Pepsi Procurement Strategies

Pepsi An Introduction
PepsiCo, Inc., major producer of carbonated soft drinks, other beverages, and snack foods. Its beverage division, Pepsi-Cola Company, bottles and markets several popular brands of soft drinks in the United States and throughout the world. PepsiCo also owns Frito-Lay Company, the leading snack-food maker in the United States. PepsiCo is based in Purchase, New York. PepsiCos soft drink products include Pepsi, Diet Pepsi, and Mountain Dew. Other beverages include Lipton Brisk and Liptons Brew iced teas, All Sport athletic drink, and Aquafina bottled water. Frito-Lay products include Lays and Ruffles Potato Chips, Fritos and Doritos Corn Chips, Chee-tos Cheese Snacks, Tostitos Tortilla Chips, Rold Gold Pretzels, and Grandmas Cookies.
Pepsi cola in Pakistan

In Pakistan, there have been consumed different types of soft drinks but Pepsi is the most frequently consumed soft drink. It is very much popular in the consumer; it has got big target market and is competing with the other companies of soft drinks. 10 units of Pepsi cola have been installed, in the different places of Pakistan i.e., Lahore, Multan, Gujranwala, etc., and working with the best utilization of their resources in the optimum way. Each of these units is owned by the different parties, which are strictly following the rules of the parent company. The company to made production has licensed each unit. These units have their own areas of selling and have different target markets. All these units are considered as separate firms, which are the franchisees of Pepsi cola international.
Pepsi in Multan
Shamim & Company SHAMIM & Co. was established in 1967 as a private limited company. It started its business in 1968. Allah Nawaz Khan Tareen (Ret. DIG) got license of 7-up franchise and was producing only one product, 7-up. But in 1973, it became Pepsi Cola franchise. Now a day MD of SHAMIM & Co. is Alamgeer Khan Tareen son of Allah Nawaz Khan Tareen. Total production of that plant was 600 crates per 24 hours. Now Factory has 5 plants, which can produce 110,000 crates per 24 hours.
Procurement Strategies which are implemented in PepsiCo

Single Source Procurement Core Purchasing Cycle
Global Sourcing
Quality Testing Methods Vendor Development
Single Source Procurement

The bottles are manufactured by Tariq Glass in Lahore under licensed by PEPSI Pakistan PepsiCo purchases its stationery items from a single source. PepsiCo purchases computers and related products from single source and in bulk quantity.
Core Purchasing Cycle

PepsiCo The gases which are used in PEPSI are made by Multan Factory itself but in case of shortage or any emergency in which Multan factory is unable to provide gas, factory buys it from Supreme Gas & Pak Gas.
Global Sourcing
Material is procured form the international suppliers.
All the ingredients including flavor enhancer that is used in Lays Masala are imported from Thailand. Pepsi Pakistan made the plant in HariPur Hadar where they import the material from USA & Ireland
Quality Testing Methods

takes effective measures for the quality control. Production of the company is according to the standards set by PCI. So the company is very much concerned about quality. Quality of raw material as well as of end product is checked. Following are the main steps taken by the company for quality control:
Sugar Testing Water Treatment Testing Syrup Testing Finished Product Testing

Sugar Testing:
The company from sugar mills purchases sugar. After the arrival of sugar at the plant, it has to pass through a strict quality check. It should be free from moisture.
- all supervisor checks the quality of sugar - a randomly selected sample from sugar bag is sent to laboratory for testing - if the quality of sugar is according to the standards, then this sugar is stored for further processing - If the sugar quality is not up to the mark, then it is sent back to the sugar mill

Water Treatment Testing
- The company has four containers to meet the requirement of water. The water is treated for the use in final processing. At different stages, different treatment tests are done.
- If some abnormality is observed by the shift in charge, then he stops the supply of water from the container. The supply of water is made from other container. These containers are also washed at regular basis.

Syrup Testing Mixing of sugar and water into concentrate produces syrup. This syrup is also tested in the lab. Then carbon dioxide and ammonia are mixed into the syrup. Now this is final syrup this is also tested in the lab. If this syrup is not according to standards, then new syrup is prepared for production.
Finished Product Testing

When bottles are filled, a chemist also takes the sample and checks the quality. Here preservation and ingredients ratios are also checked. If any deviation from the standard is found, the whole batch is drained before going in market. These finished bottles are also passed through light room to control the quality. Here if the bottle is low filled or dirty, then it is sorted out. The quality of glass, size of neck and size of bottom should be according to the given standards.
Vendor Development

Pepsi Procurement Strategies

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Pepsi An Introduction

Pepsi cola in Pakistan

Procurement Strategies which are implemented in PepsiCo

Single Source Procurement

Core Purchasing Cycle

Quality Testing Methods

Quality Testing Methods

Quality Testing Methods

Quality Testing Methods

Finished Product Testing

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