Introduction
Nestlé, a multinational corporation headquartered in Switzerland, manufactures the well-known coffee brand Nescafé. Henri Nestlé launched it in Switzerland in 1867 (Nestlé, n.d.-a). During the coronavirus outbreak, Nestlé has not been able to produce at “normal” levels, according to Mark Schneider, CEO of the multinational food and beverage corporation (Nestlé, n.d.-a). Mark Schneider has also mentioned the onset of logistical constraints and a decrease in personnel attendance caused by illness or prudent measures, which has necessitated a stricter safety standard at our factories (Nestlé, n.d.-a). The company’s management structure incorporates the notion of Supply Chain Management by outsourcing part of its tasks and employing a great staff (about 291,000) consisting of executives, managers, and line/production employees to guarantee the Supply Chain operates efficiently (Nestlé, n.d.-b). Consequently, considerable resources are allocated to marketing and advertising.
The supply chain of Nestlé’s instant coffee consists of the farmers, purchasing department, operations management, logistics, resource management, information workflow, and customers. The role of the farmers encompasses the production of coffee beans from the field. This is done through planting and subsequent harvesting before the beans are transported to the production units. The first main role apart from the farmers in the supply chain is the purchasing department. In order to create Nescafé instant coffee, the purchasing unit must acquire the necessary raw materials, and these supplies must be bought and delivered on time for manufacturing to commence. In order to eliminate any delays, cooperation with suppliers and delivery firms is necessary.
Planning and forecasting demand is within the purview of the operations departments. The approach is often necessary before procurement since the demand market determines how many units of coffee are to be produced and how much material is needed for production. Logistics is another part of supply chain management that organizes all parts of planning, buying, manufacturing, storage, and transportation to ensure that items reach the final customer without interruption. It is advantageous to have effective communication across numerous departments to distribute items to consumers rapidly and at the lowest possible cost.
Production requires raw resources, technology, time, and labor. Resource management ensures that the appropriate resources are optimally allocated to the appropriate activity. This will guarantee that a production schedule that maximizes operational efficiency is developed. The exchange and dissemination of information are what keep all other supply chain management operations on track. The whole chain might fail if the information process and communication are inadequate. By increasing visibility and communication, many supply chain problems may be avoided. Having a system used by all departments will guarantee that everyone is working with the same data set, eliminate miscommunications, and reduce time spent informing others of new developments.
The importance of supply chains has grown over the years and cannot be overlooked, and it is clear that they have become an integral aspect of the industry. Additionally, it is essential to recognize that it involves several processes. First, materials are transported to the factory, and then the product is manufactured (Nestlé, n.d.-b). The last step that should be considered is the dissemination via existing networks. A well-developed system of supply chains plays a crucial function most of the time.
In addition, it is essential to realize that limiting any potential hazards linked with supply chains is required. Disputes with a supplier, for instance, may be complicated and impede a company’s ability to create items promptly. In addition, one of the most important factors that should be addressed is that many firms have begun to spend vast amounts of money on sustainability. Sustainability is seen as a necessary step by companies that respect the views of their customers (Nestlé, n.d.-b.). This paper will investigate the overall effectiveness of the company’s present supply chains since it is one of the most important indications of a successful business. Social responsibility, environmental impact, and other variables that affect customers’ attitudes should get the most significant consideration.
Strategic Management of the Supply Chain
Nespresso’s Strategic Approach
Nestlé uses Nespresso’s strategic approach in its supply chain management of its Nescafé’s instant coffee. The Nespresso supply chain strategy initiative was initiated in 2003 (Kumar, 2020). Developed with the Rainforest Alliance, the approach guarantees that Nespresso delivers the best quality coffee while providing farmers and their communities with sustainable incomes and safeguarding the environment. Planting native trees, for instance, provides several essential advantages, such as decreased soil erosion, water supply, and temperature control. Helping coffee producers adapt to climate change is thus a crucial component of Nespresso’s approach.
Through this technique, the coffee supply chain is transparent. Nestlé has committed to producing 100 percent of its coffee responsibly by 2025 (Kumar, 2020). The traceability of Nestlé’s coffee is a continual priority for the company. Knowing the origin of coffee beans is vital for evaluating the suppliers and farmers and encouraging them to improve their practices to contribute to a more sustainable supply chain. Nespresso strategy regularly releases its Positive Cup Effect Assessment Report, which highlights the company’s efforts throughout Latin America to source coffee more sustainably, as well as the impact of its Nespresso AAA Sustainable Quality Program for responsible sourcing.
Through training and the distribution of high-yield plantlets, the technique also aids farmers’ growth. For instance, Nestlé has funded farmer workshop on appropriate agricultural techniques for coffee plantation growers worldwide (Kumar, 2020). They may increase the efficiency and quality of their farms and diversify their crop production with the acquired expertise. The strategy aids in reducing economic risk, enhancing biodiversity, and reducing environmental impacts, for instance, by using more effective irrigation techniques (Kumar, 2020). Consequently, this guarantees that the coffee supply chain adheres to established criteria and source countries and regulations.
Outsourcing of Activities
Large corporations have decided to outsource manufacturing units to India, the Philippines, China, and Malaysia, which offer skilled and tech-savvy staff at cheaper labor prices in response to wage demands and rising production costs (Nestlé., 2021). Nestlé, for example, outsources its supply chain logistics, raw materials, and equipment to save costs, react more quickly regionally, and preserve corporate social responsibility (CSR) by involving local people. As part of the Nescafé Plan and the Nespresso AAA Sustainable Quality Program, Nestlé’s coffee is obtained via trade channels, and Farmer Connect direct sourcing methods (Nestlé, 2021). The firm obtains its coffee from growing locations in Africa, Latin America, and Asia. According to Nestlé Professional (n.d.), the Nescafé Plan for outsourcing coffee beans was operational in twenty countries in 2016. The company’s 363 Farmer Connect employees visited coffee farmers throughout the year to provide training, distribute plantlets, and provide technical support to help farmers follow Nescafé Better Farming Practices programs (Nestlé Professional, n.d.). The Nescafé Plan is a worldwide strategy for obtaining coffee beans.
In addition, the Nestlé Plan complies with the Responsible Sourcing Guideline. It focuses on reducing the environmental effect of our Nescafé factories, enhancing the lives of farmers and their communities, and promoting the sustainable management of landscapes (Kumar, 2020). In addition, the Plan makes special efforts to encourage women and youth to become leaders in the coffee industry. Furthermore, the Nespresso AAA Sustainable Quality Program, created in partnership with the Rainforest Alliance, strives to safeguard the highest-quality coffees necessary for Nespresso Grands Crus, maintain the environment, and improve farmer welfare.
Relationships with Suppliers
Nestlé’s coffee suppliers are a crucial element of the company’s value chain, so establishing and maintaining excellent relationships with its suppliers is essential to achieving commercial success. Nestlé collaborates with global vendors to provide goods and brands in over 186 countries. The firm’s Supplier Portal ensures that the company and its suppliers communicate when coffee beans or raw materials are required (Nestlé, 2021). The Supplier Portal is an online platform that facilitates communication between Nestlé and its worldwide supplier network (Nestlé, 2021). Nestlé’s suppliers can safely access vital procedures and resources via the site. Active suppliers may access contract-related information and tools to handle bids, ordering, delivery, and payment via the platform. Nestlé’s Responsible Sourcing Standard outlines the standards and methods of working that the company employs with its suppliers to guarantee the sustainable long-term supply of materials and services to Nestlé. It establishes fundamental, non-negotiable criteria and critical and urgent sustainability practices that supplier, their workers, agents, and subcontractors must always respect and adhere to while doing business.
The company promotes the transformational evolution of coffee sourcing and associated manufacturing processes. As a result, Nestlé expects its suppliers to behave honestly and commit to the ongoing development of their operations via the standards and guidelines. The firm adheres to the same respect-based standards in its interactions with its suppliers and expects them to do the same with their suppliers (Nestlé, 2021). Nestlé supports the formation of benchmarks to enhance company processes, contributes to intervention initiatives, and implements requirements to improve corporate integrity, workers’ rights, and safety, health, and sustainability initiatives in this spirit of continuous improvement.
Relationships with Customers
Nestlé promotes honesty, decency, and justice across the coffee value chain and supply. Nestlé Nescafé has satisfied its consumers by supplying them with high-quality goods, which are greatly valued. Nescafé aspires to have devoted clients for whom they redesign and develop new items. Nestlé favors more corporate freedom, which has been achieved via decentralization. To increase customer happiness, the company improves its operations, segments its market, targets distinct groups of clients, and positions itself (Nestlé Professional, 2020). The global coffee market is competitive. Approximately 72% of the instant coffee market is occupied by Nestlé (Nestlé, 2021). Nestlé demonstrates the global brand loyalty and marketing approach used by Nescafé.
The majority of the company’s marketing efforts are focused on socioeconomic activities of its customers. Nestlé’s prospective consumers include individuals who acknowledge that its coffee is of high quality. However, its items are expensive, and hence not everyone can buy them. In a bid to create a conducive working relationship with its customers, Nestlé employs Nescafé & GO machines beside food-to-go products and cross-promotional discounts (Comunicaffè, 2021). By positioning the Nescafé & GO machine in front of the consumer and at eye level, buying a client’s preferred coffee flavor, such as a Vanilla latte, is facilitated (Comunicaffè, 2021). Additionally, Nestlé’s Nescafé & GO machine is used for promotional activities for customers, by giving a free snack for any pack of Nescafé. According to Comunicaffè (2021), Nestlé provides its customers with helpful, comprehendible and relevant information about the nutritional values of its Nescafé’s instant coffee and the health benefits of its brand. Furthermore, the firm provides nutritional education– comprising the role of regular exercise, a balanced diet and controlled food consumption.
Core Business Processes
Procurement
The sourcing of Nestlé coffee’s bean products is based on direct bean purchases from growers, enabling the business to monitor the quality of the raw materials. However, there are instances in which direct buying is impractical, and dealers must be used. The Nestlé Procurement Policy applies to all Nestlé staff performing procurement operations on Nestlé’s behalf or working directly or indirectly with the Nestlé procurement function (Comunicaffè, 2021). It also applies to contractual parties that carry out procurement operations on Nestlé’s behalf. Strategic sourcing, supplier selection and control, contract preparation and approval, buy requisition creation and approval, purchase order creation and approval, and goods receipt are all procurement operations.
In strategic sourcing, Nestlé procures the finest and highest-quality coffee from the best firms based on competitive bidding to guarantee that Nestlé continuously obtains competitive pricing, service, and quality from its suppliers by creating a short list of pre-qualified vendors. Competitive bidding entails either purchasing from a preferred supplier or, if this is not feasible, selecting a supplier for major purchases by getting at least three offers or proposals. After supplier selection and management, prospective suppliers will undergo further evaluations to verify compliance with the Nestlé Supplier Code and the quality of the products and services they deliver (Comunicaffè, 2021). The contract is then drafted prior to its approval and checked for compliance. In this phase, the firm will agree on all procurement goals and establish standard action plans to accomplish these objectives. The process occurs at all organizational levels, inside and above markets.
Production
Creating high-quality soluble coffee from green coffee beans demands tremendous skill and technical knowledge. Here are the eight processes involved transforming the bean into Nescafé’s famous coffee.
Blending. Naturally, the flavor of coffee beans differs from area to region, season to season, and type to type. Arabica beans provide a rich and fragrant taste, whereas Robusta beans generate a flavor that is more powerful and has more body. Expertise is required to taste samples of the different beans and choose the ideal combination to make a high-quality, unique soluble coffee.
Roasting. Roasting coffee beans brings out their taste and fragrance, and temperature and duration are carefully regulated to maximize the coffee’s taste. A light roast imparts a mild flavor, a medium roast creates a well-rounded, rich flavor and fragrance, and a dark roast imparts a robust, unique flavor.
Grinding. The roasted coffee beans are then pulverized to a powdery texture. This is the same method used for ‘Roast & Ground coffee, which one may get at any local grocery store or coffee shop.
Extraction. The roasted and ground coffee is placed in a series of extraction chambers. These devices perform the same function as a household coffee percolator or filter coffee maker: separating coffee flavor from coffee grinds into hot water. This occurs under regulated pressure and temperature settings, making the extraction process very efficient.
Drying. One of two methods of drying the liquid produces soluble coffee. Spray-drying involves spraying the liquid into a hot air flow at the tubular tower’s furthest end. As the droplets fall, they dry and become a fine powder that settles to the bottom of the cylinder. In freeze-drying, the liquor is frozen to around -40 degrees Celsius to produce a thin film (Nestlé Professional, 2022). This is shattered into tiny bits before being vacuumed. The vacuum lowers the boiling point of the water to the extent that it evaporates even at these freezing temperatures, preserving the taste of the coffee and leaving behind solid soluble coffee.
Agglomeration. The spray-dried powder is agglomerated into soluble coffee granules by a process known as agglomeration. The powder is gently moistened so that the particles adhere, and the resultant granules are sieved so that only particles of the same size are placed in jars.
Aromatization. The Instant coffee processing team catches the exquisite aromas generated during grinding.
Filling. Glass jars or sachets are filled with soluble coffee powder or granules. The filling is performed in an environment of inert gas to preserve the taste and fragrance of the coffee throughout storage.
Decaffeination. Caffeine is removed from coffee beans using decaffeination, which is done while the beans are still green before roasting. There are three primary processes in use today, and the initial step is the same for all of them: the beans are treated with steam to make them porous, allowing the caffeine to be extracted.
Distribution
Nescafé uses dual distribution; it is not feasible for consumers to buy coffee directly from Nestlé. Although the Nescafé website is available in several languages, it is exclusively intended for the nation in which that language is spoken. For instance, in Nestlé’s homepage, there is a placee where one may locate a button labeled purchase now; after clicking this button, the customer must choose the shop and have a supermarket account. On the Dutch website for Nescafé, there is also a “buy now” option, but you will be sent to the site of the local grocer.
Channel 1 and Channel 2 distributors make up the twin distribution channels. On channel 1, Nestlé offers a variety of products, including Nescafé. After this procedure, supermarkets may buy directly from Nestlé, and Nescafé coffee will be accessible for consumers on store shelves. On distribution channel 2, however, Nestlé picks its distributors/wholesalers; distributors or wholesalers may file a request to Nestlé, and the company will determine whether they can serve as a distributor. After receiving authorization from Nestlé, retailers may acquire products directly from Nestlé and sell them to retailers, and it is available for retail sale to customers.
Return
Nestlé accepts returns of its coffee products under the return policy stated on its websites. The customer should examine their purchase upon delivery and report any problems within two weeks of receiving the order. If the customers are dissatisfied with a Nestlé Nescafé Store purchase, they may return it within 30 days of receiving them for a refund. Merchandise must be returned in its original packaging. According to Nestlé Health Science (2022), items cannot be returned unless they are brand-new, unopened, unused, and in factory-sealed packaging. The customer should also note that delivery charges are not refunded, and Nestlé does not cover return shipping costs in case of a customer’s mistake. However, the firm does give a refund after they have received and processed the returns.
Logistics Operations
The logistics department of Nestlé is responsible for ensuring that raw materials are accessible at the manufacturing site whenever required and that consumers get finished goods at the appropriate time and location. This is the duty of every successful logistics department (Nestlé, 2021). As a global manufacturing corporation, Nestlé possesses a variety of raw material sources and a logistics infrastructure for getting those commodities to the production site. Nestlé outsources logistics for delivering items to its clients, who are, in most instances, wholesalers since they are dispersed.
Tactical Management of the Supply Chain
Product Demand Forecast
Nestlé employs demand-driven forecasting for its Nescafé brand, which has improved substantially over the years. According to Pierce (2022), Nestlé employs market-leading business analytics software SAS® Analytics to accelerate their forecasting and analytics. With an enterprise-wide system that can examine millions of predictions up and down a ‘product hierarchy,’ businesses must now comprehend and quantify and anticipate this demand variation with greater precision. According to Pierce (2022), SAS detects coffee demand signals rather than trends and seasonality. It informs Nestlé automatically of the demand signals that truly impact customers’ purchase of items ascending a hierarchy. Accordingly, it is said that demand-driven forecasting has the potential to make short-term and long-term projections, even two-five to ten years in advance (Pierce, 2022). Human intervention is reduced in the demand-driven forecasting technique, and technology performs most of the projections.
The Chase and SAS Technology enable Nestlé to predict without using human judgment. According to Pierce (2022), 80 percent of Nestlé’s projections are derived directly from the solution without any human judgment. In contrast, just 20 percent need human judgment. Nestlé adopted the technology for the first time three years ago and discovered that every one percent increase in forecast accuracy resulted in a two percent decrease in inventory safety stock (Pierce, 2022). Eventually, Nestlé could remove 14 to 20 percent of their inventory safety stock, decrease it, and still satisfy Nescafé customer demand due to this enhanced forecasting skill. As such, the demand-driven forecasting is an important tool in the supply chain management.
Inventory Management
Nescafé regulates and controls its stocks using SAP (system application and products) and its inventory management software. The program enables inventory management and control by the managers responsible for that area, while sales representatives and all other staff occupy accountable positions (Vierjahn, 2019). By keeping Nescafé in warehouses located all over the globe and using its highly sophisticated warehouse management monitors, the corporation regulates its stocks and warehouses. This enables the timely availability of Nescafé at reasonable costs on the market. This adequate inventory and storage management has contributed to operational sustainability and waste reduction.
Additionally, this guarantees the prompt delivery of Nescafé goods in various product variations to cafes, shops, and other sales outlets, allowing the corporation to serve a large consumer base. The efficient network of warehouses enables Nestlé to successfully manage the planning and performance of the supply chain in a condensed period. Electronic order management enables the organization to have complete control over stocks and orders.
Sales
Nescafé regulates and controls its stocks using SAP (system application and products) and its inventory management software. The program enables inventory management and control by the managers responsible for that area, while sales representatives and all other staff occupy accounting positions (Vierjahn, 2019). By keeping Nescafé in warehouses located all over the globe and using its highly sophisticated warehouse management monitors, the corporation regulates its stocks and warehouses. This enables the timely availability of Nescafé at reasonable costs on the market. This adequate inventory and storage management has contributed to operational sustainability and waste reduction.
Additionally, this guarantees the prompt delivery of Nescafé goods in various product variations to cafes, shops, and other sales outlets, allowing the corporation to serve a large consumer base. The efficient network of warehouses enables Nestlé to successfully manage the planning and performance of the supply chain in a condensed period. Electronic order management enables the organization to have complete control over stocks and orders.
Operations Planning
Two essential papers, the Nestlé Corporate Business Principles and the Nestlé Management and Leadership Principles regulate the company’s operations. The two offer the ethical code that regulates the company’s policies and initiatives (Nestlé, 2020). They outline the tone and manner of approach to corporate management. The company’s business strategy is to make and sell its goods in a manner that generates long-term value for all its stakeholders, including its workers, customers, and business consortium in the regions in which it works. The organization needs to prioritize short-term earnings above long-term business goals. Recognizing that customers have a real stake in the company’s conduct and performance, the organization promotes cultural and social diversity (Nestlé, 2020). The corporation does not engage in nationality, religion, race, or age-based discrimination in its business management. Rich cultural variety aids in developing fresh ideas for creating goods that fulfill the demands of society. Nestlé was the driving force behind the Kyoto Protocol, an agreement to limit carbon dioxide emissions in the fight against global warming (Nestlé, 2020). As an alternative to plastics for packaging their food goods, the firm was the first to manufacture biodegradable containers.
Through foreign direct investment, Nestlé tries to achieve economies of scale while operating in a more developed area. In a developing context, Nestlé Company adopts a local approach by using local raw resources and the most suitable brand. The Nestlé Company forms strategic alliances with other major corporations. For instance, the corporation partnered with Coca-Cola Company to make ready-to-drink tea and coffee, which have been embraced by a majority of its customers.
Operational Management of the Supply Chain
Processing of a Customer’s Order
As a result of Nestlé’s sophisticated ordering system, consumers have many ordering choices, including mail, the Internet, electronic data exchange, and in-person delivery. Nestlé stores its data on the cloud and other data backups to guarantee data security if a data-destroying occurrence at the workplace, such as a loss of integrity or theft (Nestlé Professional, 2022). The order information or data are submitted to the sales configuration department, which informs whether the requested items are available. The order is confirmed and forwarded to the shipping planning department if the goods are available. If the order does not need shipping because the client is willing to pick up the items at the production site, shipment execution and inventory management are carried out.
The department of shipment planning determines the available routes and assigns one to the order. Once the route has been chosen, shipment execution is completed, and the client is alerted that the package is in transit. The order details are transmitted to the inventory management department to ensure they have the most recent stock data (Nestlé Professional, 2022). The sales configuration department utilizes inventory control’s processed data to ensure that products are available when a client places an order (Nestlé Professional, 2022). Once the products have been sent to the client, the order information is forwarded to the accounting department, which then sends the customer an invoice. When the order is received, the client has the right to check the items and pay if they are in satisfactory condition.
Conclusion
Advantages
Cloud technologies have proved advantageous because of Nestlé’s objective of achieving sustainable supply chain management while simultaneously expanding the number of coffee brands on the market. Using cloud-based technologies within the supply chain management framework leads to economic and operational advantages owing to real-time accuracy and 360 degree controls of critical activities. By transitioning to a cloud service, information management no longer needs internal resources, and product innovation and improvement are faster (Kale, 2019). (Kale, 2019). The flexibility of cloud-based services is vital for Nestlé as a worldwide firm since it integrates all major supply chain participants, enabling a more strategic approach to inventory deployment (Geissbauer et al., 2017). Furthermore, location analytics is an option for cloud computing, allowing monitoring of delivery networks and prioritizing shipments as stated above.
Cloud technology is a solution that can improve the effectiveness of other supply chain management solutions. For example, an agile supply chain structure involves virtual integration to communicate information across many departments to assess the genuine demand in the market. An agile supply chain can provide an end to end visibility to discover bottlenecks in the current networks and any other problems that impede performance. In addition, agility is network-dependent, meaning that every participant in the supply chain management system must be able to offer their expertise.
Besides boosting the agility of supply chain management, cloud networks are crucial to integrate since they may also increase demand-driven planning, which is essential to perform in real time. Cloud technology may benefit demand-driven planning since it focuses on a wide range of values instead of a defined conclusion (Ranger, 2022). A cloud solution is an easy technique for recognizing the restrictions in the production or supply of products and installing ‘buffers’ in the regions that require them. Since demand-driven planning involves modifying swiftly, it is also feasible to boost supply chain agility and production (Tiwary & Unhelkar, 2019). (Tiwary & Unhelkar, 2019). Using cloud-based supply chain management as the primary enhancement will provide Nestlé with various advantages. It may assist the integration of various actors inside the system, cover a large variety of information services, and unite them into a dependable and agile framework.
Challenges
Even though Nestlé seems to be doing a decent job in supply chain management. There is still a potential problem that is unforeseen, which poses risks that can affect the supply chain or the force majeure issues. According to the news iE Food & Beverage, (2020) reports that the CEO of global food and beverage giant Nestlé, Mark Schneider, has admitted the company has not been able to hit its ‘normal’ levels of production during the coronavirus pandemic. Mark has also indicated the logistics limitations now kicking in and also a lower employee presence as a result of illness or precautionary measures, which has introduced an enhanced safety protocol that we need to run at our plants.
In addition, while a coffee’s lifespan and popularity with roasters will depend on its quality and how it’s stored, processed, dried, and handled, it can also be hard to sell green coffee that’s been in storage for 4-5 months (iE Food & Beverage, 2020). What this means is that the importers who’d usually supply these roasters could be stuck with an excess in product stock that they cannot sell. This will put their coffee exporters under financial pressure due to importers and roasters will be reducing or delaying their purchasing commitments by purchasing and reserving less coffee altogether.
Recommendations for Improving Supply Chain Management
The first approach that Nestlé is advised to pursue is demand-driven planning, which a company is operating a model based on current demand information. Due to the possibility of an increase in demand for Nestlé’s products due to the pandemic, the contingency planning approach to supply chain management is expected to ensure a comprehensive view of current processes. The capacity to effectively respond to risks and expand logistical operations ensures that supermarkets are regularly stocked (Deloitte, 2020). By monitoring the present scenario and using statistical forecasting to estimate demand for Nestlé goods during worldwide lockdowns, the firm could build unified promotional and price plans to promote revenue growth and improve margins further (Hazen et al., 2021). This strategy’s guiding idea has the foresight to capitalize on opportunities and limit the effect of adverse occurrences.
The second proposed solution for Nestlé is constructing an agile supply chain with quick planning and coordinated execution. Once the company’s upper management has a better awareness of the needs and dangers, the company’s supply chain may be adapted to changing marketing conditions. To guarantee that Nestlé goods are supplied in shops and supermarkets around the globe, it is advised to use dynamic planning capabilities and continually alter operations to promote responsive agility. This method is superior to the previous one since it is no longer necessary to wait until the end of the month to adjust production and supply in response to sales or shipments. The new model is connected with continual dynamic modifications to the supply chain that are in step with market shifts.
The third idea proposes optimizing product designs and production management in supply, manufacturing, and sustainability to accelerate innovation that promotes company development and profitability. This involves deciding on potential courses of action when the product is still in its early stages of development. Therefore, product innovation must be considered to make well-informed decisions about product design. Due to the increased demand for their products during the COVID-19 pandemic, Nestlé may use less expensive packaging to reduce the cost of their goods.
Investing in cloud supply chain technology is the fourth piece of advice for Nestlé to enhance its management and enable it to monitor its inventory in real-time to regulate the stock on shop shelves and the pace at which new goods are generated. This is how Nestlé may strengthen its management and ease its operations (Fung Business Intelligence, 2018). This strategy involves a flexible approach to managing the supply chain and total visibility across the organization. Cloud technologies will significantly improve Nestlé’s capacity to manage its supply chain since they enable advancements in analytical skills and the integration of several platforms (Min et al., 2019). Moreover, since Nestlé is an international organization, cloud computing will liberate the company from geographical and political limitations that impede supply chain management operations.
References
Comunicaffè. (2021). Nescafé research reveals top tips to help retailers drive sales in the coffee to go market. Web.
Deloitte. (2020). COVID-19. Managing supply chain risk and disruption. Web.
Fung Business Intelligence. (2018) Ten digital trends shaping the future of retail: Asia distribution and retail. Web.
Geissbauer, R., Schrauf, S., Berttram, P., & Cheraghi, F. (2017). Digital factories 2020: Shaping the future of manufacturing. PWC.
Hazen, B.T., Russo, I., Confente, I., & Pellathy, D. (2021). Supply chain management for circular economy: Conceptual framework and research agenda, The International Journal of Logistics Management, 32 (2), 510-537. Web.
iE Food & Beverage (2020). Nestlé Boss Admits Covid-19 Is Creating Production Problems. iE Food & Beverage. Web.
Kale, V. (2019) Digital transformation of enterprise architecture. CRC Press.
Kumar, A. (2020). Nespresso: Redefining the experience of coffee lovers. Web.
Min, S., Zacharia, Z. G., & Smith, C. D. (2019). Defining supply chain management: in the past, present, and future. Journal of Business Logistics, 40(1), 44-55. Web.
Nestlé Health Science. (2022). Shipping & returns. Web.
Nestlé Professional. (2020). Nescafé &GO top tips – Improving customer loyalty & relations. Web.
Nestlé Professional. (2022). From crop to cup: How coffee is made. Web.
Nestlé. (2020). Corporate business principles. Web.
Nestlé. (2021). Our sustainable journey: Ten-years Nescafé plan. Web.
Nestlé. (n.d.-a). Company profile. Web.
Nestlé. (n.d.-b). Suppliers. Web.
Pierce, F. (2022). How Demand-Driven Forecasting paid off for Nestlé. Web.
Ranger, S. (2022). What is cloud computing? Everything you need to know about the cloud, explained. Web.
Tiwary, A. and Unhelkar, B. (2019) Outcome-driven business architecture: synergizing strategies and intelligence with architecture. Boca Raton: CRC Press.
Vierjahn, I. (2019). Nestlé and SAP: Partners in business, friends in transformation, experts in innovation. Web.