Operations Management And Strategies In Nestle Company

Nestle Company Profile

Discuss about the Nestle Healthy Kids Programme.

Operation management is the management of business practices to make the maximum level of efficiency possible in a company. It is related to altering labour and materials into services and goods as professionally as conceivable to increase the company’s profit (Mahadevan, 2015). The team of operations management tries to balance the costs with the revenue to attain their maximum possible operating profit. This report is being prepared in order to understand the concepts of supply chain network, quality management processes and operations management in the organization. To do so the Nestle Company has been selected. Moreover, it is very important to know the importance of operations management in a business so that it can be used to the maximum level (Cooke, 2012). The shared certainty amongst people was to accept that the operations management was essential just in the industry of manufacturing. The trust was reinforced with the statement that the industry of manufacturing need to take care of maximum number of operations and procedures preliminary from procurement of the raw materials until the services or goods is traded. In many situations after sales support was also measured hereafter making the trust that the operations management is essential to the industry of manufacturing (Anastasia, 2016). In terms of services industry, they possess numerous procedures involved beginning from understanding the needs of the customer to receiving the feedback on the goods offered. Later at a certain point, the industry of service tells the industry of manufacturing what they need and hence to accomplish operations in the service industry it is significant to handle the operations in the manufacturing industry (Nada Sanders, 2014).

Nestle Company is one of the well-known company of food and drink with headquarter in Switzerland. It is the biggest company of food in the whole world, measured in terms of revenue (Nestle, 2018). The product line of Nestle is comprised of medical food, coffee, dairy products, frozen food, snacks, baby food, breakfast cereals, tea, bottled water, ice-creams, pet foods, and confectionery. Twenty-nine brands of the Nestle have around yearly sales of 1 billion which includes products such as Kit Kat, Maggi, Nespresso, Smarties, Vittel, Nescafe, Stouffer’s, and Nesquik. There are 447 factories operating under Nestle in around 339,000 people. The company was established by the merger of company Anglo-Swiss Milk in 1905, by the Charles and George page. Nestle Company possesses around 2000 brands from worldwide icons to local favourites (Rodrigo, 2017). 

Sustainability and Growth of Wellness and Health Initiatives

The purpose of the Nestle Company is improving the life quality and subsidizing to the healthier future. They try to support in shaping healthier and better world. They want to encourage people to have healthier lives (Nestle, 2018). This is the way they do something for the society by confirming the company’s long-term success. Company’s values are reflected through their method of doing business, performing activities of business legally and honestly by respecting both stakeholder and customers (Boha Tala, 2018).

The mission of Nestle Company is to become the leading health, wellness, and Nutrition Company in the world. The mission i.e. Good food, Good Life is to offer customers with superior tasting, most nutritious varieties in a varied range of food and beverage types and eating events, from morning to night (Jurevicius, 2013).

The vision of Nestle is to offer consumer foods that are of high quality, safe food, and offer the best diet to encounter physiological wants. In support of health, wellness and nutrition, products of Nestle offer vital ingredients for the customers of pleasure and taste (Nestle, 2018).

Nestle Company is capable enough to handle its goals and mission with three diverse strategies. The graph reflects three strategies i.e. growth drivers, competitive advantage, and operational pillars permit Nestle Company to maintain its competitive advantage over its competitor.

Operational Pillars

• Operational efficiency
• Customer communication
• Renovation and innovation
• However, whenever, wherever

Growth Drivers

• Out of home consumption
• Wellness, health, and nutrition
• Premiumisation
• Developing markets and status sited products

Competitive advantage

• Unmatched development and research competence
• Values, people, attitude, and culture
• Unmatched brand portfolio and product
• Unmatched geographic existence

All these are the strategies utilized by the Nestle Company in order to confirm that it flourishes in the market. The thing that helps Nestle in becoming stronger as compared to their competitors such as General Mills is its strong brand that is capable to make competitive obstacles. In regards to their operational pillars, Company’s success arises from the unbelievable marketing. Company’s marketing is dependent on the evidence that they are capable to offer cheaper and quality priced products by offering satisfaction to the customers. This arrives from their core health, wellness, and nutrition mission. Different from their rivals marketing, Nestle Company is capable to provision their tough brands with their inducing influences of nourishing products (Chystyakova, 2013).

Nestle Company has also gone above its rivals by utilizing its strategy of matchless development and research competence. They have united with big corporations, for instance: Coca-Cola. They also perform differently as compared to their rivals; Nestle Company has attained native companies in order to make local managers who have the understanding of the native culture and market. This permits them to attain a strategic advancement in the worldwide regions of which they are part to attain improved satisfaction of the customer (Parmar, 2018).

Supply Chain Management in Nestle Company

The company is contributing towards the healthier future by improving the quality of life, focused towards delivering justifiable, leading financial performance in the industry, and earn trust. For 150 years, the company has created an effective business by accepting and forestalling needs of the customer and adjusting to prosper in a developing marketplace. Depending on the convincing strategy, the company is offering reliable value over the short term and long term (Nestle, 2018).

At Nestle, the professionals of Supply chain play an important role in confirming quality products influence the customers. In order to attain this, the company collaborates with commercial teams in order to do the forecast of the demand, and with the suppliers in the whole world to confirm accountably sourced materials. In association with the operations, the company manages the levels of inventory to introduce the correct product supply (Nestle, 2018). The time production takes place, the teams of the supply chain are accountable for transporting and storing safety of the product to fulfil the customer’s needs. It is a united, active, and adjustable organization, which is dedicated to distributing results, not just in the supply chain, but also in the support of complete business priorities (Nestle, 2018).

The application of wellness, health, and nutrition strategy contribute to the operation strategy of Nestlé. The company forms strategies to offer customers who are eager to have a healthy lifestyle. The operations are intended by the practical aids from innovation, which is unceasingly determined by the business by the leading research and development of the industry. The whole situation supports the continuous transformation of the portfolio of food and beverage of the company. Besides this, the activities of research and development of Nestle Company are constantly concentrating on discovering the roles of nutritious treatments for confirming the development to the lifestyle and health of people (Nestle, 2018). With the support of these activities, the business is increasing concentration on make awareness among people from various societies for taking care for their wellbeing and health. Hence, the Nestlé’s operations strategy is mostly dependent on struggling to supply a positive influence on the many communities in the world in terms of their activities (Afflink, 2018). To attain the particular aim, Nestle Company insistently shares several visions in terms of worldwide wellness, health and nutrition challenges forms larger partnerships with other key businesses, and involves with the officials, stakeholders, and key leaders, from the specific company’s operation of geographical location.

Nestle’s Operations Strategy

From the above information, it can be understood that the policy or strategy designed by the company for advertising nutrition and health add to the growth of the organization. Hence, it could be said that the business plan is sufficiently based on the sustainability and growth of wellness and health initiatives intended and accomplished by the Nestle. Some company’s approached regularly activated to permit people in the society to take a decision at the time they buy food products. By the science-based programmes application advertising nutrition and health aspects of people, an increasing number of consumers are becoming definite to purchase and consume the products of food and beverage provided by the Nestle Company. For instance, the programme of healthy kids programme created by Nestle purposes to endorse the healthy drinking and eating habits, particularly for the kids as they grow older (Nestle, 2018). Consequently, the operational policies of the company develop to impart nutritional wants and significance to the parents and their children to while inspiring to the part of different physical activities in order to preserve some level of obligatory fitness. This type of activities directly affects the strategy of the business of the company to make value for the company’s operations.

On the other side, continuous development of the Nestlé’s operations strategy could be observed because of the necessary effect of the interventions and policies of the government. Because of such situations, the important alteration to the company’s commitments is witnessed. For instance, the business has effectively dropped the sugar, saturated, and salt quality from its main products in order to remove the part of trans-fat by fulfilling the important customer preference. The similar situation smears in the printing and labeling GDAs (Guideline Daily Amounts) in the development and packaging stage of the Nestle Company. The recognized developments add to the company’s operations advancement and making it transparent and affordable for the worldwide consumers.

The Nestle Company is dealing with a varied range of products that have offered it a huge success in the worldwide market. However, it deals with different challenges in its operations such as child labor. The company has made use of child labor in its cocoa production plant, which is a violation of the child labor law. The solution to this challenge or issue is to observe every supply chain participant and set clear standards of labor. This will help administrators that all the participants are adult and are not violating any standards of the company.  Along with this, the company can establish the supplier code of Nestle and operate all the activities as per the rules and regulations of the government. By introducing supplier code the relationship with the supplier of labor, raw material and company can be maintained effectively.

Conclusion

Nestle Company offers its services in different countries. The rules framed by the government are diverse in a different area. Nestle must concentrate in these political changing aspects such as excise duties on import-export, taxation, permission of the government to take entry in the target market and also to establish hygiene products permitted by the synchronized bodies (Haseeb, 2017). Furthermore, in the current trends considering the stability of the government, Nestle must see and identify all the risks that can be involved.

Diverse countries have diverse development level. Country’s economy varies everywhere. Thus, the Nestle Company has to make different economic strategies for diverse segments. The product price is a vital decision need to be taken while planning the economic strategies as per the rate of inflation and the segment’s purchasing power. An analysis report must be prepared by the Nestle regularly in order to get the complete information of the diverse income levels and inflation rates.

The mutual beliefs and thoughts of the consumers affect the operations of the business. The lifestyle, values, culture, and norms force Nestle to supply precise product to the correct target segment. Till date, Nestle has taken into account the social perspectives very well. It has acknowledged the concept that customers altering attitude has huge importance. People are focused towards living a healthy lifestyle.

Technology offers various opportunities for the new product development or enhancement of remaining ones. New marketing techniques like e-commerce and internet are essential to concentrate in this current period. Hence, Nestle Company make use of technology in various operations of the business such as to handle the databases with the support of software. The increasing use of the social media is tapering the gap between the customer’s direct interaction and the business. Nestle Company must follow such a truism that increase the number of innovations with the support of advancements in the technology.

Legal factors comprise the company’s legal environment and its impact on the working in order to fulfill the demand and reduce the cost. For example, Nestle Company has to track the safety and health laws for their workers and also to make asepsis products for the customers. Nestle need to focus on these too while operating in different regions of the whole world.

Presently, the world is aware of having a clean environment. Nestle Company has to concentrate on the rules and regulations while making healthy food with environmentally friendly processes. Many countries set diverse rules, to upsurge the approval of the products by the directed segment the rules are important to follow. Nestle Company has been considering the substantial devotion towards its contribution in the society.

Supply chain management is the combination of science and art that undergoes in the enhancing the directions a company finds:

The raw modules it requires to create service or a product

Manufacturers for the delivery of service or product to its consumers ((Chopra and Meindl, 2016)

The flow of services and goods and all procedures that convert raw material into finished products is known as Supply chain management. It is comprised of the active restructuring of supply side activities of a business to increase customer value and attain a competitive advantage in the industry. Supply chain management signifies an effort by dealers to cultivate and execute supply chain that is economical and efficient. Supply chains involve all the aspects from manufacturing to the development of the product to the information systems required to direct these activities.

Nowadays supply chains are becoming complex because of various reasons. Consumers are increasingly asking for innovative products at the correct time at an affordable price. This has appeared as the emerging challenge for the businesses because making both cost-effective supply chain and responsive supply chains is unfavourably difficult.

The largest challenge that businesses are dealing with is how to decrease their cost of the supply chain. To satisfy the price expectations of the customer, businesses have chosen to transfer manufacturing to the countries that support in manufacturing products at low cost around the world to decrease indirect and direct costs and to reduce taxes (Bossard, 2018). Then, possessing worldwide suppliers adds considerably to the complexity that derives from prolonged delivery lead times. Consumers not just need low price products, but along with this, they also demand delivery of their product (Berrios, 2014).

Nestle is conducting its business operations in different countries with a varied range of products, hence in order to serve at all the locations it much time unable to deliver the products on time which eventually makes the customers irritated. The suppliers or dealers of Nestle have created this problem or challenge since they are inaccurate in providing the delivery of the inventory or stocks in hands (Nestle, 2018).  

Nestle needs to make the dealer management systems (DMS) in order to deal with the delay in the inventory from the supplier’s side. Since, DMS is the software and the solution that offers tools for handling services, inventory and parts management, sales, core architecture, and business management integration. The software was created to maintain good relations with customers and dealers. Nestle can adopt this software to maintain all the up to date records of the transactions taking place with the dealers so that delays can be ignored at maximum level.

The global supply chains are very complex. Moreover, with the changing product features the complexity increases and so as challenges. The time new product introduced in the market, the customers start putting pressure on the company to come up with more innovative and big products on the market. Innovation is very essential as it permits businesses to remain competitive; however, it is a big challenge. To improve a product, businesses need to redesign their network or supply and fulfill the demand of the market in a method that is clear for consumers.

Nestle is dealing in the food and beverages industry which is full of competitors who are dealing in the same product line and offering new and different products for the customers to attract them. Hence, it puts huge pressure on the company to come up with new product and increase the delivery speed of the product in the market. In order to do so, the company needs to increase its number of raw material suppliers, which will increase the speed of product manufacturing and delivery of the product in the market. Moreover, the increased number of suppliers will offer more market information about the competitors that will eventually help in understanding the strategy of the competitor and company can offer the innovative and new product in the market to compete with the competitor’s product.

An approach used to operate an organization that assists in the notion of nonstop improvement, a lasting approach to the world that analytically pursues to attain small, incremental variations in the procedure to enhance quality and efficiency is known as Lean Management. It pursues to exclude any time wastage, money or effort by classifying every step in the process of business and then reviewing or eliminating steps that do not generate value (Machado and Davim, 2016).

Create core competencies- In order to follow lean management, Nestle needs to make its core competencies such as strong supply chain network, effective customer service, talented team of research and development, skilled and talented employees, and innovative ideas. All these specified competencies help business in bringing new and innovative products to the market.

Create the lean approach compulsory and inspiring- The business should adopt this important approach of making lean approach as mandatory in the company. If all the employees in the business will be instructed to offer innovative ideas by showing them long-term benefits, the business will grow and offer new products in the market regularly.   

Cultivate the attitude of nonstop improvement- Just in time approach can support business in attaining the attitude of regular improvement (Success 360, 2018). This technique helps in aligning the orders of raw material from the suppliers directly with the schedules of production. Business can use this strategy to enhance efficiency and reduce waste by getting goods when they are required in the process of production, thus reducing the cost of inventory.

Quality management is the process of supervising every activity and tasks required to handle a preferred excellence level. This comprises the purpose of a quality policy, making and executing quality assurance and planning, and quality improvement and quality control (Kiran, 2016).

Quality Circles- It is a group of workers who perform a similar type of work, who conduct meetings regularly to classify, examine and resolve problems related to work (Account Learning, 2018).

Statistical Process Control- It is a methodology that is used for controlling and measuring quality in the process of manufacturing.

Diagram of cause and effect- It diagram is used to recognize various possible causes for a problem and categories ideas into valuable groups.

Histogram- This quality management tool is used as a graph which reflects the frequency distributions, or how frequently every diverse value in a group of data occurs.

Check sheet- Checksheet is an organized, equipped form of gathering and examining data, a general tool that could be approved for a varied range of purposes (American Society for Quality, 2018).

Lean management and quality management both are very essential for the development and growth of the business as to survive in the competitive market it is important to offer continuous improvements and innovative products to attract and gain the trust of the customers. Whereas, on the other side, it is also important to innovate and offer new products by considering quality because today customer is not just greedy about the innovative product but he/she also wants good quality that does not adversely affect their health.

The common challenge in the implementation of lean is to maintain it. Lean is a non-stop procedure. Various businesses execute the concept of lean thinking that it will be done only once. Handling leaning is very challenging and needs efforts that the business is not ready to commit.

Another challenge in executing or implementing lean is supposing that it can be only utilized in manufacturing. Jones and Womack established the concept of Lean Enterprise, which involves the utilization of lean management all over the company’s departments. This includes distribution, marketing, accounting, and human resource. If the implementation of lean is done in a single department, the instant outcome might be encouraging but with time, as the subdivision is impacted or disturbs other subdivisions, then the outcomes will begin to diminish (Mwacharo, 2013).

Artificial intelligence is creating great progress in refining efficiency in the business environment which resulting in improved performance. Artificial intelligence also offers serious information to assist administrators in making informed decisions of the business. The ways the business process can be enhanced through artificial intelligence are:

Accurate demand forecasting- By using artificial intelligence, systems can check hundreds of production mathematical models and possibilities outcome, and be accurate in their examination while adapting fresh information like the introduction of new product, sudden alterations in demand and supply chain disruptions.

Predictive maintenance- Now business has started realizing that spending in predictive maintenance solutions is profit making since it is a dependable way to develop operating competence and thus has a nearly instant influence on the bottom line (Jimenez, 2018).

Legal Challenges associated with the application of Artificial intelligence in the finance department or industry can be linked to the concerns of data governances and erroneous algorithms. Erroneous algorithms, because of the lack of suitable data, can drop a large dent in the company’s profits by making improper and maybe damage forecasts. Deprived data governance can effect in breaching of data where personal identifiable information of the customers that works as a feedback to a procedure misused by the hacker and can result in legal challenges for the company (Kappal, 2017).  

Conclusion

The above report has concluded that Nestle offers a variety of goods to its customers and possess excellent operation and corporate strategies such that it can deal with intense competition in the market and can survive for longer time duration. Besides having such excellent strategies, business is dealing with some issues related to quality and supply chain. In order to deal with these challenges, the report has suggested some strategies such as to build dealer management system to keep the proper record of the transactions and good relations between customer and dealer. Along with this to manage, the changing preferences of the customer company can increase the number of raw material suppliers that will support it in delivering products on time in the market, which will result in gaining the trust of the customers and increased market share.

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