Page 37 - 100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

AT FRITO-LAY, CPS IS A KEY $
TO SUCCESS

Frito-Lay, the $3.5 billion a year in sales, Dallas- m
based snack food company first initiated a CPS pro-
gram in 1983. From 1983 to 1987, the firm docu- I•ZNOLLDV N I 3 003 3AII.VAO NN
mented cost savings and improved productivity of
$500 million directly attributable to CPS. Profits
grew at a compounded rate of 12.7% annually, twice as fast as sales.
Similai=successes -were believed to exist in product development,
but figures were not tracked. Introduced in 1983, CPS at Frito-Lay
occurs in eight steps:- - (1) finding the problem, (2) collecting the
facts, (3) defining „the problem, (4) generating ideas for its solu-

tion, (5) evaluating and selecting the best ideas, (6) creating a plan

of action, (7) selling the idea to senior management, and (8) put-
ting the solution into action. According to group manager of prod-
uct supply, Louis Kosmin, the heart of CPS is -not finding a solu-
tion but finding the real problem.

With CPS training,fi:VOrson learns methods for anticipating prob-

lems, identifying prrthtems, generating alternatives, and initiating
new projects. A m. §- r part of CPS at Frito-Lay involves training
employees in mapybf the processes discussed in this book. The
company views tfteneration of alternatives as a critical part of
CPS. Frito-Lay hA-Ts -talight CPS to some of its major vendors and
introduced it to itOistettompanielifPizza Hut and Kentucky Fried
Chicken. Frito-IcyiiiOCUreinent_tis„conducted -introductory CPS
workshops for sbIctgOinajor suppliers.

Historically, iagi at Frito-Lay focused on.--improyinz ations.

Only late in its life span was it used for ftfto

Sunchips, Frito-L ut_snack food was one

product which regtiffealrbin CPS. In 1.991, nOi''maria.gaitrntat

Frito-Lay surprisingly_abandoned a formal CPS-program. ..

•
Frank Prince,„:1-iiimee5T -th6-'-diredior of CPS for:Frito:Lay, Offered

this example= worked at Frito-Lay Members of the

planpiggVfg_kp- to discuss how- to improv-e oith and Sacithtaro-
lina were meeting business in their ar-

eas. These groups consisted of plant managers, logistics managt ,_..

ur ers,andlmgfropantseih

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