PepsiCo + Celonis

PepsiCo’s digital transformation strategy aims to create ‘a totally different’ company. They use Celonis as a key enabler to get there – and are unlocking millions of dollars in the process.

Faster, stronger, better. That’s the mission that unites everyone at PepsiCo, one of the world’s largest food and beverage companies. As part of their transformation journey, the company is using data and technologies such as predictive analytics, AI, robotics, process mining, and automation to transform the very fabric of their business: their processes.

That’s where change makers like Chris Knapik come in. As part of PepsiCo’s GPEX organization (short for Global Process Excellence), the Senior Director of Process Transformation heads a team whose mission is to transform, digitalize, and strengthen PepsiCo’s end-to-end processes — with measurable value tied to every step of it.

Transforming PepsiCo process by process

“Everyone is trying to be smarter, better, faster. My job is to enable the business to be just that: by taking the work out of the work, driving productivity, and ultimately generating cost savings and new revenue.”

Knapik, charged with transformation, has gone through quite a transformation himself in the decade he's been with PepsiCo. A veteran in risk and compliance, Knapik later entered the realm of IT – supporting PepsiCo’s Control function in rolling out new IT systems like S/4HANA. “My biggest struggle was always connecting these two worlds. How do you make a system understandable to someone that deals purely in business processes? And how can the business really make technology teams understand their objectives?”

That’s when he discovered process mining and Celonis. “It was originally a news headline that led me into it. Process mining used to be a theoretical offline discussion, until Celonis came around and turned it into actual technology,” says Knapik. “And by the time I picked it up at PepsiCo, Celonis had established itself as the leader in the space.”

Spreading Celonis’ Process Intelligence across PepsiCo

PepsiCo started with Accounts Payable in 2019. Initially, they used Celonis to tackle their main pain points – compliance and risk management.

“But very quickly, people saw the power of Celonis went far beyond visibility, and wanted to turn it on for its primary use to reduce inefficiencies, improve productivity, and create cash impact.”

Today, the company is using Celonis across nine processes — such as Accounts Receivable and Accounts Payable, Procure-to-Pay, Order-to-Cash, and Make-to-Deploy.

“Given the results we got with Celonis, it very quickly picked up speed and generated demand from other teams,” recounts Knapik.

PepsiCo brings extra millions through the door

In Accounts Receivable, PepsiCo struggled with the same challenges so many big corporations have: organizational silos, a complex billing process, and difficulties prioritizing. But bringing in Celonis changed the rules of the game almost overnight.

Using Celonis’ out-of-the-box capabilities, the Collections team learned that improving their Days Sales Outstanding (DSO) had the highest value potential – and identified which actions would quickly move the needle in terms of collecting customer payments faster.

“Celonis shows our teams a picture of their world they've never known before. It’s a treasure map for our transformation journey,” says Knapik. With Celonis surfacing delinquent accounts and ranking them by invoice value, PepsiCo’s global Collections teams can now prioritize their work, clearing high-value overdue invoices faster, and unlocking millions of dollars in free cash flow.

But bringing cash through the door quicker is just one of the benefits. PepsiCo’s Collections teams now work smarter, not harder – driving better results with less effort.

Using Celonis’ intelligent automation capabilities, dubbed Action Flows, PepsiCo automated the creation and sending of dunning notes for customers to collect on overdue receivables, helping the teams save valuable time.

https://delivery-p141552-e1488202.adobeaemcloud.com/adobe/assets/urn:aaid:aem:2efe56b2-e2f8-4a41-85d7-23bd8f37be25/as/xKcviJWGtsYmwz7QMk4Upg.jpg https://videos.celonis.com/watch/xKcviJWGtsYmwz7QMk4Upg

The value also shows in their “AP Split Checker” use case, which looks at invoices that were split so that an internal buyer could sidestep or accelerate approvals on the Procurement side.

Here, the Accounts Payable teams are using Celonis’ fuzzy matching capabilities to automatically identify invoices that were split to circumvent approval limits. “This helps us with compliance, but also saves our teams at least 1,000 hours per year on manual work,” says Sandeep Veerareddy, Director of Insights and Automation.

Preventing revenue leakage in Order-to-Cash

In Order-to-Cash, the team uncovered inefficiencies upstream in Inventory Management, which led to a high number of sales order rejections. “Back then, PepsiCo had just moved to S/4HANA and we faced a range of operational challenges,” says Veerareddy.

“With Celonis, we discovered that 30% of our orders were being rejected in the initial markets deploying the new SAP processes." “That’s not good for any company, much less a consumer-focused company like PepsiCo,” says the Automation Director.

With Celonis intelligently layered on top of their source systems, Veerareddy and Knapik saw the problem was multifaceted: Order rejections were caused by problems such as exceeded credit limits or customer cancellations, but also system integration issues and inventory stockouts.

With Celonis identifying the biggest opportunities to go after, PepsiCo drastically lowered order rejections to 4%. And happy customers equal an even better business. “That's a lot of revenue leakage saved and a lot of business for us,” says Veerareddy.

Tracking inventory and reducing food waste

In Make-to-Deploy – one of PepsiCo’s core end-to-end processes encompassing Production as well as Inventory, Warehouse, and Quality Management – Knapik’s team is looking at their most sensitive inventory movements between production plants and shipping locations.

They’ve set out to speed up inventory movement, reduce shipping costs, and optimize working capital – all while accounting for regulations and potential shipping embargos.

Knapik’s team also wants to look at PepsiCo’s product spare parts division – such as smart sensors that monitor bottles as they are rinsed, dried, filled, and packaged. The goal: get real-time visibility into stock levels to be able to order the right amount of spare parts, at the right moment, to the right warehouses.

“We are seeing first results for our pilot customers. But the real magic will happen once we connect the end-to-end process – bringing together our Procurement, Supply Chain, and Warehouse teams.”

Other teams also wanted a piece of the cake. PepsiCo’s Strategy & Transformation team is using Celonis to reduce spoilage and improve the distribution of finished goods in Latin America. In collaboration with Celonis partner Capgemini, they’ve set up a dashboard that flags goods at risk of reaching their “best before” date.

The AI behind it gives intelligent recommendations to mitigate write-offs — all while accounting for impact on costs, revenue, and sustainability. PepsiCo is also using Action Flows to alert demand planners when they don’t need to order more. The results: less write-offs that translate into millions saved, optimized inventory, higher productivity, and less strain on the environment.

GPEX’ transformation from cost-center to value engine

These use cases are just some examples of how far PepsiCo’s GPEX team has come in their transformation quest. “We're one of the fundamental back-office teams that rarely get time in the corporate limelight,” says Knapik.

“Quite often we were seen as an enabling function to support the business, but not as true equals.” Which usually means that breaking the ice and convincing business leaders their processes need change requires tact and patience.

“Change management is a fickle beast,” states Knapik, “so anything you can do to grease the skids and deliver digestible chunks of information is important.”

https://delivery-p141552-e1488202.adobeaemcloud.com/adobe/assets/urn:aaid:aem:2a3bf6d9-db4a-47a7-a090-226d0872cf7c/as/Sx3iGQfGMv5bTthEWwh2eU.jpghttps://videos.celonis.com/watch/Sx3iGQfGMv5bTthEWwh2eU

You could call bridging the two worlds – helping the business better understand technology, and vice versa – Knapik’s specialty now. “Celonis became my silver bullet to approach conversations with the business, as I’m moving away from people's canned reporting into my view of how we use the data to tell a story.”