Supply Chain Management in Nestle Final
Supply Chain Management in Nestle Final
Supply Chain Management in Nestle Final
MANAGEMENT IN
NESTLE
BY SOHINI
MUKHERJEE
PGDM-19
INTRODUCTION
Nestle is one of the largest food companies in the world. The
product of Nestle mainly includes the cereals, baby food, coffee,
tea as well as ice cream and pet foods. The company was
formed in the year 1905 by the merger of the Anglo-Swiss Milk
Company. The company grew considerably during the World
War 1st. One of the biggest competitor of the company is the
Anglo-Swiss Condensed Milk Company that is already a leading
manufacturer in Europe. As a result, in order to compete with
this company, Nestle launched a condensed milk product of its
own (Phillips, 2014).
The key flows in Supply
Chain
The product flow is something that starts from the raw
materials to the product to the consumer. The product flow is
very effective in the case of Nestle. The reason is that Nestle
ensures the highest level of quality and safety before the
products reaches the customers. The ensuring of the quality and
the safety takes place millions times a day. The company
ensures the highest possible standards along the supply chain
that starts from the raw materials via packaging, distribution to
the consumer. The products of Nestle are checked on the
product line and as a result, the customers feel safe with the
product, which increases the demand. In order to meet the
strict standards, the local, and the international regulation, the
products are checked on the line of production.
The money flow indicates the flow of funds from the customers
to the manufacturers and from the manufacturer to the
supplier. The company Nestle mainly faces three important
organization related challenges that includes the maximization
of profits, conserving cash flow as well as the creation of the
shareholder value. The cash flows from the consumers to the
manufacturer as the products are mostly sold in the retail shops
.
Supply Chain and
Procurement
Supply chain professionals at Nestlé play a critical role in
ensuring the quality of products that reach customers and
consumers. To achieve this, Nestle collaborates with the
commercial teams to develop the demand forecast, and also
with suppliers around the world to ensure responsibly sourced
materials. In alignment with operations, they balance inventory
levels to establish the right supply of their products. Once
produced, supply chain is responsible for safely storing and
transporting the products to meet our customers’ and
consumers’ needs in-full and on-time. It is an aligned, agile, and
adaptable organization that is committed to delivering results,
not only within supply chain, but also in support of overall
business priorities.
Supply chain professionals can take many different paths in
building a rewarding career at Nestlé. Whether someone joins
in Demand and supply planning, Procurement, Physical logistics
or Customer service, he or she’ll help them gain a real
competitive edge by bringing them closer to their customers
and making sure that the products are available at the right time
in the best condition.
Procurement
As strategic partner of the business, the procurement team
helps the company achieve sustainable growth. Procurement
professionals at Nestlé, ensure responsibly-sourced supply and
create value. Located in hubs in Switzerland, Panama and
Malaysia, the division provides a range of services, including the
management of procurement for specific raw materials,
packaging, indirect materials and other services. The hubs also
support markets with managing local spend.
Key features of Nestle’s
successful supply chain
management
Sound relationship between logistics management and
supply chain management:- Nestle logistics management
has been effective over time due to its concentration on the
three basics of logistics including inventory management,
network design, and transportation. The company in
question ensures adequate control of warehouses,
manufacturing plants, and stores. The supply chain
management team monitors every movement of goods to
various places of the world in order to control surplus and
shortage of goods (Master 2013). In terms of supply chain
management, the company practices effective inventory
planning, adequate transportation, proper packaging, and
warehousing. Nestle Company transports products through
air transport, roads, rails, and waterways. The company
transports nearly 140,000 tons of its products per year from
1600 warehouses that it has across the world (Nestle 2018).
When necessary, Nestle makes effective replenishment
decisions to promote its sustainability irrespective of a few
distributions that go wrong. The company also monitors its
inventory level via e-data interchange, which is a special
technology which enables to monitor the size of inventory
and distribution activities from different warehouses and
other sources.
Continued..
Significantly, large organizations such as Nestle hardly store
items in warehouses for a long period since that would pose
a risk or either breakage or damage of the goods while they
stay in the warehouse. Given that Nestle deals in food
products and beverages, it would not store items in the
warehouse for a relatively long time. Therefore, logistics also
involves enabling the good condition of goods before they
are dispatched to various areas . The safety of goods while
they are in the warehouse is key to mitigate risk and enable
timely supply since some clients are bound to make orders
at any given time. An effective supply chain and logistics
management may ensure that goods are stored in the
warehouse within an appropriate time. Nestle warehousing
and packaging activities clearly describe the relationship
between supply and logistics management.