Nestlé: Good Food, Good Life

By Wanting Zhao and Shuyang Wang

Nestlé is a Swiss multinational food and beverage company headquartered in Vevey. It is the largest food company in the world which measured by benefits, has a very long history, which can date back to 1860s.  Their products consist of baby food, bottled water, cereals, chocolate & confectionery, coffee, healthcare, nutrition, etc. They  also provide food service and weight management.  Nestlé has 447 factories, operates in 194 countries, and employs around 333,000 people. It is one of the world's largest cosmetics company.

Nestlé was founded in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé. The first world war helps Nestle have a significant growth and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products.

The Nestlé Corporate Business Principles are at the basis of Nestle company’s culture, which has spread over the span of 140 years. When Henri Nestlé first developed his successful infant cereal “Farine Lactée”, Nestle has built their business on the conviction that to have a long time success for our stockholders, Nestle not only have to comply with all applicable legal requirements and ensure that all our activities are sustainable, but additionally we have to create significant value for society.

Bernard Teiling, assistant vice president of business process integration for Nestle S.A., which is based in Vevey, Switzerland, says supply chain management (SCM) is “both a source of competitive advantage and a lever for profit margin.” Although the complexity and the cost of SCM has keep increased over the last two decades, companies must be proficient in this process. “If you are not good at SCM, someone else will be,” says Teiling.

Nestle defines SCM as the two-way management of the flow of goods, services and information from suppliers to manufacturers, wholesalers, distributors, stores — to the end user. SCM is especially critical for the food industry because of the ease of spoilage.Teiling holds an opinion that if we want consumer products company remains profitable only if it has the right product at the right price in the right place at the right time. However, getting these stars to line up only happens when “the entire supply chain works as one.” This is the Nestle's unique supply chain, they trying to make whole company supply chain works as one.Seen that way, SCM becomes a branding issue. When Nestle made one product, they put the logo on the product. The logo represents “a seal of quality.” Protecting that quality makes Nestle responsible for its entire supply chain. Teiling says consumers don’t care if a supplier or distributor had a problem. “If something goes wrong in the supply chain, it ruins things for the consumer,” says the Nestle executive.Even though Nestle feels responsible for every line in the supply chain management, it use outsources of many of those activities. “No one company can claim to do everything from A to Z in the food industry. Today that’s impossible,” says Teiling. For example, Nestle does no farming. And the world’s largest food company sells almost nothing directly to consumers.

However, new challenges comes with supply chain in Nestle.

1.Companies have to discover the best eMarketplaces for their needs. A good guideline, he says, is the ability to develop a two-way relationship.

2.Companies have to learn how to work with more than one eMarketplace. This can be a technical challenge at the outset since no standard has yet emerged.

3.Companies have to make changes internally to take advantages of eMarketplaces. For example, Teiling says Nestle’s IT infrastructure will have to change to work with these new exchanges. Companies will have to learn how to interface with these marketplaces.

Also, Nestle has its own supply chain weakness. Nestlé urged to be more transparent about supply chains. Investors are using their financial clout to ask big corporations to do more to tackle environmental and social risks. With Nestle become a big company, the supply chain pay more attention on efficiency in products. But does not focus on Environment and society any more. Tracks pollution and labor rights become a big problem on Nestle's supply chain management. This is the weakness they need to make some change.

To learn more about Ford’s and their supply chain, visit the following links: 

http://www.nestle.com/brands

http://www.answers.com/topic/nestl

Reference:

http://www.theguardian.com/sustainable-business/investors-mars-nestle-transparency-supply-chain

http://outsourcing-center.com/2001-03-supply-chain-management-article-38848.html

   http://en.wikipedia.org/wiki/Nestl%C3%A9#Major_competitors

   http://www.nestleusa.com/about-us/supply-chains-act

   http://businesscasestudies.co.uk/nestle/coffee-the-supply-chain/the-supply-chain.html#axzz33a3M7Kxp

http://www.nestleusa.com/about-us/suppliers