Supply Chain Management at Nestle
OM 4081 - Supply Chain Management
University of Cincinnati
July 13, 2024
Organization Background
Nestle is the leading food manufacturing company in the world, with its
presence being felt all over the globe and its products sitting comfortably
at the dining table of almost every homestead around the world. The
company was founded by Henri Nestle in the 1960s with an aim of solving
the problem of child malnutrition emanating from the inability of some
mothers to breastfeed. The initial product was Farine Lactee Henri Nestle,
a food supplement that was made from a combination of cow milk, wheat
flour, and sugar, which was used to curb child mortality by offering an
alternative nutritional value to breast milk. The growth of the company
was witnessed in the early years of the 20th century when it reorganized
itself, spread to countries like Britain, the US, Spain, and Germany, and
diversified its product portfolio to include chocolate following its merger
with Swiss General Chocolate Company (Resource. and, n.d). Later the
company spread to Australia, Singapore, Hong Kong, and India in order to
cater to the emerging lucrative Asian market which influenced the rapid
growth of Nestle Food Company, and later to other parts of Africa, the
Middle East, and Southern America.
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
Currently, Nestle boasts of having some of the most famous brands in the
world’s food market including Milo, Nido, and Nescafe. Over the years, the
company has gone through a lot of transformation, including diversifying
to pharmaceutical products. The company has also endured turbulent
economic and global market conditions by engaging in acquisitions and
mergers with hitherto leading food companies like Carnation of US, San
Pellegrino of Italy, and Spillers Petfoods of UK. Through its initiative
dubbed GLOBE (Global Business Excellence) cutting across the group, the
company has been able to take advantage of global market leadership, its
size notwithstanding, by harmonizing and simplifying its business
processes (Resource. and, n.d). Currently, the company boasts over US$70
in turnover and over 200 units.
The secret behind Nestlé’s operation success lies in having sound business
strategies that incorporate product innovation and renovation; as well as
customer value creation priorities and practical business core values of
cultural diversity, quality products, brand strength, consumer or customer
satisfaction, and company’s high-performance targets. Incorporating these
with its sensitivity to dynamic global economic climate makes Nestle gain
a competitive edge over its close rivals who are as well very competitive.
Nestle has also taken cognizance of the idea of supply chain management
which is the current trend for many firms who wish to survive the ever-
growing global market competition.
Management Structure and Supply Chain Management at Nestle Food
Company
The current management structure at Nestle tends to revolve around
GLOBE, an initiative whose aim is to standardize the operations of all Nestle
business units all over the world. This entails the assurance that
management of procurement, sales and distribution, factory operations,
and administrative functions are being handled through a single system. In
addition, a single information system was put in use across all its units by
eliminating the different enterprise planning systems and replacing them
with a single web-based mySAP.com software (Steinert-threlkeld, 2006).
Due to its broad network and product lines, fewer levels of information
flow, and a flat and broad span of control that encourages horizontal
communication and accountability has been favored. Under this
management structure, a uniform process in the manufacturing of Nestle
products and a uniform mode of formatting and storing data has been in
place in all of Nestlé’s 200 units spread across all the continents of the
world. This standardization has made Nestle win a competitive advantage
over its close rivals, who include; Kraft Foods of US and Unilever of UK. This
is because operational speed and personal responsibility are assured, thus
boosting the performance in nestling and minimizing bureaucracy (Nestle
Management and Leadership principles 2003).
The company’s management structure tries to embrace the concept of
Supply Chain Management by outsourcing some of its activities while using
a large workforce (over 270,000) including executives, managers, and
line/production workers to ensure the operations of the Supply Chain run
smoothly. In addition, the company ensures that the tastes of all customers
are taken care of by producing products of different types and sizes, and
ensuring there is sanity when marketing the products. It is in this view, that
products like Nescafe, Kit kat candy bar, Perrier sparkling water, and
Buitoni spaghetti have become some of the best-selling products in the
global market. Customer satisfaction has always been the key to the
success of Supply Chain Management and a conduit through which a
company’s competitive advantage and profitability are achieved
(Rosenthal 2001). Moreover, running of all activities from the time of
sourcing raw material to the time the finished products reach the
consumer is tedious and may also affect the utility of the goods to the
consumer – having the right product at the right time and at the right place.
Therefore, nestle finds it important to embrace a unified Supply Chain that
also ensures the quality of the products is maintained at all times.
Operation Management at Nestle Food Company
According to Rosenthal (2001), Nestle has realized the importance of
customer satisfaction as the source for competitive advantage based on
the success of Supply Chain Management. Competition is even stiffer today
following the emergence of e-trading, forcing companies to act quickly
otherwise they find themselves knocked out of the race. Supply Chain
Management allows a company to draw value by ensuring free flow of
goods, services, and information from the manufacturer to the consumer,
with little chance of damage or spoilage especially when it comes to
perishable goods or fragile goods. This is despite the ever-increasing costs
of outsourcing experienced all over.
Nestlé’s operation management success is tailored around the concept of
innovation and renovation whereby, new product ideas are continuously
being developed to cater to the dynamic market while at the same time
improving and strengthening the existing products to suit the tastes of the
target market. This is coupled with embracing global strategies that go
beyond a commitment to cultural and social diversity, not forgetting the
pragmatic and dogmatic business approach employed. For example, the
success of the Nescafe brand has been born through Nestlé’s sensitivity to
the cultural needs of the target market where different flavors and
formulations are being made in order to suit the tastes of the local market.
Through innovation and renovation, Nestle becomes open to dynamic
technological, market behavior, and opportunity trends without
overlooking the basic human values and attitude (Nestle Management and
Leadership principles 2003).
Long-term success can easily be achieved by engaging in sound business
practices. Through its GLOBE initiative, it has always been a priority for
Nestle to build a winning culture comprised of sound profits and value to
all its stakeholders. Creating standards on how operations have to be
carried out have eliminated the hassles of management control and also
has made the work of reports consolidation well cut out. The initiative
addresses three key areas of standardizing processes, standardizing data,
and standardizing the systems. This means that what is being done in one
country is no different from what is done in another country, including
conducting sales, factory scheduling, making management reports as well
as reporting financial results. However, local legal circumstances and
emergencies may provide an exception.
Responsibility for protecting the quality of products rests with the
company and therefore, Supply Chain Management is important.
According to Rosenthal (2001), Nestle has to protect its image by taking
responsibility for its Supply Chain, taking into consideration that,
consumers will base the product quality on the company whose logo
appears on the product regardless of who supplied the product.
In recognizing the importance of SCM, Nestle has been able to outsource
its distribution activities. For instance, the Nestle Chile SA unit contracted
Ryder System Inc for distribution and transportation management
services, while Nestle USA entered into a transportation management
contract with RedPrairie. These are some of the contracts that are aimed
at making distribution of Nestlé’s products to be done without delay,
putting in mind that, Nestle is in the food industry where products are
prone to spoilage if not delivered to the consumer on time, and where
quality is second to nothing.
The emergence of e-Marketplace has allowed companies to efficiently
manage the Supply Chain. Nestle sees the evolvement of different
exchanges as an opportunity to improve performance and has made the
change of its IT infrastructure as number one step towards interfacing with
the new marketplaces. However, due to the many players in the food
industry, embracing e-marketing has been slower than for other industries
with fewer players, with outsourcing being made more on IT infrastructure.
One notable benefit of e-marketplace is increasing efficiency in the
management of the Supply Chain, while most companies will be tied to the
decision about which e-Marketplace to join.
Procurement remains one of the most important functions as it forms the
initial stage of any business that will be carried out. Nestle has taken this
idea into account by entering into e-procurement. The efficiency of
production will be attributed to the kind and quality of inputs used which
will as well affect the quality of the products released to the market. The
contract entered into between Nestle and FreeMarkets Inc. was aimed at
providing Nestle access to its B2B (Business to Business) Global
Marketplace to source goods across the American market for use in its
operation. A well-established procurement outsourcing allows the
suppliers to be effective, while good communication that allows feedback
on delivery date and quality helps in effective management of inventory
and output.
Sound operation strategies by Nestle have ensured the company takes the
first position in the global food industry. This has been contributed by the
realization that competitive advantage can be easily achieved through
assurance of quality, dependability, flexibility and the price offered to the
consumer. In addition, the production system must be efficient in order to
efficiently manage the supply chain, maintain the correct levels of
inventory and minimize wastage. The underlying factor in the successful
production system is the cost of production which should be as low as
possible when the company is in its optimal capacity. According to Slack et
al (2007) operations management may be challenging, yet it is core to the
success of business performance in the company.
Nestlé’s operation management model is based on the tenets of upholding
human values and principles, making it one of the best-managed outfits in
the globe. With a turnover of over US$100 annually, nestle dedicates much
of its earnings to the management of research and development activities.
This is coupled with a well-managed supply chain built around the GLOBE
initiative that has hit the global market with a storm.
Nestlé’s Middle East units are the latest to integrate their operations into
the GLOBE system. In doing so, Nestle had to outsource a supplier for an
integration platform that would integrate the SAP system with the various
management systems across the Middle East units. In this regard, Supply
Network Solutions (SNS) was contracted to manage the integration project
that required integration of the various import/export and stock
reconciliation interfaces with the SAP system. With its credible supply
chain services in logistics, system integration, and project management as
well as professionalism in solution development, SNS stands out to ensure
the success of the GLOBE program and world-class integration solution in
nestling (1888PressRelease, 2009).
Recommendations on improving operation management at Nestle
The key to success at Nestle has been the efficiency in its operational
management and a business initiative that addresses the importance of an
effective supply chain. This has been reinforced by the company’s
tendency to put human needs fulfillment at the peak of its priorities.
However, the dynamic trend in the global market arena necessitates
improvement in innovation practices through research and development
as part of the company’s operation management. This will ensure the
company in question stays abreast with the ever-evolving global market.
According to Kleindorfer (2005), ensuring the success of sustainable
operation management through integrating the profit and efficiency
orientation of the existing operation management is of paramount
importance, as much as is the sensitivity of the company to all its
stakeholders’ welfare and socially responsibility. Technological prowess
dictates the limit to which an organization can stretch to tap the most
lucrative, yet competitive opportunities in e-commerce. Although Nestle
has taken the front line in technological advancement through its e-
procurement, e-marketing, and technologically integrated operations and
information systems, a lot of improvement is required to invigorate the
sustainability of its operation management.
Operation management at nestle can not be complete without elaborate
logistical strategies that revolve around all pillars of the supply chain.
Frazelle (2001) defines logistics as “the activities (transportation,
warehousing …) that connect and activate the objects in the supply chains”.
Although logistics may be simply regarded as a means of creating a utility
to the consumer through efficiency in distribution, its success can not be
achieved without having to balance the various variables involved that
include efficient inventory management, sound procurement/purchasing
practices, and elaborate risk management strategies. According to Ballou
(2004), planning, organizing, and controlling are essential for the success
of logistics in the supply chain. The diverse consumer needs have to be
satisfied through efficient management operations. The most efficient way
to achieve this is by diversifying the means through which goods find their
way to the consumer while management control remains flexible. This
implies that there is a need for improvement in the way the supply chain is
managed. Indeed, Hartmut and Kilger (2007) claim that “measures should
be assigned in the supply chain to evaluate changes and assess the
performance of the complete supply chain as well as individual processes.”
References
Ballou, R. H. (2004) Business logistics/supply chain management: planning,
organizing, and controlling the supply chain. NJ, Pearson/Prentice Hall.
Frazelle, E. (2001) Supply chain strategy: the logistics of supply chain
management. NY, McGraw-Hill Professional.
Hartmut, Stadler and Kilger, Christoph (2007) Supply chain management
and advanced planning: concepts, models, software, and case studies.
4th Edition. NY, Springer publishers.
Kleindorfer, Paul et al. (2005) Sustainable Operations
Management. Production and Operations Management. (Online). Vol. 14,
No. 4, 2005. Web.
Nestle Management and Leadership Principles (2003) Nestle Management
and Leadership Principles. Web.
Resource.axd (N.d) Nestlé’s History. (Online). Resource.axd. Web.
Rosenthal, B. E. (2001) Supply Chain Management: Nestle is Quick to Adopt
EProcument. (Online). OutsourcingCenter. Web.
Slack, Nigel et al. (2007) Operations management. 5th Edition. NJ, Prentice
Hall/Financial Times publishers.
Steinert-Threlkeld, T. (2006) Nestlé Pieces Together Its Global Supply Chain.
(Online). Projects: processes-Baseline. Web.
1888PressRelease (2009) Nestle Streamlines It’s Supply Chain Operation
with SNS Integration Services. Web.
