PepsiCo Working Toward Integrated Infrastructure With Digital Enhancements
PepsiCo has been undergoing a six-year journey to modernize its operations, particularly in the supply chain. Now as the company nears the end of its SAP rollout in the U.S., PepsiCo is preparing for the benefits of an integrated infrastructure that streamlines the foods and beverage businesses.
Ramon Laguarta shared details during the recent Consumer Analyst Group of New York (CAGNY) investors conference about ongoing investments and the company’s trialing of a single infrastructure that could connect key markets in the U.S.
“We're now testing and learning, mixing centers and delivery operations that will combine our foods and beverage business in a way that will give us a lot of optionality in how we service future demand that we think will be much more digital and delivery to home,” said Laguarta.
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The integration would combine assets instead of having them sit side by side, including their technology, data, and physical infrastructures. Within the U.S., this would provide a "tremendous opportunity to service a Walmart or to service a direct-to-home delivery in ways that right now, we cannot,” he said. “Now we have the systems [and] capabilities to do that.”
Strengthening Core Capabilities
Leading up to this, PepsiCo has been modernizing its infrastructure for supply chain, warehousing, and manufacturing in a multi-year program, including establishing data foundations that will allow it to be more precise in its decision-making in the future.
Through investments in better and more integrated data, the company said it has been able to create a network of global capability centers that allows it to avoid duplications and remove bottlenecks, “which gives us a lot of intelligence and quick lift-and-shift.”
Part of the goal is to drive productivity across its network of factories, distribution centers, and transportation using automation and connected data lakes, providing PepsiCo with increased use cases for digitizing the company.
According to Laguarta, the company has achieved the following due to these upgrades:
- Increased personalization capabilities within content generation
- Enabled more precise planogram execution to better anticipate needs
- Implemented digital twins to lower the costs of maintenance
- Used robotics to automate and expedite factory efforts
Improvements in end-to-end planning have also simplified things. "We used to plan by functions, by market … it was a lot of operational complexity,” he said. “When you do end-to-end planning, you reduce a lot of waste. We're becoming a much better forecasting company, and that translates into much more productivity all the way down to procurement.”
These types of investments have had a measurable impact on PepsiCo, with operating profits increasing from $12 billion to $16.5 billion last year.
