Introduction:
A visit to Pepsi, one of the biggest soft-drink giants, was organized as part of the schedule of companies to be studied for their Vendor development and Evaluation processes. Out of Pepsi’s many departments we visited the storage and sales department where we interviewed Mr. Dian Pereira, who explained all the nitty-gritty’s of the vendor development process.
Need for vendors:
The storage and sales department generally appoints vendors to provide for the logistics and transportation facilities. Vendors are primarily appointed for flex printing. Besides this they also appoint vendors for provision of caps, t-shirts, gifts etc. As far as the sales and storage department is concerned no specific rules are followed in the selection of vendors. The vendor selection process is purely need based. As and when the need arises they select vendors for the allotted jobs. Hence there is no specified limit to the number vendors to be appointed.
Vendor selection process:
Vendor selection is a critical and crucial decision that is to be taken by the company. Thus there are many factors to be considered while selecting the vendor. The quality of vendors also reflects the reputation of the company and for this purpose Pepsi follows a very stringent selection and evaluation method.
One of the main criterions while selecting a vendor is Cost. The one who offers the best price is chosen. Some of the other factors are credibility of the vendor in the market and the quality of their products. A consistent and efficient after-sales service is also an important attribute considered for the selection procedure. Once the vendor is selected and the order is placed, the products received are inspected and checked in order to avoid any defective pieces.
Inventory level and lead time:
Generally very few vendors come into the picture when it is the sales and storage department. Thus when circumstances arise where a huge order is to be placed, the job is mostly split up among two or more vendors. This is done in order to ensure that even if one vendor is unable to provide them with the material, they can procure the materials from the other vendors.
Another important aspect to be considered is the level of inventory. It is ensured that the level of inventory is neither too high nor too low. Stock outs generally don’t take place. There is always a 10%-20% lead time provided.
Vendor relationship:
Vendor relationship can be variable or on a long-term basis. As far as Pepsi is concerned they believe that there is a very high risk and cost involved in maintaining a long- term relationship with the vendors. Since vendor development is purely need-based, vendors are appointed on contract basis.
A visit to Pepsi, one of the biggest soft-drink giants, was organized as part of the schedule of companies to be studied for their Vendor development and Evaluation processes. Out of Pepsi’s many departments we visited the storage and sales department where we interviewed Mr. Dian Pereira, who explained all the nitty-gritty’s of the vendor development process.
Need for vendors:
The storage and sales department generally appoints vendors to provide for the logistics and transportation facilities. Vendors are primarily appointed for flex printing. Besides this they also appoint vendors for provision of caps, t-shirts, gifts etc. As far as the sales and storage department is concerned no specific rules are followed in the selection of vendors. The vendor selection process is purely need based. As and when the need arises they select vendors for the allotted jobs. Hence there is no specified limit to the number vendors to be appointed.
Vendor selection process:
Vendor selection is a critical and crucial decision that is to be taken by the company. Thus there are many factors to be considered while selecting the vendor. The quality of vendors also reflects the reputation of the company and for this purpose Pepsi follows a very stringent selection and evaluation method.
One of the main criterions while selecting a vendor is Cost. The one who offers the best price is chosen. Some of the other factors are credibility of the vendor in the market and the quality of their products. A consistent and efficient after-sales service is also an important attribute considered for the selection procedure. Once the vendor is selected and the order is placed, the products received are inspected and checked in order to avoid any defective pieces.
Inventory level and lead time:
Generally very few vendors come into the picture when it is the sales and storage department. Thus when circumstances arise where a huge order is to be placed, the job is mostly split up among two or more vendors. This is done in order to ensure that even if one vendor is unable to provide them with the material, they can procure the materials from the other vendors.
Another important aspect to be considered is the level of inventory. It is ensured that the level of inventory is neither too high nor too low. Stock outs generally don’t take place. There is always a 10%-20% lead time provided.
Vendor relationship:
Vendor relationship can be variable or on a long-term basis. As far as Pepsi is concerned they believe that there is a very high risk and cost involved in maintaining a long- term relationship with the vendors. Since vendor development is purely need-based, vendors are appointed on contract basis.