Workforce Central® Suite Creates Bottom-Line Results for PepsiAmericas
PepsiAmericas, Inc. is the number two anchor bottler in the entire Pepsi system. With 125 distribution and manufacturing centers in 18 states, more than 15,000 employees around the globe, and annual sales of $3.2 billion, PepsiAmericas is a big company doing big business.
But running such a large operation inevitably leads to occasional operational challenges, and this certainly proved to be true for PepsiAmericas. Specifically, it was burdened by cumbersome manual payroll processes that couldn't effectively handle a significant increase in employee headcount — or the complex pay policies such a diverse group required.
PepsiAmericas successfully overcame this challenge by implementing Kronos' Workforce Central suite, including the Workforce Timekeeper™ application for time and labor. This allowed PepsiAmericas to automate its entire payroll approach and realize some significant benefits along the way. For its achievements, Kronos recognized PepsiAmericas with a Best Practices Award for using Kronos technology to simplify complex pay rules on a large scale. Kronos' Best Practices Awards are presented annually to those organizations that achieve excellence in the application of Kronos technology.
An aggressive acquisition strategy causes growing pains
But when it was still relying on an inefficient, manual payroll system, PepsiAmericas couldn't even imagine such success. Its troubles began with an aggressive growth and acquisition strategy that led to an increase in headcount of 100 percent in less than five years. Adele McCarty, PepsiAmericas' payroll manager, vividly recalls exactly how this explosive growth negatively affected the payroll process at PepsiAmericas.
"We grew from 4,800 hourly and salaried employees to almost 12,000 domestic employees today," she says. "Our existing payroll function just couldn't handle that many employees. Part of the problem was the overwhelming number of employees we had to process in a short amount of time. But as headcount grew, we also gained a lot more pay rules and union policies that took a lot of time and effort to apply correctly and consistently."
Too many options
At the heart of the problem was the way — or ways — PepsiAmericas collected employees' labor data. Most of its 125 sites used different data collection methods, ranging from a DOS-based automated solution in 20 percent of the locations to the mechanical timeclocks and paper timesheets favored by the other locations. This really was the source of the problem; once the data was collected, PepsiAmericas' payroll specialists had to interpret more than 70 union contracts for over 5,100 union employees, 1,000 pay rules, and 860 company-specific work rules.
To say this was challenging is an understatement. McCarty remembers just how difficult it was to administer payroll with this old approach. "Payroll was processed on Wednesdays, which meant that all sites had to submit consolidated timesheets on Mondays. Our payroll specialists only had two days to input hours and earnings into the main payroll system," she says. "Invariably this caused problems: long hours, excessive overtime, keying errors, or even missed deadlines." All of this was detrimental to productivity at PepsiAmericas, and the wasted time, effort, and money adversely affected its bottom line.
PepsiAmericas realized that it needed an automated workforce management approach. Or as McCarty puts it, "We needed Kronos!"
Fast results with the Kronos system
After carefully researching several vendors, PepsiAmericas selected Kronos and its powerful Workforce Central suite. "We chose Kronos because it enabled us to easily configure our specific pay rules, which meant we would successfully automate most of our payroll process," explains McCarty.
One of the first steps in the process was installing 175 Kronos data collection terminals. "This was important because it gave us one consistent way to collect employees' time and attendance data across the entire enterprise," states McCarty. Now, instead of filling out paper timesheets, PepsiAmericas' employees only have to swipe bar-coded ID badges through the terminals, and their data is collected immediately. No more paper forms. No more mechanical timeclocks. But most importantly, no more waste — of time, money, or effort — in the process.
"Kronos more than met our expectations for a rapid implementation," says McCarty. "We went live with our first users in just eight weeks and completed Phase 1 within six months, bringing 7,500 employees on the system. Phase 2 was completed within three months, bringing an additional 2,000 hourly employees onto Kronos. That's practically unheard of with most enterprise software implementations."
Solving the pay rule problem
This automated approach is just the beginning of the benefits. Employees' labor data is fed directly to the Workforce Central application, where it is stored for later payroll processing. This process is nearly seamless because Workforce Central interfaces directly with PepsiAmericas' PeopleSoft payroll system.
The Kronos system helped PepsiAmericas accomplish a significant implementation objective. "One of our primary goals was to give the accountability for managing employees' time to the employees, supervisors, and managers, not the payroll specialists," says McCarty. "Implementing Workforce Central has helped us achieve this goal.
"The Kronos system offers a powerful pay rules engine that applies our specific pay and work rules to employees' time and attendance data," elaborates McCarty. "This means that our payroll specialists don't have to interpret pay policies or union contracts anymore."
This is no small feat. "Prior to implementing Workforce Central, union grievances as a result of pay issues were common," says McCarty. Not anymore. "Since we've been using the Kronos solution, not a single union grievance has been filed due to payroll discrepancies," exclaims McCarty.
Other powerful benefits
Another key improvement has been PepsiAmericas' newfound ability to administer average hourly rates for vacation and holiday pay for commission-paid employees. "With approximately 4,600 hourly employees on a compensation plan that includes commission earnings for product delivery, calculating holiday and vacation pay used to be a very tedious process," says McCarty. "For example, our truck drivers' pay is based on commissions, so the rates we use for calculating paid time off are based primarily on their prior year's W2 earnings."
The Kronos system was able to provide the solution. "At each stage of the rollout, we calculated the average hourly rate for each driver and added pay codes in Workforce Central," she explains. "These codes are used only when commissioned employees request vacation, personal, or holiday pay. Now commissioned pay is automatically calculated." She also points out that they were able to create separate vacation checks in increments of 40 hours, a step that eliminated multiple manual processes.
Today PepsiAmericas intends to continue improving internal processes and eliminating errors as it strives to maximize its investment. "Workforce Central has helped us automate manual methods, improve overall efficiency, and increase productivity," says McCarty. "And all of this has had a very positive impact on our bottom line."
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