Group Members

• MUHAMMAD ADEEL 2020-BBA-027

• HOORIA RIAZ 2020-BBA-046
• MATEEN JAVED 2020-BBA-050
• NIDA SOHAIL 2020-BBA-005
• HARIS KHAN 2020-BBA-037
• SEHRISH JABEEN 2020-BBA-023
 Group Members
• MUHAMMAD ADEEL 2020-BBA-027
• HOORIA RIAZ 2020-BBA-046
• NIDA SOHAIL 2020-BBA-005
• MATEEN JAVED 2020-BBA-050
• HARIS KHAN 2020-BBA-037
• SEHRISH JABEEN 2020-BBA-023
PepsiCo Overview

• PepsiCo is a global leader in convenient snacks, foods, and beverages.

• Founded in 1890 through the merger of Pepsi-Cola and Frito-Lay.
• Revenues: Over $500 billion.
• Employees: Over 285,000.
• Go-to-market systems: Direct store delivery (DSD), broker-warehouse,
food service, and vending.
 Major Products

• Frito-Lay, Inc.: Fritos brand corn chips, Lay's brand potato chips,
Cheetos brand cheese flavored snacks, Ruffles brand potato chips, and
Rold Gold brand pretzels.
• Mountain Dew: Iconic beverage brand.
Major Products

• Fruit Juices: Tropicana brand (acquired in 1998), offering nutritious and

high-quality fruit juices.

• Quaker Brand: Merged with Quaker Oats Company in 2001, providing a

wide range of healthy food choices.
 Frito-Lay, Inc.

• Founded in 1961 through the merger of the Frito Company and the H. W.
Lay Company.
• Leading brands: Fritos, Lay's, Cheetos, Ruffles, and Rold Gold.
• Employees: Over 48,000.
• Revenue: Over $11 billion.
Competitive Advantages of Lay's
• Lay's is a strong and internationally recognized brand.
• Latest and fully automatic manufacturing machines.
• Dedicated teams ensure quality by checking potatoes in the fields.
• Economies of scale and efficient production processes result in cost
advantages.
• Product differentiation through continuous innovation in flavors, chip
types, and packaging.
 Operations Competitive Advantages

• Strong distribution network leveraging PepsiCo's system.

• Emphasis on sourcing high-quality ingredients through strong supplier
relationships.
• Specialized Lay's formulation with unique potato varieties, seasoning
blends, and cooking techniques.
• Robust quality control system to ensure the highest standards of product
quality and safety.
 Competitive Environment
• Lay's market share exceeds 80%, providing a strong position in the
competitive landscape.
Competitors
• : Oye Hoye and Super Crisp.
 Product Life Cycle
Introduction phase: Lays quickly established itself after its introduction in
2007.
Growth phase: Exponential rise in sales due to marketing efforts, packaging
innovation, and increased consumer base.
Maturity phase: Stable acceptance and well-established position in the
market.
Decline phase: This phase is marked by a decline in sales and profits
 Shelf Life of Lay's
Average shelf life:
3 to 4 months
Average export shelf life:
6 months with high-quality potatoes and refined packaging materials.
 Forecasting
Lays company uses different forecasting techniques depending on the type
of data and the level of accuracy required.
Some of the most commonly used techniques are
Time Series Analysis
Regression Analysis
Judgemental Forecasting
Market Surveys
Short Term And Long Term Forecast
Using the chosen forecasting methods, Lay's
would generate forecasts for future potato chip
demand.
Short-term forecasts might be made for
operational planning, while medium to long-
term forecasts could aid in strategic decision-
making.
 Time Series Analysis
• Time series analysis is used to
analyze historical sales data and
identify patterns and trends.
 Regression Analysis
• Regression analysis is used to
identify the relationship between
sales and other factors such as price,
promotion, and seasonality.
 Judgemental Forecasting

• This approach relies on expert opinions and qualitative

assessments from managers, sales representatives, and other
knowledgeable individuals within the company.
 Market Surveys
• Conducting surveys allows PepsiCo Frito-Lay to gather direct feedback
from consumers regarding their preferences, buying habits, and
satisfaction levels.
 Process Description
INPUT TO THIS PROCESS
The main ingredients includes:
Potatoes
Oil
Salt
 Non-ingredient Input

Non-ingredient inputs includes electrical energy,

materials used to package the finished product.
Flow chart of the production process
 Layout
• They use Process layout
 Process Layout Cycle
Raw material selection: To obtain good quality of fried potato chips,
need to choose the high quality of potatoes.
Washing: Put the potatoes into the brush type washing machine,
wash off the dirt on the surface of the potatoes.
Peeling: Using potato peeling machine can effectively remove the
skin of potato.
Slicing: Choose the high quality potato slicer, the thickness of the
potato slice can be adjusted.
• Blanching: Will cut the potato chips into the blanching machine inside pre-
boil, play to remove starch, coloring effect.
• Dehydration: Remove the surface moisture of potato chips, easy to fry.
• Frying: Mainly used for making potato chips, also applies to green peas,
peanuts, onions, chicken wings.
• Seasoning: To satisfy the tastes of different customers, the flavoring machine
is used to enrich the taste of potato chips.
• Packaging: Potato chip bag machine for packaging potato chips, easy to
transport.
 Production Machines
Capacities for choice: 100-
150kg/hr, 200-250kg/hr, 350-
400kg/h, and 400-500kg/hr.. The
automatic potato chips production
line is fully automatic, which only
need 6-8 person. Improves the
production efficiency and reduces
the cost of production largely.
Automatic machine process
 OUTPUTS
The output of the all the process turns out to be packaged
POTATO CHIPS ready for sale.
 Waiting-line
• Lay's production operates in continuous process mode but resulting 5
minutes waiting time in selected batches and to startup machines,
 Quality management

Potato inspection
• Lay’s potato chips have two sizes. The small
pack 28.3 grams while the large pack weighs
184.2 grams. The potato chip itself is about
2.5 inches in diameter.
• For these process they also visit the potato
farms.
 Quality Tools

SPC charts can be used to monitor the quality of the potatoes used in their chip
production.
By collecting data on various quality parameters such as potato
size, weight, moisture content, and sugar content, they can
create SPC charts to track the quality of the potatoes over time.
 Reliability

• The printed date on the Lay’s potato chips packaging is

an “unopened” date which means the snack will stay
fresh, if unopened, until that date. Beyond the freshness
date, the snack may lose its crispness and optimal
flavor. Tightly sealing the package and storing in the
freezer will prolong freshness.
 After Process Inspection

• The packets are randomly picked and

sampling and there is a study of quality
wall in random packets is open and
investigate the taste and quality.
 SUPPLY CHAIN
• Pepsi must input, analyze and manage the flow of its food.
• Logistics department reach out their products to the distributors.
• Ingredients sourced from multiple regions around the world.
• PepsiCo must also plan for increase in demand.
• Products are delivered on time.
SUPPLY CHAIN STRATEGY

• As lays use both local material and import material.

• The important suppliers is HISSCO.
• In covid 19 they manufactures peanuts in bunny’s plant.
• Approximately there are 2 to 3 suppliers for a single raw material.
 ORGANIZATION INVENTORY
• Raw materials are the main materials required for
the production of lays.
• The production process involves processing the
raw materials in the facility.
• The partially finished goods are stored in WIP
inventory.
• Packed lays are stored as finished goods
inventory.
Inventory For Each Product
• Demand forecasting
• Implement an inventory tracking system
• They use these tool for the appropriate level of inventory
LAYS INVENTORY MAINTENANCE

• Quality teams randomly visit the warehouse to check the inventory

• . If they see any carton damage they immediately report that
• 24 hours’ coverage is done
 LAYS INVENTORY COST MANAGEMENT
• PepsiCo automates inventory management
through computerized monitoring
• Real-time data is provided to inventory
managers to help them make decisions
• Lays use small vehicles with large containers
to reduce transportation cost due to product
lightweight nature
Thank You