Production and Operations Management

FRITO LAY COMPANY:

Frito-Lay, a key business unit within PepsiCo, is a market leader in the snack food industry. FritoLay is a proud member of the PepsiCo family. For more than 75 years, company has enjoyed making the best snacks on earth, starting with simple, farm-grown ingredients. It has also continued to innovate, so that can provide tasty products that are good as well as fun. Company is reducing its environmental footprint by conserving natural resources as well as harnessing renewable energy technology that reduces harmful emissions.

Brands:
Lays Doritos Tostitos Cheetos Sun Chips Cracker Jacks Dips Munchies Spitz Nut Harvest Rold Gold

Suppliers:
In 1983, Frito-Lay formally launched its Supplier Diversity program with the intent of sourcing diverse suppliers who could provide the company with high quality goods and services at competitive prices. Today the program is 20 years strong and during that time the company has spent over $2.1 billion with minority and women-owned entrepreneurs (M/WBEs. Company is utilizing M/WBEs in virtually all areas. Supplier Diversity program has also allowed the company to be proactive in the economic development of communities. Frito-Lays comprehensive strategy for integrating these businesses into the supplier

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development process supports supply chain efficiency and effectiveness, as well as the companys bottom-line.

LAYS CHIPS:
Lay's is the brand name for a number of potato chip varieties as well as the name of the company that founded the chips brand in 1938. Lay's chips are marketed as a division of Frito-Lay, a company owned by PepsiCo Inc. Classic potato chips is the number one seller of Frito lay.

Raw Material:
Potatoes Vegetable oil Salt, spices and other additives Flavors Food color Packing material

Manufacturing Process:
All the production process is done on the machines which are specially designed for the lays production for hygienic product production. It has following steps: 1. Input and cleaning 2. Pealing 3. Inspection 4. Slice/ Cutting 5. Starch Washing 6. Frying 7. De-Oil 8. Inspection 9. Season 10. Packaging

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1. Input and Cleaning:

Potatoes are taken from suppliers and put it in to the cleaning section, machine wash the potatoes using water.

2. Pealing:
After washing the potatoes they are put into other section in which they are gently peeled off so that flavor remains.

3. Inspection and quality check:

Before potatoes go to the cutting section workers check if there are any defects in the material. There are special sorts of potato, which are acceptable for chips-making, such sorts have higher content of starch. They check size of potatoes. Then check their temperature. More warm potatoes are not taken. Then they do water check.

4. Cutting:
Potatoes are thinly sliced after doing inspection of the whole material.

5. Starch Washing:
After cutting, the potatoes move further in next machine for removing starch. Starch washing is performed in this section.

6. Frying:
The slices are fried to a crispy crunch in natural oil. The temperature in the fryer is 350 degrees.

7. De- Oil:
After frying the slices are moved into next machine for removing oil and it is de-oiled in this step.

8. Inspection:
Inspection is performed again for ensuring that the slices are properly de-oiled.

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Scanning:
Then a scanner checks the chips to find that there is no abnormality in color of any chips. If any bad chips are found then they are sent to the rejected ones through a box.

9. Season:
Finally the chips are topped with a sprinkle of salt.

10. Packaging:
Now potatoes are converted into delicious chips and packed for selling.

Distribution Channel:
Producer Distributor Retailer Customer

Application of Operations Management Concept and Trends:

Quality Management: Quality is ensured in each step of production process of lays chips. For ensuring quality material is inspected 2 times during the process so that any kind of defect can be removed. Inventory Management: The company efficiently manages its inventory and ensures that wastage can be minimized during production. As the taste of these potato chips changes in a short time after production, so to ensure that the product reaches in time to customers with its original flavors and taste, management produces a specific capacity at a time and does not over produce keeping in mind the demand of customers. So they keep a reasonable amount of material in production at a time. Environmental Sensitive Product: The company works with 3 purposes that are: Human Sustainability Environment Sustainability Talent Sustainability

The trend of Environment Sustainability is of major concern. Product is harmful and reduces the environmental impact on the community.
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Mass Customization: Customer needs and preferences are given importance as their satisfaction in the main objective of the company. For example Asian countries like more spices in their snacks so according to their demand company adds different flavors in its product line in these countries i.e. Lays Masala, Lays Vinegar.

Achieving Competitive Advantage:

There are three main strategies used by different companies to gain competitive advantage through operations and these are: Competing on Cost Competing on Differentiation Competing on Response

The company is competing in the market on the base of response. It has quick and flexible response and gives preference to customers demand. It produced according to what they want and what are their tastes.

MIS for taking Competitive Advantage:

A well designed information system not only improves the efficiency of transaction data processing, but it also provides all levels of management with greater knowledge that enhances decision making. The company uses Management Information System (MIS) for taking competitive advantage. It uses hand-held computers to track the products sold of shelves and from vending machines. These notebook size computers produce a vast quantity of data that flows into the data center. The use of the standardized reports generated by the Management Reporting System (MRS) has permitted the company to consolidate sales routes. This ability to better control the use of company resources has allowed it with a leaner sales force, to increase sales volume dramatically.MIS has also helped the company to reduce the cost of suppliers.

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