Nestle Company’s Management Challenge

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Introduction:

Henri Nestle is the founder of Nestle Food Products Company during the year 1867. It manufactures number of brands including some house used products. The company supplies around 80 countries over the world and about 400 million pound worth products per year. Long term success is only in their perspective. Hence, the company implemented innovations and ideas even though it might be small. They believed that even a small change can make a drastic impact in their economical statics.

Nestlé’s Company logo which is represented as Mother Bird feeding its Young one. It means that the company cares about its customers like a mother bird caring its young and the products manufactured by the company give nutrition throughout their customer’s life. The nest which represents the safe, security and nourishment for their customers.

This report has been created to analyze Nestle company’s management challenge and sustainability of the business. The failure in management and sustainability of the business with recommendations are also discussed in this report. Both business and corporate level strategies are discussed in this case study report. The management and noticing the company’s success based performances is more important than any other. Waste hunting methods are techniques uses are analyzed and concluded in this report.

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Stake holders are the real assets of many companies. Many stake holders will expect in easy and quick returns on their investments. The benefits of lean production to the business and stake holders have also been discussed in this study report.

Management Challenge:

There are several challenges in the management strategy of Nestle Company. The main challenge is their electronic commerce due to the use of midrange computers. This costs extra on their annual maintenance and economical managements. The production sectors in various countries used different software’s to manage and format data’s. Hence, a 2.4 billion dollar initiative program has been organized by the company in the name of GLOBE. The main aim of this Global Business Excellence is to standardize and manage data in all the countries in a specified format using SAP/s. This ensures that all the Nestlé’s Production using all over the world should follow the same procedures for production schedules, sales, billing, management reports compiling, and financial reports. The highly ranked executives who were doing business with Nestle Company were started refusing to accept the GLOBE policies. They thought that this standardized system will affect their business strategies.

When the company tried to make their managers and executives to use the software several number of orders and invoices are ignored to use the equipment’s, and those were started to make through word of mouth. Hence, the company had changed their deadline several times by implementing a process of GLOBE. At last it has been decided that the company had no time to teach their old staffs to put them into their new Standards and equipment. They concluded it might waste their time, and they started to focus on developing several new brands.

Sustainable Business:

Sustainability in Business is known as fulfilling our needs at present without destroying the upcoming generations’ ability to fulfill their needs. Now days going green are the only sentences which are only visible in public places. It has become as an option with fewer preferences and more necessity. Companies should not only concentrate on growing their economics they also need to concentrate on better environment achievements. The companies worth will be weighted by analyzing that how they achieve their sustainability in their business. Nestle Company achieved their sustainable business using the Chinese method called Lean to Production and a most famous Japanese method called Just In Time. These two methods of sustainable management help them to achieve their long-term success.

Recommended Alternatives:

The entire case study of nestle waters was analyzed, and it has been known that the company needs a new water plant combined with storage facilities. All new high technologies should be implemented for use in the new water plant. The major problem is that the production process is not capable to provide in a mean time, and it is not able to optimize the resources. To solve these issues mentioned above we can use Value Stream Mapping, NCE, Kaizan, these are known as Short term recommendations. This can reach in a short period with reduced cost of investment.

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Short term recommendations will give immediate results. JIT, BIQ, Internal Stability Process, Waste Hunting, Sort, Shine, Sustain, Set, and Standardize are known as Long term recommendations.

Short Term Recommendations:

Value Stream Mapping is known as inspecting the production process starts from selection raw materials and till it gets supplied to its customers. A to Z inspection and a flow system is known as Value Stream Mapping.

NCE is the global business excellence which is discovered by Lopez as Nestle Continues Excellence. He decided to implement a same technology and strategy to ensure the sustainable in business, use of single standardized set of good practices, reducing the effort of duplicates, and enable learning’s about implementation methods in a sharing way.

Kaizan is a Japanese Word, which means an increase in improvements. Toyota production company was first formed this Kaizen method which is later accepted all over the United States in the name of lean manufacturing. This method concentrates more on reducing waste, increasing production, and reaching the goal of sustainable. Major manufacturing companies believed that a small change of improvements may lead to a bigger economic savings annually.

Long Term Recommendations:

Waste Hunting and Lean Production:

Reducing the amount of resources to be used is the main aim of lean production method which is popular in China. Lean production helps to vanish waste production by lowering the defects, so the products will meet quality in their first production timeline. By using waste hunting technique, Nestle will reduce the use of extra raw materials for production, packaging and storing. Nestle Waters decided to print their labels for water bottles on a single department and distributing it to various manufacturing units. This will reduce the use of equipment’s and raw materials. The truck loading costs can also be reduced by using this method. Waste is known as MUNDA in term of Japanese language. This is split into seven regions and forms a word called TIMWOOD which represents Transport, Inventory, Motion, Waiting times, Over-processing, Over-Production, and Defects.

Impact of TIMWOOD:

Transporting: the materials from one place to another place optionally is a waste of energy and time.

Inventory: Large amount of stocks stored in a storage house will increase the cost.

Motion: The frequent Motion of people working in company increase cost.

Wasting time: of working employees and make their customers wait for a long period.

Over-Processing: Waste of time from repeating actions.

Over-Production: Materials produced in larger quantity increases storage costs.

Defects: Reworking of wasted time and materials.

Sort, Shine, Set, Sustain, and Standardize are the famous 5S method used by Japanese for housekeeping the manufacturing factory.

Sort:

Sort is method to eliminate confusions appearing in the production factory. This method predicts that the materials produced with necessary stock enrollment from the suppliers ends should only be store in the production environment. Other materials which are produced with excess inventory should be completed removed from the production environment.

Shine:

The work area and the production unit should be clean, and it should shine on naked eyes.

Set:

The work environment should be organized perfectly to identify the needs of operations easily to be done. In the case of any emergencies, the well-organized environment will help to reduce major risk factors.

Sustain:

In the case of the new implementation of mechanisms, the sustainable standards should be achieved, and it should have to be ensured by all the peoples working over there.

Standardize:

The sorting and cleaning methods should be standardized for the entire factory region.

Benefits of Lean Production in Business:

Use of Lean production method in Nestle Waters leads to better gains other than quality and efficiency. It helps to provide a better environment for sustainable business. The new factory build up increases the employment and apprenticeships opportunities for the persons located at 50 miles radius around the site location. This helps to reduce the transportation of materials and impact on Carbon Foot print. The old manufacturing units’ employs many temporary workers and agencies where the new Nestle Waters manufacturing unit employs hundreds of staffs on full-time work basis.

Benefits of Lean Production for Stake Holders:

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For many big companies stake holders are their main investors. The stake holders will always use to get very easy and increased returns on investments. Hence, Nestle Waters should concentrate more on stake holder’s comforts and profits. Just In Time becomes the major source of alternative to get benefits of Lean Production method. When implementing lean production there may occur some challenges like the changes may be disliked by most people. They prefer to a more comfort and very own used places and working environment. The company needs to focus on training the people to a new environment.

To avoid such complications before implementing the changes people’s opinions regarding environmental changes should have to be a poll to know their ideas and comforts. Increase in labor is one of the major causes. Here the company needs to spend lots of money to enhance the lean production in the name of labor wages.

Alternative Recommendations:

From the inefficiencies mentioned above like people comforts and resources are the two major problems in implementing lean productions. Keeping these complications in the mind the alternative recommendations have been straightened to the depth of the issues.

Recommendations and Implications:

As per the examination, we did, nestle just have a few issues overall organization is the best in the business in this way. They have achieved the most astounding business bunny for their image. The issues they are confronting are appropriation channels, bootblack of blender and methods that attain to its long haul goals.

Given the colossal potential advantages of applying the Just in Time standards the dominant part of SME in the assembling divisions do not matter JIT stock administration is very aggravating. SME in the assembling part, especially in the sustenance division can have a considerable measure as far as decreased stockpiling expenses, low loss of items are because of obsolescence and the stock holding expenses. Moreover, the aftereffects of the study discovered a factually critical positive connection between the use of JIT stock administration reasoning and enhanced quality and adaptability. Such a positive impact can be of incredible profit to the nourishment division the difficulties of operation in the 21st century economy with is shelled by every client’s needs and expanding levels of rivalry from both existing and new business. Applying stock administration standards can be a venture forward surviving the cruel substances of the business economy.

Radiating from the difficulties in applying the JIT standards, there is a need to assemble solid systems between the SMEs and their suppliers. It is subsequently suggested that SME fabricating division ought to be taught the standards of JIT stock administration and the methods for applying the standards.

Settles issues can be disposed of by deliberately thinking and executing methodologies that can be viable regarding both benefit and development. Answers for these issues that they receive Just in Time Strategy keeping in mind the end goal to strive for joint endeavors with their wholesalers cut demonstrate their particular strains and make others to their occupations. So in the event that they run with JIT system it may have the capacity to have more piece of the pie and interest for the item can be expanded, and business can be stringed. They can increment all through the blender by having an included blending.

Strategy of Nestle:

Nestlé's goals are to perceive as the world pioneer in Nutrition, Health, and Wellness, trusted by all its partners, and to be the reference for budgetary execution in its industry. They accept that initiative is not just about the size, it is additionally about their conduct. They perceive trust is earned just more than a drawn out stretches of time by reliably conveying on their guarantees. These goals and conduct are typified in the basic expression "Good Food, Good Life", that entireties up their corporate aspiration.

The Nestle guide is expected to make arrangement for their kin behind a binding arrangement of key needs that will quicken the accomplishment of their destinations. These goals request from their kin a mix of long haul motivation expected to assemble for the future and transient entrepreneurial activities, conveying the vital level of execution. They are looking to accomplish administration and gain that trust by fulfilling the desires of shoppers, whose every day decisions drive the execution of shareholders, of the groups in which they work and of society all in all. They accept that it is just conceivable to make long haul manageable quality for their shareholders of their practices, methods, and operations are additionally making worth for the groups where they work for their organizations and their customers, and they call this Creating Shared Value.

They are presently contributing to the future to guarantee the money related and natural supportability of their activities and operations in limit, innovation, capacities, in individuals, in Brands, in R & D. Their intends to address today's issues without trading off the capacity without bounds eras to address their issues, and to do as such in a manner which will guarantee beneficial development quite a long time and an abnormal state of profits for their shareholders and society at a vast over the long haul.

Settle vital administration is to compel the business to end up more productive, to make a local assembling system, incorporate the organization's business on a worldwide scale and to diminish advertising consumptions by abusing the collaborations between brands. Their method to create R& D organize by enhancing existing items and making tomorrow's sustenance, two third of organization's R & D exercises are devoted to redesigning existing items, the staying third is saved for radical item advancements, enhance operational level and various hierarchical changes.

Conclusion:

For an organization that will turn one hundred in 10 years, Nestle has practically attempted the greater part of the methodology there can be. Settle organization has extended globally, helped nations monetary and be ecologically cognizant and make joint endeavors with different organizations in which Nestles and these organizations execution decidedly.

The hypothesis based structure and models may be exceptionally valuable yet the application is practically speaking to be accomplished hard. It will likewise rely on upon the execution abilities of the organizations authoritative society. Settle organization is a universal organization which went into the procedure today by increasing better upper hand over its opponents. The center item contrast method has been exceptionally fruitful despite the fact that it may not work for different firms.

The organization needs to make and convey esteem not just by offering recognized items by likewise adequacy and productivity by reengineering its business process. By doing all proposals and take, after all, these ventures of adjusting JIT method, Nestle will improve later on with its rivals and may be a trailblazer in some criteria furthermore pick up its above normal prescribes their organization.