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Bottling Success

Pepsi-Cola & National Brands Ltd. Transforms Operational Performance With Support From JDA

Pepsi-Cola & National Brands Ltd. is an independent retail distributor and bottler of Pepsi-Cola and Dr Pepper Snapple Group brands and many other nationally distributed waters and teas, including Canada Dry, Schweppes, 7UP, Snapple, Mott's, Lipton and private-label brands. Based in New Jersey, Pepsi-Cola & National Brands Ltd. distributes throughout the northeastern United States and manages a breadth and volume of offerings wider than the industry average.

This immense number of stock-keeping units (SKUs) in conjunction with rising wages and concerns around productivity, inventory visibility, breakage and stock rotation led Pepsi-Cola & National Brands Ltd. to evaluate its systems and seek new technology. The company decided to invest in a warehouse management system (WMS) and workforce management (WFM) technology to help reduce costs, improve processes and enhance its relationship with union employees.

After a diligent market evaluation process, Pepsi-Cola & National Brands Ltd. selected JDA Warehouse Management and JDA Warehouse Labor Management solutions from RedPrairie, now part of JDA Software. “We looked at all of the major players in the WMS/WFM marketplace and asked PepsiCo, who is our parent company, what systems they use, and they were using JDA software. We visited PepsiCo's Tropicana plant and got a very good endorsement of the JDA product,” explained George Heinold, senior vice president of operations, Pepsi-Cola & National Brands Ltd. “We needed a solution provider with a solid WMS as well as WFM offering, and in the end, we selected JDA because it had everything we thought we needed to be successful in meeting our objectives.”

Pepsi-Cola & National Brands Ltd. at a Glance

Pepsi-Cola & National Brands Ltd. is an independent retail distributor and bottler of Pepsi-Cola and Dr Pepper Snapple Group brands, as well as many other nationally distributed waters and teas. Headquartered in Pennsauken, New Jersey, the company distributes throughout the northeastern United States.

Objective

Reduce costs, improve visibility, as well as enhance processes to transform operational warehouse and labor performance.

Solutions

Services

Real Results

  • Achieved 100 percent inventory visibility
  • Reduced warehouse labor costs by 15 percent
  • Decreased shrinkage and breakage by 15-20 percent
  • Improved driver turnaround and load accuracy by replacing manual checkout process with express checkout for conventional and bulk deliveries

Reconstructing Labor

Before Pepsi-Cola & National Brands Ltd. implemented JDA's workforce management solution, the systems it used to track picking and loading standards were paper-based and required manual interaction to calculate daily results. The consequences of considering case standards that were not dynamic and task-based created results that did not always reflect a fair day's work for a day's pay. In addition to list pick, fullpallet case pick was also lumped into the daily case pick results.

Once the JDA solution was implemented, a database was created by each picker with a time-stamp using voice picking for every transaction within the picking task. This added total accountability for individual results based on the assigned task using predetermined engineered standards, which allocated more time for difficult tasks and less time for easy tasks. The creation of a parameter to hold back full-pallet picking and fluid-load these pallets at the time of loading reduced double-handling, as well as eliminated the opportunity to inflate the prior list-picking results.

According to Heinold, gaining the ability to maintain performance records for each individual employee was critical in helping the company streamline and improve labor results. Overall, the company has achieved substantial cost savings in this area. “Since partnering with JDA, we have reduced our warehouse wage expenses, excluding fringe benefits, by 15 percent in four years — despite contractual union wage increases of 8 percent. To put it another way, our current actual wages are 85 percent of what they were four years prior. Total warehouse headcount, including management, non-union and union, was 148 FTE [full-time equivalents] four years ago and is now at 112 FTE, which represents a 24 percent decrease.”

Enhancing Warehouse Operational and Process Performance

Since going live with JDA's warehouse management system, Pepsi-Cola & National Brands Ltd. has been able to reduce its shrinkage and breakage by 15 to 20 percent. The ability to first create various breakage write-off codes and then track and measure those codes through the JDA solution has resulted in a new focus on accountability.

Additionally, with the implementation of practices such as FEFO (first expired, first out), Pepsi-Cola & National Brands Ltd. can now track the date of manufacture and calculate shelf life, which has resulted in a reduction of out-of-date product that previously had to be destroyed.

“Converting our system to the JDA WMS gave us 100 percent visibility into inventory, helping us to decrease out-of-date product, ensure that we knew what we had, allocate products faster and streamline the process,” noted Heinold.

The combination of complete inventory, along with voice picking, has enabled the company to eliminate the manual checkout process and move to express checkout for its conventional and bulk deliveries, which total between 85 to 100 routes per day. This process has improved driver turnaround, as well as out-load accuracy.

Positioned for Future Success

Pepsi quoteIn addition to addressing its specific challenges, Pepsi-Cola & National Brands Ltd. has also gained a competitive edge with its new capabilities. “Before we implemented the JDA solutions, SKU increases had been an ongoing issue in our end of the industry, so we wanted to be prepared to handle all of that — in addition to working smarter, not harder,” said Heinold. “Not many of the major soft-drink companies have embraced WMS or WFM at this time, so in my view we've gained a competitive advantage in the marketplace by implementing the JDA solutions.”

The enhanced warehouse management efficiencies drive improved customer service with the ability to allocate products more effectively while maintaining appropriate safety stock levels. The company's employees are more accountable and productive, and they have embraced the JDA solutions as part of their daily routines. “If you were to ask any of the management staff who work in this particular facility if they would go back to their old system given the choice, they would tell you no. I think that's a great endorsement of the JDA solutions,” said Heinold.

Now well-positioned for the future, Pepsi-Cola & National Brands Ltd. continues to hone efficiencies and deliver results. Heinold adds, “We are very encouraged about what we've seen so far and what we've been able to accomplish. We are definitely looking forward to the future.”

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