Government corruption; economic restraints; limitations of raw materials, and irreprehensible fiscal policies are just a few of the ingredients, that lead to corporations exhibiting inefficiencies’ in their supply chain. Defined as the sequence of processes involved in the production and distribution of a commodity; when simplified: one link leads to another creating a causal-effect relationship between the parties in that supply chain. Pepsi-Cola Venezuela, PepsiCo’s Venezuelan distributer faces challenges redefining their supply chain. This paper will shed light on the current challenges in PepsiCo’s production of water, and how the aforementioned ingredients are affecting the distribution channels for bottled water. The issues affecting PepsiCo’s supply chain pertaining to bottled water mainly derive from the effects of the materials needed to produce the packaging for bottled water, or lack thereof.

Polyethylene terephthalate (PET) is the main material for the production of plastic water bottles. In Venezuela, PepsiCo relies on its only supplier AMCOR to provide these PET bottles for their daily water bottle packaging. However, the supply of PET bottles coming from AMCOR is strongly controlled by the Venezuelan Government and this has altered PepsiCo’s production. The shortage in supply of the PET bottles can be linked to the availability of raw materials, which has decreased over the years as the Venezuelan Government uses petroleum to pay off its debts to other countries. Thus, a less amount of petroleum is left to cater to the production of PET.

All forms of plastic containers are derivatives from oil: polyethylene, polyvinyl chloride, polystyrene, they are all generated from a diverse technique of density while prepared. Density creates the texture, solidity and appearance. Production of plastics fluctuates with the life cycle of oil, being penalized during price peaks as well as during recession or extraction from regions. This fluctuation brought players to all markets of plastic containers-pre-producers. Mostly, the bottles aren’t delivered on their final size. Generally beverage companies buy tubes and mold them right before injecting the content, in order to optimize the space occupation in the plant. One can imagine the significance these plastics on the producing water hence, PepsiCo as engaged in executing inventory management strategies to pursue alternatives of reaching its consumer base.