Web Extra: Pepsi’s Next Generation

With soda sales in a slump, Pepsi’s largest bottler, Pepsi Bottling Group Inc., is turning to technology to help its salespeople push new products and get a better handle on customers. The goal? Sell more soda, of course. PBG’s vice president for supply chain logistics and technologies Paul Hamilton sat down recently with CIO Insight Reporter Debra D’Agostino to explain how.

CIO Insight: When was the NextGen project conceived?

Hamilton: It got its start with the hardware—we use the Symbol PDT 8000 device—about 18 months ago. Symbol Technologies Inc. developed an industry-specific piece of hardware for us, and since then has gone on to sell it to the whole industry. We developed it from November 2001 until about April 2002, and deployed it from Labor Day until Thanksgiving of last year. About 12,000 folks in the U.S. have that piece of hardware, so that’s the platform.

And are those 12,000 all delivery agents?

It’s a combination of sales folks and delivery folks. About half are delivery and half are selling.

So you have specific sales agents in addition to your drivers?

In general, our work force sells today and someone else delivers your order tomorrow, and that’s the easiest way to put it. So we have a dedicated sales force, and a dedicated delivery force.

So your delivery people aren’t actually doing the selling?

Right, in most cases. We have what we call off-truck, conventional sales force that do sell right off their truck, but we are shifting away from that into a total pre-selling model.

Now before this, the delivery people pretty much handled the entire relationship with the retailers, is that right?

For large formats, they haven’t for years. But at the same time, you had a salesperson go in and take an order and a delivery person go in the next day, so those two people really own the store. But the sales individual owns what got sold inside. And so historically the delivery folks did not own the store for large formats. I should say recently, that is within the last five years, they have not.

Why is that better than having the delivery guys do the selling?

For a couple of reasons. One is that our SKU portfolio is growing more complex all the time. So rather than be constrained by whatever you can fit on your truck at one time, when you separate the two, the salesperson is [free to] sell whatever, and then we just dispatch the number of trucks and deliver whatever products we have sold.

I think I read somewhere that your SKUs have gone from something in the range of 50 to 300 in a matter of just a few years, is that right?

Yes, that’s about right. But essentially that’s the work we are trying to do, to give that salesperson the ability to sell the complete portfolio and drive the business and separate that from the need to optimize the delivery side of the business. And when I say delivery, it’s really the service side, because the delivery person goes in and sort of owns the backroom and getting that product and merchandising, etc.

So when you started this pilot in Dallas, how did it work?

We started in a location, first a small number of routes, then a whole location, then a market unit, then a business unit, and then we’re done with that and we do a rollout for the other business units.

Why did you choose Dallas?

It’s a good representative market for us. We have a lower share, so it stresses the application’s ability. Also, Frito-Lay is there, and we do a lot of partnering with them on things so they are able to see what we’re doing and vice versa with us.

Frito-Lay has done some work on sales automation as well. Have you had conversations with them?

We meet every quarter to share what we’re doing. In fact, in many of the larger initiatives, we have assigned who takes the lead. So Frito-Lay is taking the lead on item price synchronization and store managed inventory, and we are taking the lead on this particular project, so we don’t duplicate our efforts. But in general we are independent. We have the same goals, but we are in different categories.

So they work on one project, you work on another, and in the end you share results so you can take the best practices from each and you both benefit?

Yes. It isn’t that we divide all projects that way, but in some things that are global and dealing with item pricing synchronization kinds of work. We’ll decide, we’ll pick a point company for projects, and it just depends on the project.

So it’s basically shared knowledge and best practices throughout the lines of business at PepsiCo?

Yes, though with us it’s mostly with Frito-Lay, because they are Direct Store Delivery, as we are.

Just getting back to Dallas, when you did the pilot, was it creating a dedicated sales force or turning the drivers into salespeople?

Just the selling application.

So they already had the PDAs?

Yes, the handhelds were rolled out last year.

So the whole country got the PDAs, and then the test program for Shelflink’s application happened in Dallas?

Yes.

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