Suppliers Selection at Pepsico Europe

Description

In 2018, Pepsico is considering adding a new supplier of CO2 to its manufacturing process in Eastern European plants. The new supplier offers a very competitive price, but other key aspects, such as reliability, service level, etc. should be carefully pondered before making a decision. Also, adding a new supplier implies removing one of the extant ones. Which one should be removed? The proposal made by Migdalski, head of purchasing in Eastern Europa, has to be analyzed before a firm decision is made.

Learning Objective

The goals of the case are as follows: 1. Understand the importance of the purchasing function for manufacturers and retailers alike 2. Learn what key drivers of purchasing decisions are. 3. Present Kraljic's matrix and its implications for management 4. Understand that price is just one driver of supply decision. But there are many more. The case has enough numbers to be addressed in programs such as MBA, EMBA, or MiM. But it can also be tackled at the strategic level, without performing many numbers, what makes the case also suitable for PDG, PDD, PADE, and the like.

Keywords

CO2 PepsiCo Purchasing Soft Drinks supply management