Map the Supply Chain
April 28, 2015
Map the Supply Chain
A critical component of any company is the supply chain to create your product and get it out to the consumer. According to Schneider, supply chains can reveal “issues that affect the total landed cost of a product, although it may not be immediately apparent without thorough questioning” (Schneider, 2014). Goods can reach retailers and consumers alike all around the globe. Globally distributed products can have a raise tin he pricing all along the path to get to consumers, such has import taxes from wherever it originated or even the value of the materials used to make it in another country. Pepsi is one of the leading manufacturers of soft drinks for many decades. Here is a simplified outline for the key links in Pepsi’s chain: manufacturer, distributor and retailer (Perreault, Cannon, & McCarthy, 2011). Supplies and Manufacturing
Pepsi is a very popular beverage company in the United States as well as around the world that has its main product consumed my millions of consumers: Pepsi-Cola (or just “Pepsi”). The majority of their products are manufactured and bottled on the East Coast of the United States. The typical supply chain of Pepsi has many steps before it ever is released to the public. This can include package design, company branding (specifically logos), sourcing of raw materials for manufacturing (water, sugar, and carbon dioxide are prime example here), improvement of designs and formulas based on customer feedback (such as the resurgence of “Throwback” Pepsi, which used all real sugar as before, as opposed to artificial sugars) and testing of any new products (which has lead to many different versions and flavors of Pepsi-Cola) (Perreault, Cannon, & McCarthy, 2011). All of this creates a specific brand as well as makes a reputation for quality, tasty variety of carbonated beverages. As for it’s competitors, Coca-Cola is Pepsi’s only real competitor, although in-store brands (or “off-brands” products) can also be included as competitors. However, Pepsi and Coke are companies with their own patented formulas that company formulas set them aside from other sodas, especially off-brand drinks. These brands compete with each other to provide sweet drinks for consumers throughout the world. Creating a brand image that focuses on quality and reliability are essential for the business of soft drinks. Primary Distributors
The link in this chain is the distributor. Pepsi is their own main distributor, however they do not directly sell their product to the actual consumers. They rely on other retail outlets such as grocery stores, restaurants, internet retailers and whatever business may decide they want to carry their brand of soft drinks. The products are then sold by these outlets who have purchased their product. Some of the roles of being a distributer are arranging local and international shipments, transportation to retailers, receives payments from retailers and provides any credit or discounts for large-scale orders or shipments (Perreault, Cannon, & McCarthy, 2011). Large bulk sales are usually from large retailers that can reliably sell their drinks (such as grocery stores). Distributers such as markets, restaurants and vending machine serve as the middleman to sell this product. Public Distributors/Retailers
The final destination in the supply chain for the products is either a distributor, in this case, a retailer of some sort. Some of the product may end up in commercial warehouse stores of whoever buys the product in bulk (or if PepsiCo. makes more than what is sold to retailers, though even canned drinks have a shelf life and must be moved out to buyers somehow) where they can be sold to the consumers who actually drink the soda. Some of this inventory may also be sold by online retailers such as Amazon or even directly by Pepsi itself on their website, which they currently do not do...
References: PepsiCo. (n/d). Pepsi Store. Pepsi.com. Retrieved from http://www.shopthetv.com/pepsi/index.php?v=pepsi&ecid=PRF-STV-1000665&pa=PRF-STV-100065
Perreault, W.D. Jr., Cannon, J.P., & McCarthy, E.J. (2011). Basic marketing: A marketing strategy planning approach (19th ed.). Retrieved from The University of Phoenix eBook Collection database.
Schneider, N. (7 May, 2014). What does your global supply chain look like from 30,000 feet? Map it. SupplyChain247.com. Retrieved from http://www.supplychain247.com/article/what_does_your_global_supply_chain_look_like_from_30000_feet_map_it/supply_chain_council
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