Pepsi Bottling Group

The Pepsi Bottling Group (PBG) is the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages – which includes some of the world’s most valuable and recognized brands. PBG is a publicly traded company generating nearly $11 billion in annual sales and sells more than one-half of the Pepsi-Cola beverages sold in North America.

The challenge: Improve Out-of-Stocks immediately

PBG recognized that Out-of-Stocks were dampening sales, causing customer friction and ultimately frustrating their end-consumer. Their mission was to fix the problem immediately, which in turn meant changing the business process of writing orders but with the human cost of changing route sales drivers’ behavior. PBG’s desire was to have state-of-the-art computer assisted ordering implemented into their hand held devices within 90 days without any change in routine for their route drivers. Further complicating the business problem is the eclectic nature of the PBG routes – a single route may have a mass merchandiser, a supermarket, a mom & pop store, a chain convenience store and a liquor store. One solution had to drive a nearly perfect order for all of these customer types in a single process.

The solution: Use state-of-the-art demand modeling with best available data

PBG chose Market6 to develop the demand models to create specific demand forecasts for each and every Pepsi SKU in every store that PBG services. These models are then updated daily with sales information and are corrected with inventory updates generated by the Market6 inventory anomaly detection engines to provide a daily order forecast. These forecasts were proven to improve customer service, reduce Out-of-Stocks and increase sales. The solution was integrated into the handhelds in use by the PBG route drivers who had to only respond to a simple inquiry from their handheld to get a computer generated suggested order. The Market6 solution actually required no field training to be put into use.

The result: Better orders improved sales and profitability for the entire demand chain

After a quick test, the Market6 solution was rolled out to the entire North America route system. For each of PBG’s 4,000+ routes, Market6 generates a new order forecasted every day for every item in every store, based on yesterday’s sales and intelligent perpetual inventory control. Paul Hamilton, Vice President of Supply Chain Logistics and Technology for PBG, said this of Market6, “Market6 did an amazing job of keeping the best math we have seen for demand chain order creation behind the scenes in our handheld device. Our route drivers now get computer suggested orders without suffering any downtime in learning a different go to market process. The results have been outstanding and the solution was quickly rolled out to all of North America.” Paul went on to say “Market6 did a great job on an accelerated timeline. I have to say that we are a demanding client, but Market6 did not miss a step.”

To find out how Market6 can help you achieve greater sales from dramatically reduced Out-of-Stocks, contact Bob Wilson at 925-262-8257 or at sales@market6.com.