ICT Application in Operation Optimization

Information is key driver to the organization. It serves as the glue that allows all the parties of the
organization to work together. Information is crucial to organization performance because it
provides the foundation on which s processes execute transactions and managers make decisions.
(Chopra, 2007) To make good decision information must be accurate, accessible and must be of
right kind. Without information, a manager cannot know what customers want, how much
inventory is in stock, and when more product should be produced or shipped. In short, without
information, a manager can only make decisions blindly. Therefore, information makes the
supply chain visible to a manager. With this visibility, a manager can make decisions to improve
the organization's performance. Given the role of information in an organization’s success,
managers must understand how information is gathered and analyzed. This is where Information
Technology (IT) comes into play. Information Technology consists of the hardware, software,
and people that gather, analyze, and execute upon information. IT serves as the eyes and ears
(and sometimes a portion of the brain) of management, capturing and analyzing the information
necessary to make a good decision. (Chopra, 2007)

An information system (IS) is a formal, sociotechnical, organizational system designed to

collect, process, store, and distribute information. There are four components: task, people,
structure (or roles), and technology in information systems. “Information systems can be defined
as an integration of components for collection, storage and processing of data of which the data
is used to provide information, contribute to knowledge as well as digital products.” So, firm
invest in information system in order to achieve organizational excellence, develop new product
and service, attain customer intimacy & service, improve decision making, promote competitive
advantage and, ensure survival.
ERP in PepsiCo
ERP stands for enterprise resource planning, Simply to define ERP all the core processes needed
to run a company: finance, manufacturing, HR, supply chain, services, procurement, and others
integrate into a single system.(SAP Insight, n.d.)

PepsiCo Inc. has selected SAP’s full MySAP Business Suite to streamline its distribution &
delivery processes, improve planning & forecasting & give better visibility to its global supply.
PepsiCo, which manufactures, distributes & markets Frito-Lays snacks, Pepsi-Cola beverages,
Gatorade sports drinks, Tropicana juices & Quaker foods, is aiming to better link its supply chain
& inventory data with its customer data.

The system manages relationships with suppliers, purchasing firms, distributors & logistics’
firms call supply chain management (SCM) system. It manages shared information about orders,
production, inventory level etc. The goal is to move correct amount of product from the company
to point of consumption as quickly as possible & at the lowest cost. PepsiCo makes sure that all
of its suppliers (water, corn syrup, food colorings, carbonation, plastics etc.) Come into an
appropriate plant so as to keep customers satisfied with no shortages. Too much of additional
inventory is avoided which hangs up resources & cash flows. PepsiCo uses My SAP business
suite applications which helps in communicating with its suppliers & generate forecast of
demand.

SAP helps in fine-tuning their supply chains from a sequential supply chains into adaptive supply
chain networks. “Adaptive” refers to the ability to rapidly sense & respond to changing internal
& external conditions “Network” refers to the ability to have real-time collaboration &
coordination across all partners in the supply chain .It is a community of customer-focused
companies that share knowledge & resources to intelligently adjust to changing market
conditions.

MySAP ERP is a software package which combines world’s best & most complete ERP software
functionality & addresses the core business software requirements of medium & large
organizations.SAP NetWeaver is a full suite of enabling software technologies including functionality
for portal infrastructure, business data warehousing, exchange integration, web application server,
mobile technologies etc.<br />From a modern ERP environment, it is highly recommended the
customers convert the existing license to MySAP ERP to benefit from additional capabilities. MySAP
ERP is designed to offer real-time integration with other SAP products.

 Customer Relationship Management (CRM) System

The system helps in managing relationship with customers. Deals with customers effectively &
efficiently to optimize their revenue & increase customer satisfaction. The system captures &
integrates customer data from all over the organization, analyze the data & distribute results to
various systems & customer touch points across the enterprise.

PepsiCo’s CRM application has allowed for conversion of former dissimilar sales systems into
an integrated application solution, which gives a complete view of their entire consumer base.
CRM applications are used in PepsiCo to determine profitable customers, discover potential
sales opportunities, improve customer interaction & relations.

 MIS at PepsiCo
Mis helps PepsiCo's managers to recognize market trends, in respect of price, differentiation of
products & timely information of market trend. Effective marketing planning is assisted in terms
of product planning, pricing, promotion & distribution. It helps in taking quick decisions & also
validating manager’s decisions. It provides reliable & relevant information so that managers can
take effective decisions at right time.

Artificial Intelligence
Artificial Intelligence is the ability of a computer program to learn and think. In computer
science, artificial intelligence (AI), sometimes called machine intelligence, is intelligence
demonstrated by machines, in contrast to the natural intelligence displayed by humans. Leading
AI textbooks define the field as the study of "intelligent agents": any device that perceives its
environment and takes actions that maximize its chance of successfully achieving its goals.
Colloquially, the term "artificial intelligence" is often used to describe machines (or computers)
that mimic "cognitive" functions that humans associate with the human mind, such as "learning"
and "problem solving". Artificial intelligence is big business these days.

23% of businesses have already incorporated AI technology into their processes and/or product
and service offerings, with 54% of executives at those companies stating that the technology has
helped them to improve productivity. Meanwhile, 61% of business executives with an innovation
strategy say they are using AI to identify opportunities in data that would otherwise be missed.
It's predicted that the AI market will grow to a $190 billion industry by 2025, covering
everything from data analysis to customer experience.

As one of the world's biggest food and beverage brands, Pepsi is regularly in the vanguard of

innovation and has been investing heavily in artificial intelligence technology to boost almost
every corner of its business.

The PepsiCo organization sells products in more than 200 countries and brought in $64.7 billion
in annual revenue last year, meaning it constantly has thousands of plates spinning at once.
Thankfully, it has the financial clout and infrastructure to implement the technology it needs to
make those plates twirl a little more smoothly.
One customer-facing application of AI technology can be found making its way around the
University of the Pacific. The so-called "Snack-Bot" is an AI-powered delivery robot from which
students can order a range of healthy snacks — sparkling water, healthy potato chips, etc. They
can have them delivered — with no additional fee — to more than 50 locations around the
campus. The technology in the robot lets it navigate at all times of the day and in all weather
conditions and has a 20-mile range on a single charge.

The Snack Bot was created based on feedback from university students and aims to help them
make healthy snack choices by making the service extra convenient. The response from students
has been great, and Pepsi has three to five of the machines operating at any one time to keep up
with demand.

Another place where Pepsi is innovating using AI technology is in the manufacture of its famous
Frito-Lay's potato chip subsidiary. The brand wanted to develop a method to help it determine
the texture of its chips without handling or destroying them.

To this end, it developed a new laser sensor array that could bounce beams of light off the
finished chips and then use AI technology to process the sound feedback, which would create a
reading of the snack food's texture.
Building on the success of this innovation, PepsiCo began work on a new type of machine
learning application which could determine the size and weight of potatoes. Up until now, the
company had been gauging potato numbers based on a vision system, but the team quickly
realized that machine learning could be applied to make the process more streamlined and
accurate, using visual data captured by cameras to determine a mass flow estimation of the
product moving along the conveyor.

However, the brand wasn't ready to stop there and is working on several different AI applications
for the Frito-Lay's manufacturing process.

"For example, we have a vision system that looks at every potato going through our peeling
process — where we abrasively peel our potatoes," continued Mirza. "I wrote an algorithm that
can tell us what our percent peel is; that is, how peeled a potato is after going through the process
versus how unpeeled it is. With this information, we can optimize our peeling, so we don't over-
abrade the potato and peel away some of its flesh.

We can easily see how PepsiCo has successfully baked AI technology into the DNA of its
brands. With many companies still demonstrating a significant lack of AI maturity, it takes the
biggest brands to lead the way and demonstrate how the technology can be used. We'll have to
wait and see how many others follow Pepsi's lead in the future.

AI

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