SUBSCRIBE

Breaking News on Industrial Baking & Snacks

Frito-Lay president: 'We’re laser-focused on productivity’

Post a comment

By Kacey Culliney+

04-Sep-2014
Last updated on 04-Sep-2014 at 17:32 GMT

'At Frito-Lay, we believe the productivity opportunity is significant. Our productivity agenda pursues cost reduction and capability building initiatives to deliver results,' says company president
'At Frito-Lay, we believe the productivity opportunity is significant. Our productivity agenda pursues cost reduction and capability building initiatives to deliver results,' says company president

Improved supply chain productivity using automation and better go-to-market delivery systems has driven core operating profit up 6% CAGR, says the president of Frito-Lay North America.

Speaking at the Barclays’ 2014 Back-to-School conference in Boston, Massachusetts yesterday, Tom Greco said a dedicated drive on improvements across the supply chain had improved Frito-Lay's profit.

“We’re laser-focused on productivity which has led to a 6% CAGR [compound annual growth rate] on core operating profit,” he said.

Frito-Lay’s net revenue five-year CAGR was 3.8%.

“At Frito-Lay, we believe the productivity opportunity is significant. Our productivity agenda pursues cost reduction and capability building initiatives to deliver results,” he said.

While the company invested heavily in R&D and new product development, none of that could succeed without “world-class execution and productivity”, he said.

Productivity is a growth enabler

Back in 2012, Frito-Lay rolled out a go-to-market system that it said reconceptualised the traditional plant and warehouse to store model. Its geographic enterprise system (GES) was developed to reduce the amount of manual handling throughout the supply chain and drive productivity.

By the end of 2014, Frito-Lay North America would have six GES sites in operation, Greco said.

 

“GES continues to be a huge unlock for us, enabling more SKU capacity with fewer facilities while lowering inventory levels. The exciting part about GES is that it is both a productivity generator and a growth enabler,” he said.

In 2012, the productivity agenda was increased by 50%, he said, and in 2013 and 2014 it continued to stimulate growth. “We’ve hit our productivity target each other the last three years.”

In addition, the company was leveraging automation, he said, including automating packaging, case picking and forklift transportation.

“Productivity allows us to invest in our growth,” Greco said. 

Green fleets

In 2013, Frito-Lay announced it would shift 20% of its fleet from diesel fuel to compressed natural gas (CNG).

The project, it said, would slash Frito-Lay’s total fuel consumption and greenhouse gas emissions in the US by 50% by 2015, compared to 2007.

All quotes from the Barclays conference have been sourced from Seeking Alpha .

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products

Key Industry Events

 

Access all events listing

Our events, Events from partners...