Question
Frito-Lay, the massive Dallas-based subsidiary of PepsiCo, has 38 plants and 48,000 employees in North America. Seven of the Frito-Lay's 41 brands exceed $1 billion
Frito-Lay, the massive Dallas-based subsidiary of PepsiCo, has 38 plants and 48,000 employees in North America. Seven of the Frito-Lay's 41 brands exceed $1 billion in sales: Fritos, Lay's Cheetos, Ruffles, Tostitos, Doritos, and Walker's Potato Chips. Operations is the focus of the firm-from designing products for new markets, to meeting changing customer preferences, adjusting to rising commodity costs, to subtle issues involving flavors and preservatives-OM is under constant cost, time, quality, and market pressure. In the food industry, product development kitchens experiment with new products, submit them to focus groups, and perform test marketing. Once the product specifications have been set, processes capable of meeting those specifications and the necessary quality standards are created. At Frito-Lay, quality begins at the farm, with onsite inspection and with statistical potatoes used in ruffles and the corn used in Fritos. The rate continues throughout the manufacturing process, with visual inspection and statistical process control of product variables such as oil, moisture, seasoning, salt, thickness, and weight. The production process at Frito-Lay is designed for large volumes and small variety, using expensive special-purpose equipment and with a swift movement of material through the facility. Frito-Lays facility is located regionally to aid in the rapid delivery of products because freshness is a critical issue. Cross-trained workers, who handle various production lines, have promotion paths identified for their particular skill set. The company rewards employees with medical, retirement, and educational plans. Its turnover is very low. The requirement for fresh products requires on-time; just-in-time deliveries combined with low raw material, and finished goods inventories. Tight scheduling to ensure the proper mix of fresh finished goods on automated equipment requires reliable systems and effective maintenance. Frito-Lay's workforce is trained to recognize problems early, and professional maintenance personnel is available every shift. Downtime is very costly and can lead to late deliveries, making maintenance a high priority.
Required: From the discussion of Operations Management above, how each of the ten decisions of OM is applied at Frito-Lay?
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