Business Operations of PepsiCo: Kaizen and Business Operations (Coursework Sample)

BUSINESS OPERATIONS OF PEPSICO
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Introduction
Pepsico, Inc. is multinational food, beverage corporation and snack company that has its headquarters in Purchase, New York. It is involved in the production, distribution, and marketing of other products and beverages (Eades et al., 2017, p. 13). Pepsico was formed in 1965 after it merged with Frito-Lay and it has expanded its scope of operations to beverage and food brands. The company is the second largest beverage and foods supplier in the world and the largest in the United States of America. This paper provides a detailed analysis of how Kaizen, Total Quality Management (TQM), Six Sigma, Business Process Reengineering (BPR), and lean manufacturing affect the business operations of PepsiCo.
Business Operations of PepsiCo
Pepsico is grouped into four main business units which are the PepsiCo Americas Foods, Pepsico Americas Beverages (PAB), PepsiCo Europe and Pepsico Asia, Middle East and Africa (AMEA). These four business units operate in the line of snack and food in different countries. They are further inclusive of six divisions namely the Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PAB, Europe, and AMEA. The duties of FLNA include making, marketing, selling and distributing snack foods that are branded to independent retailers and distributors. On the same note, the responsibilities of QFNA is producing, marketing and distributing rice, cereals, and dairy to independent retailers and distributors. Latin America Foods is tasked with the distribution of snack foods such as Cheetos, Ruffles and Elma Chips. Pepsico Americas Beverages markets finished goods, fountain syrups, and beverage concentrate under the name of many brands of beverages such as mountain dew, Pepsi, and Gatorade. The distribution network of the company is direct-store-delivery (DSD), and customer warehouse and the system of distribution is dependent on the needs of clients, the characteristics of products and the practices in local trade (Chang et al., 2015, p. 359).
* Kaizen and Business Operations
Kaizen is founded on the belief that all things can be improved. Apparently, PepsiCo follows the principle of kaizen and have initiated significant improvements within the organization (Macpherson et al., 2015, p. 3). This means that there is nothing that is viewed as a status quo and that there are efforts of improving things that are small and within a given period. These changes add up to be significant over time for the company. Under this principle, all employees are tasked with the responsibility of identifying the inefficiencies and gaps at every organizational level and make suggestions for places that need improvement. Accordingly, kaizen looks to the increase in rates of productivity, safety, reduction of waste and effectiveness. Kaizen functions through quality Circles, Kaizen Groups or at an individual level and these groups are brought together for the identification of the areas requiring improvement. The key features of this approach are, firstly, that the increases are based on small but many changes. Secondly, that because the ideas originate from employees themselves, there are minimal chances of differences in the approaches (Macpherson et al., 2015, p. 9). Thirdly, the minor improvements do not need a significant investment of capital, and the ideas are from talents of the employees in place. On the same note, kaizen is essential given that it assists workers in taking ownership of their work and in reinforcing teamwork, which in turn improves the motivation of workers. Kaizen is an unrelentless process because PepsiCo sets targets for teams and employees for them to formulate an idea in a more extended timeframe. For kaizen to be effective, there is the need for the culture of trust between managers and staff which is supported by democratizes.
* Total Quality Management of Pepsico
TQM refers to a systematic approach to improvement of quality for comprehensive management of an organization (Goetsch et al., 2014). These are carried out for the primary goals of realizing improvements in quality, the satisfaction of clients, productivity and profitability. The practices of TQM have been embraced at PepsiCo, and it has helped in empowering every member of the company. It has also helped in the promotion of a continuous, long-term and sustained productivity and quality improvement and for the elimination of the fear of employees over changes. PepsiCo has used this principle for the realization of competitive advantage given that TQM integrates the control of statistics, deployment of quality function and current tools of management in a well-structured way. TQM lays much emphasis on internal continuous organizational improvement for the realization of superior customer value and meeting their daily needs. Therefore, TQM has been defined as a philosophy in management that aims for the integration of all functions within an organization such as marketing, design, finance, production, and engineering to meet the objectives of a company and the needs of clients.
A team is regarded as a collection of processes and that they have to undergo continuous improvements through the incorporation of experience and knowledge of employees. Its vital principles that are useful for PepsiCo include, firstly, the top management acting as the key driver and creating an environment that guarantees success. Secondly, employees must have regular training on the quality concepts and methods, and these quality improvements have to improve the satisfaction level of clients. Quality decisions have to be arrived at depending on measurements, and appropriate tools and methodology must be utilized (Dale, 2015). This is to allow for the identification, analysis and responding to incidents of non-conformance. TQM also focusses on the PepsiCo culture, continuous improvement, and the extent of involvement of employees in the identification and tackling problems related to quality.
* Six Sigma
Six Sigma refers to the method of measuring quality that aims for perfection, and it is essential for the elimination of defects (Evans et al., 2014). The significant features of six sigma include calling for continuous efforts for getting processes to a stage where there is the stable production of predictable results. The second critical aspect is that of the deconstruction of the process of manufacturing into six parts which are defined and evaluated independently. The assessment searches for ways of improving the efficiencies of the structure of a business and the quality of the whole process. The final aspect is the training of personnel on Six Sigma for the improvement of every level. For the reduction of costs of waste reduction and warehouses under the Six Sigma plan, PepsiCo has installed a warehouse control system and automated storage and retrieval system (AS/RS). This new equipment utilizes 30 percent smaller footprint. The AR/RS system has ensured that Pepsi maximizes on its storage space, reduced the costs of constructing buildings and lowered the sustainable prices of operation. It has additionally guaranteed that PepsiCo increases its accuracy on inventory, decreased energy, product and costs of waste. Pepsico has also enjoyed flexibility which is inclusive of buffers in the handling of periods where production is high at the bottling plant.
Apparently, Six Sigma uses two main methodologies which are DMAIC and DMADV. DMAIC stands for the definition of the problem, measurement of the details of the current process, analysis of data, improvement of the process and controlling the execution of the process (Basios et al., 2017, p. 55). DMADV stands for the definition of the project goals, measurement of the components of the project and capabilities of the product, analysis of information, designing and testing process details and verification of the design through a pilot program and carrying out simulations.
* Business Process Reengineering (BPR)
BPR refers to the redesigning and evaluation of workflow to improve its efficiency levels. The core principles of BPR include achieving satisfaction for clients, reducing business costs and increasing the competitiveness of an organization (Iqbal 2015, p. 152). The activity of BPR has to be set under measurable and outlined goals which are in line with the mission and vision of PepsiCo. On the one hand, the purpose of PepsiCo is to be the best consumer products company in the world which focuses on convenient foods and beverages. On the other side, the vision of PepsiCo is to put into action through programs and focus on stewardship of the environment, activities to benefit the community and commitment to building shareholder value. The second significant step involved in BPR is the identification of processes that need improvement and which have a direct influence on the output of the organization. The third goal is understanding and measuring the "red" process. The "red" process assesses chances of compromise on the quality of a product and the timeframe for the completion of a product. Most significantly, every method has to be objectively judged against the standards of the industry or the best practices of competitors. The capabilities of the technology and information systems have to be taken into consideration. A relevant and useful information technology system is essential for BPR. When this type of a system is not in place, it becomes impossible to keep track of all factors that affect change. Before PepsiCo launches any of its products, it carries out a prototype test. Lack of prototype testing can be attributed to the lack of identification and acceptance of limitations at the stage of the trial.
* Lean Manufacturing
As a process, lean manufacturing refers to the systematic...