History

PepsiCo is a world leader in convenient snacks, foods and beverages, with revenues
of more than$39 billion and over 185,000 employees. The company consists of PepsiCo
Americas Foods(PAF), PepsiCo Americas Beverages (PAB) and PepsiCo International
(PI). PAF includes Frito-Lay North America, Quaker Foods North America and all
Latin America food and snack businesses, including Sabritas and Gamesa businesses
in Mexico. PAB includes PepsiCoBeverages North America and all Latin American
beverage businesses. PI includes all PepsiCo businesses in the United Kingdom,
Europe, Asia, Middle East and Africa. PepsiCo brands areavailable in nearly 200
countries and generate sales at the retail level of more than $98 billion. Some of
PepsiCo's brand names are more than 100-years-old, but the corporation isrelatively
young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-
Lay.Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company,
includingGatorade, in 2001.PepsiCo offers product choices to meet a broad variety
of needs and preference -- from fun-for-you items to product choices that
contribute to healthier lifestyles. PepsiCo�s mission is: �To bethe world's premier
consumer �Products Company� focused on convenient foods and beverages.We seek to
produce healthy financial rewards to investors as we provide opportunities for
growthand enrichment to our employees, our business partners and the communities in
which weoperate. And in everything we do, we strive for honesty, fairness and
integrity.�(www.pepsico.com)
PepsiCo Headquarters
PepsiCo World Headquarters is located in Purchase, New York. The seven-building
headquarterscomplex was designed by Edward Durrell Stone, one of America's foremost
architects.
Haidiri Beverages Private Limited, Pakistan
The Haidiri Beverages Group was set up in 1979 and is Pepsi's sole selling agent
for DistrictRawalpindi and Islamabad. It is based in the CDA Industrial Triangle,
Kahuta Road, Islamabad.It manages the supply for several wholesalers, retailers,
restaurants, hotels and other such foodoutlets. In order to achieve the projected
sales targets effectively, the organization ensures acomprehensive strategic
alignment with the overall Pepsi Cola�s business strategy. HaideriBeverages�
primary functions are to conduct a systematic manufacturing and supply of the
product without any tactical flaws. Backed by a powerful competitive strategy and
empowered by some effective supply chain strategies, the group has been managing an
effective supply chainthrough out the region. It has set up a sophisticated
manufacturing and storage plant inRawalpindi with multiple production units and
huge production capacity. Haidiri Beverages hasdifferent management departments
dealing with specialized Marketing, Human Resource,Information Technology and
Supply Chain Processes. In this section we conduct a brief analysisof the basic
supply chain management functions of Haidri beverages.1
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Understanding the Supply Chain of Pepsi

The objective of every supply chain should be to maximize the overall value
generated. Thevalue of a supply chain generates is the difference between what the
final product is worth to thecustomer and the costs the supply chain incurs in
filling the customer�s request. (Chopra, Meindl2006)
Supply Chain Strategy or Design:
During this phase a company decides how to structure the supply chain over the next
severalyears. The company makes long term decisions in regards to location and
capacities of production and warehousing facilities, the products to be
manufactured or stored at variouslocations, the modes of transportation to be made,
information systems and so on. The supplychain design is very expensive to alter on
short notice and supports the company�s strategicobjectives. In order to ensure a
good supply chain strategy, Haidri Beverages plans two years inadvance. It has
several contracts with manufacturers, and receives raw material on a convenient
basis. The company also decides where production plants are to be placed. Haidri
has production plants at Peshawar and Islamabad. The production process is 65%
automated. The company hasto provide and manage transport for the delivery of
products as well as the arrangement of third party services for the procurement of
products. The shipping department handles orders and thetransport department
decides the vehicles for safe delivery.Material planning and sourcing is carried
out as well. Sources of supply of raw material bothlocal and foreign are identified
and terms and conditions are negotiated. Capacity planning isalso done at this
stage. Sales forecasting and production planning depends upon the capacity of the
organization with respect to:1.Production (180,000 converted 250 ML crates per
day).2.Storage: Raw and packing (80,000 Sq Ft)3.Storage: Finished goods (120,000 Sq
Ft)Haidri has a procurement budget of Rs 2.9 billion. Approved suppliers cannot go
beyond this budget. The supplier is audited by the most cost efficient quality
control department. Distributorsare also decided by the company, keeping in mind
past performances. The company hasincreased its distribution capacity from one to
six filling lines during the last few years lending ita competitive edge over Coca
Cola.
Supply Chain Planning
As the above configurations have been set, planning must be done within the above
statedconstraints. The goal of planning is to maximize the supply chain surplus.
Planning establishes parameters within which a supply chain will function over a
period of time. Companies start the planning phase with a forecast for the coming
year of demand. Pepsi carries out s