matt alfano & brittany masi frito lay replenishment manager: jeff arndt
DESCRIPTION
Senior Design Spring 2010. Matt Alfano & Brittany Masi Frito Lay Replenishment Manager: Jeff Arndt. Corporate Structure. PepsiCo International. PepsiCo Americas Foods. PepsiCo Americas Beverages. Frito-Lay North America Quaker Sabritas Gamesa Latin American food businesses - PowerPoint PPT PresentationTRANSCRIPT
Matt Alfano & Brittany MasiMatt Alfano & Brittany Masi
Frito Lay Replenishment Manager:
Jeff Arndt
Senior Design Spring 2010Senior Design Spring 2010
Corporate Corporate StructureStructure
PepsiCo PepsiCo Americas Americas
FoodsFoods
PepsiCo PepsiCo Americas Americas BeveragesBeverages
PepsiCo PepsiCo InternationalInternational
• Frito-Lay North America
• Quaker
• Sabritas
• Gamesa
• Latin American food businesses
• Power of One retail sales teams
• Pepsi-Cola North America
• Gatorade
• Tropicana
• Latin American beverage businesses
• North America foodservice
Our food, snack and beverage businesses in: • U.K.
• Europe
• Asia
• Middle East
• Africa
Frito-Lay North America represents 37% of PepsiCo’s profit and about 29% of its revenues. * * PepsiCo 2008 Annual Report
• Convenient foods leaderConvenient foods leader
• $11 billion in annual sales$11 billion in annual sales
• Division of PepsiCo Division of PepsiCo
• 48,000+ employees48,000+ employees
• Headquartered in Plano, TXHeadquartered in Plano, TX
• 70+ year history70+ year history– 30+ plants and 200 distribution centers across 30+ plants and 200 distribution centers across
the U.S. and Canada.the U.S. and Canada.– One of the largest private fleets in North One of the largest private fleets in North
America America
Frito-Lay North Frito-Lay North AmericaAmerica
BrandsBrands
#1 #1 Dips/SalsasDips/Salsas
#1 Branded Nuts#1 Branded Nuts
#1 Premium Meats#1 Premium Meats
#1 Pita Chips#1 Pita Chips
#1 Corn Chips#1 Corn Chips
#1 Tortilla #1 Tortilla ChipsChips
#1 Potato Chips#1 Potato Chips#1 Extruded Snack#1 Extruded Snack
#2 Pretzels#2 Pretzels
Category LeaderCategory Leader
Out of Stock (OOS) issues due to:Out of Stock (OOS) issues due to:
• Little or no control over RSRs (route sales rep.)Little or no control over RSRs (route sales rep.)
• Outdated OOS Tools and ServerOutdated OOS Tools and Server
• Unknown appropriate delivery frequenciesUnknown appropriate delivery frequencies
• Unknown Inventory levels needed per club, per SKU Unknown Inventory levels needed per club, per SKU
Background & Problem Background & Problem Situations Situations
Goals & General ApproachGoals & General Approach
• Create a single, user-friendly database/server to Create a single, user-friendly database/server to make sales information and reports more readily and make sales information and reports more readily and easily availableeasily available
• Update OOS Analysis ToolsUpdate OOS Analysis Tools
Modeling tools used for accomplishing goals Modeling tools used for accomplishing goals and fixing problems:and fixing problems:
• ExcelExcel
• SmoothieSmoothie
• SASSAS
• LESLES
2 Products Analyzed2 Products Analyzed
Smart Mix & Classic Variety Mix
Sample Sales DataSample Sales Data
Seasonal AdjustmentSeasonal Adjustment
Seasonal Adjustment (con’t)
Linear Exponential Smoothing (LES)Linear Exponential Smoothing (LES)
LES (con’t)LES (con’t)
Original & Reseasonalized Data
Forecast with Confidence Forecast with Confidence IntervalsIntervals
Errors (seasonally adjusted)Errors (seasonally adjusted)
Analysis Summary Summary
• We created multiple tools for analyzing sales data and creating forecasts for every Sam’s Club nationwide
• These forecasts analyze two high volume and high demand products and give:
– - Seasonal adjustments along with LES (linear exponential smoothing) models
– - two week future forecasts with confidence intervals to measure the accuracy of those forecasts
– - centered moving averages, seasonal indices, root mean squared errors, and ratio to moving averages
Managerial Interpretation
Sam’s Club representatives, RSRs and RSMs (regional Sam’s Club representatives, RSRs and RSMs (regional sales managers) will be able to access needed, sales managers) will be able to access needed, time sensitive sales information and generate time sensitive sales information and generate reports and forecasts more easily. reports and forecasts more easily.
Appropriate inventory levels per Club, per SKU can be Appropriate inventory levels per Club, per SKU can be established, along with proper delivery frequencies.established, along with proper delivery frequencies.
This will allow Frito Lay to avoid the hassle of OOS This will allow Frito Lay to avoid the hassle of OOS fines and gain a bit more control over the fines and gain a bit more control over the information gathering process, which is crucial information gathering process, which is crucial when it comes to forecasting sales and maintaining when it comes to forecasting sales and maintaining moving inventory.moving inventory.
Conclusions & Critiques
• User Friendly!!!
• Update your software!!!
• Keep sales records of at least 5 previous years (currently 3) for more accurate forecasts and analysis
• Replace/change minimum inventory levels for appropriate SKUs (currently 11 units for every product)