If John Phillips had to choose one acronym to sum up the past three years, it would be VUCA. As senior vice president of Customer Supply Chain and Go-to-Market for PepsiCo Inc., Phillips has been seeing the combination of “volatility, uncertainty, complexity, and ambiguity” every day in his operations.
“We’ve used the term VUCA for decades, but I can honestly say, that this has been the first time I really understood what it meant,” said Phillips during his keynote address at the Council of Supply Chain Management Professionals’ 2023 EDGE Conference.
Phillips highlighted four structural changes that are having a major transformative effect on Pepsi’s supply chain operations:
- Omnichannel retailing: While online sales are no longer increasing at a rate of 60%, growth continues to be steady and consistent. With e-commerce sales for food and beverages currently at $5.3 billion, it is clear that online retailing is a meaningful and scaled business that requires fulfillment strategies that are scalable, sustainable, and economically feasible.
- Smart packaging: The new GS1 Digital Link QR Code is set to greatly enhance consumer engagement with products by providing greater nutritional labeling as well as origin information and any pertinent regulatory disclosures and certifications. It will also be an effective way to issue recall notices and provide detailed information about how and where the product and packaging can be recycled.
- Work-life balance: Companies must embrace the fact that most employees are uninterested in returning to a fully in-office work environment. Instead, they must pursue a hybrid option that is purposeful about in-office experiences. Managers need to look for creative ways to foster collaboration, enable mentoring, and build a strong team culture when more employees are working from home. Additionally, companies must offer more flexible schedules to frontline employees and borrow best practices from the gig economy.
- Leverage automation: One way to help improve supply chain resiliency is to take advantage of the increasingly wide range of automation solutions available. Phillips reviewed some of the automation that Pepsi and its partners are using including automated guided vehicles (AGVs), microfulfillment, automated truck loading, automated case picking and pallet building, and automated order pickup kiosks.
