Frito Lay Mission Paper

If we were to implement the back hole program, how would you do it, what customers do you need

Marketing would be conducted, and training of staff in the traffic center sales and marketing would have to be done

Apply to each state to ensure they bypass regulations individual to each state

Make sure their trucks were kept clean

The customers they had to choose had to be in similar geographic regions to the customers and the distribution centres so that service would not be tampered

Optimize outbound routes, determine which routes were available for backhaul

Compensation package for backhaul drivers for additional hours and drives

Product mix and distribution

35 clients, they produce a full mix, a core mix and a speciality mix. For the full mix, they have short lead times and high turnover. Goes from plant warehouse, to the distribution centres (169), to vending machine operations to the retail stores to 300,000 customers

For the speciality mix and core mix goes to regional warehouses (2), then to sales storage locations (1631) then to distribution centre and then to retail sales over 300,000 customers

Frito lay mission

Frito lay is a company as product of two mergers. Produce salty snacks and distribute them throughout the country. They like to have total control of their distribution process even if it costs more. Product gets to customer in 9 days, example of a time based competitor. Really fast man. How do they compete? Freshness of product. Quality of product. Mission statement: service to sales. A big factor is 99.5% of their employees are service level, and it’s a huge part of their sales force. In terms of support – kedak, takes note of all truck activity so they have eyes and data on their drivers. VSP, vehicle scheduling system which makes best routes.

What changes were happening in frito lay which caused the backhauling?

Management needs to figure out a way to reduce costs. Noticed that unused trucks could be used for profit. Sku - stock keeping unit.  SKUs were increasing which means that it’s much more complex to manage. Market was flat. In 1980 motor carrier act was passed which allowed hauling goods for other companies – deregulation.

Why get involved in backhauling?

To increase revenue by 7-9 million dollars a year. What are the cons? QC, may lead to contamination. Backhauling would cause problems for manufacturing. Transporting goods such as alcohol could lead to thefts. Cargo spills could lead to image problems for company. Drivers didn’t want more tasks, wanted more compensation. Could detract from service to sales.