Evaluate the design and operation of Frito-Lay's logistic network.

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XP 75                                                                Operations Management

Frito Lay, Inc: The Backhaul Decision

1. Evaluate the design and operation of Frito-Lay’s logistic network.

Logistics is a supply chain effort involving the planning, implementation and control of the forward and reverse flow, storage and services of goods from origin to destination.

Frito-Lay’s logistics defined its mission as delivering the right product, to the right place at the right time, in the right amount, in a cost effective manner.

The logistics system is complex and consists of six geographic zones. The managers of the zones were responsible for their own logistics and there was very little interaction between the zones. They primarily utilized their own private fleet of trucks and supplemented it with third party carriers to transport its less service sensitive shipments such as inter-plant shipments. They had a very high on-time delivery rate of 99.1%.

 

The private fleet coupled with the CADEC system allows fleet drivers to maximize productivity and provide excellent customer service. The CADEC system is designed to support regulatory reporting.  It routinely tracks trip events from the perspective of the driver and the time between significant points of travel.  It has good reports and provides reliable and consistent data with flexibility afforded through a combined automatic data capture and driver keying.  The fleet drivers act as customer reps and are the eyes and ears of the organization.

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Frito-Lay appears to have a strong distribution network. It is one of the company’s pillars for success. The company’s private fleet is an integral part of the network because it guarantees an uninterrupted supply chain. Because the product production cycle is short and the majority of the items are highly perishable, the logistics network and, in particular, its private fleet allows Frito-Lay to guarantee an uninterrupted supply chain. The objectives of the logistics are tied to the goals of Frito-Lay’s corporate headquarters.

The private fleet also may allow Frito-Lay to provide back haul service and act as a ...

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