Established in 1989, Shanghai Pepsi-Cola Beverage Co., Ltd. is one of PepsiCo’s most important subsidiaries in China. The company produces and sells popular beverage brands such as Pepsi, 7-Up, Mirinda, and Gatorade, providing high-quality products and innovative marketing strategies in a large territory covering Shanghai and southern Jiangsu, China.
- shanghai-pepsi-co
Success Story
Shanghai PepsiCo
Shanghai PepsiCo Optimizes Production Sequencing with Blue Yonder
Met sales demands while optimizing inventory levels
Reduced production changeover costs
Achieved high order fill rate (OFR)
The Company
The Business Challenge
Shanghai PepsiCo has seen rapid and sustained growth across its products, which has resulted in production complexity. To maximize customer service and financial results, Shanghai PepsiCo needs to strategically plan, schedule, and sequence production in its factories. Manual processes and human analysis were ineffective in tackling the complexity of adjusting a sequence in real-time to support rush orders, material shortages, or equipment downtime.
The Solution
Today, Blue Yonder Order Sequencing ingests data from the sales forecasting, inventory management, and production planning functions to arrive at an intelligent, profitable order sequence in seconds. The sequence considers all constraints — including those in the supply and transportation planning functions — so bottlenecks are eliminated, and costs are controlled. Order Sequencing also supports dynamic re-sequencing as conditions change.
“Successfully managing a supply chain the size of Shanghai PepsiCo requires real-time visibility and coordination. Blue Yonder provides us with a fast, automated way to adjust sequencing so that production, financial, and service objectives are consistently met. Blue Yonder has helped us meet sales demand and control inventory more effectively by integrating real-time data from sales forecasts, inventory management, and production planning. We’ve also reduced our production change-over costs and inventory levels while maintaining high order fill rates.”
–Yu Jiawei, Supply Chain Management Department, Shanghai PepsiCo.
How Shanghai PepsiCo is boosting production efficiency whilst reducing waste across its operations.
Balancing complex demand with production complexities at Shanghai PepsiCo
In providing beverages to consumers in Shanghai and southern Jiangsu, China, Shanghai PepsiCo faces a host of production complexities compounded by its rapid growth. The manufacturer must balance shifting market demand for its broad product range with constraints that include materials supply, current inventory levels, manufacturing capacity, asset utilization, and warehouse and transportation availability.
The key is to create an ideal production sequence that matches the moving targets of supply and demand as precisely as possible. The order sequence must also be continuously and dynamically updated as upstream and downstream conditions change.
Previously, Shanghai PepsiCo was challenged to successfully manage this complexity when it relied on its planning team's manual analysis, experience, and intuition. Human planners were overwhelmed by the volumes of real-time data they needed to consider, including sales forecasts, inventory levels, turnover rates, materials availability, and end-to-end supply chain capacities.
The beverage leader turned to Blue Yonder and its service partner PWC, to implement Order Sequencing, a module within the Blue Yonder Production Planning solution set.
Intelligent, profitable order sequencing based on real-time inputs
While human analysts are overwhelmed by large, complex datasets, Blue Yonder Order Sequencing is purpose-built to ingest real-time data from across the supply chain, conduct rigorous analysis, and arrive at an optimal order sequence in seconds. In addition, as new data is added, this intelligent solution automatically adjusts the order sequence to get production, profitability, and customer service goals back on track.
With a consistent focus on optimizing efficiency, resource utilization, time, and cost, Order Sequencing combines the strategic advantages of a stable order sequence with the practical benefits of an adaptable production scheduling solution.
The benefits for Shanghai PepsiCo have been significant. The manufacturer can match sales demand with product supply at a new level of precision and agility. Shanghai PepsiCo has also reduced its inventory investments, carrying costs, and expenses associated with production changeovers. At the same time, the company has consistently achieved high order fill rate (OFR) metrics.
The software implementation, managed by PWC, will enable Shanghai PepsiCo to increase production efficiency further, optimize inventory, improve customer service, and reduce waste and costs across its production operations.