PepsiCo has reached a significant milestone in its vision of a digitalised future, partnering with Dematic to integrate automation as a central feature of its expanded production and logistics facility in Rojana, Thailand.
Colin Matthews, Supply Chain Senior Director – IndoChina Foods, PepsiCo
The AS/RS has more than doubled our capacity and the automation takes us away from the very manual operation we had before. This allows us to supply goods to customers with greater efficiency, leaving them very satisfied.
PepsiCo is proud to be one of the world’s leading convenient foods and beverages companies. Pepsico’s products are enjoyed more than one billion times a day in more than 200 countries and territories around the world. Pepsico’s portfolio – including Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream – consists of many iconic brands that generate more than US $1 billion each in estimated annual retail sales, helping to deliver more than US $79 billion in net revenue in 2021.
PepsiCo aims to become a stronger, more unified company by transforming its capabilities and costs, and by using new technologies to its advantage. This includes developing and scaling the company’s core capabilities through advanced technology in logistics.
Optimising through expansion
In today’s competitive business landscape, global companies like PepsiCo are constantly seeking ways to optimise their operations for increased productivity, efficiency, and accuracy.
PepsiCo’s Rojana facility in Thailand is a critical regional hub for the company. With a growing demand for its products in Thailand, PepsiCo recognised the necessity to build capacity in both production and logistics.
Colin Matthews, Supply Chain Senior Director – IndoChina Foods, PepsiCo, says, “Rojana is one of our biggest plants with production lines for a number of different products. The products made at Rojana are not only distributed nationally across Thailand, but we also send products internationally to Vietnam and other neighboring countries.”
One of the key strategies employed by PepsiCo to support growth was the expansion of its production and logistics capacity at the Rojana site. This expansion project has been driven by the vision of a digitalised future, where automation plays a pivotal role in addressing challenges and enhancing overall operational performance.
Charan Techapattaraporn, Logistics Manager, PepsiCo, says “Automation is the perfect solution to take on these challenges, whilst also improving our facility operations across the board.”
As part of its expansion and automation goals, PepsiCo turned to its global partner Dematic, a world leader in providing automated solutions for materials handling and logistics.
“I've now worked with Dematic across two business units, firstly here in Indochina and also in Australia and New Zealand,” adds Matthews. “I've seen Dematic really lean into providing a customised response based on the tailored needs of individual problems.”
Dematic took a collaborative approach to the Rojana facility system design, understanding PepsiCo’s key business and operational objectives, and aligning the solution with PepsiCo's forecasted business growth. To address the need for increased capacity, space constraints and other challenges, Dematic worked closely with Pepsico to develop an automation solution for their logistics operations. The solution centred around an Automated Storage and Retrieval System (AS/RS) with a direct link to both the production and order fulfilment areas.
“Dematic has a strong track record of successfully implementing AS/RS solutions across the Asia Pacific region and globally, catering to diverse industries and applications,” says Phamondate Rukdee, Sales Manager, Dematic Thailand. “The AS/RS is at the heart of PepsiCo's strategy to enhance its production and logistics efficiency at the Rojana facility.
“The AS/RS aids in storing products before they are delivered to customers. It provides an extremely space efficient way to store products in between when they are manufactured and when they need to be assembled and dispatched for delivery to customers.”
The AS/RS stores pallets within five aisles of doubledeep high bay racking, with a total capacity in excess of 16,000 pallet locations. A network of pallet conveyors and Rail Guided Vehicles (RGVs) receives pallets automatically at the end of the production lines and transports them for storage, then directs them from storage to dispatch docks or to automatically replenished pick locations for full-case order picking. The system includes Dematic's Warehouse Control System (WCS) software to manage all of the automation, the material flow and inventory and to provide real time tracking and visibility of all transactions.
Dematic's commitment to quality and reliability is exemplified through the deployment of top-of-the-line equipment including Dematic RapidStore Storage and Retrieval Machines (SRMs), Dematic pallet conveyors and RGVs for automated pallet handling. The equipment, controls and software are all designed and engineered in-house by Dematic and serviced and supported 24/7 by the experienced local Dematic team of engineers and technicians.
The Dematic AS/RS not only provides PepsiCo with the capacity to meet their forecast demand but has been designed in a modular way to provide the flexibility for expansion so that the system can be scaled and adapted to their changing needs in the future.
Roll-out, support and training
Dematic was on the ground at the Rojana facility during implementation, testing and go live phases to ensure the success of the project, which was delivered on time for PepsiCo, despite the challenging conditions of a pandemic.
“The system was completed on schedule. We are also well supported by both domestic and international Dematic teams who are ready to quickly aid PepsiCo in terms of both hardware and software,” says Techapattaraporn.
The success of any new automated system is ultimately in the hands of the system operators. That’s why training is essential for providing an understanding of not only the automated equipment, but also the procedures for ensuring its safe and efficient operation. To achieve this, Dematic followed a “train the trainer” approach to helping PepsiCo develop a good working knowledge and understanding of the system so that PepsiCo supervisors and lead operators can train their teams on an ongoing basis.
“Our team really embraced the solution that we've put in at Rojana and they really value the investment that we've given them, as we've trained them to get new skills. That training of new skills has helped us with people retention, which is another benefit,” says Matthews.
The complexity of the automation installed for PepsiCo makes it essential to have service and support in place to optimise system uptime, continuity of throughput, and production efficiency. The benefits of ongoing support include a reduction in downtime due to component failure, lower overall system maintenance costs, optimisation of system lifespan and knowing that Dematic as the system designer and builder are also available to service the system.
“Dematic takes care of PepsiCo’s AS/RS and machinery 24 hours a day, 7 days a week,” says Nipat Kummu, Service Engineer, Dematic Thailand. “We have Dematic staff on-site to make sure any issues are responded to and resolved quickly.”
Key benefits of the solution
The AS/RS provides fully automated high-density, high-throughput storage for pallets. With an AS/RS, stock cannot be lost or forgotten, as the system provides complete and real-time visibility of overall inventory, delivering the highest level of accuracy. With minimum manual handling needed, product damage and the associated cost and waste are also significantly reduced.
“Previously we had a very manual solution that took a lot of time for people to go around and understand exactly what products we had in the warehouse. In contrast, the Dematic system is very intuitive. It enables our team to look across the whole of the AS/RS and understand exactly where we have the stock, and they can intuitively and quickly make any adjustments they need. The AS/RS has more than doubled our capacity and the automation takes us away from the very manual operation we had before. This allows us to supply goods to customers with greater efficiency, leaving them very satisfied,” explains Matthews.
The Dematic solution has delivered a multitude of benefits to PepsiCo, including:
- Improved space efficiency: The AS/RS has more than doubled storage capacity, making the most of the available footprint, which is important in highly urbanised regions.
- Improved productivity: Automation streamlines processes, reducing reliance on manual labour and increasing throughput.
- Fast responsiveness: Automation allows for quick and efficient responses to customer orders and to changing demands.
- Accuracy and tracking: Precise tracking of inventory ensures accuracy in order fulfilment.
- Inventory security: Enhanced security measures inherent to the AS/RS protect valuable stock.
- Modularity and scalability for expansion: The system can grow with PepsiCo’s needs.
- Redundancy: Built-in redundancy ensures continuous operation and avoidance of costly downtime.
- Reduced facility energy consumption: Automation helps to minimise overall warehouse energy usage.
- Low maintenance, reliable, and locally supportable: Dematic provides ongoing local support for trouble-free operation.
- Life cycle value: A long-term investment that continues to provide value over time.
The superior high-density storage capability of the AS/RS, which allows PepsiCo to store much more within the warehouse building cube than would be possible within a conventional warehouse environment. Beyond the benefits described above, the AS/RS also improves warehouse operator safety by dramatically reducing the amount of manually-operated forklift trucks, pallet movers and other materials handling equipment, helping to prevent accidents in the facility.
“Our first priority was safety, and the AS/RS plays a crucial role in reducing the occurrence of accidents. Secondly, we were focused on efficiency gains, and this was achieved through reducing the storage footprint. Thirdly, PepsiCo wanted increased accuracy and traceability of products so that the warehouse throughput could be increased,” explains Techapattaraporn.
Long-term automation goals
PepsiCo’s Rojana system has been designed with the future in mind, offering the potential for the system to be expanded to accommodate additional growth and to adapt to changing business requirements. Dematic and PepsiCo have already been exploring additional automation possibilities for future stages, including truck-sized outfeed lanes, paperless picking technology, and Automated Guided Vehicles (AGVs) for various tasks within the production and warehouse areas.
“Dematic and PepsiCo collaborated closely to achieve outstanding results. This system will bolster PepsiCo’s growth, enabling it to become bigger and stronger, and provide PepsiCo with a solid foundation to build on for the future,” concluded Kummu.