Logistics Structure of Frito Lay - Essay Example

? LOG503 MOD 5 SLP Introduction Frito- Lay is the largest manufacturer of salty snacks in the world assimilating around 35% and 60% of world and the United States market respectively. It is essentially a division of PepsiCo Inc which generates around half of the revenues and two-thirds of profits of the organization. There are as many as five branded products of the company which include Doritos, Ruffles, Lays, Chee-tos and Tostitos. It has also certain other branded products such as Cracker Jack candy- coated popcorn, Rold Gold pretzels and Grandma Cookies. Moreover, the international brands of Frito-Lays are Chee-tos, Ruffles and Lays along with other local brands such as Walker and Sabritas in the United Kingdom and Mexico respectively (United States Securities and Exchange Commission, 2010). Logistics Structure of Frito Lay The logistics process of Frito- Lay is carried out in six geographical zones and is quite complex in nature. The channel of distribution is quite an essential element for the organization. It has been observed that in the logistic department Frito-Lay engages women and minorities which facilitates in development and growth of the organization. A Supplier Diversity Program was established in 1983 in order to supply better quality of products and services through diverse suppliers at competitive prices. The program has permitted the organization to maintain proactivity through the development of communities in economic sphere. This comprehensive strategy enables the organization to integrate the operations with supply chain department for assisting suppliers and distributors to handle and deliver products within a stipulated time period. With the incorporation of women and minority groups in business activities, effective productivity can be ensured leading to greater sales and profitability. It enables the organization to gain competitive advantage in order to propagate effective results in business. Minority groups as well as women assist in building grater supplier base for smooth functioning of product deliverance in wider markets nationally as well as globally. Effective supply chain stimulates organizational effectiveness and enhances sales through efficient logistics systems. The Supplier Diversity Program is enabling to maintain effective supply chain activities and it also helps Woman Owned Business Enterprises (MWBEs) in various divisions of PepsiCo (Frito-Lay North America, 2013). Furthermore, in terms of the other crucial components in the logistics structure of Frito-Lays, it can be recognized that it follows an incorporated outbound supply chain based activities. It aims to optimize the transportation as well as inventory decisions. Moreover, there are a number of distribution centers of the company on a global basis which provide required amount of products to the retail outlets on time. Through the process of supply chain optimization, key performance indicators in the logistics process of the company are looked after by a number of teams. It facilitates to reduce the amount of travel required by vehicles to reach out to their desired destinations. Superior technologies are used within the process of implementing best practices in the logistics related activities. Strategic sequencing technique is used streamline the sales which facilitates to reduce travel distance (Transport Canada, 2010). Improving the Logistics Process of Frito Lay It has been recognized that Frito- Lay’s logistics activities consist of outbound activities in the supply chain management that stimulate the transportation and inventory decisions. The logistic processes also include the delivery of products through trucks in an efficient manner. The organization possesses efficient information technology process through which the shipment of products, availability of raw materials and the level of inventory are effectively handled at any point of time. With relation to the learning obtained during the course, it can be recognized that despite having efficient information system, the organization is in search of improving the technological aspects for selling its products by providing better software systems in every store for enhancing productivity of the organization. With efficient software systems, it is possible to distribute quality products which would ultimately increase the sales of the organization as well as its profitability. It can also be stated that with adequate knowledge of inventory processes, the organization can devise better planning for developing the routing and inventory systems which would effectively increase the organization’s productivity around the world resulting in effective growth and profitability. In this regard, another process i.e. the use of the application of tablets by the workers in the factory would provide better efficiency in the work process and would enable to perform the activities conveniently. Moreover, by developing mixed integer programming, inventory and routing systems can be improved through certain cost derivable. Moreover, delivery of products can be maintained along with estimating loading and storage capacity. Efficient inventory and routing systems would provide greater opportunities in savings. The execution of two benchmark models would facilitate the organization in delivering the products inside stipulated time period along with reducing the inventory levels through effectively supplying products by the logistics department (Cetinkaya, Uster, Esawaran & Keskin, 2013). From the above observation, it can be stated that with the incorporation of effective technical innovation, it would largely enable the organization to handle the activities of logistics effectively. Adequate distribution network would facilitate it to maintain the supply of products effectively. The development of transportation system along with routing could stabilize the management with regard to the supply chain activities significantly. Moreover, with the incorporation of mixer integer programming, it would also facilitate to increase the loading capacity of products for transporting as well as reducing the level of inventory. With greater demands and adequate supply of products, it would increase the customer base of the organization. Furthermore, with the availability of adequate variety of products and appropriate channels of distribution, logistics process might get improved. It can also be stated by recruiting skillful suppliers and distributors in the business activities, the area of logistics can be handled quite effectively. Skillful suppliers and distributors enable supplying products inside stipulated time period which can mitigate the deficiency in business process through their adequate knowledge and perceptions. Incorporation of software and application of tablets in every store would also systematically assist the organization in the routine activities of sales, Furthermore, initiating a market survey on a quarterly basis would also regulate effective functioning and make the organization aware of the demands of customers in different segmented markets. Conclusion From the above observation, it can be comprehended that Frito-Lay is one of the largest organizations in the segment of salted products in the USA as well as on a global basis. It maintains greater efficiency in business activities. In the context of logistics, it has been observed that it comprises effective distribution channels which facilitates in supply chain management. With the incorporation of technological aspects in various stores, logistics process can be further improved significantly. Improved mixed integer programming facilities the controlling and monitoring of inventory products. Efficient survey system would also generate better sales and productivity in the organization. Inadequate transport facility can hamper the reputation of the organization. Thus, in order to improve effective productivity in the global markets, efficient transport systems needs to be maintained in organizational functioning which would enable to render adequate services thus maintaining the growth of the business. References Cetinkaya, S., Uster, H., Esawaran, G., & Keskin, B.B. (2013). An integrated outbound logistics model for Frito-Lays: Coordinating aggregate-level production and distribution decisions. The Informs Journal on the Practice of Operations Research. The article intends to discuss the production and distribution process through an integrated logistics model in the outbound category for Frito-Lays product. Frito-Lay North America. (2013). Supplier diversity. Retrieved from http://www.fritolay.com/about-us/supplier-diversity.html The article depicts about the supply chain management of Frito-Lay. In this context, it can be stated the article depicts the level of commitment provided by the organization in supply of its products in global markets and how appropriately the activities are handled. Transport Canada. (2010). Frito Lay Canada. Retrieved from http://www.tc.gc.ca/eng/programs/environment-ecofreight-shippers-frito-lay-canada-1904.htm This article provides an understanding regarding the various strategies and best practices used by Frito-Lays within the process managing its logistics efficiently. United States Securities and Exchange Commission. (2010). PepsiCo, Inc. Retrieved from http://www.sec.gov/Archives/edgar/data/77476/000119312511040427/d10k.htm This article provides a vivid description about the main holding company of Frito-lay i.e. PepsiCo, Inc. It also provides a description of the sales and revenue generated by Frito-Lay. Read More