PEPSICO MIS project report

Project Report on Information System of PEPSICOAn insight on strategic business evolution KINSHUK KALIA (501004029) KUNAL KAPOOR (501004030) MANISH KAMRA (501004034) MAYANK KAPOOR (501004038)1/5/2011 TABLE OF CONTENTS TOC ACKNOWLEDGEMENT PAGEREF _Toc282030211 4 ABOUT PEPSI CO PAGEREF _Toc282030212 5 EXECUTIVE SUMMARY PAGEREF _Toc282030213 7 Introduction to Information Systems PAGEREF _Toc282030214 8 Information & Organizations PAGEREF _Toc282030215 9 Functional aspects of MIS PAGEREF _Toc282030216 9 Financial MIS PAGEREF _Toc282030217 10 Manufacturing MIS PAGEREF _Toc282030218 10 Marketing MIS PAGEREF _Toc282030219 11 Human Resource MIS PAGEREF _Toc282030220 11 Business functions PAGEREF _Toc282030221 12 The order fulfillment process PAGEREF _Toc282030222 13 Role of Information Systems in a business: PAGEREF _Toc282030223 13 Systems from a functional perspective PAGEREF _Toc282030224 14 Sales & Marketing systems: PAGEREF _Toc282030225 14 Manufacturing & production systems: PAGEREF _Toc282030226 15 Finance & accounting systems: PAGEREF _Toc282030227 16 Human resources systems PAGEREF _Toc282030228 16 Systems from a constituency perspective PAGEREF _Toc282030229 17 Transaction processing systems PAGEREF _Toc282030230 17 Management Information Systems (MIS) & Decision Support Systems (DSS) PAGEREF _Toc282030231 17 How MIS obtain data from Organization’s TPS PAGEREF _Toc282030232 18 Decision Support Systems (DSS) PAGEREF _Toc282030233 18 Executive Information Systems (EIS) PAGEREF _Toc282030234 19 Relationship of Systems to one-another PAGEREF _Toc282030235 20 ERP SYSTEMS PAGEREF _Toc282030236 21 Enterprise Resource Planning PAGEREF _Toc282030237 22 ERP systems automate business processes PAGEREF _Toc282030238 22 ERP – bringing the organization together PAGEREF _Toc282030239 23 SAP modules: PAGEREF _Toc282030240 24 Enterprise Applications: PAGEREF _Toc282030241 25 Enterprise Systems: PAGEREF _Toc282030242 26 Supply Chain Management (SCM) systems: PAGEREF _Toc282030243 27 SAP’s vision of SCM PAGEREF _Toc282030244 28 What is an Adaptive Supply Chain Network? PAGEREF _Toc282030245 29 Customer Relationship Management (CRM) systems PAGEREF _Toc282030246 29 Integrating SCM, CRM & ERP PAGEREF _Toc282030247 30 Knowledge Management Systems PAGEREF _Toc282030248 31 Management Information System In PepsiCo PAGEREF _Toc282030249 31 Status of MIS PAGEREF _Toc282030250 32 Strategic Business Units PAGEREF _Toc282030251 32 Business Process PAGEREF _Toc282030252 32 Current Enterprise Applications: PAGEREF _Toc282030253 32 Current Enterprise Resource Planning Systems (ERP) PAGEREF _Toc282030254 32 Current Supply Chain Management (SCM) PAGEREF _Toc282030255 33 Current Customer Relationship Management System (CRM) PAGEREF _Toc282030256 33 The decision maker’s dilemma PAGEREF _Toc282030257 34 MySAP ERP: SAP next generation PAGEREF _Toc282030258 39 MySAP: a user centric approach PAGEREF _Toc282030259 39 MySAP E-Business solutions PAGEREF _Toc282030260 40 Proposed Enterprise Applications PAGEREF _Toc282030261 42 Information systems in PepsiCo PAGEREF _Toc282030262 47 Softwares Used by PepsiCo PAGEREF _Toc282030263 53 RECOMMENDATIONS PAGEREF _Toc282030264 54 ACKNOWLEDGEMENT It is our duty to record my sincere thanks and deep sense of gratitude to Ms. Jagdeep Ahuja ( IT MANAGER , PEPSICO CHANNO) for his valuable guidance interest and constant encouragement for the fulfillment of the report. ABOUT PEPSI CO MISSION To be the world's premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity”. VISION quot;
To build India’s leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people.quot;
 SUSTAINABILITY VISION quot;
PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than todayquot;
 Tomorrow better than Today HISTORY AND PROFILE PepsiCo entered India in 1989 and has grown to become the country’s largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched ‘Aliva’ savoury crackers. The company’s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of making tomorrow better than today. PepsiCo’s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. EXECUTIVE SUMMARY Introduction PepsiCo is a world leader in convenient snacks, foods & beverages, with revenue of more than $39 billion & more than 1, 85,000 employees. The company consists of PepsiCo American Foods (PAF), PepsiCo Americas Beverages (PAB) & PepsiCo International (PI). PAF includes Frito-lay North America, Quaker foods North America & all Latin America food & snack businesses. PAB includes PepsiCo Beverages North America & all Latin America beverage businesses. PI includes all PepsiCo businesses in UK, Europe, Asia, Middle East & Africa. PepsiCo brands are available in nearly 200 countries & generate sales at the retail level of more than $98 billion. Some of PepsiCo’s brands names are more than 100 years old, but the corporation is relatively young. PepsiCo was founded in 1965 through a merger of Pepsi-Cola & Frito-Lay. Tropicana was acquired in 1998 & PepsiCo merged with Quaker Oats Company, including Gatorade, in 2001. PepsiCo offers product choices to meet a broad variety of needs & preferences – from fun-for-you items to product choices that contribute to healthier lifestyles. PepsiCo’s mission is “To be the world’s premiere consumer “Products Company” focused on convenient foods & beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth & enrichment to our employees, our business partners & the communities in which we operate. And in everything we do, we strive for honesty, fairness & integrity.” PepsiCo Headquarters PepsiCo World Headquarters is located in Purchase, New York. The 7 building headquarters complex was designed by Edward Durrell Stone, one of America’s foremost architects. The unit of PepsiCo we visited manages the supply for several wholesalers, retailers, restaurants, hotels & other such food outlets. In order to achieve the projected sales target effectively, the organization ensures a comprehensive strategic alignment with the overall PepsiCo’s business strategy. The unit’s primary functions are to conduct a systematic manufacturing & supply of the product without any tactical flaws. Pepsi products are safe, Pepsi analyze water, sugar & flavorings in accordance with the best international guidelines. Pepsi products comply with most stringent international regulations, including the new regulations for carbonated soft-drinks. Introduction to Information Systems Information & Organizations Functional aspects of MIS MIS is an integrated collection of functional information systems, each supporting particular functional area. Financial MIS This MIS provides financial information to all financial managers within an organization. Manufacturing MIS Marketing MIS This MIS supports managerial activities in product development, distribution, pricing decisions & promotional effectiveness. Human Resource MIS This type of MIS is concerned with all the activities related to employees & potential employees of the organization. Business functions There are 4 major business functions: ,[object Object]

Human resources.Every business regardless of its size must perform the above mentioned 4 functions to succeed. It must produce the product or service; market & sell the product; keep track of accounting & financial transactions & perform basic human resource tasks such as hiring & retaining employees. The order fulfillment process Fulfilling a customer order involves a complex set of steps that require the close coordination of the sales, accounting & manufacturing functions. Role of Information Systems in a business: Firms invest in information systems in order to: ,[object Object]

Develop new products & services.

Attain customer intimacy & service.

Promote competitive advantage.

Ensure survival.Systems from a functional perspective ,[object Object]

Manufacturing & production systems

Sales & Marketing systems:They support activities for selling & marketing firm’s products or services. Senior management: monitor trends affecting product & sales, planning for new products & services, monitor performance of competitors. Middle management: support market research; analyze marketing campaigns, pricing decisions & sales performance. Operational management & employees: locating & contacting potential customers, process orders, provide customer service support. Sales Information Systems ,[object Object],This system support activities for producing firm’s product or services. Senior management: help plan long-term manufacturing goals such as technology investments & locating new plants. Middle management: analyze & monitor manufacturing & production costs & resources. Operational management: manage status of production tasks An Inventory Control System ,[object Object],This systems support activities for managing financial assets, firm’s capitalization & financial records. Senior management: establish long-term investment goals & provide long range forecasts of firm’s financial performance. Middle management: oversee & control firm’s financial resources. Operational management: track flow of funds in firm through transactions (paychecks, payments, securities reports, receipts etc.) An Accounts Receivable System ,[object Object],This system support activities for attracting, developing & maintaining firm’s workforce. Senior management: identify manpower requirements (skill, education level, types & number of positions etc.) for meeting long term business plans. Middle management: monitor & analyze recruitment, allocation & compensation of employees. Operational management: track recruitment & placement of employees. An Employee Record Keeping System Systems from a constituency perspective Transaction processing systems ,[object Object]

Its principal purpose is to answer routine questions & to track the flow of transactions through the organization. For e.g. inventory status, granting credit to customers etc.

It monitors status of internal operations & firm’s relationship with external environment.

Major producer of information for other systems.

It is highly central to business operations & functioning.Management Information Systems (MIS) & Decision Support Systems (DSS) ,[object Object]

It summarizes & gives reports on basic operations using data from TPS.

It provides weekly, monthly, annual results but may enable drilling down into daily & hourly data.

It is typically not very flexible system with little analytical capability.How MIS obtain data from Organization’s TPS In the system illustrated by this diagram, 3 TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provide them with appropriate reports. Decision Support Systems (DSS) ,[object Object]

It uses information from TPS, MIS & external sources.

The system uses various modules to analyze the data.

It focuses on extracting, analyzing information from large amounts of data.Executive Information Systems (EIS) ,[object Object]

It addresses strategic issues & long term trends for e.g. what types of products should we make in next 5 years?

The system addresses non-routine decision making.

It provides generalized computing capacity that can be applied to changing set of problems.

The system draw summarized information from MIS, DSS & data from external events.

It typically uses web portal interface to present the content.Relationship of Systems to one-another TPS: it is the major source of data for other systems. EIS: it is primarily a recipient of data from lower level systems. Exchange of data between functional areas for e.g. sales order transmitted to manufacturing system. ERP SYSTEMS ERP systems integrate business processes & information from entire enterprise. The system helps in coordinating the operation of business functions. ERP systems are software packages that can be used for the core systems necessary to support enterprise systems. ERP systems vendors Enterprise Resource Planning At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately & automatically updated throughout the entire system. ERP systems automate business processes ERP – bringing the organization together After implementing ERP SAP modules: Enterprise Applications: Enterprise applications are systems that span functional areas & automate processes for multiple business functions & organizational areas; they include: ,[object Object]

Supply Chain Management (SCM) systems.

Customer Relationship Management (CRM) systems.

Knowledge Management systems.Enterprise Application Architecture Enterprise Systems: ,[object Object]

It speeds up the communication of information throughout the system.

The system enables greater flexibility in responding to customer requests, greater accuracy in order fulfillment.

It enables managers of large firms to assemble overall view of operations.Supply Chain Management (SCM) systems: ,[object Object]

It manages shared information about orders, production, inventory levels etc., the goal is to move correct amount of product from source to point of consumption as quickly as possible & at lowest cost.Customer orders, shipping notifications, optimized shipping plans & other supply chain information flow among Warehouse Management System (WMS), Transportation Management System (TMS) & its back-end corporate systems. SAP’s vision of SCM SAP’s vision of changing SCM corresponds to businesses by changing their supply chains into adaptive supply chain networks. Sequential Supply Chain SAP’s Transformation of Supply Chain What is an Adaptive Supply Chain Network? “Adaptive” refers to the ability to rapidly sense & respond to changing internal & external conditions. “Network” refers to the ability to have real-time collaboration & co-ordination across all partners in the supply chain. An adaptive supply chain network is a community of customer-focused companies that share knowledge & resources to intelligently adjust to changing market condition. Tradition supply chains are linear, sequential &designed for predictable & controlled conditions. So what happens when customer orders change or are canceled, rush orders are placed, breakdowns create bottlenecks, or problems with shipment arise? Because visibility is limited and information moves slowly, responses happen slowly, too. Changes take days, weeks, or even months to make. But companies today, of course, increasingly need to respond to changes in hours and minutes. Within the adaptive supply chain network, a customer can control business processes from end to end, allowing seamless collaboration with partners, suppliers, distributors, and customers. This allows them to: ,[object Object]

Increase the ability to manage variability.

Raise operational flexibility.And these changes result in sustainable value creation. Adaptive supply chain network is basically architecting business for flexibility. Customer Relationship Management (CRM) systems ,[object Object]

It coordinates business processes that deal with customers to optimize revenue & customer satisfaction & increase sales.

The system combines sales, marketing & service record data from multiple communication channels to provide unified view of customer & eliminate duplicate efforts.

Integrating SCM, CRM & ERPData points where SCM, CRM & ERP integrate Knowledge Management Systems ,[object Object]

It includes systems for managing & distributing documents, graphics & other digital knowledge objects.

It includes systems for creating knowledge directories of employees with specialized expertise.Management Information System In PepsiCo The microcomputers are linked up to PepsiCo’s central computer system daily to update inventory information system. Management estimates that over $25,000 (Rs. 12,50,000) per year may be saved because of the system. ,[object Object]

It facilitates marketing planning & control: effective marketing planning is required in terms of product planning, pricing, promotion & distribution. Such planning will be possible only if the company is possessing adequate & relevant information. This is also possible through MIS.

Quick supply of information in PepsiCo: today a form has to take quick decisions, for this purpose it requires fast flow of information which is facilitated by a properly designed MIS.

Improves quality of decision making: properly designed MIS supplies reliable & relevant information. With the help of computers & other data processing equipments, the marketing managers over there can make effective decisions at the right time.Status of MIS Computer Based Information Systems: ,[object Object]

Information exchange between companies.

Information exchange between hand-held computer & store’s delivery system.Strategic Business Units ,[object Object]

Plans independent of other businesses.Business Process There are so many products, operations centers, & offices required for massive co-ordination of each department, activity, geographic location & employees. PepsiCo uses MySAP Business Suite applications in the management of their enterprise resource management. The systems help to standardize the internal software & systems through the elimination of legacy systems, thus reducing the redundancy & error that are common in nature of legacy systems. The system is built with the industry best practices that allow Pepsi to be at the forefront of the industry in each area of the business. Current Enterprise Applications: Current Enterprise Resource Planning Systems (ERP) The ERP Corporate portion of MySAP serves to streamline the processes of everyday business to reduce costs. It has reduced the number of steps needed to accomplish a single activity by not sending it through as many departments. Also included is a tool related to reducing travel expenses. There is, of course, a portion of software devoted to financial & management accounting. These programs are linked to the production lines & the sales software in order to account for certain expenditures & sales. The Enterprise Performance Management portion of the software is used to measure how management objectives are being met by profits. This then allows managers to plan & strategize for operations, profit & growth. It allows for the integration of information from, for e.g., both human resources & operations, in order to budget personnel for a specific production line. The entire company can be consolidated into representation in single budget. Individual employees at all levels of the organization are able to access information documenting their own contributions & the progress made within their department. Another important part of the ERM at Pepsi is the Enterprise Human Capital Management. This system has processes that help managers place employees, provide rewards for performance & promote valuable employees. Current Supply Chain Management (SCM) PepsiCo is in charge of managing the suppliers of many of its smaller subsidiaries. Right now PepsiCo has many bottling plants situated all over the globe. PepsiCo must make sure that all of its suppliers (water, corn syrup, food colorings, carbonation, plastics, aluminum & paints etc.) come into an appropriate plant so as to keep customers satisfied with no shortages, yet not make too much additional inventory in stock which hangs up extra resources & cash flows. As stated earlier, PepsiCo uses the help of MySAP Business Suites applications for its business solutions. MySAP helps communicate with its suppliers & generate forecast of demand so than an overabundance of inventory does not happen. MySAP helps PepsiCo generate a forecast in order to keep up with demand. Forecast takes into account past sales plus additional information about sales right now, seasonal changes, economic turns, diet habits, health changes & environmental changes. PepsiCo also has been trying to broaden their supplier base. They have a program in place to encourage minority & women in their business program. In fact, in October 2004 both PepsiCo & Toyota received a “Corporation of the Year” award from the National Minority Supplier Development Council. The encouragement will encourage suppliers to take part in PepsiCo’s functions & hopefully broaden their customer & market base. Current Customer Relationship Management System (CRM) Businesses use customer relationship management system to “capture & integrate customer data from all over the organization, consolidate the data, analyze the data & then distribute the results to various systems & customer touch points across the enterprise.” These systems are useful in improving sales, marketing & customer service in a business. Through the use of CRM system, PepsiCo has been able to deliver top-line growth & superior customer service. Pepsi’s current CRM application has allowed for conversion of former disparate sales systems into an integrated internet application solution, a 360 degree view of the entire customer base, simplification of the resolution process, accurate & timely deliveries & reduction of product inventory close time by 1-2 days. Through the use of real time customer information, the managers are able to have up-to-date information on any issue of needs of the customer through their account, allowing a clear picture of their customers & their relationships with the company. This also allows workers to uncover potential sales opportunities with their customers. The real time information system is also used to improve customer interaction & satisfaction through the use of help desks, customer service representatives & allowing customers themselves to access the real time information system. Pepsi uses CRM applications to determine profitable customers, uncover potential sales opportunities, improve customer interaction & relations & provide the enterprise with up-to-date information. The decision maker’s dilemma ,[object Object]

Wait for (& trust) the already integrated equivalent in their vendor’s infrastructure solutions.The toss: Strategic vs. Tactical ,[object Object]

Tactical: it is a point solution & perhaps a more controllable project. It is perceived to increase short term benefits & decrease risk. Fast ROI, seeking dramatic results in short time frame with complete implementation measured in months, not in years.The Fiscal concerns in evaluating the integration of multiple applications ,[object Object]

Integration of the application with one or more other applications across the enterprise.

Ongoing upkeep of the points of integration & data fields as the products change over time.

PEPSICO MIS project report

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