How PepsiCo is Using AI to Transform Supply Chain Operations

PepsiCo is overhauling its supply chain infrastructure through a multi-year partnership with Siemens and Nvidia, deploying artificial intelligence (AI) and digital twin technology to redesign how goods move from production facilities to customers.

Announced on 7th January 2026 at CES 2026 in Las Vegas, the collaboration could represent a shift in how consumer packaged goods companies manage logistics, warehousing and distribution networks.

Global supply chains face increasing pressure to deliver faster, more efficiently and with greater resilience against disruption. PepsiCo is digitising its US plants and warehouses using virtual replicas of physical facilities.

These digital twins allow the company to test supply chain configurations and material flows before implementing changes on the ground, potentially reducing disruption and improving throughput across distribution networks.

Simulating supply chain layouts virtually

The partnership centres on creating physics-based simulations of PepsiCo's supply chain operations. Using Siemens' Digital Twin Composer software, built on Nvidia's Omniverse platform, the company is reconstructing warehouse layouts, conveyor systems, operator movements and pallet flows in a virtual environment.

This approach enables supply chain planners to identify bottlenecks, test new distribution strategies and validate equipment placement without modifying physical infrastructure. The virtual testing environment allows multiple scenarios to be evaluated simultaneously, accelerating decision-making processes that would traditionally take weeks or months.

According to PepsiCo, early trial outcomes show the company improves throughput by 20% whilst achieving almost full design validation and reducing capital expenditure by 10% to 15%.

Nvidia Founder and CEO Jensen Huang says: "Physical industries are entering the age of AI. For companies with real-world assets, digital twins are the foundation of their AI journey.

"Working with Nvidia and Siemens, PepsiCo is re-architecting its operations – using physically-accurate digital twins and AI to reinvent how it designs, optimises and runs its global operations."

The technology could allow PepsiCo to detect up to 90% of operational issues in simulation before changes reach the warehouse floor, significantly reducing costly errors and minimising downtime during implementation phases.

Connecting facilities through digital infrastructure

Siemens' software solution creates industrial metaverse environments that merge digital twin data with real-time physical information from supply chain operations. The system provides visibility across warehouse operations, inventory flows and logistics networks throughout a facility's lifecycle.

Roland Busch, CEO at Siemens, says: "We are proud to partner with PepsiCo and Nvidia to digitally transform their manufacturing facilities using physics-based digital twins and AI from design to engineering to operations.

"This collaboration sets a new standard for all industries. Customers can turn ideas into real-world impact with greater speed, quality and efficiency."

PepsiCo is piloting the approach in select US locations with plans to scale globally across its extensive network of manufacturing and distribution facilities.

Building adaptive logistics networks

Ramon Laguarta, Chairman and CEO at PepsiCo, explains: "The scale and complexity of PepsiCo's business, from farm to shelf, is massive – and we are embedding AI throughout our operations to better meet the increasing demands of our consumers and customers.

"Our work with Siemens and Nvidia will help accelerate our continued journey of becoming a future-fit company, operating with agility and foresight."

Athina Kanioura, CEO for Latin America and Global Chief Strategy & Transformation Officer at PepsiCo, adds: "We are deploying the first digital blueprint that reimagines how the supply chain is designed, built and scaled, a first for the industry.

"With a unified, AI-powered digital foundation, PepsiCo is building toward a world where every plant and warehouse operates as part of a single, intelligent ecosystem.

"In this future, our facilities don't just respond to demand; they anticipate and then adapt to it."