- Survey the organizational data and master data related to PepsiCo’s business process, hence, analyze those data to see its central characteristics, internal structures, behaviors in di
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This report analyzes data within PepsiCo's organization, business processes, and the ERP implementation specifically related to procurement processes.
Pepsico, founded in 1965, through the merger of Pepsi-Cola Company and Frito-Lay, Inc, internationally is a leading food and beverage firm that operates in over 200 countries The corporation has its headquarters in Purchase, New York, and employs about 274,000 people globally
PepsiCo's business model is diverse, with a significant presence in the snack food and beverage areas Its product range varies from Pepsi, Gatorade, Frito-Lay, Quaker Oats, and Rockstar Energy, to Muscle Milk, including 23 brands that generate more than $1 billion each in estimated retail sales annually a portfolio tha
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PepsiCo’s organizational structure’s characteristics are based on the company’s approach to maximizing its control of the business while continuing to grow internationally
These are the main characteristics of PepsiCo’s organizational structure: e Market divisions
Including 7 divisions defined by their geographical location and business operations: (1) PepsiCo Beverages North America, working on all beverages including the namesake soda in the USA and Canada
(2) Frito-Lay North America, working with branded foods and snack businesses in the USA and Canada
(3) Quaker Foods North America, working with cereals, rice, pasta, and other branded, non-snack foods in the USA and Canada
(4) Europe, including all products in the company's segments in Europe
(5) Africa, Middle East, and South Asia, including all foods and beverages in all of these regions
(6) Latin America (foods and beverages), including all company products and operations in Latin America
(7) Asia Pacific, Australia, New Zealand, and China, including the mentioned regions and all of the company's food and beverage businesses there
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>65% ~60% >80% of net revenue of net revenue of net revenue
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Geographic Mix: £2: 94% / (+): 69 Geographic Mix Geographic Mix
Bev COBO / FOBO Mix: 953 e Functional corporate groups/offices
PepsiCo’s objective in having functional groups is to ensure corporate control and rapid implementation of policies and strategies
The following are the main functional corporate groups/offices at PepsiCo:
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TT eer ti i Production & Operations
Though PepsiCo has maintained a considerable hierarchy that covers the entire corporation for top-down communications, monitoring, and control, it does allow each business unit to make decisions independently under organization’s policy and goals.
PepsiCo is a decentralized structure with each markets and business units independent to make decisions but they must uphold the organization’s policy and goals
2.3 BUSINESS STRATEGY, MISSION, OBJECTIVES, AND CORE VALUES BUSINESS STRATEGY
PepsiCo uses a very simple marketing strategy:
“ONE STRATEGY” is the primary strategy to compete with its rival based on price, brand recognition, and loyalty by cutting down its cost of advertising and marketing to make the branding of its products much easier: e In responding to consumer preferences and trends, PepsiCo customizes its product so as to meet the customer’s needs such as focusing on health and sustainability, availability of e-commerce applications, and other methods in terms of distributing and purchasing products e Other than that, the distribution channel is also emphasized through direct store delivery, customer warehouse, and distributor networks and also sold directly to consumers via e-commerce platforms On the whole, the company depends heavily on customer needs, and product characteristics to apply an appropriate distribution network
Our mission is to enhance lives with every sip and bite As a partner to customers, we aim to evoke joy through our premium products For associates, we prioritize opportunities for growth and inclusivity within a diverse workplace Recognizing our environmental responsibilities, we strive to protect the planet's resources and preserve its ecosystems.
Be the global leader in convenient foods and beverages by winning with a purpose
PepsiCo aspires to maintain its competitive edge by enhancing its capabilities, responsiveness, and overall performance This entails expanding its global presence and market share by prioritizing consumer needs Internally, the company is strengthening its foundation through improved culture and core competencies, ultimately leading to enhanced customer experiences and brand loyalty Additionally, PepsiCo integrates its environmental sustainability vision into its business strategy, acknowledging its impact on the well-being of the planet.
“PepsiCo is committed to delivering sustained growth through empowered people acting responsibly and building trust.” e Sustained Growth: Expectation of PepsiCo towards its employees to have skills such as innovation, ambition, and determination since the company believes it is a significant key to long-term success e Empowered People: Giving freedom and autonomy to its employees The company values people who can get the job done correctly with minimum guidance e Responsibility and Trust: The two important core values that the company relies on its employees to execute all activities responsibly by giving regulations.
PepsiCo's ERP SyStem ch nh nh nh HP nh xin XE 7 1 DEFINITION OF ENTERPRISE RESOURCE PLANNING (ERP)
THE BENEFIT AND BUSINESS VALUES OF ERP - 0222.2222 22reeee 8 3.3 WHEN DOES OUR BUSINESS NEED ERP2 QQ- 22 2.2222222 01212 re 11 3.4 EXPLAIN THE BUSINESS PROCESSES (FUNCTIONS) IN DETAIL
By bringing every aspect of the enterprise under one roof, ERP helps PepsiCo have solid solutions for managing, tracking and controlling the whole enterprise systems Due to the implementation of ERP System, PepsiCo could completely create these long-lasting business values:
_ Sales = Portal and Web:Site Document Management mm j =
In order to visualize the sustainability vision of making tomorrow better than today, PepsiCo has utilized the ERP system to help streamline its distribution and delivery process, improve planning and forecasting, and give better visibility to its supply chain
2 Develop new products, services and business models
ERP leads to a change in the business models by unifying all of the information from various departments and different external resources It could avoid the ‘silo effect’ between departments and efficiently manage on the whole operations
For example, ERP System establishes availability to promise by checking warehouse and scheduled manufacturing and price and creditworthiness determined from the database
3 Develop the intimacies between business with customers and suppliers
PepsiCo manufactures and distributes the markets of various products (beverage, snacks, sports drinks, juices) so the ERP system is implemented as a bridge between its supply chain and inventory data with customer data.
CRM in ERP Systems divides the client base into high and low-value categories, identifies the customer persona, and targets the marketing materials and sales efforts at potential customers Moreover, the communications with clients are informative, timely and efficient - and customers could have quick responses as having any complaint
ERP ensures all of PepsiCo's suppliers supplying the intermediaries’ goods (such as water, colorings, carbonation, plastic, etc) come to the appropriate plant with the lowest cost to avoid any shortage in supply
4 Enhance the decision-making process
By having close intimacy with suppliers and customers through ERP System, Pepsico could generate a forecast of demand in the next phases, minimize the additional inventory and make a wiser decision in reducing high cash flow and abundant resources
For example, integrated warehouse management systems allow manufacturers to maintain just-in-time deliveries, with precisely calibrated stock levels This makes it much easier to customize your output to suit market needs, rather than producing regardless of demand
PepsiCo chose to implement SAP which is the world’s leading provider of business software solutions The competitive advantages could be seen from the way SAP helps PepsiCo to give geographic locations real-time processes visibility and remove process redundancies
Moreover, other ERP Systems (Oracle, People Soft, Siebel CRM Systems) had been used in the subsidiaries of PepsiCo but did not synergize well between business processes, and plants with client Therefore, choosing a suitable ERP System could maximize the advantages over the competitors
In an era of rapid development, the use of technology in the information system of enterprises is crucial and urgent ERP System has helped PepsiCo to build resources more suitably, minimize the risks of abundant inventory goods or human resources and especially create a tight connection between departments to ensure the flow of procurement and fulfillment process, even when there is a recession in the whole economy.
3.3 WHEN DOES OUR BUSINESS NEED ERP?
In many previous businesses, each department had a different and inconsistent way of managing data This method can work internally, but when it comes to combining other departments, it brings many barriers as connecting data, especially large amounts of data or incompatible software Since then, the coordination between many parts of a company has become more complex, expensive, and time-consuming Therefore, the larger the enterprise and more complex the human resource system, the more it needs an effective ERP system
ERP emerges as a solution for seamless data management, consolidating data from various sources into a single system and database This centralized platform enables departments to access and share information, streamlining processes like procurement In the case of Pepsico, ERP facilitates coordination among Supply Chain, Sales, Production, and Accounting departments during the delivery process Indra K Nooyi highlights the importance of adopting shared technology platforms like SAP in enhancing efficiency and synergy across departments and international branches.
3.4 EXPLAIN THE BUSINESS PROCESSES (FUNCTIONS) IN DETAIL
In Pepsico’s ERP system, five major business functions are working together to manufacture a good or service, advertise and sell it, monitor bookkeeping and financial transactions, and carry out fundamental human resource functions Each department is in charge of its duties and specific works according to the functional perspectives, respectively from the functional level, the operational level to the apex level including:
To begin with, our research will give a close-up of the detailed functions of these business departments in Pepsico’s ERP system Firstly, the Marketing and Sales department takes responsibility for tasks related to selling products, marketing analytics, design, and communication This department is divided into five branches: Communications, Sales, Marketing, Design and Marketing analytics Following the standard organizational structure of Pepsico, this division consists of three levels (functional level, operational level, apex level) being charged with different pieces of work In particular, the functional positions play an important role as a point of entry - which have direct exposure to the company’s customers Their day-to-day work is seeking prospective clients, handling orders, and offering consumer service Moving on to the higher unit, the position taking on backing up market research, price decision-making, and sales performance is operational level The Sales and Marketing department is considered to be a key factor determining the success of the FMCG product's market access, especially for Pepsico To exist in such a seriously competitive industry, it is required that the company places tracking sales and product patterns, planning new goods, and keeping an eye on rivals’ performance on the top Hence, the leading body called the apex level is entrusted with these vital tasks. as
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Introduction to Procurement process ẽn generalL . - ôsen nhe 16 1 DEFINITION OF BUSINESS PROCESS Q Q2 L2 22222HHnHy 16 2 A GENERIC PROCUREMENT OPERATION - IN PEPSICO
SOME TERMS RELATED TO PROCUREMENT PROCESS
Request for Proposal (RFP) A document issued by a buyer to potential suppliers, requesting them to submit a proposal detailing how they would meet the buyer's needs
Request for Quotation (RFQ) A document issued by a buyer to potential suppliers, requesting them to provide a quote for a specific product or service
Request for Information (RFl) A document issued by a buyer to potential suppliers, requesting information on their products or services, capabilities, and experience
Purchase Order (PO) A document issued by a buyer to a supplier, indicating the items or services to be purchased, the price, and delivery details
Purchase Requisition A document used to request the purchase of goods or services, typically initiated by the department or individual needing the items
Vendor Management The process of selecting, evaluating, and managing suppliers to ensure they provide quality goods or services and meet contractual obligations
Procurement Plan A document that outlines the approach and activities to be undertaken to acquire goods or services to meet the needs of an organization
Contract Management The process of managing the creation, execution, and analysis of contracts with suppliers to ensure that contractual obligations are met
Supplier Performance Evaluation The process of measuring and evaluating a supplier's performance against predetermined criteria, such as quality, delivery, and cost
Goods receipt A goods receipt, depending on the context, has two different meanings: e |t is the movement of goods or materials into the warehouse i.e incoming goods e |t is a document that serves as a confirmation to the receipt of materials to the warehouse or the receipt of stock from the vendor or manufacturer.
THE BENEFITS OF PROCUREMENT PROCESS - IN PEPSICC
Procurement is a critical function in any organization, including PepsiCo Here are some common reason3@{@%s why the procurement process is essential to PepsiCo: e Cost savings: Procurement helps PepsiCo to negotiate the best prices from suppliers, ensuring that the company gets the best value for its money
Specifically, the cost of supplying raw materials can impact up to
80% of the costs for a company (Hartman, Kerkfeld & Henke, 2012)
Retail Computers Consumer Automotive Pharma- Service Typical electronics ceuticals industry structure
FIGURE Percentage of cost of goods sold for raw material supply costs (Source: Hartman, Kerkfeld & Henke, 2012) e Advanced supply chain management: Procurement ensures that the right products are available at the right time and in the right quantities This helps
PepsiCo to avoid stockouts, reduce waste, and improve customer satisfaction
Quality control: Procurement ensures that PepsiCo receives high-quality goods and services from suppliers This helps to maintain PepsiCo’s product quality and reputation
Risk management: Procurement helps PepsiCo to identify and manage potential risks associated with its supply chain such as disruption, and price volatility
Innovation: Procurement can drive innovation by working with suppliers to develop new products, processes, and technologies that can _ benefit PepsiCo's business
Currently, the operations of procurement process at PepsiCo are most based on the following basic criteria:
Savings indicator is measured in money: Based on yearly forecasts of raw material supply, PepsiCo's procurement team will establish savings objectives ranging from 2-5% of total raw material supply value
Cash flow indicator: By negotiating better payment arrangements with suppliers
Measure the ability to ensure continuous supply: no lack of raw materials, sufficient amount, right time, right place
Besides some general benefits, based on the above fundamental criterias, PepsiCo's material supply activities in previous years have provided the specific advantages:
Efficient raw material supply activities: There were some cases where the supplier had a problem that did not deliver in time, but when the material supply department was involved, everything was resolved without seriously affecting the production
The raw material supply department clearly understands the demand for which materials the company regularly uses, combining the output of all factories, thus always bringing about cost benefits for the company
In the search and selection of suppliers, the company has selected a large, reputable, reliable and _ financially stable supplier, meeting the requirements of standards and specifications of goods and materials
Moreover, there are many suppliers who have good relationships with the company so that the company enjoys many incentives to help the material supply activities be promoted
PepsiCo, Inc Global Supplier Code of Conduct
At PepsiCo, we believe acting ethically and responsibly is not only the right thing to do, but also the right thing to do for our business Our Global Supplier Code of Conduct (“Supplier Code”) sets out our expectations for suppliers in the areas of business integrity and anticorruption, labor practices, health and safety, and environmental management
As a condition of working with PepsiCo and its affiliates, all external entities (suppliers, vendors, contractors, consultants, agents) must adhere to the Supplier Code and related policies These entities are further obligated to disseminate and enforce the Supplier Code and policies throughout their supply chains.
PepsiCo expects its suppliers to conduct business responsibly, with integrity, honesty, and transparency, and to adhere to the following principles:
1 Maintain awareness and comply with all applicable laws and regulations of the countries of their operation
2 Maintain the confidentiality of all PepsiCo’s and its partners’ information
Suppliers must take all reasonable and necessary precautions to safeguard PepsiCo’s and its partners’ information to which it has access, including not disclosing to anyone, inside or outside of PepsiCo, unless disclosure is properly authorized, in connection with a clearly defined legitimate business need (i.e., shared only on a need-to-know basis), and subject to a written confidentiality agreement.
PepsiCo's Procurement Process AnalySÌS cong khe 24
DETAILED PROCUREMENT PROCESS 0 2 ccccceccescescesceeceeceeseeseceeeeeceeeeseeseenees 35
5.3.1 Introduction to the detailed BPMN of the process
BPMN has been developed by the Business Process Management Initiative (BPMl) since 2005 and is increasingly widely applied in business process development of
34 many different organizations It is a flow chart method that models the steps of a planned business process from end to end It helps: e illustrate a thorough sequence of business operations and information flows required to complete a process visually e business analysts (who create the initial drafts of processes) to technical developers (who implement the technology that performs the processes), to the employees (who use the technology), can rely on to find out the non-optimal parts of the currently operating process
In terms of Pepsico, the procurement process performed through SAP software (S/4HANA) that the company is operating can be easy to understand through modeling diagram using BPMN
5.3.2 Analyzing the procurement process steps of the BPMN
As mentioned before in part 4, the current procurement strategy of PepsiCo consists of the identification of needs, the selection of vendors, the negotiation of contracts, and the receipt and payment of goods or services
- The first step in handling the Pepsico’s procurement process by the Finance and Legal department, Procurement team in particular, starts with determining and defining the business requirements & needs with the support from using SAP S/4HANA System
Once the needs of the company are identified, the Procurement team has responsibility for re-checking the validity of these needs e lf not valid, the business requirements & needs have to be determined and defined again e lf valid, it comes to creating purchase requisition (PR), which includes the details of the purchase such as the quantity, price, delivery date, and payment terms The input data using here to create PR includes User Input, Material Master, Purchasing Info Records, Vendor Master, Organizational Data
After creating PR, Procurement team continue to search and identify the suppliers suitable for these needs step, as mentioned before in Part
4, this step includes determining the technical requirements, quality standards, and any other relevant criteria
Then, Procurement team submits recommendations for suitable suppliers to the Head of Department for approval The Head of Department reviews by evaluating the submitted suppliers, verifying the available budget (taking into consideration the risk, that budget overdraft may occur here and taking also into consideration the risk, that data breach may occur) The submitted suppliers will be divided into two kinds: internal and external suppliers e To internal suppliers, there is one suppliers list that PepsiCo has collaborated with in previous time, the Head bases on this list to reach the final selection for suppliers And then, store the data into SAP to transfer it to Marketing & Sales e To external suppliers, the Head will store data of recommended external suppliers Procurement team sends to Marketing & Sales
Moving on to Marketing & Sales department, Sales team receives supplier data from Finance & Legal to re-check e lf internal suppliers, Sales team choose final suppliers from the list
When external suppliers are involved, a Request for Quotations (RFQ) is issued to gather quotations for evaluation After receiving these quotations, the sales team engages in negotiations with suppliers to determine the best option and finalize a contract.
The Sales team initiates the purchase order (PO) process upon selecting the supplier This document incorporates data from various sources such as RFQs, previous POs, master data, transaction documents, and user input Once created, the Sales team transmits the PO to the chosen supplier, marking the completion of this step.
- The Purchase Order is sent to selected supplier, the supplier will review PO specifications:
PO is approved, the supplier will prepare for PepsiCo’s required goods and services And then, the delivery of those goods and services to PepsiCo will be performed The Supply Chain department is responsible for receiving these deliveries Above all, the Warehouse checks goods and services against PO whether meeting the requirements or not Data from these checked goods and services will be stored to send to Finance & Legal
PO is denied, the supplier sends denial to PepsiCo’s Procurement team The Sales team is in charge of re-checking the supplier data received from the Procurement team to find new suppliers
Upon delivery of goods and services, suppliers submit invoices to PepsiCo's Finance & Accounting team for payment processing To ensure accuracy, the team verifies the invoice against information stored from goods receipt (GR) and entry service sheet (ESS) documents issued by the Supply Chain department This cross-referencing process aids in the validation of the invoice before payment is authorized.
If the invoice is correct, the team posts it on SAP system
If the invoice is incorrect, it will be returned back to supplier to adjust and send back to PepsiCo to continue to post on SAP
- Next, the team decides on the method of payment To perform this task, the data needed includes Invoice, Vendor Master and User Input Step 10:
- In the end of the process, the data will transfer to the Procurement team to assess data and give feedback for performance
PepsiCo's procurement process is successfully completed
5.4.1 Principles of accounting on financial impacts of the procurement process in ERP
Understanding the financial impact of the procurement process requires having a certain amount of knowledge of accounting’s principles on how financial changes are recorded in the general ledgers, as well as what method is used in order to do so Therefore, we are going to have a quick glance through how the system generally works
So, in business, accounting processes are divided into two main categories: financial accounting (Fl) and management accounting (CO) While management accounting provides the organization internally with essential information needed to effectively manage many business processes, financial accounting, on the other hand, mainly records financial impacts and changes of those business processes, as they are executed, in order to make financial reports which will be given to audiences outside the organization Therefore, from an ERP perspective, financial accounting is the
“heart” of the system and also the system’s main accounting method since one of many ERP system’s main functions is to accurately reflect the financial status of the firm at any given point in time
In financial accounting, one of the key accounting processes is General Ledgers (GL) accounting The general ledger includes many accounts that companies use to record financial data; each account tracks different types of financial data So, GL accounting involves recording all the financial transactions of a business entity in a central repository of accounts The process will record financial transactions by, first, identifying accounts affected by the transactions and then, using T-accounts and
“debit-credit” rule in order to record those transactions The “debit-credit” rule can be simply illustrated in the picture below: an increase in assets and expenses will be recorded on the debit side along with a decrease in revenue and liabilities; and vice versa, a decrease in asset and expenses will be recorded on the credit side along with an increase in revenue and liabilities And to know which account belongs to
38 assets or expenses or revenue or liabilities, the information can be looked up on the Chart Of Accounts (COA)
Assets and expenses + || Assets and expenses
Revenue and liabilities — || Revenue and liabilities +
Compare PepsiCo's process with the GBI’s process, discussion and evaluation
OVERVIEW OF GBI Ặ c cee ceeceeeec cee cee cee eee cencen ens aeceseeeeensensnsnsceeseeeeeseneenentenes 47 6.2 COMPARISION BETWEEN GBI AND PEPSICO COMPANY
Global Bike Incorporated (GBI) is a fictional company used as the case study for illustrating important concepts, processes and techniques relating to SAP ERP
GBI serves the professional and “prosumer” cyclist market for mountain (off-road) and touring (road) bikes
The company was founded in 2001 following the merger of two bicycle manufacturers, one based in the United States and the other in Germany GBI has three lines of business: deluxe and professional touring bikes, men’s and women’s off-road bikes, and bike accessories GBI procures its raw materials from a variety of suppliers globally
The organization uses SAP ERP to support its processes
6.2 COMPARISION BETWEEN GBI AND PEPSICO COMPANY
There are both similarities and differences between the two companies using ERP in the purchasing/procurement process
* Purchase order Source of supply known?
* Payment documents documents ái Material co documents
6.2.1 The number of steps a General steps
GBI is listed to have six steps in the procurement process: Requirements determination, supplier selection, order processing, goods receipt, invoice verification, payment processing
Whereas, there are ten steps in PepsiCo's procurement process: Requirement determination, purchase requisition, identify supplier, request and receive quotations, negotiate contract, select vendor, purchase order processing, goods receipts, invoice receipts and payment processing, performance evaluation b Similarities & Differences in steps of GBI and PepsiCo
To meet the demands of consumers, GBI and Pepsico both rely on the procurement of raw materials and trading goods from suppliers and vendors These materials are essential for the production and distribution of their final products, which are ultimately sold to end-users.
It can be seen from the purchasing process of the two companies that they are quite similar to each other in many steps To name a few, identifying the needs is the first and the key cause for requirement for raw materials A lack of materials can result in disruption to the whole process of a company However, it is not the only important step as choosing an appropriate and prestigious supplier can also affect the quality of its finished goods as a whole That is the reason why both GBI and PepsiCo have to take careful consideration before signing a contract with a potential supplier
Especially, it is the similarity between the two companies in the order of steps in the buying process: Processing purchase requisition and purchase order, receiving and checking goods, creating and sending invoice; and paying to its suppliers Though GBI does not include the creation of purchase requisition, it is given the hint that it has been merged in the first step of the procurement process (Known as supplier determination) This is the relevant order which triggers the other steps to take place, if not, the creation of documents in each step will be adversely affected and overlapped
PepsiCo has some additional distinctive steps which are called purchase requisition, request and receive quotation, negotiate contract, select vendor and performance evaluation The order of steps in which a supplier is selected is also somewhat different between the two companies
Firstly, in GBI, it can be seen that request for quotation (RFQ) has been concluded in determination of supply source step In some cases, GBI does not need to create RFQ, in contrast, it can use either purchase requisition or quotation to identify potential suppliers
Whereas, PepsiCo identifies its supplier by the purchase requisition and in turn, uses the quotation or contract as the main source of selecting the potential for its needed materials
Another additional step in PepsiCo should be considered is contract negotiation This is defined as the terms and conditions of the purchase with these suppliers However, if need be, GBI also uses outline purchase agreements in order to receive materials from suppliers within the specified period While in the PepsiCo procurement process, contract negotiation is a necessity in order to reach an agreement and discuss pricing, payment terms and timeline in order to deliver materials and goods in a timely manner
GBI merge selecting supplier into the purchase order processing so as to choose the supplier based on the PO document On the contrary, PepsiCo does the reverse That means it selects the supplier before creating and sending the purchase order
Performance evaluation post-purchase allows PepsiCo to scrutinize and reassess the adherence to established policies and order protocols within their buying process.
6.2.2 Departments involved and their roles
There are primary departments in PepsiCo taking responsibility for the procurement process: Finance & Legal (Procurement, Finance & Accounting team), Marketing and Sales, Supply Chain (Transportation & Logistics; Warehouse positions)
In GBI, three departments including Purchasing (Procurement team), Accounting and Warehouse are in charge of the purchasing process
Requirement Procurement Procurement Defines the business determination and | department department requirements requirement verification needs ¡in order
48 request for purchase of unavailable materials
Re-check if the requirement is valid or not
Purchase requisitions | Warehouse Procurement Responsible for the creation department department creation of purchase requisitions
Supplier selection Procurement Procurement Selecting the department department appropriate supplier for its non-stock or unavailable materials
Validity of selected | Procurement Sales department | Check is the supplier is supplier check department relevant, if not, the team send feed back to procurement team
Contract negotiation Procurement Sales department | Negotiate the contract department to its supplier before creating purchase order
Goods receipts Warehouse Warehouse Receive and check the department department goods receipts against the purchase order
Invoice Accounting Accounting and] Posting the invoice to receipts and and Finance Finance the SAP system, payment department department deciding the payment methods and updating the reconciliation account
Complete the procurement process Because of the differences in assignment of tasks, the procurement department in each company can carry more or less tasks They can be a cross-functional team in a specific time and back to their jobs at the same time
6.2.3 The strengths and weaknesses of the Procurement Process of PepsiCo in comaprision to GBI a Strengths of PepsiCo’s against GBI's procurement process
In terms of flexibility, PepsiCo's procurement process stands out as more adaptable and straightforward than GBI's The PepsiCo process is easier to navigate, allowing for greater agility and efficiency during purchasing.
Department involved: The number of departments involved in this process of PepsiCo is more than that of GBI which means that PepsiCo can take advantage of its employee expertises and skills to complete the process according to the plan
Effective processing: Processing orders faster, managing inventory effectively and minimizing lead times These benefits can result in potential procurement savings
Certainty of task: By adding three more additional steps relating to purchase requisition creation, contract negotiation and evaluation performance, the primary and key tasks are ensured to be finished before skipping to the next steps That is to say, there is little chance of missing the task
Low chance of wrong selection of supplier: There is a small detail that the sales team in PepsiCo is in charge of checking the relevance of suppliers
50 chosen by the procurement team This acts as a chance of reducing risk of selecting the wrong supplier with low-quality and high-price inputs b Weaknesses of PepsiCo’s compared to GBI’s procurement process e Time cost for additional steps e Increase overall cost (fixed cost and variable cost) e PepsiCo is expanding its business sector to many other fields without focusing on food and beverage - the main field of PepsiCo This action can lead to confusion in selecting the right supplier/ vendor for its product materials Hence the increase in the cost and inefficiency in the purchasing process is inevitable e Lower the quality of the product somehow e Effect cash flow and revenue e PepsiCo may have to negotiate long-term contracts or bulk purchasing agreements with its supplier This may lead to higher cost in the long run