Frito-Lay, the massive Dallas-based subsidiary of PepsiCo, has 38 plants and 48,000 employees in North America. Seven of Frito-Lay’s 41 brands exceed $1 billion in sales. The production process at Frito-Lay is designed for large volumes and small variety, using expensive special-purpose equipment, and with swift movement of material through the facility. Product-focused facilities, such as Frito-Lay’s, typically have high capital costs, tight schedules, and rapid processing. Frito- Lay’s facilities are located regionally to aid in the rapid delivery of products because freshness is a critical issue. Sanitary issues and necessarily fast processing of products put a premium on an efficient layout. Production lines are designed for balanced throughput and high utilization. Cross-trained workers, who handle a variety of production lines, have promotion paths identified for their particular skill set.
The supply chain is integral to success in the food industry; vendors must be chosen with great care. Moreover, the finished food product is highly dependent on perishable raw materials. Consequently, the supply chain brings raw material (potatoes, corn, etc.) to the plant securely and rapidly to meet tight production schedules. For instance, from the time that potatoes are picked in St. Augustine, Florida, until they are unloaded at the Orlando plant, processed, packaged, and shipped from the plant is under 12 hours. The requirement for fresh product requires on-time, just-in-time deliveries combined with both low raw material and finished goods inventories. The continuous-flow nature of the specialized equipment in the production process permits little work-in-process inventory. The plants usually run 24/7.This means that there are four shifts of employees each week.
a. Develop an ITO and SIPOC model based on information in the scenario.
b. Apply four V’s of operation on Frito-Lay. Mention each V as high, moderate or low with one liner reason.
c. Suggest how we can determine the productivity in this case. No calculation is required, just show possible data.
d. Make a comparison how operations of Frito lay is different from a service restaurant (you can assume a restaurant of your choice).
e. Given a bakery located opposite to your proposed service restaurant makes 1,500 loaves per month with a labor productivity of 2.344 loaves per labor-hour. Calculate number of workers working there? (Hint: Each worker works 160 hours per month.)
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