Rishabh Sharma

“Impact of Information Technology in the efficiency and
effectiveness of Material Management”

A CASE STUDY OF PEPSICO INC.
Research Project
Submission: Project Report
Presented to
College of Vocational Studies, University of Delhi
On
October 30, 2018
In
Partial Fulfilment of the Requirement for the Three year under Graduate Degree
B.A (Vocational) Materials Management
Project Guide: Submitted by:
Mr. S.W. Lyngdoh RISHABH SHARMA

Roll No.: 16013574028
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CERTIFICATE BY SUPERVISOR
This is to certify that the Project Report titled, “Impact of Information Technology in the
efficiency and effectiveness of Material Management” being submitted by Mr. Rishabh
Sharma in partial fulfilment of the requirements for the award of the degree of B.A (Vocational)
Materials Management at College of Vocational Studies, University of Delhi is work that has been
done under my supervision.
To the best of my knowledge, it is an independent work and the results presented in this report
have not been submitted, in part or full, to any other university or institute for the award of any
degree or diploma.
October 30, 2018 Mr. S.W. Lyngdoh
Assistant Professor
Page 3
CERTIFICATE BY STUDENT
The report titled, “Impact of information Technology in the efficiency and effectiveness of
Material Management”, is original and independent work done by me. This report has not been
submitted in part or full to any other university or institute for award of degree or diploma.
October 30, 2018 Mr. Rishabh Sharma

Roll. No.: 16013574028
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ACKNOWLEDGEMENT
I wish to express my sincere gratitude to Dr. Inderjeet Singh Dagar, Principal, College of
Vocational Studies, University of Delhi for providing me an opportunity to do a project titled
“Impact of information technology in the efficiency and effectiveness of material
management”
I sincerely thank my project guide Mr. S.W. Lyngdoh, Assistant Professor, College of
Vocational Studies, University of Delhi for his guidance and encouragement in carrying out this
work.
I also wish to express my gratitude to the officials and other staff members of College of
Vocational Studies, University of Delhi library who rendered their help during the period of our
work and gave kind co-operation to the completion of my project work.
In the end, I express a sense of gratitude and love to all my friends and family for their love and
support for everything.
October 30, 2018 Mr. Rishabh Sharma

Roll. No.: 16013574028
Page 5
ABSTRACT
Irrespective of the fact that Logistic firms are making much profit, they still suffer from inefficiency and
insecurity. Critically evaluating the introduction of information technology owing to its objectives, it is not
concern with how much technology is provided but how well it serves potential users. This cloudy
atmosphere therefore provides a fertile ground for the research to examine the effects of information
technology on Logistic firm’s performance at PepsiCo to realize its significant impact on their operations
in order to guarantee its profitability and growth. The target population was supply chain management at
PepsiCo. A set of items, based on the research model, was developed, and aggregated into four scales for
measuring the use of IT in company, and three scales for measuring the company performance. The data
was analysed and result presented in form of content and table.
On the extent to which the Information and Technology, the findings reveal that PepsiCo is efficiently and
effectively using IT in their departments and service delivering indicating high level of IT usage among.
It is therefore, means the role of IT factors have a big contribution to put on the performance of PepsiCo.
This implies that there is a strong relationship between the Information Technology and the performance
of PepsiCo.
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TABLE OF CONTENTS
ACKNOWLEDGEMENT…………………………………………………………………..
ABSTRACT……………………………………………………………………………………..
1. INTRODUCTION…………………………………………………………………..…………9
1.1 OBJECTIVES OF MATERIALS MANAGEMENT………………………….10

1.2 CHALLENGES TO MATERIALS MANAGEMENT………………………..10
1.3 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT……………….11
1.4 ADVANTAGES OF SUPPLY CHAIN MANAGEMENT…………………..15
1.5 INTRODUCTION TO IT MANAGEMENT……………………………………16
1.6 APPLICATIONS OF IT INTO MATERIALS MANAGAMENT………….17
1.7 INTRODUCTION TO GREEN SUPPLY CHAIN MANAGEMENT……20
1.8 INFORMATION TECHNOLOGY AND SUPPLY CHAIN…………………21
1.9 INTRODUCTION TO PEPSICO INC….…….....................................24
2. PURPOSE AND OBJECTIVE OF STUDY……………………………………………25
3. LITREATURE REVIEW…………………………………………………………….…..…27
4. COMPANY PROFILE – PEPSICO…………………………………………………….40
5. RESEARCH METHODOLOGY…………………………………………………………50
6. FINDINGS…………………………………………………………………………………….66
7. CONCLUSION………………………………………………………………………………68
8. REFERENCES………………………………………………………………..............….70
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INTRODUCTION
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INTRODUCTION TO MATERIALS MANAGEMENT
Materials management is a core supply chain function and includes supply chain planning and supply chain
execution capabilities. Specifically, materials management is the capability firms use to plan total material
requirements. The material requirements are communicated to procurement and other functions for
sourcing. Materials management is also responsible for determining the amount of material to be deployed
at each stocking location across the supply chain, establishing material replenishment plans, determining
inventory levels to hold for each type of inventory (raw, WIP, Finished Goods), and communicating
information regarding materiel needs throughout the extended supply chain.
Typical roles in Materials Management include: Materials Manager, Inventory Control Manager, Inventory
Analyst, Material Planner, Expediter and emerging hybrid roles like "buyer planner".
The primary business objective of Materials Management is assured supply of material, optimum inventory
levels and minimum deviation between planned and actual results.
The concept of having one department responsible for the flow of materials, from supplier through
production to consumer, is relatively new. Although many companies have adopted this type of
organization, there are still a number that have not. If companies wish to minimize total costs in this area
and provide a better level of customer service, they will move in this direction. The name usually given to
this function is materials management. Other names include distribution planning and control and logistics
management, but the one used in this text is materials management.
Materials management is a coordinating function responsible for planning and controlling materials flow.
Its objectives are as follows:
• Maximize the use of the firm’s resources.
• Provide the required level of customer service.
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1.1 OBJECTIVES OF MATERIALS MANAGEMENT
The goal of materials management is to provide an unbroken chain of components for production to
manufacture goods on time for customers. The materials department is charged with releasing materials to
a supply base, ensuring that the materials are delivered on time to the company using the correct carrier.
Materials is generally measured by accomplishing on time delivery to the customer, on time delivery from
the supply base, attaining a freight, budget, inventory shrink management, and inventory accuracy. The
materials department is also charged with the responsibility of managing new launches.
In some companies materials management is also charged with the procurement of materials by establishing
and managing a supply base. In other companies the procurement and management of the supply base is
the responsibility of a separate purchasing department. The purchasing department is then responsible for
the purchased price variances from the supply base.
In large companies with multitudes of customer changes to the final product there may be a separate
logistics department that is responsible for all new acquisition launches and customer changes. This
logistics department ensures that the launch materials are procured for production and then transfers the
responsibility to the plant materials management
1.2 CHALLENGES TO MATERIALS MANAGAMENT
The major challenge that materials managers face is maintaining a consistent flow of materials for
production. There are many factors that inhibit the accuracy of inventory which results in production
shortages, premium freight, and often inventory adjustments. The major issues that all materials managers
face are incorrect bills of materials, inaccurate cycle counts, un-reported scrap, shipping errors, receiving
errors, and production reporting errors. Materials managers have striven to determine how to manage these
issues in the business sectors of manufacturing since the beginning of the industrial revolution. Although
there are no known methods that eliminate the aforementioned inventory accuracy inhibitors, there are best
methods available to eliminate the impact upon maintaining an interrupted flow of materials for production.
One challenge for materials managers is to provide timely releases to the supply base. On the scale of worst
to best practices, sending releases via facsimile or PDF file is the worst practice and transmitting releases
to the supplier based web site is the best practice. Why? The flaw in transmitting releases via facsimile or
email is that they can get lost or even interpreted incorrectly into the suppliers system resulting in a stock
out. The problem with transmitting EDI releases is that not all suppliers have EDI systems capable of
receiving the release information.
The best practice is to transmit the releases to a common supplier web base site where the suppliers can
view (for free) the releases. The other advantage is that the supplier is required to use the carrier listed in
the web site, must transmit an ASN (advanced shipping notification), and review the accumulative
balances of the order.
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1.3 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
Supply chain management (SCM) is concerned with the flow of products and information between supply
chain members' organizations. Recent development in technologies enables the organization to avail
information easily in their premises. These technologies are helpful to coordinates the activities to manage
the supply chain. The cost of information is decreased due to the increasing rate of technologies. In the
integrated supply chain model bi-directional arrow reflect the accommodation of reverse materials and
information feedback flows. Manager needs to understand that information technology is more than just
computers. Except computer data recognition equipment, communication technologies, factory automation
and other hardware and services are included.
Please refer to Fig. 1 for detailed understanding.
FIG. 1
Bi-directional arrow reflects the accommodation of reverse materials and information feedback flows.
Managers need to understand that information technology is more than just computers. Except
computer, data recognition equipment, communication technologies, factory automation and other
hardware and services are included.
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Supply Chain Management can be defined as the management of flow of products and services, which
begins from the origin of products and ends at the product’s consumption. It also comprises movement and
storage of raw materials that are involved in work in progress, inventory and fully furnished goods.
The main objective of supply chain management is to monitor and relate production, distribution, and
shipment of products and services. This can be done by companies with a very good and tight hold over
internal inventories, production, distribution, internal productions and sales.
Partnering As observed earlier, designing and implementing a globally optimal supply chain is quite
difficult because of its dynamics and the conflicting objectives employed by different facilities and partners.
Nevertheless, Dell, Wal-Mart, and Procter & Gamble success stories demonstrate not only that an
integrated, globally optimal supply chain is possible, but that it can have a huge impact on the company’s
performance and market share.
Of course, one can argue that these three examples are associated with companies that are among the biggest
companies in their respective industries; these companies can implement technologies and strategies that
very few others can afford. However, in today’s competitive markets, most companies have no choice; they
are forced to integrate their supply chain and engage in strategic partnering.
In the above figure, we can see the flow of goods, services and information from the producer to the
consumer. The picture depicts the movement of a product from the producer to the manufacturer, who
forwards it to the distributor for shipment. The distributor in turn ships it to the wholesaler or retailer, who
further distributes the products to various shops from where the customers can easily get the product.
Supply chain management basically merges the supply and demand management. It uses different strategies
and approaches to view the entire chain and work efficiently at each and every step involved in the chain.
Every unit that participates in the process must aim to minimize the costs and help the companies to improve
their long term performance, while also creating value for its stakeholders and customers. This process can
also minimize the rates by eradicating the unnecessary expenses, movements and handling.
Here we need to note that supply chain management and supply chain event management are two different
topics to consider. The Supply Chain Event Management considers the factors that may interrupt the flow
of an effective supply chain; possible scenarios are considered and accordingly, solutions are devised for
them.
We classify the decisions for supply chain management into two broad categories -- strategic and
operational. As the term implies, strategic decisions are made typically over a longer time horizon. These
are closely linked to the corporate strategy (they sometimes {\it are} the corporate strategy), and guide
supply chain policies from a design perspective. On the other hand, operational decisions are short term,
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and focus on activities over a day-to-day basis. The effort in these type of decisions is to effectively and
efficiently manage the product flow in the "strategically" planned supply chain.
There are four major decision areas in supply chain management:
 location
 production
 Inventory
 transportation (distribution)
And there are both strategic and operational elements in each of these decision areas.
The geographic placement of production facilities, stocking points, and sourcing points is the natural first
step in creating a supply chain. The location of facilities involves a commitment of resources to a long-term
plan. Once the size, number, and location of these are determined, so are the possible paths by which the
product flows through to the final customer.
These decisions are of great significance to a firm since they represent the basic strategy for accessing
customer markets, and will have a considerable impact on revenue, cost, and level of service. These
decisions should be determined by an optimization routine that considers production costs, taxes, duties
and duty drawback, tariffs, local content, distribution costs, production limitations, etc. (See Arntzen,
Brown, Harrison and Trafton [1995] for a thorough discussion of these aspects. Although location
decisions are primarily strategic, they also have implications on an operational level.
In the past, many company managers placed most of their attention on the issues that were internal to their
companies. Of course they were aware of the impact of suppliers, customers, and distributors, but those
entities were often viewed as business entities only. Specialists in purchasing, sales, and logistics were
assigned to “deal” with those outside entities, often through formal legal contracts that were negotiated
regularly and represented short-term agreements.
For example, suppliers were often viewed as business adversaries. A key responsibility of a purchasing
agent was to negotiate the best financial and delivery conditions from a supplier, whose job was to maximize
his company’s profit. Organization theorists often called the functions that dealt with outside entities
boundary spanners, indicating that for most people in the organization there were well-defined and rigid
boundaries between their organization and the rest of the world. The first major change in that perspective
for most companies can be traced to the explosive growth in just-in-time (JIT) concepts originally
developed by Toyota and other Japanese companies in the 1970s.
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Supplier partnerships were felt to be a major aspect of successful JIT. With that concept, suppliers were
viewed as partners as opposed to adversaries. In that sense the supplier and the customer had mutually
Introduction to Materials Management 7 linked destinies, in that the success of each was linked to the
success of the other. Great emphasis was put on trust between the partners, and many of the formal boundary
mechanisms, such as the receiving/inspection activity of incoming parts, were changed or eliminated
altogether.
A more complex, or extended, supply chain will likely include a number of suppliers and suppliers'
suppliers, a number of customers and customers' customers -- or final customers -- and all the organizations
that offer the services required to effectively get products to customers, including third-party
logistics providers, financial organizations, supply chain software vendors and marketing research
providers. These entities also use services from other providers.
The totality of these organizations, which evokes the metaphor of an interrelated web rather than a linear
chain, gives insight into why supply chain management is so complex. That complexity also hints at the
types of issues that can arise, from demand management issues, such as a release of a new iPhone that
chokes demand for old iPhone cases; to natural supply chain disruptions, such as the halt of transportation
in the U.S. in 2015 due to extreme winter weather, or California's drought and its effect on crops; to political
upheaval, such as the strikes in India that throttled movement at its largest container port.
Role of Softwares’ In Information Technology

Technology is critical in managing today's supply chains, and ERP vendors offer modules that
focus on relevant areas. There are also business software vendors that focus specifically on SCM.
A few important areas to note include:
 Supply chain planning software for activities such as demand management.

 Supply chain execution software for activities such as day-to-day manufacturing operations.
 Supply chain visibility software for tasks such as spotting and anticipating risks and proactively
managing them.
 Inventory management software for tasks such as tracking and optimizing inventory levels.
 Logistics management software and transportation management systems for activities such as
managing the transport of goods, especially across global supply chains.
 Warehouse management systems for activities related to warehouse operations.
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1.4 ADVANTAGES OF SUPPLY CHAIN
In this era of globalization where companies compete to provide the best quality products to the customers
and satisfy all their demands, supply chain management plays a very important role. All the companies are
highly dependent on effective supply chain process.
Let’s take a look at the major advantages of supply chain. The key benefits of supply chain management are
as follows −
 Develops better customer relationship and service.

 Creates better delivery mechanisms for products and services in demand with minimum delay.
 Improvises productivity and business functions.
 Minimizes warehouse and transportation costs.
 Minimizes direct and indirect costs.
 Assists in achieving shipping of right products to the right place at the right time.
 Enhances inventory management, supporting the successful execution of just-in-time stock models.
 Assists companies in adapting to the challenges of globalization, economic upheaval, expanding
consumer expectations, and related differences.
 Assists companies in minimizing waste, driving out costs, and achieving efficiencies throughout
the supply chain process.
These were some of the major advantages of supply chain management. After taking a quick glance at the
concept and advantages on supply chain management, let us take a look at the main goals of this
management.
Every firm strives to match supply with demand in a timely fashion with the most efficient use of resources.
Here are some of the important goals of supply chain management −
 Supply chain partners work collaboratively at different levels to maximize resource productivity,
construct standardized processes, remove duplicate efforts and minimize inventory levels.
 Minimization of supply chain expenses is very essential, especially when there are economic
uncertainties in companies regarding their wish to conserve capital.
 Cost efficient and cheap products are necessary, but supply chain managers need to concentrate on
value creation for their customers.
 Exceeding the customers’ expectations on a regular basis is the best way to satisfy them.
 Increased expectations of clients for higher product variety, customized goods, off-season
availability of inventory and rapid fulfilment at a cost comparable to in-store offerings should be
matched.
 To meet consumer expectations, merchants need to leverage inventory as a shared resource and
utilize the distributed order management technology to complete orders from the optimal node in
the supply chain.
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Lastly, supply chain management aims at contributing to the financial success of an enterprise. In addition
to all the points highlighted above, it aims at leading enterprises using the supply chain to improve
differentiation, increase sales, and penetrate new markets. The objective is to drive competitive benefit and
shareholder value.
1.5 INTRODUCTION TO INFORMATION TECHNOLOGY
IT management is the discipline whereby all of the information technology resources of a firm are managed
in accordance with its needs and priorities. These resources may include tangible investments like computer
hardware, software, data, networks and data centre facilities, as well as the staff who are hired to maintain
them.
Managing this responsibility within a company entails many of the basic management functions,
like budgeting, staffing, change management, and organizing and controlling, along with other aspects that
are unique to technology, like software design, network planning, tech support etc.
IT Management is different from management information systems. The latter refers to management
methods tied to the automation or support of human decision making. IT Management refers to IT related
management activities in organizations. MIS is focused mainly on the business aspect, with strong input
into the technology phase of the business/organization.
A primary focus of IT management is the value creation made possible by technology. This requires the
alignment of technology and business strategies. While the value creation for an organization involves a
network of relationships between internal and external environments, technology plays an important role
in improving the overall value chain of an organization.
However, this increase requires business and technology management to work as a creative, synergistic,
and collaborative team instead of a purely mechanistic span of control.
1.6 INFORMATION AND TECHNOLOGY: APPLICATIONS OF SCM:
In the development and maintenance of Supply chain's information systems both software and hardware
must be addressed. Hardware includes computer's input/output devices and storage media. Software
includes the entire system and application programme used for processing transactions management
control, decision-making and strategic planning. Recent development in Supply chain management
software is:
1. Base Rate, Carrier select & match pay (version 2.0) developed by Distribution Sciences Inc. which is
useful for computing freight costs, compares transportation mode rates, analyse cost and service
effectiveness of carrier.
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2. A new software programme developed by Ross systems Inc. called Supply Chain planning which is
used for demand forecasting, replenishment & manufacturing tools for accurate planning and scheduling
of activities.
3. P&G distributing company and Saber decision Technologies resulted in a software system called
Transportation Network optimization for streamlining the bidding and award process.
4. Logitility planning solution was recently introduced to provide a programme capable managing the
entire supply chain.
A) Electronic Commerce:
It is the term used to describe the wide range of tools and techniques utilized to conduct business in a
paperless environment. Electronic commerce therefore includes electronic data interchange, e-mail,
electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared
databases and magnetic/optical data capture. Companies are able to automate the process of moving
documents electronically between suppliers and customers.
B) Electronic Data Interchange:
Electronic Data Interchange (EDI) refers to computer-to-computer exchange of business documents in a

standard format. EDI describe both the capability and practice of communicating information between
two organizations electronically instead of traditional form of mail, courier, & fax. The benefits of EDI
are:
1. Quick process to information.

2. Better customer service.
3. Reduced paper work.
4. Increased productivity.
5. Improved tracing and expediting.
6. Cost efficiency.
7. Competitive advantage.
8. Improved billing.
Though the use of EDI supply chain partners can overcome the distortions and exaggeration in supply and
demand information by improving technologies to facilitate real time sharing of actual demand and
supply information.
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C) Bar coding and Scanner:
Bar code scanners are most visible in the checkout counter of super market. This code specifies name of
product and its manufacturer. Other applications are tracking the moving items such as components in PC
assembly operations, automobiles in assembly plants.
D) Data warehouse:
Data warehouse is a consolidated database maintained separately from an organization's production

system database. Many organizations have multiple databases. A data warehouse is organized around
informational subjects rather than specific business processes. Data held in data warehouses are time
dependent, historical data may also be aggregated.
E) Enterprise Resource planning (ERP) tools:
Many companies now view ERP system (e.g. Baan, SAP, People soft, etc.) as the core of their IT
infrastructure. ERP system have become enterprise wide transaction processing tools which capture the
data and reduce the manual activities and task associated with processing financial, inventory and
customer order information. ERP system achieve a high level of integration by utilizing a single data
model, developing a common understanding of what the shared data represents and establishing a set of
rules for accessing data.
F) Radio Frequency Identification (RFID):
Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and

track tags attached to objects. The tags contain electronically-stored information. Passive tags collect
energy from a nearby RFID reader's interrogating radio waves. Active tags have a local power source (such
as a battery) and may operate hundreds of meters from the RFID reader. Unlike a barcode, the tag need not
be within the line of sight of the reader, so it may be embedded in the tracked object. RFID is one method
for Automatic Identification and Data Capture (AIDC).
G) GPS:
The Global Positioning System (GPS), originally Navstar GPS, is a satellite-based radio navigation system
owned by the United States government and operated by the United States Air Force. It is a global
navigation satellite system that provides geolocation and time information to a GPS receiver anywhere on
or near the Earth where there is an unobstructed line of sight to four or more GPS satellites. Obstacles such
as mountains and buildings block the relatively weak GPS signals.
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 CUSTOMER SERVICE
 Customers expect the correct product assortment and quantity to be delivered.
 Customers expect products to be available at the right location. (i.e., customer satisfaction
diminishes if an auto repair shop does not have the necessary parts in stock and can’t fix your car
for an extra day or two).
 Right Delivery Time – Customers expect products to be delivered on time (i.e., customer
satisfaction diminishes if pizza delivery is two hours late or Christmas presents are delivered on
December 26).
 Right After Sale Support – Customers expect products to be serviced quickly. (i.e., customer
satisfaction diminishes when a home furnace stops operating in the winter and repairs can’t be
made for days)
 REDUCE OPERATING COSTS

 Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver expensive
products to avoid holding costly inventories in stores any longer than necessary. For example,
electronics stores require fast delivery of 60” flat-panel plasma HDTV’s to avoid high inventory
costs.
 Decreases Production Cost – Manufacturers depend on supply chains to reliably deliver materials
to assembly plants to avoid material shortages that would shut down production. For example, an
unexpected parts shipment delay that causes an auto assembly plant shutdown can cost $20,000 per
minute and millions of dollars per day in lost wages.
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1.7 GREEN SUPPLY CHAIN MANAGEMENT
A well-integrated IT system can provides a clear picture of supply chain status, inventory status (of the
manufacturers or its suppliers), and even the service capability of its logistic providers. IT allows suppliers
to be able to access the inventory information of their customers and prepare for stock delivery on time.
However, it is argued that the uncertain impact of IT on different aspects of SCM and disappointing
outcomes of IT investment posing a serious challenge to the vital role of IT in a company’s performance is
possible. With the support of IT, organization can keep to tract of market needs and to relocate resources
in a responsive manner
So, the supplier relationship management system (SRM) and customer relationship management systems
(CRM) are integrated in this study. The IT in SC can impact firm performance in several ways. First, an
integrated system helps to achieve benefits through allowing a firm to respond better to customer problem
and requests. Second, information flows facilitated by the IT can potentially increase the sales volume by
reaching customers directly and promptly whenever a new product is introduced, and by tapping into
markets that were inaccessible on account of distribution or other infrastructure constraints. The impact of
IT on supply chain is a measure of the influence of IT applications across many activities, the interactions
of organizations and some with external entities such as customers and suppliers.
The present study conducts three firm performances including marketing performance, financial
performance and customer satisfaction. Marketing performance includes sales growth, market share,
product development, and market development. Financial performance includes profitability, ROI, and cash
flow from operations. Customer satisfaction mentions fulfil various customer demand Nevertheless, these
IS practices for managing firm’s operations are not enough.
Due to its system rigidity and incapability to deal with uncertainty, other systems of technologies such as
radio frequency identification (RFID), mobile and wireless technologies, would help to achieve the
success order, part and product traceability and operational efficiency. The applications of technologies
such as RFID, global positioning system (GPS), wireless and mobile have been included in
manufacturing, services, logistics and distributions, healthcare and retailing. These technologies are
normally used along with IS systems to allow ubiquitous flow of information in supply chain. Hence, these
technologies can be considered as a category of the IS practice. Electronic data interchange (EDI) allows
suppliers to ascertain when to replenish the parts/products, thus reducing inventory level and improving
forecasting.
IT can contribute a very important role in SCM. Many of research have examined the relationship between
SCM and IT range from surveys, to case studies, and simulations. The previous research model have
conducted the directly links between IT use in the supply chain and performance gains, while others have
modelled the presence of mediators and moderators as qualifies of the relationship between two constructs.
This study considers IT investment in supply chain as causes and higher firm performance as effects via
applying DEMATEL.
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1.8 INFORMATION TECHNOLOGY AND SUPPLY CHAIN
Today, information and technology must be conceived of broadly to encompass the information that
businesses create and use as well as a wide spectrum of increasingly convergent and linked technologies
that process the information with the emergence of the personal computer, optical fibre networks, the
explosion of the Internet and the World Wide Web. This means that organizations are moving toward a
concept known as Electronic Commerce, where transactions are completed via a variety of electronic
media, including electronic data interchange (EDI), electronic funds transfer (EFT), bar codes, fax,
automated voice mail, CD-ROM catalogues, and a variety of others. The old “paper” type transactions are
becoming increasingly obsolete. Leading-edge organizations no longer require paper purchase requisitions;
purchase orders, invoices, receiving forms, and manual accounts payable “matching” process. All required
information is recorded electronically, and associated transactions are performed with the minimum amount
of human intervention. Recent developments in database structures allowed part numbers to be
accumulated, coded, and stored in databases, and electronically ordered. With the application of the
appropriate information systems, the need to constantly monitor inventory levels, place orders, and expedite
orders will soon become a thing of the past.
ACTIVITIES/ ASPECTS IT APPLICATIONS AREAS BENEFITS
Transportation  Fleet management-car tracking,  Recovery of stolen vehicles

maintenance, driver management, speed  Increase in personal safety and security
management, fuel management and  Reduction in insurance costs
health& safety management, route  Decrease in unnecessary
over time
management
 Increased customer satisfaction
Warehousing -------Warehouse management • Reduction in paper work

 Receive goods • Real time dispatch
• Identify the goods • Time saving in locating of inventory
• Dispatch goods to storage • Increase of safety and security of goods
• Pick goods • Cargo consolidation
• Dispatch shipment
Custom Clearance Documentation, duty payment, • Increased customer satisfaction

inspection • Reduced paperwork in clearance
• Reduced administrative costs
• Enhancing compliance with KRA
Cargo Management Container leasing, cargo security, loading • Improved security and safety
and offloading • Real time cargo tracking
• Cargo documentation
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New technology in the supply chain can help improve supply chain agility, power up operation, reduce
cycle time, achieve higher efficiency and deliver products to customer on time if implemented correctly. It
is also to make sure new solution integrate with existing technologies and processes crucial. Integrating
new technology into existing operations can help a lot in increasing customer service, reduce costs, and
streamline supply chains. The new technology must fit into existing policies, practices and people and use
to it full power. The topic “Information Technology contribution to firm’s performance” has been in the
focus of research for more than three decades, and a plethora of research has been conducted to understand
and evaluate the link between IT investment and organizational performance.
The ongoing diffusion of new Information Communication Technology (ICT) and e-business technologies
among firms is a current example of the dynamics of technological change and economic development.
IT can have a significant influence on the mobility of people and goods; IT is potentially important enabler
of change in social and organizational practices, thus affecting the demand for transport in spatial and
temporal terms.
Technological trends will meet the demand for comfort, safety and speed through advances in IT in the
field of telemetric. This covers systems for traffic and transport management, travel information and
reservations, vehicle guidance, and mobility cards. Over the last few years, firms operating in the transport
and logistics sector have made significant progress in their adoption of new technologies, particularly those
linked to the internet and e-business.
The dissemination of IT has affected the competitive scenario of the third party logistics (3PL) industry in
recent years contributing to change the supply chain role of Third Party Logistics (3PLs) significantly.
Logistics service companies play a more important function than in the past insofar as they are entrusted
with the task of integrating and accelerating physical and information flows at multiple levels of the supply
chain (Kenneth & Laudon, 2007). This new supply chain role of 3PLs has emphasized the need to measure
their performance.
There has been little empirical research focused on 3PLs performance measurement, especially in order to
structure 3PIs for the evaluation of value added services. In addition, the impact of IT on logistics service
companies has amplified the difficulties in measuring performance, as it is particularly hard to identify the
specific contribution of IT in generating superior company performance (Kenneth & Laudon, 2007).Due to
growth of information technology, many firms have adopted its application in their business processes to
enhance operational excellence. Specifically logistics firms have not been left behind in applying IT in their
business processes (Cooper & Schindler, 2013).
The Information Technology Association of America (ITAA) as being the study, design, development,
implementation support, has defined information technology and/or management of any computer based
information systems.
This relates particularly to software applications and computer hardware. Information technology deals
with using electronic, computers and software to convert, store, protect, process, retrieve with security or
transmit any information (Kenneth & Laudon, 2007).
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Information technology is concerned with improvements in a variety of human and organizational problem-
solving endeavours through the design, development, and use of technologically based systems and
processes that enhance the efficiency and effectiveness of information in a variety of strategic, tactical and
operational situations. Ideally, this is accomplished through critical attention to the information needs of
humans in problem-solving tasks and in the provision of technological aids, including electronic
communication and computer-based systems of hardware, software and associated processes. Information
technology complements and enhances traditional engineering through emphasis on the information basis
for engineering.
Everything from data management, networking engineering computer hardware, software design, database
design and management and administration of systems is included in the term of information technology.
When covering the aspects of IT as a whole, the use of computers and information are typically associated.
The history of IT goes back several years. In order to perform the functions associated with the field of
technology the modern field will use computers, servers, database management systems and cryptography.
Due to the nature of logistics firms, globalization and growth of technology, it has necessitated the firms to
adapt IT in their operations. The use of IT has been associated with the benefits such as increased efficiency
and effective in business process, facilitates sharing of information quickly and efficiently by bringing down
barriers of linguistic and geographic boundaries, it facilitates cheaper, quicker, and more efficient
communication, cost reduction hence increased productivity, increased working hours and bridging cultural
gap. Generally, firms that have adopted IT have achieved high levels of efficiency and effectiveness in their
day-to-day business operations hence improving their performance by gaining a competitive advantage,
increased profitability and increased market share over their competitors.
SCM
IMPORT EXPORT
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1.9 INTRODUCTION TO PEPSICO INC.
PepsiCo Inc. (PEP) is a leading food and beverage company that manufactures and distributes its products
in more than 200 countries. Food products that PepsiCo manufactures include chips, flavored snacks,
cereals, rice, pasta, and dairy-based products. The company’s beverage product portfolio includes
carbonated soft drinks, juices, ready-to-drink tea and coffee, sports drinks, and bottled water. Headquartered
in Purchase, New York, the company employs around 274,000 people worldwide.
According to Information Resources, Inc. (or IRI), a market research company, PepsiCo owns nine of the
40 largest packaged goods trademarks in the United States. The company owns several brands, and 22 of
them, including Pepsi, Lays, and Gatorade, generate more than $1 billion each in revenues.
PepsiCo competes with global, regional, and private companies across the food and nonalcoholic beverage
space. In the food industry, the company’s rivals include ConAgra Foods, Inc. (CAG), Kellogg Company
(K), Kraft Foods Group Inc. (KRFT), Mondelez International, Inc. (MDLZ), Snyder’s-Lance, Inc. (LNCE),
and Nestlé S.A. (NSRGY).
In the nonalcoholic beverage industry, The Coca-Cola Company (KO) is PepsiCo’s closest rival. Other
peers in the beverage industry include Dr Pepper Snapple Group, Inc. (DPS), Cott Corporation (COT), Red
Bull GmbH, and Monster Beverage Corporation (MNST).
Food and beverage companies like PepsiCo are part of the consumer staples sector. You can invest in this
sector through exchange traded funds (or ETFs) such as the Consumer Staples Select Sector Standard &
Poors depositary receipt (or SPDR) Fund (XLP). PepsiCo is also part of other ETFs such as the SPDR S&P
500 ETF (SPY) and the Vanguard Dividend Appreciation ETF (VIG).
PepsiCo Inc. (PEP) has a diversified business model with a strong presence in food and beverage products.
In a scenario where carbonated soft drinks have been continually declining, PepsiCo’s significant presence
in the snack food category gives it an edge over its closest rival, The Coca-Cola Company (KO), which is
heavily dependent on sparkling or carbonated beverages. In 2013, PepsiCo’s food business accounted for
52% and its beverage business accounted for 48% of the company’s $66.4 billion revenues.
PepsiCo benefits from its presence in two complementary categories: food and beverages. There is a high
coincidence of purchase between these two categories. According to Information Resources, Inc. (or IRI),
a market research company, 54% of US consumers who buy salty snacks also buy a beverage in the same
basket. For instance, PepsiCo states that when Frito-Lay snacks are merchandised along with Pepsi
carbonated soft drinks (or CSDs), it results in higher sales.
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PURPOSE AND OBJECTIVE OF THE STUDY
The objective of the study was:
 To observe the usage of information technology in Materials Management and Supply

Chain Management at PepsiCo Inc.
 To analyse the importance of information technology into production and materials
processing strategy.
 To know the PepsiCo Inc. planning towards the implementation of information technology
into materials management and supply chain process.
 To know how strong relationship PepsiCo Inc. has with the distributors of information
technology and how strongly it has implemented it.
 Finding new techniques of information technology which has improved the process of
Materials Management and Supply Chain Management
 Analysing how information technology has overall improved the productivity at PepsiCo
Inc. over the past years and since PepsiCo Inc. has implemented information technology
into their materials management processing and supply chain management.
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LITERATURE REVIEW
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LITERATURE REVIEW
This chapter reviews what other scholars have had to say about the impact of IT on logistics firms and how
IT has transformed their operations. It also gives empirical review of the past research both globally,
international and nationally. The chapter also focuses on conceptual framework before concluding with the
summary of literature review and research gaps.
2.1 THEORETICAL
The theoretical starting point for our research is the well-established literature on new technology adoption.
This literature points to delays in the adoption of new technologies and differences in adoption rates across
firms, industries and countries. To understand the adoption and diffusion of IT as a new technology it is
therefore essential to uncover the factors that explain this delay and the variation in the rates of its adoption.
The existing theoretical models focus on a number of factors explaining this delay and the variation in the
adoption rates including uncertainty about the characteristics of the new technology.
2.2 INSTRUMENTAL
Instrumental theory offers the most widely accepted view of technology. It is based on the common sense
idea that technologies are "tools" standing ready to serve the purposes of their users. Technology is deemed
"neutral," without evaluative content of its own. However, what does the notion of the "neutrality" of
technology actually mean? The concept usually implies at least four points.
First technology, as pure instrumentality, is indifferent to the variety of ends it can be employed to achieve
(Kenneth & Laudon, 2007). Thus, the neutrality of technology is merely a special case of the neutrality of
instrumental means, which are only contingently related to the substantive values they serve.
This conception of neutrality is familiar and self-evident. Secondly, technology also appears to be
indifferent with respect to politics, at least in the modern world, and especially with respect to capitalist and
socialist societies. A hammer is a hammer, a steam turbine is a steam turbine, and such tools are useful in
any social context. In this respect, technology appears to be quite different from traditional legal or religious
institutions, which cannot be readily transferred to new social contexts because they are so intertwined with
other aspects of the societies in which they originate.
The transfer of technology, on the contrary, seems to be inhibited only by its cost. Thirdly, the socio-
political neutrality of technology is usually attributed to its "rational" character and the universality of the
truth it embodies.
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Technology, in other words, is based on verifiable causal propositions. Insofar as such propositions are true,
they are not socially and politically relative but, like scientific ideas, maintain their cognitive status in every
conceivable social context. Hence, what works in one society can be expected to work just as well in
another. Lastly, the universality of technology also means that the same standards of measurement can be
applied in different settings. Thus, technology is routinely said to increase the productivity of labour in
different countries, different eras and different civilizations. Technologies are neutral because they stand
essentially under the very same norm of efficiency in any and every context.
Given this understanding of technology; the only rational stance is unreserved commitment to its
employment. Of course, we might make a few exceptions and refuse to use certain devices out of deference
to moral or religious values. Reproductive technologies are a case in point. Even if one believes that
contraception, abortion, test tube babies are value-neutral in them, and, technically considered, can only be
judged in terms of efficiency, one might renounce their use out of respect for the sacredness of life.
This approach places "trade-offs" at the centre of the discussion. "You cannot optimize two variables" is
the fundamental law of the instrumental theory of technology. There is a price for the achievement of
environmental, ethical or religious goals, and that price must be paid in reduced efficiency.
On this account, the technical sphere can be limited by non-technical values, but not transformed by them.
The instrumentalist understanding of technology is especially prominent in the social sciences. It appears
to account for the tensions between tradition, ideology and efficiency, which arise from socio-technical
change. Modernization theory, for example, studies how elites use technology to promote social change in
the course of industrialization. In addition, public policy analysis worries about the costs and consequences
of automation and environmental pollution. Instrumentalism provides the framework for such research
(Howells &Tether., 2004).
2.3 SUBSTANTIVE THEORY
Despite the common sense appeal of instrumental theory, a minority view denies the neutrality of
technology. This system is characterized by an expansive dynamic, which ultimately overtakes every prêt-
technological enclave and shapes the whole of social life. The instrumentalization of society is thus a
destiny from which there is no escape other than retreat. Only a return to tradition or simplicity offers an
alternative to the juggernaut of progress. Something like this view is implied in Max Weber's pessimistic
conception of an "iron cage" of rationalization, although he did not specifically connect this projection to
technology.
Ellul makes that link explicit, arguing that the "technical phenomenon" has become the defining
characteristic of all modern societies regardless of political ideology. "Technique," he asserts, "has become
autonomous. Heidegger agrees that technology is relentlessly overtaking us. We are engaged, he claims, in
the transformation of the entire world, ourselves included, into "standing reserves," raw materials to be
mobilized in technical processes. Heidegger asserts that the technical restructuring of modern societies is
rooted in a nihilistic will to power, a degradation of man and Being to the level of mere objects
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This apocalyptic vision is often dismissed for attributing absurd, quasi-magical powers to technology. In
fact, its basic claims are all too believable. The substitution of "fast food" for the traditional family dinner
can serve as a humble illustration of the unintended cultural consequences of technology. The unity of the
family, ritually reaffirmed each evening, no longer has a comparable locus of expression. No one claims
that the rise of fast food "causes" the decline of the traditional family, but the correlation is surely
significant. An "instrumentalist" might reply that well prepared fast food supplies a nourishing meal without
needless social complications. This objection is blind to the cultural implications of technology.
Instrumentalist theory treats "eating" as if it were merely a matter of ingesting calories, while all the
ritualistic aspects of food consumption are secondary to this biological need. In adopting a strictly
functional point of view, we have determined that eating is a technical operation that may be carried out
with more or less efficiency. This example can stand for a host of others in which the transition from
tradition to modernity is judged a progress by a standard of efficiency intrinsic to modernity and alien to
tradition.
The substantive theory of technology attempts to make us aware of the arbitrariness of this construction, or
rather, its cultural character. The issue is not that machines have "taken over," but that in choosing to use
them we make many unwitting cultural choices. Technology is not simply a means but has become an
environment and a way of life. That is its "substantive" impact. It seems that substantive theory could hardly
be farther from the instrumentalist view of technology as a sum of neutral tools. Yet I will show in the next
section that these two theories share many characteristics that distinguish them from a third approach I will
introduce, the critical theory of technology.
2.4 CONCEPTUAL FRAMEWORK
A good starting point to a study of this nature must be a discussion of the various concept and terminologies
that formed pillar of this work and give it a form. In line with the position held by the conceptual framework
of your study, the system of concepts, assumptions, expectation, beliefs, and theories that supports and
informs your research is a key part of your design.
A conceptual framework is a visual or written product, one that, “explains either graphically or in narrative
form, the main things to be studied, concepts, or variables and the presumed relationship among them. This
study was guided by the variables as conceptualized overleaf by the researcher. It consists of the dependent
variable and independent variable. The independent variables include level of IT usage, customer service,
security tracking and IT adoption while dependent variable is performance of logistic firms.
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Level of IT usage
Number of department using IT
Time/Hours of IT usage
Number of days of IT usage
Performance of logistic firms
Increased customer based
Security and Tracking

Increased cargo security
Increased security
Time taken to trace cargo

Profitability
Customer Service delivery System

Time taken
Efficiency
Integration of IT services
Easy of communication
Rate of transaction
1.5 IT USAGE
The implementation of new IT and complementary investments can lead to innovations, and innovations
are positively associated with turnover growth. In other words, innovative firms are more likely to grow
(Seddon, 2005). Several countries display impressive economic growth with the aid of IT. Prior research
concerning IT and global economy growth demonstrates the contribution of IT to output growth as being
very remarkable for economies during the periods 1990-1995 and 1996-2000(Bowers ox, 2009).
The largest economic benefits of IT are typically observed in countries with high levels of IT diffusion.
OECD data shows that the United States, Canada, New Zealand, Australia, the Nordic countries and the
Netherlands typically have the highest rates of diffusion of IT (Bowers ox, 2009).Kenya has been ranked
fourth in logistics performance in the region, making it the second last poorest performing country in the
bloc, according to a study (Daily Nation 18th August 2014).
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The 2014 Logistics Performance Survey (LPS), an annual report published by the Shippers Council of
Eastern Africa (SCEA), says Rwanda, Uganda and Tanzania take the first three positions with aggregated
scores of 3.52, 3.07 and 2.89, respectively. This poor performance has been attributed to low diffusion of
IT among the logistic firms in the country. In some countries, notably the United States and Australia, there
is evidence that sectors that have invested most in IT, such as wholesale and retail trade, have experienced
an increase in the overall efficiency of using labour and capital, or multi-factor productivity growth. This
could be because these sectors have received productivity gains from IT use over and above the labour
productivity gains they received from investment in IT, for instance because of network effects (Bowers
ox, 2009).
All the firms covered in the survey had computers and Internet access, though only 62 percent had a web
presence on the Internet. This is an indication that size, age together with ownership is not discriminating
factors in acquiring IT in Uganda.
A finding consistent with Dunne, that young and old firms adopt IT at more or less the same rate. While all
these firms had access to IT, it had been acquired at different times. The small firms are faced with limitation
of investment capital, tend to be risk averse and conscious of uncertainties, and are more responsive to
taxation. The results indicate that most small firms started adopting IT in the last three years when the
government started dropping some taxes. Established that the adoption of IT increases with firm size; and
larger firms tend to adopt IT earlier than they tend to adopt IT earlier than they tend to adopt IT earlier than
the smaller firms do. As for the Internet, there is also significant relationship between firm size and the
duration of Internet usage. This is in line with some studies that have established that larger firms due to
their capability to have skilled managers and workforce, advanced business practices are more likely to
adopt the Internet more quickly than other firms.
2.6 CARGO TRACKING AND SECURITY SYSTEM
IT has made it possible to track cargo and fleet for Logistic Firms. This has had a lasting impact on the
security of both the cargo and fleet. In Kenya, the requirement by all truckers to install the Electronic Cargo
Tracking System (ECTS) was initially met with opposition. However, truckers have slowly embraced the
ECTS, which seeks to replace the security bond while monitoring cargo in transit and providing real time
information on location, security and condition of cargo and assets (Bradawl, 2000).
The ECTS is currently being implemented by customs authorities in many parts of the world to mitigate
against a range of risks such as significant tax loss, cargo theft, and improving regulatory compliance. The
use of modern day technology such as bar codes and RFID makes it possible to access more precise
information on the stock. Radio-frequency identification (RFID) is the wireless non-contact use of radio-
frequency electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking
tags attached to objects.
One of the major advantages of radio-frequency identification is that information exchange between tags
and readers is rapid, automatic and does not require direct contact or line of sight (Bradawl, 2000). This
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will allow for access to more precise inventory management information. The researcher anticipates
establishing whether there is any correlation between this and the performance of logistic firms.
Multi-modal container units, designed as reusable carriers to facilitate unit load handling of the goods
contained, are also referred to as cargo, especially by shipping lines and logistics operators. Similarly,
aircraft ULD boxes are also documented as cargo, with associated packing list of the items contained
within. When empty containers are shipped each unit is documented as a cargo and when goods are stored
within, the contents are termed as containerised cargo.
Trains are capable of transporting a large number of containers that come from shipping ports. Trains are
also used for the transportation of water, cement, grain, steel, wood and coal. They are used because they
can carry a large amount and generally have a direct route to the destination. Under the right circumstances,
freight transport by rail is more economic and energy efficient than by road, especially when carried in bulk
or over long distances.
Many firms, like Parcelforce, FedEx and R+L Carriers transport all types of cargo by road. Delivering
everything from letters to houses to cargo containers, these firms offer fast, sometimes same-day, delivery.
2.7 ROLE OF IT IN EFFICIENCY AND EFFECTIVENESS OF CUSTOMER SERVICE DELIVERY
Business management consists of leading, planning, organizing, monitoring and controlling all the involved
actors and activities in a company to achieve goals and objectives. Sullivan (2005) asserts that, “as the
process of managing networking between companies” describe it. Fast changes in customer demand,
globalization of markets, and changing technology require companies to focus their efforts on improving
competitiveness, trying to achieve customer’s satisfaction through adding more value to their products.
Thus, improving business process performance is critical for business management (Kohli & Devaraj,
2003). In addition, process strategy is used to improve manufacturing performance, and as result business
performance (Sullivan, 2005). Managers view marketing strategy as a tool for improvement of their
financial returns (Sullivan, 2005). In addition, innovation should be seen as part of business management,
allowing the implementation of new processes, products, and services to respond promptly to customers’
requirements (Sullivan, 2005).
The customer’s perception is not always the same as the product manufacturer’s perception. Customers
may give more value to low cost, on time delivery, delivery date certainty, or receiving a customized
product.
According to Bowers ox, (2009) manufacturers and retailers are always looking for practical after-sales
policies that will permit them to enhance customer satisfaction levels. Furthermore, an analysis conducted
by Kohli & Devaraj, (2003) showed that customer-firm-supplier relationship management improves
operational performance and customer satisfaction.
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Based on this, a sub-factor customer service is identified. The goal of the companies is to give customers
the best service in an efficient and effective manner (Closs & Kefen, 2007) without forgetting about
information such as product description, product availability, order status, shipping dates, and assisting
them in all what they need Closs & Kefen 2007)). Kohli & Devaraj, (2003) states that customer service is
defined by demand forecasting, service levels, order processing, parts/service support, and aftermarket
operations.
2.8 INTEGRATION OF INFORMATION TECHNOLOGY
Supply chain relationships play an important role in achieving the firm’s goals. The coordination and
integration of activities with suppliers and understanding of customer’s needs results in greater benefits for
companies. According to Bradawl, (2000) supply chain management is directly related to relationship
management, which includes suppliers and customers.
Strategic supplier partnerships and customer relationships are main components in the supply chain
management practices (Bradawl, 2000), leading to information sharing, which is one of the five pillars in
achieving a solid supply chain relationship (Bradawl, 2000).
Two sub-factors are considered in the model relationship with suppliers and customers Companies are
inclined to work with different suppliers in different ways. It is important that the relationship with suppliers
satisfy their company needs. Bowers, (2009) mentioned that in commodity products, it is common to find
an adversarial relationship mainly based on price between buyer and supplier.
This type of relationship with suppliers does not allow for cost reduction in the supply chain. It may be
beneficial to network the supplier, to develop partnerships and alliances that will benefit both partners.
This could be based on Production, personal, and or symbolic networking that will turn on strategic
alliances (Bradawl, 2000), allowing the information sharing, risk sharing, obtaining mutual benefits and
coordinating plans, permitting the improvement of the supply chain.
The global markets offer a variety of products of different quality and cost. As a result, companies are
always competing and trying to reduce costs and improve quality. According to Bowers ox, (2009)
customers look for more choices, better service, higher quality, and faster delivery. The relationship with
customers has turned a strategic issue for today’s companies.
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2.9 PERFORMANCE OF LOGISTICS
The complementarily view, which was missing in the traditional technology diffusion literature, signifies
that developing a better understanding of the complementary factors that may facilitate or retard the process
of a firm’s IT adoption is an issue of contemporary importance to both managers and policy makers (Kohli
& Devaraj, 2003).
First, a firm’s technological choices are more likely to come to fruition when they are aligned with its
operational and organizational readiness for new technologies. Hence, it is necessary that managers’ efforts
to maximize the effectiveness of IT adoption and usage be concomitant with their organizations’ capacity
to accommodate to new technologies. Second, the complementarily view may help policy makers gain new
insights into the designing industrial policy to promote the usage of new technologies.
For instance, firms across different industries face different business environments in terms of market
competitiveness and uncertainty so that their incentive to adopt IT may be influenced by the extent to which
industrial policy reflects and conforms to distinct circumstances of their respective industries (Bradawl,
2000).
Lastly, the study of complementary factors to boost IT investments may have some macroeconomic
implications as well. There is now quite conclusive evidence of a strong positive correlation between IT
investments and economic performance.
Logistic performance is empirically measured in terms of turnover growth, market growth and customer
base expansion. The hypothesized relationship between IT and turnover growth is straightforward: The
implementation of new IT and complementary investments can lead to innovations, and innovations are
positively associated with improved performance.
The effects of IT on corporate performance are subject to debate because not all studies have demonstrated
clear payoffs from IT investments (Kohli & Devaraj, 2003). In addition, the results vary depending on how
performance and IT payoffs are measured and analysed. For example, one empirical study finds positive
impacts of IT investments on productivity, but not on profits (Hitt & Brynjolfsson, 2006).
Another study did not find positive effects of IT capital on productivity, while IT labour positively
contributed to output and profitability (Prasad & Harker, 2007). This ambiguity necessitates this study. The
researcher, against this background, wants to establish the relationship between IT and Logistic Firm
Performance.
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2.10 REVIEW
Several studies have taken an international perspective to the study of SCM and IT. For example the study
by Croom (2006) mentioned above involved respondents from the United Kingdom and United States,
while the ones conducted by Subramani (2010) and Gall ear, Ghobadian,&Oregon(2008) have provided
empirical insights based on data collected in Canada and UK, respectively. In addition, several studies have
investigated IT and supply chain in specific geographical areas. Mzoughi et al. (2008) investigate the impact
of supply chain management and Enterprise Resource Systems (ERP) on organizational performance and
competitive advantage in Tunisia by conducting a survey on 216 Tunisian managers.
Their results show the importance of SCM and ERP systems adoption as well as reveal their positive impact
on organizational performance and competitive advantage in Tunisians companies.
From a global supply chain perspective, Reyes, Raisinghani, &Singh,(2012) describe the importance of
inter and intra supply chain management through collaboration with supply chain partners and entities both
upstream and downstream in order to integrate the information systems. By employing the case study
method, they describe how a telecommunications Original Equipment Manufacturer (OEM) had
implemented an Advanced Planning and Scheduling (APS) system and how integrating its internal demand
flow system with electronic (e)-business software had helped in real time collaboration with trading partners
(Bradawl, 2000).
There are a number of studies that investigate the role of culture at individual, organizational and country
level, for example in the field of Enterprise Information Systems (ERP), Hwang (2011) investigates the
phenomena of cultural orientation, personal innovativeness in IT and general computer self-efficacy in the
context of the technology acceptance model (TAM) for ERP system adoption. The results, based on a survey
questionnaire of an international user group utilizing an ERP system developed by one of the largest IT
solution providers in the world; show that culture in term of power distance negatively affects computer
self-efficacy, while collectivism affects usefulness. Livermore and Rippa (2011) investigate the interplay
between national culture and the manner in which the ERP project unfolds by conducting two case studies
from the US and Italy.
Their results also show that indeed the national cultural has an impact on the two ERP implementation
projects. A classification scheme logistics functions provides a meaningful way to study how IT has
affected the various functions of logistics. Previous research in logistics has categorized the use of
information systems in logistics in different ways. A system of logistics functions can be divided into
following five broad areas by Bowersox, (2009); facility location, transportation, inventory, and
communication and material movement.
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Based on the problem areas that application addresses, seven areas of logistics has been identified as facility
location, inventory control, order entry, vehicle scheduling, and warehouse layout planning, freight rate
retrieval, and product and shipment tracing (Ballou, 2006).
Another survey by Livermore and Rippa (2011) identified five categories as facility location, inventory
control, transportation, production scheduling, and total physical distribution. These categories treated each
category as individual entities rather than a whole system. Noting this shortcoming, Anderson, and Quinn,
(2006), proposed another classification consisting of transaction systems, short-term scheduling and
inventory replenishment systems, flow planning systems, and network planning and design systems.
Information and Communication Technologies (ICT) are at the core of the “new” knowledge-based
economy (Lee & Wang, 2011). There is growing evidence suggesting that IT-linked knowledge, innovation
and ongoing technological change are strong determinants of productivity, growth differentials as well as
the ability of countries to benefit from globalization.
The impact of IT investment on productivity and growth is found to be greater at firm level in comparison
to industry and country-levels. At the firm level, IT use leads to improvements in product design, marketing,
production, finance and the organization of firms. Furthermore, IT is an innovation driver through
facilitating the creation of new products and services. IT use increases the productivity of R&D activities
in downstream sectors, so IT use is the source of “innovation complementarities” (Lee & Wang, 2011). In
recent years, there have been many research efforts to identify factors and practices indicating how
technological innovation may support company in creating a competitive advantage. The common ground
of such research is the relationship between innovation and the development of competitiveness.
For example, Porter &Millar, (2005) argued that the possible contribution of innovation to create
competitive advantages ranges from the continuous assessment of the cost/performance ratio, as in the case
of incremental innovation, to the establishment of completely new competitive rules, as in the case of
disruptive innovation. Information and communication technology (ICT) is one of the most important and
fast growing technological innovations that provide companies with a wide range of opportunities to
improve efficiency and effectiveness and even gain competitive advantage (Porter & Millar, 2005).
The use of IT in supply chain and logistics management has attracted increasing attention of the business
and academic world. Lee & Wang (2011) addressed the possibilities of reducing the bullwhip effect in
supply chains through Internet based collaboration. Technology application in supply chain context may
provide benefits in the following areas: improve supply chain agility, reduce cycle time, achieve higher
efficiency, and deliver products to customers in a timely manner (Lee & Wang, 2011). Capgemini (2008)
found that supply chain performance would be significantly increased if the members of the supply chain
collaborated through Internet tools.
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However, the diffusion of IT in managing supply chain processes is having a profound impact on supply
chains. For manufacturers and retailers, information management has become as critical as the physical
movement of goods.
As a result, poor IT resource management by one or more actors in the supply chain could have negative
repercussions on the performance of the entire supply chain in terms of planning ability, customer service
and costs (Lee &Wang, 2011). Furthermore, IT may further reduce existing wastes and inefficiencies along
the supply chain through increasing real-time movement of shipment and operational control of logistics
activities. However, increasing expenditure on IT in the supply chain process does not automatically result
in higher firm performance.
2.11 CRTICS
On the organizational level, as aggregate corporate performance, IT investment has been researched
extensively. The results have become known as productivity paradox because the studies have not
confirmed the expectations of a positive correlation between IT investment and Logistical firm
performance. There is increased use of IT in most organizations ranging from formal, government and
informal sectors of economy.
Many organization both national and international organizations are transacting online with improved
technological development and innovation. The available literature does not give enough evidence
concerning the impact of IT on the organization performance rather most of them are dwelling on single
business unit performance with most of them giving a general descriptive few of IT without in-depth
analysis of their impact. This research on the other hand will be focusing specifically on the supply and
chain management companies, which are being contracted to manage the supply of different company’s
goods.
2.12 GAPS IN RESEARCH
The literature shows that there is a little research, which has been done on the effect of IT on the
performance of the logistic firms in Kenya. However, literature has shown very little concerning the direct
impact of IT on the service delivery on the logistic firms. Many research which have been done majorly
dwell on the IT impact on the organization in general. This paper intends to explore more on the actual
impact of IT on logistic firms.
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2.13 SUMMARY OF LITERATURE REVIEW
There are varying conclusions in the literature review with respect to the impact of IT on the performance
of logistic firms. Many findings agree that IT in one way or the other, directly influences the operations of
most of logistic firms with most researchers agree that they positively influence management systems. It
influences firms’ infrastructure and asset management system.
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PEPSICO
COMPANY PROFILE
P a g e 39
COMPANY PROFILE – PEPSICO
Supply Chain Management is the process of planning, implementing, and controlling the operations of
supply chain with the purpose to satisfy customer requirements as proficiently as possible. Supply chain
management spans all development and storage of crude materials, work-in-process inventory, and finished
goods from point-of-origin to point-of-consumption. It is a cross utilitarian way to deal with managing the
development of crude materials into an association and the development of finished goods out of the
association toward the end consumer.
Supply Chain management is also the combination of workmanship and science of improving the manner
in which organization finds the crude components it needs to make an item or service and convey it to
customers. It seeks to upgrade focused execution by closely integrating the internal functions within an
organization and viably linking them with outer operations of suppliers and channel members. Also, this
has been a prominent worry for both vast and small companies as they strive for better quality and higher
customer satisfaction.
In a supply chain, an organization links to its supplier upstream and to its distributors downstream in request
to serve its customer. The objective of supply chain management is to give greatest customer service at the
lowest possible costs.
Companies presently are competing supply chain-to-supply chain as opposed to enterprise-to-enterprise

requiring for all the more intimately associated relationships. Customer markets and supply chains are never
again restricted by physical closeness, and businesses are sourcing from and managing a more noteworthy
number of far-flung partners and channels.
Success of an organization presently depends on compelling worldwide supply chain management, its
capacity to convey the correct item to the correct market at the opportune time. The intricacy involved in
managing supply chains that span continents and dominate markets demands strategies and systems that
are versatile.
Managing Supply Chain for Global Competitiveness takes a strategic take a gander at all of the center
functions of worldwide supply chain management which includes item design, planning and forecasting,
sourcing, outsourcing, manufacturing, logistics, distribution, and satisfaction.
An example to illustrate this theory on the supply chain management is the PepsiCo, Inc.
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3.1 PEPSI Co. HISTORY
PepsiCo, a Fortune 500, American Multinational Corporation is under the sustenance consumer item
industry and is the world pioneer in advantageous foods and beverages. The Pepsi mark and other Pepsi-
Cola products represent about 33% of the aggregate soft drink sales in the United States. In request for the
organization to ensure that their products achieve the customers, the organization needs a proficient supply
chain solutions.
It was established in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was gained in 1998
and PepsiCo converged with The Quaker Oats Company, including the Gatorade in 2001. PepsiCo offers
item choices to meet an expansive assortment of needs and inclination - from a good time for-you items to
item choices that add to more beneficial lifestyles. PepsiCo owns some of the world's most mainstream
brands, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay's, Doritos, Tropicana, Gatorade, and Quaker.
Coca-Cola Company in market an incentive without precedent for 112 years since the two companies
started to contend. Different brands include Caffeine-Free Pepsi, Diet Pepsi/Pepsi Light, Caffeine-Free Diet
Pepsi, Caffeine-Free Pepsi Light, Wild Cherry Pepsi, Pepsi Lime, Pepsi Max, Pepsi Twist and Pepsi ONE,
7 Up, Aquafina (Flavor Splash, Alive, and Twist/Burst),Propel Fitness Water, SoBe, Quaker Milk Chillers.
P a g e 41
During the Great Depression, Pepsi-Cola gained popularity following the introduction in 1936 of a 12-
ounce bottle. With a radio advertising campaign featuring the jingle "Pepsi-Cola hits the spot / Twelve full
ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you", arranged in such a
way that the jingle never ends. Pepsi encouraged price-watching consumers to switch, obliquely referring
to the Coca-Cola standard of 6.5 ounces per bottle for the price of five cents (a nickel), instead of the 12
ounces Pepsi sold at the same price. Coming at a time of economic crisis, the campaign succeeded in
boosting Pepsi's status. From 1936 to 1938, Pepsi-Cola's profits doubled.
Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had initially used
Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth
for possession of the Pepsi-Cola company. A long legal battle, Guth v. Loft, then ensued, with the case
reaching the Delaware Supreme Court and ultimately ending in a loss for Guth.
From the 1930s through the late 1950s, "Pepsi-Cola Hits The Spot" was the most commonly used slogan
in the days of old radio, classic motion pictures, and later television. Its jingle (conceived in the days when
Pepsi cost only five cents) was used in many different forms with different lyrics. With the rise of radio,
Pepsi utilized the services of a young, up-and-coming actress named Polly Bergen to promote products,
oftentimes lending her singing talents to the classic "...Hits The Spot" jingle.
Film actress Joan Crawford, after marrying Pepsi-Cola President Alfred N. Steele became a spokesperson
for Pepsi, appearing in commercials, television specials, and televised beauty pageants on behalf of the
company. Crawford also had images of the soft drink placed prominently in several of her later films. When
Steele died in 1959, Crawford was appointed to the Board of Directors of Pepsi-Cola, a position she held
until 1973, although she was not a board member of the larger PepsiCo, created in 1965.
The Buffalo Bisons, an American Hockey League team, were sponsored by Pepsi-Cola in its later years;
the team adopted the beverage's red, white, and blue color scheme along with a modification of the Pepsi
logo (with the word "Buffalo" in place of the Pepsi-Cola wordmark). The Bisons ceased operations in 1970,
making way for the Buffalo Sabres.
Through the intervening decades, there have been many different Pepsi theme songs sung on television by
a variety of artists, from Joanie Summers to the Jacksons to Britney Spears. (See Slogans.)
In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting
between Pepsi-Cola and rival Coca-Cola. During these blind taste tests, the majority of participants picked
Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign
with television commercials reporting the results to the public
P a g e 42
In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. "Project Blue" was
launched in several international markets outside the United States in April. The launch included
extravagant publicity stunts, such as a Concorde aeroplane painted in blue colors (which was owned by Air
France) and a banner on the Mir space station.
The Project Blue design arrived in the United States test marketed in June 1997, and finally released in
1998 worldwide to celebrate Pepsi's 100th anniversary. It was at this point the logo began to be referred to
as the Pepsi Globe.
By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine
promotion marketing".
In 2007, PepsiCo redesigned its cans for the fourteenth time, and for the first time, included more than thirty
different backgrounds on each can, introducing a new background every three weeks. One of its background
designs includes a string of repetitive numbers, "73774". This is a numerical expression from a telephone
keypad of the word "Pepsi".
In late 2008, Pepsi overhauled its entire brand, simultaneously introducing a new logo and
a minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of its can and
bottle designs. Pepsi also teamed up with YouTube to produce its first daily entertainment show called
Poptub. This show deals with pop culture, internet viral videos, and celebrity gossip.
Pepsi has official sponsorship deals with the National Football League, National Hockey League,
and National Basketball Association. It was the sponsor of Major League Soccer until December 2015
and Major League Baseball until April 2017, both leagues signing deals with Coca-Cola. Pepsi also has
the naming rights to the Pepsi Center, an indoor sports facility in Denver, Colorado. In 1997, after his
sponsorship with Coca-Cola ended, retired NASCAR Sprint Cup Series driver turned Fox
NASCAR announcer Jeff Gordon signed a long-term contract with Pepsi, and he drives with the Pepsi logos
on his car with various paint schemes for about 2 races each year, usually a darker paint scheme during
nighttime races. Pepsi has remained as one of his sponsors ever since. Pepsi has also sponsored the NFL
Rookie of the Year award since 2002.
Pepsi also has sponsorship deals in international cricket teams. The Pakistani national cricket team is one
of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test
match clothing.
In July 2009, Pepsi started marketing itself as Pecsi in Argentina in response to its name being
mispronounced by 25% of the population and as a way to connect more with all of the population.
October 2008, Pepsi announced that it would be redesigning its logo and re-branding many of its products
by early 2009. In 2009, Pepsi, Diet Pepsi, and Pepsi Max began using all lower-case fonts for name brands.
The brand's blue and red globe trademark became a series of "smiles", with the central white band arcing
at different angles depending on the product until 2010. Pepsi released this logo in U.S. in late 2008, and
later it was released in 2009 in Canada (the first country outside of the United States for Pepsi's new logo),
Brazil, Bolivia, Guatemala, Nicaragua, Honduras, El Salvador, Colombia, Argentina, Puerto Rico, Costa
Rica, Panama, Chile, Dominican Republic, the Philippines, and Australia. In the rest of the world, the new
P a g e 43
logo was released in 2010. The old logo is still used in several international markets, and has been phased
out most recently in France and Mexico. The UK started to use the new Pepsi logo on cans in an order
different from the US can. Starting in mid-2010, all Pepsi variants, regular, diet, and Pepsi Max, have started
using only the medium-sized "smile" Pepsi Globe.
In 2011, for New York Fashion Week, Diet Pepsi introduced a "skinny" can that is taller and has been
described as a "sassier" version of the traditional can that Pepsi said was made in "celebration of beautiful,
confident women". The company's equating of "skinny" and "beautiful" and "confident" drew criticism
from brand critics, consumers who did not back the "skinny is better" ethos, and the National Eating
Disorders Association, which said that it took offense to the can and the company's "thoughtless and
irresponsible" comments. PepsiCo Inc. is a Fashion Week sponsor. This new can was made available to
consumers nationwide in March
In April 2011, Pepsi announced that customers would be able to buy a complete stranger a soda at a new
"social" vending machine, and even record a video that the stranger would see when they pick up the gift.
In March 2013, Pepsi for the first time in 17 years reshaped its 20-ounce bottle. However, some areas did
not get the updated bottles until early 2014.
On April 4, 2017, Pepsi posted a commercial, dubbed “Live for Now (Pepsi) to YouTube. In the
commercial, Kendall Jenner is seen taking off her wig, removing her necklace, and leaving her
photoshoot to join a protest going on. The protest ends when Jenner hands a police officer a can of Pepsi
soda, reuniting everyone. The advertisement generated public controversy and criticism for trivializing
protest movements such as Black Lives Matter. On April 5, 2017, Pepsi issued an apology and removed
the commercial from YouTube.
In 2018 May, Pepsi began selling 0,33L cans with designs of older Pepsi generations, with stylized prints
of celebrities associated with the brand and the older designs of the Pepsi logo.
As of 2012, Pepsi is the third most popular carbonated drink in India, with a 15% market share,
behind Sprite and Thumps Up. In comparison, Coca-Cola is the fourth most popular carbonated drink,
occupying a mere 8.8% of the Indian market share. By most accounts, Coca-Cola was India's leading soft
drink until 1977, when it left India because of the new foreign exchange laws which mandated majority
shareholding in companies to be held by Indian shareholders.
The Coca-Cola Company was unwilling to dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA), thus sharing its formula with an entity in which it did not have majority
shareholding. In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint
venture marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was allowed; PepsiCo
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bought out its partners and ended the joint venture in 1994. In 1993, The Coca-Cola Company returned in
pursuance of India's Liberalization policy.
In Russia, Pepsi initially had a larger market share than Coke, but it was undercut once the Cold War ended.
In 1972, PepsiCo struck a barter agreement with the then government of the Soviet Union, in which PepsiCo
was granted exportation and Western marketing rights to Stolichnaya vodka in exchange for importation
and Soviet marketing of Pepsi. This exchange led to Pepsi being the first foreign product sanctioned for
sale in the Soviet Union.
In 1931 the company’s trademark and assets were picked up by Charles G. Guth (1876–1948), founder of
the modern Pepsi-Cola. He established a new Pepsi-Cola Company, had a chemist formulate a better drink,
set up new bottling operations, and began merchandising a hugely successful 12-ounce bottle for five cents.
Guth was also president of Loft, Incorporated, a candy manufacturer and soda-fountain chain (founded
1919), and in legal battles in 1936–39 he lost a controlling interest in the Pepsi-Cola Company to the new
management of Loft. When in 1941 the Pepsi-Cola Company was merged into Loft, the name Loft, Inc.,
was changed to Pepsi-Cola Company.
In 1950 Alfred N. Steele (1901–59), a former vice president of Coca-Cola Company, became chief
executive officer. His emphasis on giant advertising campaigns and sales promotions increased Pepsi-
Cola’s net earnings 11-fold during the 1950s and made it the chief competitor of Coca-Cola. (After Steele’s
death, his wife, actress Joan Crawford, became an active director of the company.) In 1965 Pepsi-Cola
merged with Frito-Lay, Inc., the maker of snack foods such as Fritos, Doritos, Lay’s potato chips, and Rold
Gold pretzels. The newly enlarged company diversified further with the purchase of three restaurant
chains—Pizza Hut, Inc. (1977), Taco Bell Inc. (1978), and Kentucky Fried Chicken Corp. (1986; now
called KFC)—and Seven-Up International (1986), but in 1997 the restaurant chains were spun off into a
new, separate company called Tricon Global Restaurants, Inc.
In the early 21st century, PepsiCo focused on expanding its operations in other countries, notably Russia,
which was its second largest market. In 2008 it bought a controlling interest in JSC Lebedyansky, Russia’s
largest juice manufacturer, and three years later it completed its acquisition of Wimm-Bill-Dann Foods.
Those investments helped make PepsiCo the largest food and Beverage Company in Russia.
Looking to add more products that were considered healthier, PepsiCo acquired the Tropicana and Dole
juice brands from the Seagram Company in 1998, and in 2001 it merged with the Quaker Oats company to
form a new division, Quaker Foods and Beverages. With the merger, PepsiCo’s popular brands included
Pepsi cola, Frito-Lay snack products, Lipton Tea, Tropicana juices, Gatorade sports drinks, Quaker Oats
cereals, and Rold Gold pretzels.
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1992, following the dissolution of the Soviet Union, Coca-Cola was introduced to the Russian market. As
it came to be associated with the new system and Pepsi to the old, Coca-Cola rapidly captured a
significant market share that might otherwise have required years to achieve. By July 2005, Coca-Cola
enjoyed a market share of 19.4 percent, followed by Pepsi with 13 percent.
Pepsi did not sell soft drinks in Israel until 1991. Many Israelis and some American Jewish organizations
attributed Pepsi's previous reluctance to do battle with the Arab boycott. Pepsi, which has a large and
lucrative business in the Arab world, denied that, saying that economic, rather than political, reasons kept
it out of Israel.
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3.2 PEPSI CO. CEO (CHIEF EXECUTIVE OFFICER)
Indra Krishnamurthy Nooyi has been the CEO of PepsiCo since 2006. During her time, more advantageous
snacks have been advertised and the organization is striving for a net-zero effect on the earth. This focus
on more beneficial foods and lifestyles is a piece of Nooyi's "Execution with Purpose" philosophy. In 2007,
Nooyi spent $1.3 billion on more beneficial elective brands like Naked Juice, a California creator of soy
drinks and natural juice.
Today, refreshment distribution and bottling is attempted essentially by associated companies such as The
Pepsi Bottling Group and Pepsi Americas. PepsiCo is a SIC 2080 (drink) organization.
PepsiCo has also as of late obtained a half stake in U.S.- based Sabra Dipping Company.
PepsiCo also has shaped partnerships with several brands it does not possess, in request to distribute these
or showcase them with its very own brands.
3.3 COMPETITIVE AND SUPPLY CHAIN STRATEGIES
 It understands the needs of our consumers and customers

 Commitment to purchase from a supplier base representative of our employees, consumers, retail
customers and communities.
 Uses diversity in our supplier base and in everything we do.
 Developing partnerships with minority-owned and women-owned suppliers helps us build the
world-class supplier base we need.
 Its brands appeal to an extraordinarily diverse array of customers and they are sold by an equally
diverse group of retailers.
 Creates mutually beneficial relationships that expand PepsiCo's sphere of activity. It helps build
community infrastructure by providing employment, training, role models, buying from other
minority and women-owned business and supporting community organizations.
 In its business, diversity and inclusion provide a competitive advantage that drives business results.
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Thus the major sustainable advantages that give PepsiCo a competitive edge as they operate in the global
marketplace:
 Powerful go-to-market systems,

 Proven ability to innovate and create differentiated products and
 Big, muscular brands.
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RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
4.1 INTRODUCTION
This chapter discusses the research methodology used in this study and provides a general framework for
this research. The chapter presents details of the research design, target population, sample and sampling
procedures, description of research instruments, validity and reliability of instruments, data collection
procedures, data analysis techniques and ethical considerations while conducting the study.
4.2 RESEARCH DESIGN
The study used descriptive survey method is appropriate. Research design is defined as a plan, structure
and strategy of investigation conceived to obtain answers to research questions and control variance.
Research design refers to all the procedures selected by a researcher for studying a particular set of questions
or hypotheses. States that descriptive studies are not only restricted to facts finding, but might often results
in the formulation of important principles of knowledge and solution to significant problems. This design
was therefore, adopted for this study as it helped to obtain a cross-referencing data and some independent
confirmation of data, as well as arrange of options.
4.3 DIFFICULTIES WITHOUT JUST-IN-TIME
 When a task of the organization was not just-in-time based, the interest or generation organizer strived
to advance creation arranged objectives and targets, for example, hardware usage, work proficiency,
throughput and uptime.
 Optimizing these objectives frequently prompts run vast bunch sizes that are subject to the accessibility
of crude materials. This improves the hardware and work usage yet the creation organizers and directors
had not been looking to the detriment of the master plan.
 The sourcing or purchasing administrators strived towards reducing organization's spending generally
speaking. This director combined providers offering items or materials at the most minimal per unit
costs through buying in volume.
 They even got the shipping and cargo costs included in the price tag, which prompted the increase in
the cost of the ware.
 Purchasing chiefs concentrated on getting the best cost, not putting into thought the provider execution
and unwavering quality.
 The logistics/transportation manager was tacked with getting raw materials in and the finished goods
out of the production process and seek to optimize the transportation and distributing network. This
manager focused on the lowest cost and reliability of the logistics or transportation solutions. But lowest
cost could only be attained if the purchasing team negotiates a delivered cost package deal with the
supplier and the supplier is responsible of the reliability and performance of the carriers or transporters.
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4.4 IMPROVEMENT WITH JUST-IN-TIME
 When it comes to delivering mind-boggling expense and perishable products to manufacturing sites,
just-in-time (JIT) remains a standout amongst the most cost-successful supply chain solutions. In JIT
process, on time conveyance is an absolute necessity.
 Just-in-Time (JIT) is a philosophy that defines the way in which a manufacturing system should be
overseen. It enhances customer satisfaction in terms of accessibility of options, assurance of value,
incite conveyance times, and estimation of cash.
 The Pepsi mark and other Pepsi-Cola products represented almost 33% of the aggregate soft drink sales
in the United States. In request to ensure that PepsiCo's concentrates reaches bottlers as required during
the creation needed to contact them JIT, they banded together with 3PL supplier Penske Logistics to
deal with its transportation. Penske also provides warehouse administration for two Pepsi distribution
centres in North America.
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4.5 TRANSPORTATION
 Transportation is a piece of end to end solution for planning, execution, and administration of the whole
transportation cycle.
 It is designed to empower an association to use and deal with a whole transportation arrange, as well
as lessen cost while improving transport execution.
 Transportation is designed to utilize sophisticated improvement and information techniques to define
and assess elective transportation strategies. It is also designed to give comprehensive information
administration, analytics, and reporting of key transportation cost and service exchange offs.
4.6 SUPPLY CHAIN VISIBILITY
With shorter lifecycles and lead times—to customers demanding faster results and more responsive service.
Globalization and outsourcing have added to the multifaceted nature, resulting in more diversified supply
chains. The quantity of supply chain partners, as well as the measure of geographic dispersion, has increased
drastically as a result. To ensure that their request to-conveyance execution is not affected, companies need
more prominent coordination and visibility into the material stream across the supply chain.
4.6.1 INCREASE GLOBAL VISIBILITY
With Companies approach worldwide visibility into the majority of their basic supply chain activities and
partnerships. It allows organizations to respond all the more rapidly and successfully to an extensive variety
of impromptu and possibly disruptive supply and request events. Supply-related events can include
generation bottlenecks, satisfaction delays such as port strikes and customs delays, and supplier shortages.
Request side events may include customer orders that are more prominent than forecasts or changes to
orders that have just been put.
Supply Chain Visibility is designed to deal with these events, assess their effect, and orchestrate a quick
and commonsense resolution while providing a bound together perspective of the supply chain. The solution
can also incorporate bundled business process packs for replenishment, satisfaction, and manufacturing,
and these packages can be arranged to meet customer-specific requirements.
Supply Chain Visibility also enables companies to close the circle between customary planning and
execution processes. It enables better understanding of orders, inventory, and logistics information.
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4.6.2 POWER FUNCTIONALITY
This solution incorporates pre-assembled workflows that integrate information across request
administration, warehouse administration, logistics, and inventory applications for the stream of both
domestic and international goods. A series of predefined, extensible events and exceptions support every
work process and a visual "studio" allows workflows and events to be broadened, arranged, and customized
to meet specific enterprise requirements. Supply Chain Visibility delivers a robust innovation that is
scalable and extensible, and that operates smoothly in a distributed computing condition.
4.6.3 EXTENSIVE CAPABILITIES
 Inbound and outbound tracking of request, inventory, and logistics flows

 Domestic and international flows that track multi-leg and multi-modular shipments
 Visibility into exceptions and events across orders, inventory, and shipments
 Role-based views for buyers, suppliers, analysts, and 3PL vendors
 High level of permissibility and security controls
 Track-and-follow inventory across different locations
 Configurable occasion location mechanism and customizable occasion administration workflows
 Event chaining such as linking of related events, review trails, setting based issue prioritization and
extensive warning options including email, email digest, pagers, and phones
 Calendars, internationalization (i18n), and multi-time zone support empowered
 Integration to underlying applications for intelligent resolution and to forestall occasion repeat
 Root-cause, occasion pattern, and execution analysis capabilities
 Rich occasion library with more than 100+ out-of-box events supported
 Fast, web-based supplier enablement and transaction support
4.6.4 BENEFITS
 Exception-based administration
 End-to-end supply chain visibility and occasion administration tools
 Customer-specific solutions for replenishment, satisfaction, and manufacturing
 The capacity to forecast and respond to supply/request events
 The choice to move from timetable based to occasion driven planning and re-planning. Increased
worker profitability
 Reduced process, personnel, and expediting costs
 Improved customer, supplier, and accomplice communications.
 Real-time decision support
 Less space required
 Waste decrease
 Smaller investments
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4.7 IMPLEMENTATION
PepsiCo set two objectives for transportation management. One was to accomplish an on-time movement
rate at 99.1% and another was to diminish transportation costs. It connected with upgraded processes and
innovation that enable the gathering to perform at the highest possible level. With the usage of new
innovation that provides more important supply chain visibility, better sorted out information, and access
to more lifted measure of ongoing or close continuous information, even the best gathering can improve
their execution.
In 2000, Penske changed over Pepsi's transportation management innovation from respectability software
to transportation improvement solution. Transportation stage was redesigned with the expansion of
interface between the two companies.
In addition, Penske's partnership with Business objects gave comprehensive supply chain information from
its information warehouse, analysis and management applications. Penske's with use of transportation could
track execution at each stage in the process which increased versatility and gave more significant control
over the transportation movement.
This increase in visibility made it easier to screen shipments, revise routes and schedules to suit unforeseen
changes and execute elective plans to counter delays. By Penske's putting a solution set up to track and
measure every shipment, Pepsi has possessed the ability to give an on-time transport execution of well in
excess of 99 percent.
Pepsi's transportation is consolidated to a central zone to lessen costs. Penske also gave an across the nation
carrier rate re-transaction and service assessment which improved cost structure and accomplish on-time
transport objective. With this centralization, allows game plan in an immense scale to secure the best rates
and services.
Besides, Pepsi's orders are gotten electronically and upgraded to ensure lowest transportation cost. Cutting
edge innovation is passed on to select the lowest cost carrier, find the best routes and consolidate shipments.
Perfect load course of action ensures growth of each truckload (2003).
In summary, PepsiCo used the JIT process to its supply chain management. To make this possible, Pepsi
partners with Penske that has furnish them with transportation improvement solutions which has satisfies
their consumer with the on-time movement and with the preferred standpoint to the association for it has
also lessen transportation cost.
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4.8 E-Solution by HP (Hewlett Packard) TO PEPSICO (PepsiCo)
PepsiCo signed an arrangement with Hewlett Packard in 2006 to help enhance its supply chain management
and increase in general proficiency. The multi-year bargain involved the redesign of current IT solutions
with PepsiCo and focused on updating server environments as well as ensuring another infrastructure which
profited operations and increased in general cost-saving.
Specifically, HP introduced various new solutions which empowered stronger customer relationship
management and supply chain management. PepsiCo had also decided on BT as its system supplier to
ensure the e-solution is completely executed.
The supply chain management solution decreased costs as well as upgraded current service provision online
and by means of its communications networking system. By standardizing and optimizing its server
condition, PepsiCo International is better flex to meet its changing business needs and in turn give better
service to customers anyplace on the planet.
HP will consolidate PepsiCo International’s technology infrastructure into three HP data centers located in
Mexico, Singapore and the United Kingdom. These data centers will support PepsiCo business operations
in more than 60 countries outside the United States and Canada.
This initiative will migrate PepsiCo International to a standardized storage and server architecture that
provides capability upgrades in the areas of application management, network security, disaster recovery,
asset management and operations support. HP will use a variety of storage and server systems, tools and
software to manage PepsiCo International’s new data center environment.
In addition, with PepsiCo International choosing BT as its network provider, there will be more
opportunities for the HP and BT alliance to help increase service integration and innovation for PepsiCo
International.
“We have closely collaborated with PepsiCo International to build an IT environment that will help them
become more adaptive,” said John E. Evers Jr., vice president and general manager, Managed Services –
Americas, HP. “By standardizing and optimizing its server environment, PepsiCo International can better
flex to meet its changing business needs and in turn provide better service to customers anywhere in the
world.”
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4.9 PEPSI BOTTLING GROUP
Pepsi Bottling Group is the world's largest producer, seller and distributor of Pepsi-Cola beverages. With
yearly sales of almost $11 billion, the organization's fastest growing segment is non-carbonated beverages,
including the main brand of filtered water in the U.S., Aquafina, as well as Tropicana juice drinks and
Lipton Ice Tea. As a major aspect of an all day, every day generation task, the organization's Detroit plant
ships around 27 million cases for each year.
Generation at the plant begins as unfilled bottles are emptied from trucks by means of transport and
transported to a depalletizer. From that point, they are, rinsed, dried and sent to a filling machine (filler
speeds at the plant change based on jug size, ranging from 350 to 1,000 bottles for each minute). The bottles
leave the fillers and advance toward a packaging machine, and after that to a palletizer. Every pallet is
wrapped for distribution and moved to the warehouse for shipping.
4.9.1 THE CHALLENGE
The plant uses an assortment of sensors to screen bottles as they travel through the sequence of steps and
to deal with the stream to the individual stations. Line sensors coordinate the speed of the transport. The
organization's inventory of sensors swelled throughout the years to include in excess of 120 unique
varieties.
A large number of these included various styles of the same item stocked under various brands. A similar
issue was developing with its drives inventory, which had developed to more than 50 diverse part numbers.
The wide assortment of sensors made it progressively more mind boggling and time-consuming to supplant
a flawed gadget. Despite its fast, superior machinery, the increasingly protracted and more regular
downtime was beginning to affect the organization's capacity to meet its profitability goals.
Moreover, operating costs were on the rise because of the excess spares inventory. Because of the extensive
number of sensors they had in inventory, including various styles and brands, simply finding the correct
substitution resulted in an hour of downtime.
A more strategic way to deal with maintenance was necessary, as even the smallest of delays could cost the
plant thousands of dollars in lost creation and overtime.
Knowing that viable parts management and fast, solid gear repair lies at the core of productive
manufacturing, the organization investigated ways to get its inventory and maintenance processes under
more tightly control. That is the point at which it chose to swing to Rockwell Automation for help.
P a g e 56
4.9.2 THE SOLUTION
The first task attempted by Rockwell Automation was to direct an Installed Base Evaluation – an expansive
inventory assessment to determine the correct number of sensors and drives the plant right now had in stock.
Next it expected to make sense of what products were really required and which ones could be eliminated.
To streamline its activity, Rockwell Automation suggested that Pepsi standardize its whole sensors
inventory on Allen-Bradley products. The neighbourhood distributor, McNaughton-McKay Electric
Company (Mc&Mc), helped design a relocation intend to help ease the cost of this inventory conversion.
Albeit every one of the drives utilized at the plant were Allen-Bradley mark, many were more established
models representing a huge number of drive families. To simplify its drives inventory and overhaul its
innovation at the same time, Pepsi changed over the majority of its drives to the Allen-Bradley PowerFlex
group of AC drives. A nitty gritty cross-reference outline created by Rockwell Automation presently
provides technicians with a speedy and easy approach to recognize fizzled and new parts, as well as
installation instructions.
To ensure solid accessibility to spare parts, Pepsi set-up a Rockwell Automation Services Agreement that
included parts management. With the understanding, Pepsi pays a settled month to month cost for their
spare parts, which are possessed and overseen by Rockwell Automation however stocked nearby.
The attention allows Pepsi to decrease its forthright expenses, have quick access to spares, diminish carrying
costs, and refresh its control innovation cost-viably. The attention also includes an in-service guarantee, so
the parts don't leave guarantee until the point when they are really used for the guarantee time frame.
P a g e 57
To enable the organization to all the more likely use its internal resources and lessen costly troubleshooting
delays, the Rockwell Automation Services Agreement included TechConnect Support. This remote support
service provides the plant with day in and day out access to Rockwell Automation specialized specialists.
At the point when an issue occurs, Pepsi technicians can call for prompt troubleshooting assistance to
resolve it as fast as possible. To help encourage issue resolution, Rockwell Automation specialized
specialists can also perform remote system diagnostics through an Allen-Bradley modem installed at the
Pepsi office. This helped Pepsi minimize risk and reducing long haul costs.
4.9.3 THE RESULTS
Leveraging Rockwell Automation Services and Support has turned out to be a smart decision for Pepsi
Bottling Group. The enhanced inventory and parts management capabilities diminished downtime and
inventory costs, and standardizing on Allen-Bradley products eased training requirements and minimized
the innovation learning bend. These benefits have eventually improved efficiency by 8 percent and
diminished the overtime required to take care of orders. Moreover, the plant was ready to diminish the
quantity of sensors it uses from 180 to 46, a decrease of 66 percent. Likewise, it was ready to lessen the
quantity of drive styles from several hundred to 14.
4.10 PACKAGING AS A TOOL FOR SUPPLY CHAIN MANAGEMENT
 Online supply chain visibility across the chain

 Commercial Security offerings
 RFID tags for real-time stock replenishments
 Counterfeit & pilferage
 GS – 1 standards (bar codes)
 Pack safety for the consumer
Pepsi-Cola Saved $44 million by switching from corrugated to reusable plastic shipping containers for one
litre and 20-ounce bottles, conserving 196million pounds of corrugated material.
Palletization – cost vs. value creator
Key supply chain cost optimizer through an integrated supply chain approach
• Pallet pooling services

• Drive standards – pallets/trucks
P a g e 58
4.11 PEPESICO’S FRITO LAY SUPPLY CHAIN
Frito-Lay is the snack sustenance division of PepsiCo and the largest supplier of potato and corn chips on
the planet, as of now holding 40% of the piece of the overall industry all inclusive, and selling its products
in 120 countries.
4.11.1 STRENGTH
Frito-Lay is succeeding against a large number of competitors in a savage, yet slow-development industry,
selling around 4.5 billion packages of snacks for each year.
In request to accomplish this, the organization has figured out how to masterfully make, innovate and deal
with all aspects of its supply chain using cutting edge IT systems that permit it more prominent command
over its generation processes and distribution arrange.
Frito-Lay's supplier arrange for potato chip creation has less than 100 individual suppliers.
4.11.2 STRATEGY USED
• Several years back, Frito-Lay moved toward its potato suppliers to seek those farmers willing to focus
on cultivating a predetermined number of potato varieties, with a focus on producing the most appealing
taste and quality potato chip for the consumer.
• Frito-Lay at that point offered these farmers long haul contracts, which made it easier for the farmers
to get financing and for Frito-Lay to accomplish more productive, gainful economies of scale in
different areas of the esteem chain.
• It is vital to make reference to that steps like these that insure a stable supply of crude material are
imperative to an organization who purchases 2.3 billion pounds of potatoes and 775 million pounds of
corn yearly.
4.11.3 FROM SUPPLIER TO RETAILER
• Frito-Lay generally depended upon its in-house armada of trucks to transport products from its plants
to its 1,900 warehouses or 200 distribution centres.
• However, as the organization extended, operations managers understood that it was not efficient to
deliver each item at each plant, and thus started specializing at specific locations.
• On the other hand, logistics turned out to be increasingly troublesome and distances developed longer,
and thus, Frito-Lay figured out how to abuse the benefits of truck transporter services, employing
Menlo Logistics to deal with course planning. Menlo was ready to decrease the bearer base by half and
arrange across the country discounts with different carriers.
P a g e 59
4.11.4 RETAILERS
• The last stop involved is the 400,000 stores across the country that carries Frito-Lay's snack
nourishment products. The organization utilizes their very own innovative systems to show stores how
reallocating shelf space, for instance, can create bigger profits.
• Retailers are also furnished with Frito-Lay's "Benefit Vision Program", which allows retailers to dissect
their sales and contrast it with national execution statistics.
• At the same time, Frito-Lay benefits from the program because it convinces retailers to apportion more
shelf-space to their products.
4.11.5 STRENGTHS OF IT CORPORATION
• Tracks the logistical development of products all through the supply chain, from acquiring the crude
materials to final conveyance, by utilizing its 848 tractors, 2,251 trailers, and an armada of thousands
of neighbourhood PC prepared conveyance trucks.
• Empowers its provincial managers with access to vast amounts of information on their databases that
can be used to adequately direct them in their distribution decisions.
• It is ready to accurately assess demands across the majority of its products because of the accessibility
of point-of-sale information and a flawless IT system, giving planners the capacity to discern consumer
trends and suitably get ready generation plans.
• Its managers can be capable in determining levels of inbound supplies, crude materials, the allotment
of the organization's creation limit, and logistical details for truck routing.
• The organization's capacity to target nearby request patterns with compelling advancement and
conveyance systems results in continuously optimizing net revenues and reducing inventory and
unneeded costs.
4.11.6 COMPETITIVE ADVANTAGES
• The organization tries to enthral its customers by developing extensive databases that record who
their customers are and precisely what they need.
• They focus on being the most solid, quality-driven suppliers who give services through the retail
channel by means of collecting as much information en route and utilizing it to address their
weaknesses and exploit their strengths.
• Despite just delivering potato and corn chips, relies on its capacity to include unparalleled incentive
in its distribution channel. Its customers realize that when they work with Frito-Lays, they aren't
simply buying an item to shelve in their stores, however incorporating a propelled information
system keeping in mind the desire of increasing sales and profits.
P a g e 60
SUPPLY CHAIN IN INDIA
PepsiCo is one of the pioneers of agreement farming in India since 2001 Their involvement in contract
farming has secured numerous crops – potato, basmati rice, tomato, stew, shelled nut, oranges and all the
more as of late sea weed. PepsiCo's operations started in India started in the area of Punjab in a joint effort
with state government. PepsiCo India's task with the Punjab Agro Industries Corporation and Punjab
Agriculture University remains a standout amongst the most ambitious contracts farming projects in the
nation.
P a g e 61
4.12 PEPSICO TROPICANA SUPPLY CHAIN
4.12.1 BACKGROUND
Of the four principal Distribution Centers (DC) in the U.S. the Jersey City, N.J. DC is responsible for the
supply of Tropicana juices in all states in the Northeast U.S., and every Canadian province. Jersey City
houses a unit stack limit Automated Storage and Retrieval System (ASRS) that is completely integrated
into an Automated Warehouse System (AWS). The middle handles chilled premium orange juices, and
mixed juices from think as well as shelf stable juice products from either Florida or neighbourhood co-
packers. Products differ according to bundle size, and squeeze compose and style, giving rise to roughly
200 Stock Keeping Units (SKU), each facing irregular interest from customers. Juices arrive as of now
palletized and variously pre-bundled, and are emptied according to request, and moved into the ASRS
region.
The Jersey City Distribution Center (DC) of Tropicana is responsible for the supply of Tropicana juices in
all states in the Northeast U.S., and every Canadian province. Premium squeezed orange from Florida
represents around 65% of the shipments, and has a rough shelf life of 65 days. The Jersey City DC receives
five Tropicana Unit trains from the generation office in Florida week by week. Each train has around 45
refrigerated cars. Juices arrive as of now palletized and pre-bundled in paperboard containers and plastic
and glass bottles. Two types of unloading procedures are at present practically speaking: cross-docking and
warehousing. Cross docking typically is used for customers receiving a single item types or transfers to a
smaller distribution focus in Whitestone, NY. Each train usually contains 8 to 10 railcars that can suit cross-
dock conveyance.
4.12.2 PROBLEMS
There are three major problem areas related to the current practices in Tropicana.
A) Ordering policy of the individual retailers
Right now, Tropicana manages the inventory orders for around 10% - 20% of the retailers. This process is
called CRP or continuous replenishment program.
The Tropicana customer service office administers the ordering of those individual customers. From the
supply chain perspective, this is commonly valuable for both the customers and the warehouse.
The benefit of the warehouse is that it is ready to incorporate the interest information of individual stores
in its replenishment decisions of juices shipped from Florida to Jersey City. The retailers’ advantage from
in time conveyance and less stock out cost. Individual stores contribute the other 80% - 90% of the orders,
which are not under Tropicana's control. This is subject to irregular variety and subsequently uncertainties
of interest on the warehouse. One methodology is make an incentive for the customers to entrust their
ordering capacity to Tropicana. This is the so-called supplier-retailer coordination issue. A precisely
P a g e 62
designed coordinated system will profit every single player in the supply chain arrange. This may require
the design of contracts or cost sharing agreements with the customers. Central ordering of juices that are
shipped to the distribution centre
As of now there are five trains of juices scheduled to arrive week after week from Florida. The organization
never ships in part filled trains from Florida. The Jersey City distribution focus sometimes builds up
inventory of certain classes of juices that are close to their termination date, and the organization has to
dispose of them either at a low cost with sales advancement or give them to philanthropy.
A precisely designed and sophisticated coordination of ordering policies will lessen the chances for these
problems and result in savings. At the same time it will increase the fill rate because the extra limit gained
from more reasonable ordering can be used for ordering more juices of the sort that cause trucks to hold up
in the yard.
B) Combining marketing strategies with inventory levels and other factors
Marketing strategies such as sales incentives can influence request. Foreseeing an inventory develop issue,
the organization can use marketing (and mainly pricing) as an apparatus to either increase request (when
certain items develop) or lessen request (when insufficient inventory is accessible).
4.12.3 SOLUTION
• Tropicana, a unit of PepsiCo, actualized Supply Chain Strategist to show manufacturing logistics
operations to include co-packer operations.
• The show involved more than 30 manufacturing and distribution facilities and the seasonal interest of
more than 20 item types.
• Tropicana used Supply Chain Strategist to execute hundreds of scenarios and sensitivities, producing
information that gave insights into areas where the organization could legitimize system limit at
manufacturing facilities and increase efficiencies within existing distribution and logistics systems.
P a g e 63
4.12.4 LIMITATIONS OF PEPSI SUPPLY CHAIN OVER COKE
• PepsiCo has copy distribution systems for its beverages. Coca-Cola has generally maintained
distribution of its whole refreshment line-up through its bottlers.
• Pepsi bottling system is more divided than Coca-Cola's
• In a consolidated system negotiations involve less players and thusly set aside less opportunity to gain
attention, which might be the reason the Pepsi system has slacked in system proficiency efforts.
PepsiCo and its bottlers have established a purchasing helpful to gain purchasing power in buying crude
materials.
• While PepsiCo has been pursuing international drink acquisitions, those investments will set aside
opportunity to deliver significant operating income
• PepsiCo consolidation puts pressure on the independent system bottlers to all the more promptly
consider agreements for warehouse distribution.
P a g e 64
FINDINGS
P a g e 65
FINDINGS
The findings of this study offer support to the proposed relationships between the drivers and the use of IT
for transaction processing. Support was also found to the normal drivers for the use of IT for request
tracking and conveyance coordination. The research of the drivers for the use of IT for supply chain
planning and cooperation, be that as it may, realized some interesting new findings. To be specific, in the
companies examined in this study, the sharing of planning information through information systems is
firmly linked to the advancement of respective cross-authoritative processes. We suggest three possible
reasons for this finding:
• Uni-directional benefits of information sharing

• The scope of this study on information shared with IT systems.
• The complexity of actually achieving benefits with the shared information. Next each of the reasons
is explained in more detail.
Several authors have pointed that typically the suppliers gain the most benefits from information sharing
(e.g. Yu et al., 2001). Truth be told, Lee et al. (2000) suggest that suppliers should offer specific financial
or process-related incentives to their customers to confine them in information sharing. A decent case of
possible process-related incentive is the merchant oversaw inventory (VMI) system, as it enables the
customer to increase the effectiveness of its purchasing process besides providing the supplier timely
interest and inventory information.
This study focused on formal inter-authoritative information sharing by means of IT systems. Thus, it might
oversee the sharing of information that is not used by any of the formal supply chain processes.
The third possibility for the absence of information sharing without process re-design is that the companies
neglect to see as well as understand the normal benefits of information sharing. The research promoting the
benefits of information sharing is usually based on expository modelling or computational experiments,
and relies on simplified representations of the supply chain (most regularly a linear supply chain with two
to four echelons and one or a couple of products). In any case, by and by the situation is considerably more
perplexing.
P a g e 66
CONCLUSION
P a g e 67
CONCLUSION
It is confirmed that the importance of IT and quality of information are complementary to each other
because manual filtering might disappear. Although automated information processing prevents manual
mistakes, it also makes the process less transparent and therefore, wrong information or information of low
value might be generated if the information input is already of bad quality and not properly checked. A
difference can be noticed between the volume of information and the richness of information exchange.
The sharing of information in systematic language involves more action and commitments support to
enhance the quality of any organization which is beneficial in the light of supply chain network. This paper
discusses the role of IT as an enabler in Supply Chain Management and also highlights the vast benefits to
companies with a comprehensive IT strategy.
In this study the use of IT for SCM purposes was studied by dividing the use of IT into three
categories:
1) Transaction processing
2) Supply chain planning and collaboration.
3) Order tracking and delivery coordination.
Further, the drivers behind these diverse IT use types were examined. Based on the exact information
gathered for this study, the three IT use categories proposed represent well the roles that IT plays in SCM.
Notwithstanding clarifying this broadly discussed point, the classification provides a basis for further
research on the use of IT in SCM.
Besides, our findings suggest that the drivers between the three uses of IT in SCM vary. As expected,
decrease of manual work and costs, enhancement of information quality, speeding up of information
transfer, and volume of transactions were observed to be the drivers for the transaction processing job
of IT in SCM. Furthermore, the continuity of the business relationship was found to drive this use of IT. Its
use in supply chain planning and coordination, in turn, was observed to be driven by the execution of cross-
authoritative processes, most frequently the VMI system. In contrast to assumed, unusual and logistically
demanding condition did not stand out as a driver for this use of IT. Finally, venture introduction of business
and in-transit consolidation were found to drive the use of IT for request tracking and conveyance
coordination. Also, this use of IT was mostly determined by the need to coordinate different activities or
deliveries based on the progress of specific followed deliveries.
P a g e 68
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“Impact of Information Technology in the efficiency and

effectiveness of Material Management”

B.A (Vocational) Materials Management

Project Guide: Submitted by:

Mr. S.W. Lyngdoh RISHABH SHARMA

October 30, 2018 Mr. S.W. Lyngdoh

College of Vocational Studies, University of Delhi

October 30, 2018 Mr. Rishabh Sharma

B.A (Vocational) Materials Management

College of Vocational Studies, University of Delhi

October 30, 2018 Mr. Rishabh Sharma

B.A (Vocational) Materials Management

College of Vocational Studies, University of Delhi

1.1 OBJECTIVES OF MATERIALS MANAGEMENT………………………….10

2. PURPOSE AND OBJECTIVE OF STUDY……………………………………………25

4. COMPANY PROFILE – PEPSICO…………………………………………………….40

• Maximize the use of the firm’s resources.

• Provide the required level of customer service.

1.2 CHALLENGES TO MATERIALS MANAGAMENT

Please refer to Fig. 1 for detailed understanding.

There are four major decision areas in supply chain management:

Role of Softwares’ In Information Technology

 Supply chain planning software for activities such as demand management.

 Develops better customer relationship and service.

1.5 INTRODUCTION TO INFORMATION TECHNOLOGY

1.6 INFORMATION AND TECHNOLOGY: APPLICATIONS OF SCM:

B) Electronic Data Interchange:

Electronic Data Interchange (EDI) refers to computer-to-computer exchange of business documents in a

1. Quick process to information.

Data warehouse is a consolidated database maintained separately from an organization's production

E) Enterprise Resource planning (ERP) tools:

F) Radio Frequency Identification (RFID):

Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and

 REDUCE OPERATING COSTS

ACTIVITIES/ ASPECTS IT APPLICATIONS AREAS BENEFITS

Transportation  Fleet management-car tracking,  Recovery of stolen vehicles

Warehousing -------Warehouse management • Reduction in paper work

Custom Clearance Documentation, duty payment, • Increased customer satisfaction

The objective of the study was:

 To observe the usage of information technology in Materials Management and Supply

2.3 SUBSTANTIVE THEORY

2.4 CONCEPTUAL FRAMEWORK

Increased customer based

Security and Tracking

Time taken to trace cargo

Customer Service delivery System

2.6 CARGO TRACKING AND SECURITY SYSTEM

2.7 ROLE OF IT IN EFFICIENCY AND EFFECTIVENESS OF CUSTOMER SERVICE DELIVERY

2.8 INTEGRATION OF INFORMATION TECHNOLOGY

2.12 GAPS IN RESEARCH

Companies presently are competing supply chain-to-supply chain as opposed to enterprise-to-enterprise

3.3 COMPETITIVE AND SUPPLY CHAIN STRATEGIES

 It understands the needs of our consumers and customers

 Powerful go-to-market systems,

4.2 RESEARCH DESIGN

4.3 DIFFICULTIES WITHOUT JUST-IN-TIME

4.6 SUPPLY CHAIN VISIBILITY

4.6.1 INCREASE GLOBAL VISIBILITY