ERP insights are helping PepsiCo cut fixed costs, renegotiate contracts, and streamline operations, without undercutting future capacity.
In Brief:
• PepsiCo is using ERP-driven procurement insights to deliver a 70% productivity lift in H2 2025
• The company has closed two plants and paused several production lines to rebalance fixed costs
• Expense controls, contract reviews, and workforce adjustments are being coordinated through a unified system strategy
ERP as a Procurement Engine, Not Just a Platform
PepsiCo’s latest cost push didn’t start with headcount cuts, it started with systems. After years of ERP investment, the company is now using that infrastructure to surface savings across sourcing, operations, and third-party contracts. “We’ve got the procurement savings,” said CFO Jamie Caulfield at the company’s Q2 2025 earnings call, “a lot of that is enabled by the investments we’ve made in the ERP system.”
This marks a shift from procurement as a support function to a core lever of structural productivity. Instead of separate tracks for sourcing and cost control, PepsiCo is using ERP-enabled visibility to coordinate both, feeding live insights into vendor terms, production cost baselines, and capital planning.
Cost Reduction That Preserves Growth Headroom
PepsiCo has shuttered two plants and taken some lines offline, but with the intent to restart them quickly if demand rebounds. “We want to be careful… not to take out so much that we don’t have room to grow,” Caulfield said. That same logic is being applied to workforce planning: flexible labor models allow PepsiCo to scale up or down without full reorgs.
This approach moves beyond conventional cost-cutting. It’s capacity tuning based on real-time demand signals, enabled by systems that track volume patterns, contract performance, and fixed-cost exposure in tandem.
From Expense Control to Procurement-Led Execution
The company isn’t stopping at plant and labor adjustments. “We’re going after everything,” Caulfield said, citing cuts to travel, third-party services, and other overhead areas. What’s notable is how these actions are coordinated. Instead of one-off savings pushes, PepsiCo is executing a layered strategy where ERP insights drive vendor renegotiations, structural workforce changes, and simplified management models.
This is how the company plans to achieve 70% more productivity in the second half of 2025, by linking procurement and planning inside a single system logic.
Reframing Procurement as a Structural Lever
PepsiCo’s integration of procurement, ERP, and cost planning shows what’s possible when sourcing is embedded into the operational core. The company’s ability to identify underperforming assets, adjust operating models, and rewire supplier spend is grounded in system-wide insight and execution-ready governance.
For companies navigating inflation, tariff exposure, or fixed-cost bloat, the lesson is not just to digitize, it’s to activate. ERP investment only yields strategic return when it is explicitly linked to sourcing decisions, manufacturing capacity, and supplier performance in a unified architecture.
What PepsiCo shows is that enterprise procurement, when built on real infrastructure and paired with structural levers, can become a primary driver of productivity, without shrinking future growth options. The question for peers is no longer whether to integrate sourcing and systems, but whether they’re willing to let procurement lead the cost architecture of the enterprise.