PepsiCo IT redefines direct-to-store business model success

For leading snack manufacturer Frito-Lay, direct-to-store delivery is essential business. The PepsiCo Foods North America (PFNA) subsidiary generates more than 95% of its annual revenue of $19.6 billion through this model, which enhances efficiency and slashes labor costs by reducing the number of touchpoints.

But with 25,000 frontline employees performing 500,000 store visits a week, those efficiencies can be achieved only if information technology in the field is robust.

Whether they are placing orders, making deliveries, or creating invoices, frontline employees need a dependable, feature-rich edge device that they can take into stores and reliably connect with key enterprise systems. So, when old bulky devices that led to maintenance, connectivity, and user experience issues were holding PFNA back, Shyam Venkat, sector CIO, and his team revamped PFNA’s direct-to-store approach with an edge strategy centered around the iPhone, mobile development, and the cloud.

“Until recently PFNA frontlines were using HH4 Intermec Windows-based devices that were heavy and bulky with limited memory and limited SKU processing capability. This led to frequent crashes that required rebooting, which took 20 to 30 minutes each time and caused productivity loss of multiple hours a day per employee,” Venkat says.

And when telecom providers announced they would end support for 3G-based devices in early 2022, PFNA soon found its direct-to-store business in the balance, as Intermec devices cannot be upgraded beyond 3G. “These devices needed to be replaced to be able to continue running the business,” Venkat says.

Moreover, the existing on-prem solution supporting PFNA’s frontline employees was built in the 1990s, making it hard and costly to maintain. “Some of the technologies used for this solution are not officially supported by vendors,” says Venkat, adding that the devices’ capacity and stability issues were also holding back PepsiCo’s ability to innovate.

“The business team wanted to introduce new concepts and try out new business models and this device became a bottleneck for all those ideas,” he says.

Accelerating business with cutting-edge IT

Firmly believing that “successful delivery business model needs a modern toolset in able hands to conduct productive business,” Venkat decided to replace the old bulky devices used by frontline users with a modern iPhone app that elevated user experience and significantly improved productivity and sales.

Christened SalesHub+, the application was custom built with state-of-the-art software, hardware, and connectivity enablement to facilitate order, delivery, and inventory management, as well as timecard, tasks, in-store activities, and passive tracking, all in one place.

“SalesHub+ is an iPhone app with modern architecture like MVVM [Model-View-ViewModel, which enables separation of the business logic of an application from the user interface], reactive pipelines, and other flexible patterns,” Venkat says. “Using an opportunistic sync engine, it has two-way synchronization with the backend using NoSQL database and can also work in complete offline mode for days without any connectivity.”

The app works with complex, date-effective master data while maintaining cash register accuracy and allows connectivity to external hardware peripherals such as Bluetooth printers, DEX cables, and scanners, which are used extensively in the field.

“SalesHub+ acts as a hub and seamlessly connects to other mobile apps such as Salesforce, SAP, Geotab, and other internal and external applications,” Venkat says. “A cloud-native backend with more than 100 interfaces was developed to support the data needs of the app. The backend can process 750,00 complex transactions a day and integrates with more than 20 other PepsiCo systems. As a tier 1 application, this team developed real-time monitoring and alerting systems which identifies all issues in the ecosystem and takes proactive actions before there is disruption in the field.”

One solution, multiple innovations 

SalesHub+ — which earned PepsiCo a 2023 CIO 100 Award for IT innovation and leadership — is a centralized solution born of a range of innovations, says Venkat.

“One of the key requirements for this project was for the app to work offline. We had to bring all the data required for the user to perform all the activities to the device. Data synchronization, therefore, was a key element to this,” he says.

PFNA used Couchbase’s sync gateway to achieve this. “It uses web sockets to sync in real-time when a connection is available and can store all the documents when there is no connection,” Venkat says, adding that, although SalesHub+ stores a vast amount of data on the server, each field device only needs the data related to the specific group of stores that comprise the individual route.

“When data comes to the server from backend systems, we designed patterns to assign the correct channel for each document type so that it is synced to all devices that need this data,” Venkat says. “A lot of design and development went into the channel assignment, and this is one of the key innovations to send only the required data to a specific user.”

As part of this project, Venkat and his team built a mobile banking feature to enable employees to take checks or money orders from customers and deposit them using their iPhone. “We tried to use a leading check capture solution but due to some legal issues of that company, we could not acquire the licenses. We developed our own check capture feature with blur detection, outline cropping, and many other features to implement the check deposit successfully,” Venkat says.

To ensure tier 1 uptime, the SalesHub+ project team developed real-time monitoring and alerting systems. As part of that effort, the team also employed AI/ML models to detect errors and patterns from log files. “These levels of monitoring systems were not built for any application in PepsiCo before,” he says.

PepsiCo’s shift to iPhones also helped with connecting frontline employees to the peripherals, such as printers, scanners, and DEX cables, that they need to perform their daily activities.

“We chose a Bluetooth printer, BLE DEX cable, and a scanner that was attached to the phone. We had to create full-on integrations with all these peripherals and they seem to be time savers for the users. We also worked with a vendor to use an iPhone camera for scanning and had to do a lot of innovation to make it work for our use-cases. This worked so well that we did not buy external scanners for more than 50% of users and rolled our camera scanning to them,” says Venkat.

Security was key to this app and PepsiCo “brought in Okta as our authentication solution and used it to authenticate the user at all layers. Moving all the systems in our ecosystem to Okta was a major accomplishment. This helped in single sign-on for going between apps as well as calling APIs with other systems,” the CIO says.

Delivering business benefits on the back of innovation

The state-of-the-art SalesHub+ helps PFNA’s 25,000-plus frontline users operate more than 18,000 routes in North America, and it has delivered to PepsiCo’s bottom line as well, largely in time savings that free up employees to drive more sales.

“This app saves the retail sales representative at least 20 minutes with the speed of the printer,” Venkat says, adding that it also reduces sync times dramatically. A full data sync used to take 20 to 30 minutes on an old device. It takes less than a minute with SalesHub+, which Venkat says is a huge time saver for the retail sales representative who can do more important work during this or sign off early instead of waiting to sync.

The project has also digitized Department of Transportation compliance paperwork, driving additional time savings for employees “along with millions of dollars in paper savings,” Venkat says. The solution’s mobile banking feature also saves PepsiCo about $5 million in mailing fees and by reducing the float time of cash significantly, he adds.

Visualizations of each store’s product displays, called planograms, are also helping facilitate sales, Venkat says. “The users now have visibility to the planograms of stores and can see the images of the products that they want to order. Using these two features, orders become a lot more accurate and increase in sales. A conservative estimate for adhering to the planogram would increase about 1% of the sales,” he says.