Operation Management Project

Operation Management at Nestle Juices

Submitted by:

Rizwan Ahmed

Babar Azhar

Rizwan Younas

Imran Younas
 Summary
In this project we will analyze the operation management at the Nestle Juice factory. Nestle is
the world's leading nutrition, health and wellness company today and was founded in 1866 by
Henri Nestl. It has employed around 250,000people and has factories or operations in almost
every country in the world.

Since its inception Nestle has provided quality products to its customer by providing product
and packaging innovation. Nestle juices is Pakistans number one and fastest growing food
company. The company is trying to differentiate themselves from the rest of the competition in
Pakistan by adopting latest product development techniques and processes.

In this detailed project we have covered the topics related to product development and
processes that juice production goes through. Quality management is inspected thoroughly and
supply chain management at Nestle is studied.

First of all we have gone through industry analysis, which include Porters five force analysis and
PEST analysis. Then we have completed company analysis and also given the brief introduction
of company in this section. The section of company analysis include vision statement of Nestle,
High quality standards of Nestle, vision statement of Nestle Juices, Mission of Nestle, Company
main objectives, its structure, Juice manufacturing factories, SBUs within Nestle, Brands in
Nestle, Its current Earnings and other financial stats and in the end SWOT analysis.
Then we have examined product design phases at Nestle. Process phases are examined and
value chain was examined in detail. Quality management at Nestle follows the process phases,
followed by supply chain management at Nestle. In the end we have given recommendations.
 INDUSTRY ANALYSIS

PORTERS FIVE FORCES ANALYSIS

Michael Potter's five forces framework can be used to determine whether the industry is
attractive enough to sustain a small or medium size enterprise. The five forces of Entry, Rivalry,
Substitutes, Buyers and Suppliers jointly determine the intensity of competition and profit
potential for a small and medium size firm in a given industry or market sector. The focus at this
stage is at the industry level because industry dynamics and profits of necessity dictate profits
of other firms that enter the industry.

Threat of New Entrants

The threat of new entrance means, when any company that is not operating in that product
category or the company that start it new venture see a opportunity in this field like juices, and
based on that they decided to enter in this market. So the current company that is operating in
the market has a Low threat for the new entrance. Nestle is big organization being it
competitor is not an easy task. There is some barrier for the new entrance like Economies of
Scale, Product Differentiation, Capital Requirements, Switching Costs, and Access to
Distribution Channels, Cost Disadvantages, Independent of Scale, and Government Policy.

Bargaining Power of Suppliers

The company needs raw material, labors, component and other supplies. This requirement
leads to buyers-suppliers relationships between industry and the suppliers. Suppliers, if
powerful can exert an influence on the producing industry, such as selling raw materials at high
price to capture some of the industry profits. The bargaining power is low because Nestle
doesnt rely on any supplier. They produce their own raw material. Even they have no reliance
on the distributors. They have their own factory trucks to supply the material and have their
own distribution network.

Bargaining Power of Buyers

Buyer power is the most important factor of porters fiver forces model, because buyer are the
consumers of the product. For nestle its a major impact factor because the competition is
intense & competitors have the same products that may differs in quality but are providing the
same needs. For that particular reason we can say that Nestle have high bargaining power
from buyers.
Threats from Substitutes
Substitute products refer to products in other industries. To the economist, a threat of
substitutes exists when a product demand is affected by the price change of a substitute
product. A close substitute products constrains the ability of firms in an industry to raise prices.
Nestle have a major threat from it substitute products from other competitor due to which
there product can lost the market share, there are many competitors so the threat from
substitutes product are high.

Competitive Rivalry
The big factors determining the strength of rivalry is how actively and aggressively are rivals
employing the various weapons of competition in jockeying for a stronger market position and
seeking bigger sales. Many local companies have entered market and there is also great threat
from established companies. Nestle also face lot of HIGH competitor rivalry.

Conclusion
We can conclude from above observation that whether the company is MNC or local it will face
the tough competition from its competitors because competitive edge is the most volatile thing
in business world now-a-days. Companies are reactive & they react to the change. We can
conclude that the FMCG industry is unfavorable for the new entrant to enter in the market.
However existing firms can control these five forces & attain the edge over their competitors as
nestle is following a sound strategy.
PESTLE ANALYSIS
PESTLE analysis is a powerful tool to visualize your external surroundings, which enables you to
understand the external factors such as Political, Economic, Social, technological, Legal &
environmental affecting your business. So for understanding Nestls position in the market &
to visualize the Nestls position among its competitor Pestle analysis is the best technique to
understand the external forces.

Political & Legal Forces

FMCGs have to pay heavy taxation, changes in any taxation system can badly affect Nestles
productivity & sales (profits). Nestle company also follow law related to employees like
government announce minimum salaries of an employ Rs. 6000. Foreign trade regulation does
not affect the overall policy and the working of the Nestle because they operate nationally not
internationally. The government stability also plays a great role for any industry. In Pakistan
government face lot of difficulty from the side of terrorism and also its activity that badly effect
environment of the country which is totally very upset.

Economic Forces
Now in Pakistan inflation rate is almost 22.3%, so if any increase in inflation rate then increase
in prices of Nestle products which eventually affects the Nestle Pakistan Economy growth rate
accelerate is 7% and plus which eventually affect the Nestle productivity & sales.

Social Forces & Cultural

Today people are more health conscious so Nestle products by identifying this need of the
people they are also producing health conscious products with more elements of pure &
quality, which create the market for Nestle & trend of its products in the market About the
environmental concerns of Nestle products are the symbol of good health & nutrition no
matter which product is under consideration.

Technological forces
Nestle focusing concentric and conglomerate diversification because in present era it is not
possible for any organization to exist in market for long run by providing just one product.
Product innovation is becoming more necessary for the organization because of globalization
people are becoming aware about the changes being taken place around them so in order
tackle the situation nestle is focusing on product innovation. Now by the help of technology
Nestle maintain the efficient scale of production which normally called economies of scale.
Nestle has R&D department and Nestle total spending on R&D 70 millions.
 COMPANY ANALYSIS
Nestl is the world's leading food and beverage company, with sales of about CHF 83 billion. It
has 230,000 employees world-wide and operates 520 factories in 82 countries. Its products are
available universally, including such remote markets as North Korea, and they are sold under a
number of brands such as Nestl, Nescafe, Nestea, Maggie, Buitoni, Perrier and Friskies.
Company belongs to more than 200,000 shareholders, today; Nestl is about twice the size of
its nearest competitor in the food and beverage sector. The company is in business for over 130
years.

VISION
Nestl aim is to meet the various needs of the consumer every day by marketing and selling
food of a consistently high quality.
The confidences that consumers have in our brands is a result of our companys many years of
knowledge in marketing, research and development, as well as continuity - consumers relate to
this and feel they can trust our products.

High quality and collaboration

Our objectives are to deliver the very best quality in everything we do, from primary produce,
to choice of suppliers and transport, to recipes and packaging materials.

Vision Statement of Nestle JUICES

The strategic priorities of Nestle Juices are focused on delivering shareholder value through the
achievement of sustainable, capital efficient and profitable long term growth. Improvements in
profitability will be achieved while respecting quality and safety standards at all times. Nestle
JUICES envisions to grow in the shortest possible time into the number one Beverage Company
in Pakistan with the unique ability to meet the needs of consumers of every age group through
development of a large variety of beverage categories of the highest quality.

CORPORATE MISSION
Nestls brands and products are the focus of continual innovation and renovation so that they
meet and exceed our consumers' expectations. We seek to ensure that our products are
available whenever, wherever and however our consumers want them.
OBJECTIVES
Nestls purpose is to offer safe, tasty, convenient and nutritious foods to improve health and
well-being of consumers of all ages all over the world. To meet the needs and desires of todays
and tomorrows consumers, Nestl is strongly committed to Research and Development (R&D)
to improve existing products and develop new foods with specific health benefits.

Company Structure
Nestle head office in Pakistan is in Lahore. It also has its registered office in Lahore.
Nestle has divided the whole Pakistan in to three Zones.
Northern Zone
Central Zone
Southern Zone
Nestle has 8 regional offices in all over Pakistan. These offices work under their respective zonal
offices.

Factories
Nestle has two factories in Pakistan for the production of juice items.
One near Sheikhupura near Lahore (29 Kilometer on Lahore Sheikhupura road)
Second in Kabirwala near Multan (Khanewal raod, Distt. Kabirwala)

Zones
Zone of Food and beverages are shown below

Zone Targeted Ares

Food And Beverage Europe Europe
AMS Food and Bevearge Amercia United States of America, Canada, Latin America and Caribbean
AOA Food and Bevearge Asia, Oceania and Africa Asia, Oceania, Africa and Middle East

Strategic Business Units (SBUs) and Marketing

Below are some SBUs of Nestle
Strategic Generating Demand Unit
Business Excellence Generating Demand
Dairy SBU
Coffee & Beverages SBU
Chocolate, Confectionery & Biscuits SBU
Ice Cream SBU
Food (Culinary and Frozen food) SBU
Pet Care SBU
BRANDS
The main brands of Nestle are

Coffee
Nescafe, Nespresso, Tasters Choice, Ricor, Ricoffy, Bonka, Zogas, Loumidis

Water
Poland Spring, Nestl Pure Life, Arrowhead, Vittel, Deer Park, Levissima, Perrier, S.Pellegrino,
Ozarka, Contrex, Ice Mountain, Zephyrhills, Nestl Aquarel, Hpar, Acqua Panna

Other beverages
Nestea, Nesquik, Nescau, Milo, Carnation, Libbys, Caro, Nestomalt, Nestl

Dairy - Shelf stable

Nestl, Nido, Nespray, Ninho, Carnation, Milkmaid, La Lechera, Moa, Klim, Gloria, Svelty,
Molico, Nestl Omega Plus, Bear Brand, Coffee-Mate

Ice cream
Nestl, Antica Gelateria del Corso, Dreyer's/Edy's, Drumstick/Extrme, Maxibon/Tandem,
Mega, Mvenpick, Sin Parar/Sem Parar/Non Stop, Delta
Infant nutrition
Nestl, Nan, Lactogen, Beba, Nestogen, Cerelac, Nestum, Neslac, Guigoz, Good Start

HealthCare nutrition
Nutren, Clinutren, Peptamen, Modulen Bouillons, soups, seasonings, pasta, sauces
Maggi, Buitoni, Thomy, Winiary, Torchin, Osem, Totole, Haoji

Frozen foods (prepared dishes, pizzas, small meals)

Stouffers, Lean Cuisine, Hot Pockets, Buitoni, Maggi, Wagner, La Cocinera

Refrigerated products (cold meat products, dough, pasta, pizzas, sauces, snacks)
Nestl, Buitoni, Herta, Toll House, Sabra

Chocolate, confectionery and biscuits

Nestl, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties, Butterfinger, Aero, Polo

Nestl Professional
Chef, Davigel, Minors
EARNINGS
For 2011 the Nestl Group reported sales of CHF 83.6 billion and 7.5% organic growth on top of
good growth in recent years. The organic growth was composed of 3.9% real internal growth
and pricing of 3.6%. Foreign exchange had a negative impact of 13.4% and divestitures, net of
acquisitions, a further 4.2%, mainly Alcon. Excluding the impact of the sale of Alcon, sales were
down by 4.8%. Following are the highlights
The Group's trading operating profit was CHF 12.5 billion. The margin increased 60
basis points (90 basis points in constant currencies) to 15.0%.
Nestl Continuous Excellence in all areas of the company continued to create significant
savings ahead of target, helping to partially offset major input cost pressures.
Higher input costs increased the cost of goods sold by 190 basis points.
Total marketing costs were down 100 basis points, mainly the result of leveraging our
sales and marketing structures. Consumer facing marketing remained at almost the
same level after two years of double-digit increases, which allowed us to further build
our market positions in most categories.
Administrative costs were down 80 basis points.
Net profit was CHF 9.5 billion, up 8.1% on a continuing basis.

Sales by activity breakdown: 27% from drinks, 26% from dairy and food products, 18% from
ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products,
6% from pharmaceutical products.
Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US),
16% from Asia, 21% from rest of the world.
Full year sales and operating profit margin overview
MARKETING
Nestle hold strong reputation for high quality brands. In major markets, trade marketers are
frequently rated highly in customer surveys on professionalism and service. They don't believe
in 'one brand fits all' and thats their marketing strategy. They have a strong, diversified global
portfolio well focused and defined offers a brand for all key consumer and market sectors.

STRATEGIES ADOPTED BY NESTLE

Business principle
Nestl is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:
Nestl's business objective is to manufacture and market the Company's products in
such a way as to create value that can be sustained over the long term for shareholders,
employees, consumers, and business partners.
Nestl does not favor short-term profit at the expense of successful long-term business
development.
Nestl recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place their
trust and that without its consumers the Company would not exist.
Nestl believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form
of voluntary business principles is beneficial in order to ensure that the highest
standards are met throughout the organization.
As a global food manufacturer and marketer, Nestl takes into consideration local
needs, cultural differences and consumer preferences as well as attitudes concerning
the use of ingredients derived from genetically modified crops.
Global commitment
Nestl firmly supports the principles of the United Nations Global Compact and is committed to
reflecting these in its business principles and practices.

Search for trust:

A basic reason company has grown to be the world's largest food company is that consumers
have learned to trust its brands. Additionally company introduced the Nestl Seal of Guarantee
and emphasized corporate logo. This Seal of Guarantee is a visible sign of companys corporate
responsibility for the safety and quality of every product, which leads to maintain consumer
confidence and trust in this corporation

Nestle companys Success is built on quality:

Quality is the cornerstone of companys success. Every day, millions of people all over the world
show their confidence in company by choosing Nestl products. This confidence is based on our
quality image and a reputation for high standards that has been built up over many years.
Every product on the shelf, every service and every customer contact helps to shape this image.
A Nestl brand name on a product is a promise to the customer that it is safe to consume, that
it complies with all regulations and that it meets high standards of quality.

The customer comes first:

Trade customers expect excellent service, correct information and timely delivery. Consumers
consider taste, appearance and price when they make their choice. Companys task is to
understand what customers want and respond to their expectations rapidly and effectively.
All customers expect good quality at a reasonable price. Customers are central to companys
business and company always respects their needs and preferences.

Nestl's Position on Technology:

From its inception more than 130 years ago, Nestl has built its business on successfully
applying scientific breakthroughs and technological innovations while taking full responsibility
for the quality and the safety of its products. Nestl supports a responsible application of gene
technology for food production based on sound scientific research.

Consumer information and labeling:

Consumers confidence in the food they are buying is supported by having access to
information. Nestl's Consumer Services are well equipped to provide this access and thus are
the first source of information, including the use of ingredients, derived from genetically
modified crops, in Nestl products.
SWOT ANALYSIS
STRENGTH
Below are areas where the strength of Nestle Lies
Its a company that does not depend on personalities.
Leaders in Dairy Products.
Long term experience.
Innovative products.
Designative packaging.
Innovative planning and ideas.
Wide variety of brands.

WEAKNESSES
Below are the areas where, Nestle is weak
Supply Chain
Exports

OPPORTUNITIES
Below are the opportunities available for Nestle
High credibility
Ability to secure more credit.
Available means for expansion.
Improving trends
Industry leadership.
Consumer preference.
Fewer competitors.
Dedicated workforce
Untapped rural market.

THREATS
Some threats to Nestle are
Highly competitive market (multinational companies are very organized and financially
strong).
Increasing prices of raw materials.
Competitors like Opler, Shezan, Coca Cola breverages, Halla, Askari, Pure water, Nurpur
dairies, and Prime yogurt.
 PRODUCT DESIGN AND PROCESS DESIGN
Core Competency
Core competency is defined as one thing that a company can do better that its competitor.
For Nestle, the core competency lies in its quality and brand name.

Product Development
It includes phase of Planning, concept development, system level designs, design details, testing
and refinement and production ramp up.

Planning Phase
In this phase, product type is selected based on Nestles corporate strategy and market
demand. Nestle has introduced many product for specialized market and as they believe that
one product cannot serve all the customers. They believe in quality product and wellbeing of
customers. They believe in building trust of customer.

Market Demand Analysis

In this stage Nestle, research the market and develop alternate product categories. Concept are
developed related to design and features of product.

Product Ingredients
In this process Nestle defines the product architecture and composition of product. What
would be the ingredients and what would be its nutrition value is decided in this phase.

Design Detail
In this phase Nestle define the complete composition of product, its packaging and the
nutrition value it will provide to customer.

Testing and refinement

Prototype is developed and tested in market by promotional activities like distributing product
free of cost. Mostly Lahore is selected as test city and product is launched in Lahore and its
response is checked and feedback from customer is evaluated.

Product Launch
After all the testing and making necessary adjustments to taste and nutrition value, product is
launched.
 VALUE CHAIN AND PROCESSES
It is defined as chain of value creating activities. Micheal porter identified a set of interrelated
generic activities common to vide range of firms. The resulting model is known as value chain
and is depicted below

Inbound Operation Outbound Marketing Service

Logistics Logistics & Sales

Inbound Logistics
Major raw materials of Nestle orange juices are different pulps of orange which they import
from Germany and France. Nestle company get their other raw material from local market in
Pakistan. Nestle juices raw material include ingredients such as fresh fruit, nectar of mango,
apple, and pineapple, orange.
Nestle imported all machinery and formulas, which is advantage of Nestle company.

Operation

Production Process
Process is any part of an organization that takes inputs and transforms them into output of
greater value. Fruit Juice production procedures involved in fruit drinks manufacturing depends
on type of juice unit is going to make. For purpose of this- feasibility, Nestle propose 4% token
juice drink of citrus fruit (Orange), Mango and pineapple.
The type of process that Nestle uses is make-to-stock as it produces standardized products. The
process is multistage as few stages are similar for all juices and few are different.

Process Type
The process for Nestle Juices is continuous flow process as juice, which is liquid, flows through
the production process.

Push or Pull strategy

Nestle follows push strategy as they make product, which are standardized and then push them
in to market.
Fruit Juice- Production Process flow
Production of fruit juice is standardized process and initial processes for all fruits will be similar,
as will be the last stage of juice pasteurization section and packaging, although differences in
handling juice composition arise in certain cases due to the nature of the fruit and percentage
of vitamin involved. Basically preparation of juices involves the following steps:
Boiling of Fruit
Storage in Tank
Ingredients mixing
Juice Preparation
Juice storage Tank
Filling and Packaging
Cooling and storage
Below is the flow chart and brief description of the various processes involved in fruit juice
production are outlined

Fruit Juice Production Process

Fruits boiled in the boiler and shifted to the plate heat exchanger. Then it is stored in the
storage tank. Then supplied to the mixing tank in the desired quantity while in mixing tanks; any
additives to the mixture is made at this stage before it is pumped to syrup storage tank.
Blended juiced is then pumped through pasteurizer; where it is heated to 90 C to inactivate
enzymes and living organism. After pasteurization the juice passes through final filtration,
before lauding it into juice tank. Juice from the tank is ready for packaging.

Packaging and Labeling

The juice is the packed in the quantities demanded by the market. Consumer packs as like
200ml and 1000ml tetra pack and then labeled as Nestle Juices. Then the final product is stored
in cool dry store.
Process Flow Chart:
Raw Material

Reject NO YES Storage

Production

Boiler

Juices Mixing Plate Heat

Tank Exchanger
Storage and
Shipping
Preservatives Juices Mixing
Tank

Syrup Storage
Tank

Pasteurizers

Juice Storage
Bulk Bottled/
Tank
Transport Packaged/
Labeled

Finished
Product in
cold storage
Retailer Wholesaler Transport
Outbound Logistics
In Nestle Company the activities that include in outbound logistics are, They establish their sale
and distributive offices in big cities like Karachi, Lahore, Islamabad, Faisalabad, Gujranwala etc.
and also hire suitable distributors on agreed profit margins. Who buy product from Nestle
office of the cities and try to distribute to each retailers and shop keeper in the cities and rural
areas.

Services
Company established the customer center in each office in a major city and also given toll free
number as a help line number. This means that if customer feels any problem then they can
contact through their help line.

Marketing and Sale

Nestle company launch their sale promotion scheme after six months. Their last sale promotion
was for retail shop that put nestle juices billboard on their shop or sale reception table. They
could win attractive prizes in this promotional activity. By this operation they can save all the
advertisement expenses which they have to pay to the retailer or owner of the shop.
Nestle Company use advertisement channels when company has to launch new brand. So
company prefers to use Geo, ARY one world, PTV Home, 1 vision and newspaper. They contract
with the advertisement channels for 1 to 2 months repeat 2 or 3 times a day.
They hire suitable distributors in a country at agreed profit margins who bought juices in bulk
form from the distributive channels and then sell to the retailer who finally sale to the end
consumers.
Nestle company has efficient market management whos main objectives for marketing their
product are.
Strong customer relationship
Identify need of customer like new taste new, fruit items
Maintain market leadership by maintaining the pure quality
Provide juices which are fit for human body
Stop brand selling and dont reduce quality
Quality is Nestls guarantee
 Process Analysis
Cycle time
In a repetitive process the average time between the completions of successive units is called
cyclic time. For Nestle 90 min is batch preparation time. 60 min is the process time and 75 min
packing time. (Batch of 15000 Liters).

Bottleneck
The limiting factor or the constraint in the process is called bottleneck. In Nestle juices Batch
making is the bottle neck. What should be the size of batch? Another bottleneck is mixing plant.
It takes the largest amount of time.

Efficiency
It is the ratio of actual output of a process relative to some standard input. Packing machine at
100 % efficiency produces 7000 packs in 1 hour. At Nestle the packing machine efficiency is
95%.

Run time
It is the time required to produce a batch of parts. This is calculated by multiplying the time
required to produce each unit by the batch size. If the machine produces 7000 packs in 60 mins,
then it takes 0.514 sec to produce one pack. So the batch will be completed in 3855 secs, if
packed on two similar machines. This will make in total 15000 packs.

Setup time
It is the time required to prepare a machine to make a particular item. For Nestle Juices, 3.5 hrs.
is the setup time. (Sum of CIP and sterilization processes)

Operation time
It is the sum of the setup time and run time for a batch of parts that are run on a machine. For
Nestle it is 210 + 75 = 285 min

Through put time

It includes the time that the unit spends actually being worked on together with the time spent
waiting in a queue. For Nestle Juices it is 90 mins (Batch making time) + 60 mins ( process time)
+ 75 mins (filling time) = 225 mins
 QUALITY MANAGEMENT
Quality assurance (QA) refers to the planned and systematic activities implemented in a quality
system so that quality requirements for a product or service will be fulfilled. It is the systematic
measurement, comparison with a standard, monitoring of processes and an associated
feedback loop that confers error prevention. This can be contrasted with quality control, which
is focused on process outputs.
Two principles included in QA are: "Fit for purpose", the product should be suitable for the
intended purpose; and "Right first time", mistakes should be eliminated. QA includes
management of the quality of raw materials, assemblies, products and components, services
related to production, and management, production and inspection processes.
Following the similar functional steps the Nestle Pakistan has a great focus on the quality of its
products. To ensure the consistency of its Juice and to get it free from any foreign
contamination HACCP is applied at the plant. HACCP is a system which comes under the food
safety programme and in this system such points or process steps in the system are determined
which can lead to the deterioration of the product quality. Once these steps are finalized then
the controls are applied on these steps. Similarly controls are applied from End to end product
process i.e. form receipt of raw materials to the finished goods. All the Raw materials are
checked before being given to production and their conformance with the agreed specifications
with suppliers are verified. Similarly the function of QC is also to check in line parameters of
product manufacturing process. In juice plant the sugar percentage and brix is checked and
after that taste testing is also done by a panel of people which is certified by the company.
Similarly this QA function also gets involved in the start of the project to do the design HACCP
of the equipment so that the equipment being procured is well worth and is not prone to any of
the potential problems regarding food safety.

Fig: PROCESS APPROACH TO MANAGEMENT FOR QUALITY & PRODUCTIVITY

 SUPPLY CHAIN MANAGEMENT
Nestl Pakistan's supply chain makes sure that Nestl products are available, no matter where
you are in Pakistan. We integrate processes from the farm to markets, and ensure products are
delivered to you at the right time, the right cost and in the right quantities. In the first quarter
of 2006 alone, we delivered an astonishing 136 million kg of Nestl products in Pakistan. Supply
chain was established as a separate department in 2001. Since then, we've achieved a number
of milestones, including a cold-chain in 2002, centralized demand and supply planning in 2003,
and implementation of GLOBE in 2005.
Our mission is to:
Optimize and consolidate resources and processes for a low- cost but efficient execution
Develop and manage simplified and effective supply network to achieve a high level of
service
Create a continuous improvement culture driven by performance measures and reward
Nestle has own fleet of trucks and through them they distribute to retailers and wholesalers.
But their own fleets of truck, they have also faced problems, because their expertise are not in
distribution.
 RECOMMENDATIONS
According to the analysis we did nestle only have few problem otherwise company is doing
their best in the industry so far. They have attained the highest market share for their brands.
The only problem they can face is from limited Distribution Channel and the bottleneck of
mixer.
Nestls problem can be eliminated by strategically thinking &implementing some strategies
which can be effective in terms of both profit& growth. Solutions to the problems which have
been discussed before is that, they should go joint ventures with their distributors cut short
their own tensions &make others to their job as Pepsi co. have Riaz bottlers for their
distribution which eventually gave them an edge. So if they go forward integration then they
might be able to have more market share & demand for the product can be increased & more
market can be taped. They can increase throughput of the mixer by having an added mixing
plant.