PepsiCo Foods Canada- Business Consulting Project
||PepsiCo Foods Canada
||Delivery Schedule Optimization
||Neil Raj, James Park, and Nick Kim
||Business Operations Management
The purpose of the study was to determine an optimal delivery schedule to service all of the company’s large-format (higher volume) customers in a more effective manner. Primary goals included increasing delivery vehicle cube utilization and maximizing delivery resource allocation efficiency.
The study consisted of analysis of the current ordering and delivering process. This included gaining insight on the process by shadowing both PepsiCo’s Delivery drivers and Merchandisers as they perform their regular duties. Past sales volume data was also analyzed to identify trends in regards to peak periods and the current workload distribution throughout the week.
Opportunities discovered were that the client’s current delivery model was ineffective leaving certain high volume stores under serviced and lower volume stores over serviced. The current workload distribution through the week also proved to have major imbalance with an increasing amount of overtime stemming from Saturday and Monday deliveries. An additional key finding was that deliveries were being made from Monday to Saturday, leaving a potential delivery day (Sunday) unused.
Recommendations and Benefits:
Alternatives were developed and evaluated resulting in recommendations being made to address the needs of PepsiCo Foods Canada, they were as follows:
Incorporate Sunday deliveries to balance weekly workload and improve flexibility in truck scheduling with the additional day available for delivery.
- Increase the range of delivery frequency per store from 2-4 weekly deliveries to 1-5 weekly deliveries depending on individual store sales volume increasing levels of customer service and flexibility.
- Utilize the delivery frequency model to provide structure and predictability for weekly delivery scheduling.
- Increase the minimum order quantities from 25 cases to 30 cases, to ensure no deliveries are made under the 30 case minimum used in the Periodic scorecard.
By applying these recommendations, the issues of delivery efficiency, flexibility, and uneven distribution of workload are overcome.