Sold and delivered goods remain a gift until they are eventually paid for. There are many ways that invoices are provided to over 36,000 customers in the U.S. It usually depends on how the product was delivered and/or how the customer would like to receive their invoices. Some invoices are provided electronically, while some customers receive paper invoices. Some customers have an open process while others have a balance forward process. Some customers don’t receive any invoice at all. Invoices are issued with each product delivery and daily. There were over 24 million invoices issued in the year 2013. Large customers usually pay daily or weekly, while smaller customers pay similar to how they pay their other vendors and operating costs like water and electric. Negotiating timely payments is important to PepsiCo. There are two different systems for billing, one for Warehouse and one for DSD. Each billing uses the system that manages the receivables. The billing system for the Warehouse is in SAP and the billing system for direct store delivery (DSD) is HHC. The key difference is that the Warehouse will be in pallet quantities and the DSD will be in “each” units. The invoice total for Warehouse Wal-Mart, for example, could be $25,000 - $50,000 and the DSD would be $2,000-$5,000. Weekly warehouse invoices might total 200 per week versus 36,000 DSD invoices. Ultimately, the warehouse has low invoices but high dollar amounts, and DSD has high volume of invoices and low dollar amounts.
Warehouse Billing
When the warehouse fulfills an order, an invoice is either provided electronically, via paper or sent by a third party AP consolidator. AP consolidators are manufacturers and/or vendors who send invoices in a defined format to a third p...
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...t to automate enforcement is made. To help ensure receivables are paid timely, the accuracy of pricing and billing is critical to collections. Also, managing outliers default in payment is part of the total relationship PepsiCo has with its customers. This could be done via trade spending which is getting special placement and/or pricing for PepsiCo’s goods while giving the retailers a way to monetize prime store real estate. This helps the retailer increase sales growth. Another way to manage the outliers is with the terms for payment. Most industries have standard terms, Warehouse versus DSD. The terms could be reduced from net 30 to net 25. PepsiCo’s write-offs in 2013 were less than $2 million (Wyatt, 2014).
PepsiCo conducts business in the spirit and compliance of the Robinson-Patman Act. PepsiCo avoids preferential treatment of prices or terms to any customer.
Costco Wholesale Corporation is an international chain of membership warehouses operating on the concept that offering members lower prices will produce high sales volume and rapid inventory turnover (“Annual Report” 4). While Costco warehouses are designed to help reduce costs for small-to-mid-sized companies, memberships are also available for individuals (“Company Profile”). The two memberships offered by Costco include Business and Gold Sta...
Senior Management of PepsiCo is evaluating the potential acquisition of two companies – Carts of Colorado and California Pizza Kitchen – in order to expand the company’s restaurant business. If indeed PepsiCo decides to pursue the acquisition of one or both, they must decide how to align each of these business units in its historically decentralized management approach and how to forge relationships between the acquired business units and existing business units. In their evaluation, Senior Management is faced with the question of whether the necessary capital investment in order to purchase one or both of the businesses can be profitable for each of the acquired business units, but must also take into consideration that the additional business units will not hinder the profitability of the existing business units.
In order for the SAP system to be used effectively at Novartis, they must first re-design the invoice process to better integrate with the software. Currently, the process is inefficient and is thus resulting in a backlog of overdue bills. By focusing on business processes first, Novartis can eliminate this concern, ensuring the system automatically makes payments before they are due.
Handy Andy, Inc., a maker of trash compactors, had a problem with how the distribution of their products was being done by distributors and retailers alike. The company made two models of trash compactors the standard and the deluxe, the latter having more capacity thus a higher price. The distribution of the trash compactor to the end user worked like this, a customer makes an order for a trash compactor through a licensed retailer, once the order is made the retailer buys from the distributor to fulfil that order and then delivers it to the customer. The initial agreement between Handy Andy Inc. and the distributors was based on delivering and installing all units in a period of 5 days after an order was made by a retailer, as compensation
Founded in 1907 as a messenger company, United Parcel Service has grown into a world renowned provider of specialized transportation and logistics services. This multi-billion corporation enables and manages the flow of goods, information, and funds to over 200 countries and territories around the globe (UPS.com, 2013). Air, freight, oceanic is just a few of the modes that UPS uses to move the flow of goods around the globe. The company structure of UPS entails operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. It’s just about an everyday occurrence to see an brown UPS truck on the road as we go about our everyday lives, the U.S. Domestic Package operations are comprised of delivery of documents, packages, and letters around the United States. The International Package operation delivers specifically outside the United States. Providing deliveries to the world’s major business hubs up to three times a day, UPS can deliver packages to at the best time possible for their customers. UPS has teamed up with the U.S. Commercial Service, an agency of the U.S. Department of Commerce, to help customers get started exporting or increase their sales to new global markets (UPS.com, 2013). Partnering within a supply chain can prove to be very important in the success of the overall supply chain. Communication within a supply chain that flows freely between partners reduces in-efficiencies such as excess inventory (bullwhip effect), and lost profits. The Supply Chain & Freight operation within UPS entails forwarding and contract logistics operations and UPS Freight. As a freight forwarder they organize shipments from various sources to their final p...
Quickly becoming apparent after only a few rounds of play was in the absence of coordinating direction the individual supply chain links immediately focused upon acting in their own best interests much more so than the organization as a whole. Whether the end use customer was satisfied became secondary to avoiding stock outages for the next link in the chain, or their specific “upstream customer”. The real world application of this example is that focus on the end use customer must be consistent and maintained throughout the process up to and including delivery. Undoubtedly internal customers, such as retailers to wholesalers and distributors to production, must be serviced along the way for the transaction to ultimately occur. However, unless an end use customer is involved no profit can be realized by anyone.
Coca Cola faces many costs when producing their products. These cost are usually categorized into variable costs and fixed costs. Variable costs are costs that vary depending on production output. Some examples of variable costs that Coca Cola incurs include labor, raw materials, packaging, and transportation and deliver cost. Raw materials are a major variable cost for Coca Cola. When production increases more materials are need to product more product therefore the cost for raw materials increases. The main raw material in all Coca Cola products is sugar which includes high fructose corn syrup, sucrose, and sugarcane. The availability of these natural resources often depend on weather conditions making for fluctuations
Ferdows, K., Lewis, M., & Machuca, J. A.D., 2003. Zara. Supply Chain Forum: International Journal, 4(2), 62-66.
The transnational corporation Nestle Company founded in 1886 based in Vevey, Switzerland, sells its products in 189 countries and has manufacturing plants in 89 countries around the world, boasting an unmatched geographic presence. The company started off as an alternative to breastmilk and initially looked into other countries for an increase in global opportunities. It founded its first out of country offices in London in 1868, and due to the small size and inability of Switzerland to compensate growth manufacturing plants were built in both Britain and the United states in the late nineteenth century. A large portion of Nestlé’s globalization came in the 1900s which was when it first moved into the chocolate business after
As we all should know, PepsiCo is one of the world’s leader in convenient food and beverages. PepsiCo shares are traded worldwide and particularly in NYSE (United States). PepsiCo is in the same line with Coca cola and Cadbury Schweppes as the dominating beverage companies. PepsiCo has successfully built a great brand name rivaling with coca cola, probably because PepsiCo unlike coca cola has its own bottling companies. With a competitive strategy based on differentiation rather than cost leadership like its fellow competitors PepsiCo invests highly in new packaging, flavors, formulas to outsmart their competition. Founded in 1919, producing a variety of sweet and grain-based snacks, carbonated and non-carbonated
During the 1990s, PepsiCo launched new products and engineered a global re-branding campaign in an effort to grow sales volume; reinvigorate their stagnant brand; and to close the increasingly large sales and market share gap between itself and its primary competitor, Coca-Cola. In 1993, Pepsi jump-started its marketing efforts by adding two brands to its portfolio: Crystal Pepsi and Pepsi Max. Crystal Pepsi, which was initially offered in the United States, failed to earn the company more than 2 percent volume share. Pepsi Max, which was launched in the United Kingdom, proved more successful, but because one of its primary ingredients was an artificial sweetener not yet approved by the Food and Drug Administration, it wasn't brought to market in the United States.
The social responsibility activities of PepsiCo emphasizes on sustainable agriculture, water use efficiency, alternative sources of energy, packaging, wasting, and recycling. The company is also promoting a healthy lifestyle with product like whole grain snack and vitamin beverage. PepsiCo makes sustainability an innate part of their company culture to improve their business strategy and gain competitive advantage. According to Triple Pundit website, PepsiCo reached two years early its 2015 goal of delivering potable water. The sustainability report shows PepsiCo’s effort to nourish customers with healthy products. By going green, companies like PepsiCo have been able to adapt to the expectation of the toda...
Transactions in business to business are usually in huge quantities and involve huge cash expenditure. Businesses usually buy in large quantities to sell to many customers. Businesses also buy raw materials in large quantities to finish the raw materials into final products and sell them in large quantities. On the other hand, business to customer involves transactions related to the sale of one product and this involves less capital expenditure (Barschel, 2007). Most of the customers do not buy in large quantities. No customer will buy two vehicles since this would be expensive. Even though business to business transaction may be for final consumption, the quantity dealt with is usually large because the number of users in the organization is usually high.
PepsiCo's mission listed on their website said as follows: "Our mission is to be the world's premier consumer products company focused on convient foods and beverages. We seek to produce finanical rewards to investors, business partners, and communities in which we operate. And in everything we do, we strive for honesty, fairness, and intergrity." Their mission is done through programs with environmental care, activities that aid the society, and a commitment to build shareholder value. PepsiCo puts significant emphasis on shareholders throughout all aspects of the company.
Ben Cohen and Jerry Greenfield founded Ben & Jerry's Homemade Ice Cream in 1978. Over the years, Ben & Jerry's evolved into a socially-oriented, independent-minded industry leader in the super-premium ice cream market. The company has had a history of donating 7.5% of its pre-tax earnings to societal and community causes. Ben and Jerry further extended their generosity by offering 75,000 shares at $10.50 per share exclusively to Vermont residents, so that they may help those who first supported the company; Ben and Jerry's wanted residents to profit from their venture as well. In addition, steady growth and a widely recognized brand name helped Ben and Jerry's obtain 45 percent of the premium ice-cream market, yet the company stock price remained stagnant at $21 a share for several years.