principles project

NESTLE FOOD AND DRINK COMPANY

PRINCIPLES OF OPERATIONAL MANAGEMENT – MGMT 6092

PROFESSOR JEFF HAYES

APRIL 20, 2018.

Contents Summary report:- 4 Designing of goods and services 5 Strategic mission and vision: 5 Mission: 5 Vision: 5 Strategic and market analysis: 5 Reference:- 6 Understanding competitive priorities: 6 Reference: 7 Customer benefit package design and configuration: 7 These are the customer benefit packages:- 7 Reference:- 8 Detailed goods, process and service design: 8 Goods:- 8 Design Process:- 8 How ice-creams are manufactured inside London branch:- 8 Service by the company to the customer:- 8 Service encounter:- 9 How the product gets reached to customer:- 9 Market introduction/deployment: 9 Marketplace evaluation: 9 References:- 9 Product Process matrix: 10 The product process Matrix of Nestle Ice-cream factory which has a continuous flow process as follows: 10 Comparison: 11 References 11 Nestle Production layout 11 Introduction: 11 Workplace: 11 Work Performed: 12 Technology: 13 Important things to see: 13 Important points to hear: 14 Environment and Safety: 14 Conclusion: 15 Bibliography 16 Inventory at Nestle Company: 17 Importance of this inventory system :- 17 In our opinion, 18 References : 18 References 20

Nestle company is the world’s leading health, nutrition and wellness company. Henry nestle is the founder of the company. It is a Swiss multinational health and nutritional consumer goods company headquartered in vevey, Switzerland. The company has high revenues.

This report is composed on nestle ice-cream manufacturing company located at London, Ontario. The director of the branch is Arthur Van Raalte. This branch has 700 employees and makes almost nestle the ice-creams sold across Canada. Every year, this plant produces 60 million litres of ice cream.

Nestle company ranked 64 among the fortune 500 companies during the year 2017.Nestle products include medical food, baby food, bottled water, dairy products, ice-creams ,snacks ,chocolates and coffee. Nestle company is operated in 196 countries and it has 447 factories all over the world. And it has around 4, 00,000 employees.

Nestle company has a dynamic expansion by bringing various new products into existence. Nestle products and brands focus on continuous renovation and innovation. In this way it attracts today’s and tomorrow’s consumers. Nestle company ensures to meet and beat consumers expectation. And these products will be available at all the food stores. Most of its incomes and revenues are from Canada and United states. Today, Nestle is the world’s largest company.

In this report we are going to discuss about nestle manufacturing company located at London, Ontario. Where, we will be knowing how the KitKat ice-cream is manufactured and served to the customer with more benefits. And the report provides information about the design of goods and services, product process matrix, location advantages and disadvantages, layout design and the company’s inventory process for the ice-cream products.

The company mission is to prepare better food, so that people live a better life.

The company’s vision is to supply safety food with high quality and to provide most favourable nutrition to meet physiological needs. Nestle products have essential ingredients which produces taste and pleasure to the consumers.

· Nestle serves different customer segments and have the market capitalization of Canadian $ 250 billion according to 2015 data.

· The company uses various strategies in different markets. It uses geographic, demographic and behavioural segmentation to provide food and drink during the changing needs of the most competitive industry.

· It uses targeting strategy in order to target the customers with similar needs.

· It also uses product based and value based positioning strategies.

· The nestle company focuses on producing the large number of ice-creams by knowing that large number of customers are looking forward for the product.

· According to market analysis, nestle company has few variety of products in ice-creams which are not that popular. This makes nestle to have tough competition with their rivals.

· Development of quality products to target the middle class people.

· Increase promotional activities through web development.

· Develop and promote ice-cream products.

Here we can see how nestle company takes measures to satisfy its internal and external customers currently and in the future.

Certain measures to satisfy internal customers are:-

· The company provides pension plan for the employees.

· Health insurances.

· Family benefit plan

· Work from home for engineers

· Sick leaves

· Employee discounts

· Increase wages every year.

Certain measures to satisfy external customers are:-

· Providing safety and quality products.

· Providing nutrition and health products.

· Provide easy to understand instructions.

· Minimize Waste.

· Providing taste, texture and convenience products.

The customer benefit package describes about the goods and service features, and about the customer identifies, purchases or use. Primary product is known to be Core offering products that attracts and influences the customer.

· Nestle provides products for all age groups, taste preferences and occasions.

· There are many nestle website pages. Among them, baby care webpage is a very attractive page where it gives instructions how to take care of babies as well as various baby products are available online.

· Nestle company sell various products related to beverages, milk and milk products, prepared dishes, cookies, chocolates and ice-creams.

· Nestle company provides various types of ice-cream products to the customers like

· Sugar-less ice creams

· Low fat ice-creams

· Choco crunch

· Nestle company provides many flavours to the customers. Some of them are: KitKat, Butterscotch, Chocolate, Chocolate chip, French vanilla

· They concentrate more on product design. And designing packages that are easy to open and easy to close.

· Nestle promote healthy kids programmes.

Firstly, nestle company collects raw materials like milk, cheese, wheat flour from farmers. The company employees, managers and directors will have a meeting and brain storm about the ice-creams products development.

Company decides to provide good quality, flexibility, productivity and customer satisfaction. For all ice-creams, there is a manufactured and expiry date. The ice-cream will be in good condition till its expiry date.

Strict sanitary and safety standards, visits by the public to the plant are rare. Sixty million litres of ice-cream is produced at this plant every year. There are totally five section inside nestle manufacturing company. All these five sections are divided into 4 divisions. Various ice-creams are produced like drum sticks, cone ice-cream and cane ice-cream. Each section built different type of ice-creams. But, many flavours are prepared at London branch. The goods are manufactured and processed at optimum temperature. The manufactured goods are then stored at the right temperature for packaging.

· Nestle company main goal is to satisfy its customers.

· Nestle company interacts with customer very quickly, if there is any problem with the product.

· Company provides replacement and provides offers if there is anything wrong from their side.

Nestle company focuses on interaction between the customer and the service provider. To satisfy the customer, they provide valid information through online nestle services, nestle website instructions and through nestle promotions. They may guide directly or indirectly.

The goods are stored inside refrigerated containers for shipping. The containers are transported to the cargo hub for distribution. Then the goods are shipped to the distribution center through trucks. The goods are stored in cold storage. Then finally the ice-creams are distributed to the local stores. The ice-creams are stored in fridge at optimum temperature.20% of the cold goods are wasted during the shipping process. All different flavours are produced and distributed throughout Canada.

· Once the products are ready for the shipment, then the company starts advertising about the ice-cream through media, social media, news channels and promotions at supermarkets by offering with low cost. So that many people will come to know about the product and its taste.

· All the ice-cream products will be stored in refrigerators with optimal temperature. This London branch has high capacity refrigerators.

· New employees will be hired for promotions and for the ice-cream production. Newly hired people will get trained. They will get trained how to use plant.

· Nestle evaluates its financial reports annually and reports are designed on each products.

· Sales and profit reports on both online and offline.

· Management meetings should occur frequently between top management at corporate level.

Nestlé’s Product Process Matrix which is available in London and their different types of process involved in this matrix. IT all depends on the manufacturing of goods and services. Nestle ice-cream factory has its own product matrix and the Nestle ice-cream company follows continues job process.

As it is nestle ice cream factory which as a continuous supply that will lead to continuous flow job process. The process involves the cycle stage of the product, volume of the product, producing a high quantity of the product, depending on the production sale, the volume will be high and can be measured in weights and the variable cost does not change but the capital income will be high as it is a continuous flow process. The following flow chart describe the Nestle ice-cream company flow process of their product. Marketing investment focused on the growth according to the trend and based on the famous segment innovative products has been released with minimum margin.

Blending the Mixture

Manufacturing Process

Raw materials

Cooling and rest

Flavouring

Adding toppings

Freezing

Homogenizing

Pasteurizing

Delivery

Quality Control

Packaging

Nestle goes with the product process Matrix as it follows continues flow job process and the service product matrix does not fit to this method as we have selected a Nestle Ice-cream factory which produces a large amount/ volume of production.

As we have compare our work between service production matrix and the product process matrix and we have selected product process matrix as our company is supplying large production of ice-creams which are supplied all over Canada and we strongly agree with the process which we have use to make our job successfully complete, as it is a continuous flow process which agreed to select the product process matrix.

Bhasin, H. (2018, January 7). Marketing mix of Nestle – Nestle marketing mix. Retrieved from Marketing91: https://www.marketing91.com/marketing-mix-nestle/ Bhasin, H. (2018, January 7). Marketing mix of Nestle – Nestle marketing mix. Retrieved from marketing91: https://www.marketing91.com/marketing-mix-nestle/ CCOHS. (1997-2018). Retrieved April 18, 2018, from CCOHS web site: https://www.ccohs.ca/oshanswers/phys_agents/exposure_can.html Consumers & Our Products. (n.d.). Retrieved from Nestle: https://www.nestle.com.au/creating-shared-value/nutrition/consumers--our-products Harte, J. (2013). A visit to the Nestle’ - Dreyer’s Ice Cream Plant. Retrieved from vimeo.com: https://vimeo.com/69806651 How product are made. (2018). Retrieved April 18, 2018, from How product are made web site: http://www.madehow.com/Volume-3/Ice-Cream.html Ibarra, V. C. (2008, March). Choice of inventory costing method of selected companies in the Philippines. Retrieved from Freepatentsonline: http://www.freepatentsonline.com/article/Journal-International-Business-Research/204419288.html Inman, R. A. (n.d.). INVENTORY TYPES. Retrieved from referenceforbusiness: http://www.referenceforbusiness.com/management/Int-Loc/Inventory-Types.html made, H. p. (2018). ice-cream. Retrieved from Madehow.com: http://www.madehow.com/Volume-3/Ice-Cream.html Nestlé Benefits. (n.d.). Retrieved from Glassdoor: https://www.glassdoor.ca/Benefits/Nestlé-Canada-Benefits-EI_IE3492.0,6_IL.7,13_IN3.htm Rasheed, H. (2011, September 22). Nestle Strategic Model . Retrieved from slideshare: https://www.slideshare.net/hammadrasheed7/nestle-strategic-model Rouse, M. (2017). Inventory management . Retrieved from searcherp.techtarget: https://searcherp.techtarget.com/definition/inventory-management Shelton, C. (2017, October 30). What Is The FIFO Inventory Method? First In, First Out Explained. Retrieved from fitsmallbusiness: https://fitsmallbusiness.com/fifo-inventory-method/ The London Free Press. (2018). Retrieved April 18, 2018, from The London Free press web site : http://lfpress.com/news/local-news/nestle-canadas-london-ice-cream-plant-licks-space-crunch-with-51-5m-addition The London Free Press. (2018). Retrieved April 18, 2018, from The London Free Press web site: http://lfpress.com/2017/11/16/local-nestle-factory-boosts-its-capacity-gears-up-for-major-expansion/wcm/23348ec1-bb02-e058-eb0f-166108121879 Vimeo. (2018). Retrieved April 18, 2018, from Vimeo web site: https://vimeo.com/69806651

Nestle company has a tested and proved inventory management process which includes supply chain, procurement, and storage divisions. The production unit is being discussed here, which produces ice creams, supplied all over Ontario. In this unit, the production is confined only to our Nestle Parlour range of frozen treats which are considered classics all around Canada. Inventory network specialists at Nestle created a basic part of providing quality items to build our customers. While performing this tasks , we adjust stock levels to set up the accurate supply of our items. Once manufactured , inventory network takes charge of securely placing away and transporting our products to address our customers ' and purchasers' issues the product on-time.

There are various types of inventories. Inventory is used depending on the products produced by the organization in our nestle we use First in First out inventory method for calculating the inventory value of total ice creams available. In the inventory report, we can find the expiry date for the ice cream products. In this type of inventory, the old stock is kept first for the sold and the new stock is kept for the storage and maintained as additional stock.

· The ice cream manufacturing company requires a lot of raw materials which are perishable products like milk,butter, cream they follow FIFO inventory in order to keep additional stock for the sale.

· To store the perishable product safely, specialized refrigerators are used for the storage purpose.

· This inventory is also helpful to avoid the wastage of old stock.

· As ice cream is seasonal product this inventory is used for lowering the cost of the raw materials during potential price increases.

· In this type of inventory, the product can be maintained to quality standards and make the customer satisfy.

· With this type of inventory, our company can beat competitors prices by reducing the manufacturing cost.

Nestle also uses some tangible type of inventory like equipment to mix the flavors of ice creams and also supply temp check for human resource in order to check the product standards for the manufacturing of ice cream.

we strongly agree and believe that the inventory used by nestle company is suitable for accurate results and reaching up to the demand of the customer at all time.First in first out type of inventory is best for selling the perishable good and also to maintain the stock, in addition, to increase the manufacturing of the product, when the demand increases. We can predict the number of products needed for the next month.Whereas the ice cream sales depends on the season and the raw materials costs required for the manufacturing ice cream may fluctuate. So, in order to make profits in the competitive market and especially, during the summer season, the more amount of ,stock need to be maintain regularly. The old raw material stock is used first to maintain the quality of the product which is used for avoiding the wastage and keep the new stock to storage by using specialized equipment .