How project team is selected in PepsiCo? Which qualities are taken into consideration?5. What are performance indicators in PepsiCo? Which measures are taken for performance indicators?6. Who are order winners of Pepsi?7. Who are order qualifiers of Pepsi?8. What are the global strategies of Pepsi?9. What are their strategies for implementing change?10. How they analyze market either through market segmentation or need assessment?11. What strategies they are opting for competitor analysis?12. What are the core competencies they have?13. What they do for employees who want to work in flexible hours and some work in fixed hours?14. Which communication method is mostly used to explain complex problems?15. How much supplier relationship is effective in PepsiCo?16. What is the hierarchy of project managers in project management?17. How mission and vision statement fulfill the Global objectives of PepsiCo.?18. Which issues are mandatory for the company to follow the parent company rules?19. To attain the best quality of raw material, which strategy is used?20. From where raw materials are purchased?21. How raw materials are tested for maintaining the best quality?22. What is the strength of PepsiCo. that have made its position remarkably stable?23. What is SOP? How is it effective in making quality product?24. What are the processing steps in PepsiCo.?25. What are the methods for feedback? Is there any organized system for this purpose?26. What parent company PCI do for maintaining the good quality of the product?27. What is the marketing strategy of Pepsi?28. To make consistent quality product, PepsiCo. tests the product, how it rank its quality?29. This company is customer focused or business focused?30. How HACCP supports in formulating vision and mission statement of company?31. What is the benefit of approved supplier?32. What are bottlenecks for PepsiCo.?33. In which category PepsiCo. lies?34. How audits are performed in PepsiCo.?

References and Bibliography: Pepsi Cola Bottling, District Jail Road, Multan Muhammad Danish, Manager Quality Control, Pepsi Cola Multan Major Muhammad Farooq, Sales Manager, Pepsi Cola Multan. http://www.essaycoursework.com/coursework/pest-analysis-on-pepsico-plc.php http://www.studymode.com/subjects/pest-analysis-of-pepsi-in-pakistan-page1.html http://stepheny.hubpages.com/hub/pepsi-swot-analysis-with-other-soft-drinks http://kninn.blogspot.com/2009/11/swot-analysis-of-pepsico.html http://www.studymode.com/subjects/pest-analysis-of-pepsi-in-pakistan-page4.html http://www.slideshare.net/purki/swot-analysis-pepsi#btnNext