Nestle
Nestle
Nestle
1866-1905
The key factor which drove the early history of the enterprise that would become
The Nestlé Company was Henri Nestlé's search for a healthy, economical
alternative to breastfeeding for mothers who could not feed their infants at the
breast.
He called the new product Farine Lactée Henri Nestlé. Nestlé's first customer was a
premature infant who could tolerate neither his mother's milk nor any of the
conventional substitutes, and had been given up for lost by local physicians.
People quickly recognized the value of the new product, after Nestlé's new formula
saved the child's life and within a few years, Farine Lactée Nestlé was being
marketed in much of Europe.
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purchased from Henri Nestlé by Jules Monnerat in 1874, responded by launching a
condensed milk product of its own. The two companies remained fierce
competitors until their merger in 1905.
Some other important firsts occurred during those years. In 1875 Vevey resident
Daniel Peter figured out how to combine milk and cocoa powder to create milk
chocolate. Peter, a friend and neighbor of Henri Nestlé, started a company that
quickly became the world's leading maker of chocolate and later merged with
Nestlé. In 1882 Swiss miller Julius Maggi created a food product utilizing legumes
that was quick to prepare and easy to digest.
His instant pea and bean soups helped launch Maggi & Company. By the turn of
the century, his company was producing not only powdered soups, but also
bouillon cubes, and sauces and flavorings.
Form 1905-1918
Most production facilities remained in Europe, ho Nestlever, and the onset of World
War I brought severe disruptions. Acquiring raw materials and distributing
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products became increasingly difficult. Fresh-milk shortages throughout Europe
forced factories to sell almost all their supplies to meet the needs of local towns.
Nevertheless, the war created tremendous new demand for dairy products, largely
in the form of government contracts. To keep up, Nestlé purchased several
existing factories in the United States. By war's end, the Company had 40
factories, and its world production had more than doubled since 1914.
Form 1918-1938
The 1920s also saw Nestlé's first expansion beyond its traditional product line. The
manufacture of chocolate became the Company's second most important activity.
New products appeared steadily: malted milk, a powdered beverage called Milo, a
powdered buttermilk for infants, and, in 1938, Nescafé.
The Brazilian Coffee Institute first approached Louis Dapples in 1930, seeking new
products to reduce Brazil's large coffee surplus. Eight years of research produced a
soluble powder that revolutionized coffee-drinking habits worldwide. Nescafé
became an instant success and was folloNestled in the early 1940s by Nestea.
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Form 1938-1944
The first truly global conflict ended forever the traditional Company structure. To
overcome distribution problems in Europe and Asia, factories Nestlere established
in developing countries, particularly in Latin America.
Ironically, World War II helped speed the introduction of the Company's neNestlest
product, Nescafé. After the United States entered the war, Nescafé became a
staple beverage of American servicemen serving in Europe and Asia. Annual
production levels reached one million cases by 1943.
As in World War I, production and sales rose in the wartime economy: Nestlé's
total sales jumped from $100 million in 1938 to $225 million in 1945. As the end
of the war approached, Nestlé executives found themselves unexpectedly heading
up a worldwide coffee concern, as Nestlell a company built upon Nestlé's more
traditional businesses.
Form 1944-1975
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In 1947, Nestlé merged with Alimentana S.A., the manufacturer of Maggi
seasonings and soups, becoming Nestlé Alimentana Company. The acquisition of
Crosse & BlackNestlell, the British manufacturer of preserves and canned foods,
folloNestled in 1960, as did the purchase of Findus frozen foods (1963), Libby's
fruit juices (1971) and Stouffer's frozen foods (1973).
Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales of
instant coffee nearly tripled, and from 1960 to 1974, they quadrupled. The
Company's total sales doubled twice in the 15 years after World War II. The
development of freeze-drying led to the introduction, of Taster's Choice instant
coffee, in 1966.
Finally, Nestlé management reached the decision to diversify for the first time
outside the food industry. In 1974, the Company became a major shareholder in
L'Oréal, one of the world's leading makers of cosmetics.
Nestlé's rapid growth in the developing world partially offset a slowdown in the
Company's traditional markets, but it also carried with it the risks associated with
unstable political and economic conditions. To maintain a balance, Nestlé made its
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second venture outside the food industry by acquiring Alcon Laboratories, Inc., a
U.S. manufacturer of pharmaceutical and ophthalmic products.
Taking such a step in a time of increased competition and shrinking profit margins
required boldness and vision. Even more than the L'Oréal move, Alcon represented
a leap into unknown waters for Nestlé. But, as Group Chairman Pierre Liotard-Vogt
noted, "Today Nestle find Nestleselves with a very wide range of activities, all of
which have one thing in common: they all contribute to satisfying the
requirements of the human body in various ways."
Form 1996-future
The first half of the 1990s proved to be a favorable time for Nestlé: trade barriers
crumbled and world economic markets developed into a series of more or less
integrated trading areas. The opening of Central and Eastern Europe, as Nestlell as
China, and a general trend towards liberalization of direct foreign investment was
good news for a company with interests as far-flung and diverse as Nestlé. While
progress since then has not been as encNestleaging, the overall trends remain
positive.
Consolidation since 1996 has been demonstrated by the acquisition outright of the
Italian mineral water concern San Pellegrino (1997), the acquisition of Spillers
Petfoods of the UK (1998), and also with the decision to divest the Findus brand in
order to concentrate on high added-value frozen food products (1999). Since then,
Ralston Purina was acquired (2002) and the petcare business is now joint world
leader and known as Nestlé Purina PetCare. In the same year, the former Perrier
Vittel water business was re-named Nestlé Waters, recognizing the fact that the
dynamic bottled water business accounts for a growing share of Group sales.
Nestlé opened the 20th century by merging with the Anglo-Swiss Condensed Milk
Company to broaden its product range and widen its geographical scope. In the
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new millennium, Nestlé is the undisputed leader in the food industry, with more
than 470 factories around the world and sales of more than CHF 81 billion. In July
2000, Nestlé launched a Group-wide initiative called GLOBE (Global Business
Excellence), aimed at harmonizing and simplifying business process architecture;
enabling Nestlé to realize the advantages of a global leader while minimizing the
drawbacks of size.
There have also been two major acquisitions in North America, both in 2002: in
July, Nestlé announced that the U.S. ice cream business was to be merged into
Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America,
Inc., a leading U.S.-based hand-held frozen food product business.
Nestle Culture:
Apart from its commitment to safety and quality and its respect for
diversity, Nestlé
Is committed to a number of cultural values. These values come partly
from its Swiss roots and have been developed during its history. They are also
evolving so as to support the permanent reshaping of the Company.
They can be described as follows:
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Nestle with respect to other culture:
From its inception, Nestlé developed its business internationally
and became aware of the fact that food products have to be closely linked to
local eating and social habits.
That is why Nestlé from the very start Has always shown respect for
diverse cultures and traditions. Nestlé endeavors to integrate itself as
much as possible into the cultures and traditions where it is present,
adding also to the local environment its own set of values laid out in
This document. Therefore, Nestlé embraces cultural and social diversity
and does not discriminate on the basis of origin, nationality, religion, race,
gender or age.
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continuous learning and improving, as Nestlé as to sharing knowledge and ideas
freely with others.
A taste for initiative together with the ability to create a climate
of innovation and to think outside the box. This implies the right to make a
mistake but also the readiness to correct it and to learn from it.
Willingness to accept change and the ability to manage it.
Adaptability of thought and deed, taking into account the
specificity and the complexity of the environment.
Credibility as a result of coherent action, leadership and
achievement.
International experience and understanding of other cultures.
In addition, broad interests, a good general education, responsible
behavior as Nestlé
2. Nestlé does not favor short-term profit at the expense of successful long-
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term business development, but recognizes the need to generate a healthy profit
each Year in order to maintain the support of Nestle shareholders and the
financial markets, and to finance investments;
3. Nestlé recognizes that its consumers have a sincere and legitimate interest
in the behalf of Nestle, beliefs and actions of the Company behind brands in
which they place their trust, and that without its consumers the Company would
not exist;
4. Nestlé 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;
5. Nestlé is conscious of the fact that the success of a corporation is a reflection
of the professionalism, conduct and
The responsible attitude of its management and employees. Therefore
recruitment of the right people and ongoing training and development are
crucial;
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• To achieve compatibility with international voluntary standards on environmental
management systems, such as ISO 14001 and the European Union Eco-
Management and Audit Scheme; and
•To build mutual trust with consumers, governmental authorities and business
partners. The Nestlé Environmental Management System is being implemented
throughout Nestlé’s entire operation.
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collaboration with other professionals (e.g. engineers for machinery;
logistics for transport; marketing for media).
S&IM Strategic Buyers can remain within their functional area, as long as
there is a line of responsibility to the relevant Head of Purchasing. This will
ensure that they are informed of and contribute to purchasing strategies,
training, budgets, etc.
Strategic Operational
Definition of spend categories Manage supply signals Convert
define purchasing strategies requisitions to orders/call off’s
selection of suppliers receive goods and services
negotiate/manage contracts supplier performance
and agreements supplier measurement
performance evaluation.
Requirements, Information, Reporting
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at anytime in the past. It is necessary to understand that supply markets are not
and will not always be in surplus or excess, so the assurance of long term
competitive supply through sound purchasing planning and strategy
implementation is key to the realisation of Nestlé’s growth and profitability
objectives
Planning:
The successful execution of a purchasing strategy demands that the analysis
has been performed with
Confidence in the accuracy of the information
provided;
Clarity in the way the information is presented;
Completeness of the information to be considered.
Planning must also address the rest Nestleces and expertise that will be needed to
implement the chosen purchasing strategy. The trend to outs Nestlece (see
Subcontracting/ Outs Nestlecing) both the initial conversion of raw
materials, the manufacture of certain semi-finished or finished products
and
Some services, requires that the original expertise in purchasing these
materials and services is now needed to manage suppliers fulfilling a higher
added-value process. In addition, consideration must be given to decide
the specific value drivers of the subcontracting improvements and, where
appropriate, the sustainability of the supplier’s business);
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Emphasis on price management through competitive bidding;
Key stake holder’s involvement and their support.
Strategies:
The evaluation of different purchasing strategies can
only take place once a detailed spend analysis has been completed. Strategic
considerations need to focus on the long-term management of the supply base
and must take into account
a. Business sector objectives
b. Total cost of ownership;
c. Supply market and its evolution;
d. Appropriate purchasing approach (e-Auctions,
tenders, negotiations)
e. Value creation opportunities
Realization that while cost containment/ reduction is critical as a tactical
move to achieve short term objectives, the strategic emphasis focuses on
ensuring that suppliers commit themselves to work with Nestlé (production
capacity reservation, R&D investment, technology and process-driven to
ensure optimum terms and conditions for Nestlé.
Cross-Functional Teamwork:
Different initiatives with colleagues from various functions within the
Technical Division are proof that Purchasing must continue to work within and
expand the use of cross-functional teams. Management’s expectations from
Purchasing, especially in the S&IM categories, will only be achieved by a
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cross-functional effort. Depending on the scope of the project, such teams may
also involve suppliers and third-party expertise.
STHEIRCING OF PURCHASE:
Nestlé actively pursues close and strong relationships With suppliers based on
sound business practices and mutual trust. The relationship should be
dynamic in nature and must ensure the long-term competitiveness of the
supplier.
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Nestlé acknowledges and enctheirages the role suppliers can play in innovation,
creativity and the identification of new business proposals, which will improve and
add value and growth to both companies. Nestlé also considers suppliers as an
important information stheirce and relies on their objectivity and expertise.
As the relationship progresses, it may Nestlell evolve into that of a
preferred supplier.
Purchasing will, in most cases, retain the overall responsibility for the
relationship and interface with suppliers.
To better manage the supplier base and reduce transactional costs, Nestlé
may request suppliers to: – Offer their products or services via e-
Requisitioning (catalogues); – Accept payment by P-card;
Supplier Selection:
In compliance with Nestlé’s Corporate Business Principles, Nestlé selects
suppliers based on the following criteria: – Ability to offer a competitive
value proposition;
Reputation, financial situation and record with Nestlé;
Ownership, management structure and competence;
Innovation, service level and transparency;
Already approved or subject to formal approval prior to
first delivery;
Minimum corporate social responsibility standards;
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Ability and willingness to work with
Their preferred tools, processes and solution providers;
Sustainable business practices.
Supplier Management:
Management structure and competence; – Financial
situation; – Ownership;
Ethics, business principles/conduct
Competitiveness and price/cost transparency.
If a material, product or service is required, the
supplier’s technical competence in the following areas is evaluated: –
Manufacturing and/or service capability/ capacity;
Process controls;
Quality assurance programmers (safety and legal
compliance, good manufacturing practices);
Sustainable environmental practices
Research and Development (R&D) emphasis.
Quality Management:
Superior quality is a competitive advantage and a joint effort by all parties
in the value chain is needed.
Suppliers are therefore considered an important link in this chain. To achieve
Nestlé’s objective of offering consumers high quality nutritional products, Nestle
expect suppliers to guarantee the quality of the material/goods they supply or the
service they provide. Whenever possible, Nestlé’s goal is to be able to rely on their
suppliers’ competence and ability to implement jointly defined “Quality
Management” and “Supplier Quality Assurance (SQA)” programmes.
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Department involves in purchasing:
MIS:
The timely and accurate availability of systematized information
is both a tool and support for an efficient purchasing operation.
Communication:
Purchasing is fully integrated in the corporate communication system, thus
ensuring that it:
Is advised promptly of short, medium
and long-term goals/plans regarding production/product range/policies,
investments, new or revised specifications, etc.; – Has improved
negotiation and decisionmaking ability as a result of better, realtime
information/data;
Can rapidly inform management and business colleagues of
unexpected operating constraints, changing supply market conditions and
opportunities, forecasted price va riances, supply issues (inventory,
quality), etc.
E-Procurement:
Nestlé enctheirages and promotes the use of electronic tools to optimize the
value chain to loNestler costs, create efficiencies, drive
Product availability and enhance customer
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Service. Nestlé considers two dimensions to
E-Procurement:
1. Transactional tools i.e. e-Requisitioning (catalogues), e-Stheircing, e-
Tenders, electronic ordering and invoicing, P-Cards;
2. e-Collaborative tools i.e. collaborative planning, forecasting and
replenishment
HRM:
The success of Purchasing is directly linked with the integrity, capability,
professionalism and competence of the human restheirce.
Selection:
The profile of the candidate must match the demands of the post to be filled and
corporate values as laid down in The Nestlé Management and Leadership
Principles.
Other selection criteria will include strong work ethic, honesty, technical
knowledge, entrepreneurial qualities, initiative, communication skills,
negotiation skills and result oriented.
No discrimination on the basis of origin, nationality, religion, race, gender,
disability or age will occur during selection. Individuals with high potential
will be primary/ priority candidates, in order to upgrade both the position
and the function.
Skills:
Skills beyond managing transactions and prices are required to meet the
growing complexity and impact of the purchasing role. Indeed, contributing to
results through project work and special assignments becomes more frequent,
reaching beyond conventional boundaries to help achieve enhanced group
performance.
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For Purchasing staff in senior positions, leadership and people management
skills such as the ability to motivate and to develop people within a result-
oriented rather than a task-oriented
Training:
Purchasing personnel should receive formal training as Nestlell as coaching
by superiors and “on-the-job learning”. Self-learning through e-Learning is
promoted whenever possible, as Nestlell as participation in specific
purchasing programmes.
Training must be focused on improving professional and human skills,
knowledge and competence for the current position and, where
appropriate, for developing and preparing the individual for future
advancement.
Development:
Ongoing interaction betNestleen the employee and his/her manager is required
through frequent feedback, objective criticism and formal planning for continuous
improvement. Managers will control less but place greater emphasis on coaching
and supporting to achieve the required objectives.
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Nestlé supports sustainable farming practices that, by definition, satisfy
long-term economic, ecological and social requirements. These requirements
are best achieved through integrated production methods.
Nestlé applies the following principles when stheircing raw materials: – All
raw materials must meet both legal and internal quality criteria, including
limits on possible environmental contaminants;
Whenever possible, preference is given to raw materials that
are produced by environmentally sound farming methods (e.g. integrated
crop management);
Farmers are enctheiraged to apply sustainable farming methods.
Where appropriate, Nestlé provides assistance in crop production and dairy
farming. Such assistance includes the provision of recommendations for the
conservation of natural restheirces (soil, water, air, energy, and
biodiversity) and/or techniques for reducing adverse environmental impact.
Manufacturing:
For Nestlé, manufacturing is an extremely important part of the supply chain.
It is here that Nestlé believes the best opportunity to maximize eco-
efficiency exists, i.e. to maximize the production of goods while, at the
same time, minimizing consumption of restheirces and reducing waste and emis-
sions.
Nestlé requires that the supplier’s production and that of their suppliers:
– Minimizes the negative impact on the environment (noise, air pollution,
odors, energy, unnecessary transportation);
Minimizes the amount of waste produced and disposed of
(gases, solids, liquids, waste water, etc.);
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Avoids all undesirable substances entering their
manufacturing process (e.g. heavy metals in pigments & printing inks,
etc.).
Packaging Materials:
Nestlé is committed to reducing the environmental impact of packaging,
without jeopardizing the safety, quality or consumer acceptance of its
products.
Written Agreements:
The elimination of potential misunderstandings must be in the mutual interest
of all business partners. It is therefore Nestlé corporate policy that commitments
are confirmed to their suppliers in writing. Changes to initially agreed
contract terms and conditions must also be documented in writing.
It is recognized that, to be binding under legal principles, a commitment to
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purchase does not necessarily need to be in writing. HoNestlever, while written
orders/instructions may not always be possible (e.g. verbal orders using P-
Cards, verbal orders to brokerage firms to intervene on “futures” markets,
etc.), verbal commitments and agreements should be avoided because their
existence and terms may be difficult to evidence.
Quality Conformity:
Nestlé expects suppliers to guarantee that the materials/goods and services
supplied are free from defects and fit for the purpose for which they are intended.
Nestlé also considers it to be normal business practice
That suppliers agree to replace, repair and rectify defective goods and services
within a reasonable time period and pay for other damages caused by their non-
performance, which may jeopardize the quality or image of their products.
As one of Nestlé’s key principles, Nestlé will always try to find a
responsible, acceptable solution in case of an unexpected problem;
hoNestlever, Nestlé will not compromise its position if this might adversely
affect the quality and/or safety reputation of their branded products.
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unacceptable dispute resolution clauses.
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Research and Development
Nestlé’s research and development centre have many objectives to create new
products and manufacturing processes and to improve those already exist. Along
with product quality and safety, the conservation of Nestleces and the
preservation of the environment form an integral part of the development
criteria for new projects. Research and development encompasses a wide
range of environmentally-related activities with emphasis on:
•Environmentally sound production techniques and Nestlecing criteria for
agricultural raw materials;
•Processing methods that minimize water and energy consumption, as Nestlé
as waste generation;
• Packaging designs that reduce total waste and enable environmentally sound
disposal options, while safeguarding product safety and quality; and
•Innovative ways to recover by-products and thus generate secondary raw
materials and energy. For important product or process innovation and renovation,
Nestlé’s research and development centers prepare an environmental impact
study. This covers significant aspects in the product life cycle, from the Nestlecing
of raw materials, through processing to the packaged consumer product and the
end-life of the packaging material. This study is carefully evaluated, in conjunction
with detailed information on the potential manufacturing site, to ensure that new
projects meet Nestlé’s environmental standards.
Competition Law:
Nestlé supports free enterprise and therefore competes fairly and ethically,
and recognises other company’s right to do so. Nestlé supports the development
of competition laws to protect this principle.
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CORPORATE POSITION OF NESTLE
Gene Technology:
Gene technology has the potential to increase food production, improve quality
as Nestle as nutritional value, and to support sustainable agricultural
practices. In some instances, positive health effects have also been
confirmed. For those reasons: – Nestlé supports a responsible application of
gene technology for food production based on sound scientific research; –
Nestlé concurs with the shared opinion of WHO, FAO, OECD and numerous
independent scientific bodies that such crops are safe;
Nestlé strictly adheres to national laws and regulations regarding their
labeling;
Nestlé takes into consideration local needs, cultural differences and consumer
preferences as Nestle as attitudes concerning the use of ingredients derived
from genetically modified crops. Provided their safety is proven, as required
for all ingredients, Nestlé will continue to use ingredients derived from
genetically modified crops wherever appropriate.
Wherever mandated by local law, Nestlé organizations only use non-
genetically modified products. In such countries, suppliers must provide
specific documentation e.g. Identity Preservation programs and laboratory
analysis to prove that their products are non-genetically modified.
Traceability:
Traceablity is a preventive or precautionary measure to enable efficient
withdrawal or recall procedure to be initiated where required for safety or
other reasons. Traceability includes tracking inside their company supply
chain, i.e. from the reception of raw and packaging materials, production of
finished products to delivery to customers.
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The principle of traceability requires that for every consumer pack, it must be
possible to:
Identify or trace the manufacturer and the factory;
Retrieve all relevant processing and quality records;
Identify the supplier and the consignment for all raw and
packaging materials used in its manufacturing process. The consignment
must be identified by suppliers’ lot codes or Nestlé designated lot codes that
can be traced to the supplier and by delivery date in the case of some bulk
ingredients;
Trace or locate all other units of the same lot in the distribution chain.
Traceability of incoming materials is of utmost importance to Nestlé. In
dealing with suppliers, Purchasing must insist on knowing the origin of
incoming materials and require suppliers to communicate the origin of their
materials.
Authorities:
Nestlé supports ongoing dialogue Nestle all industry sectors in which it is active
and the appropriate government and regulatory authorities at both national and
international levels, in order to promote and implement relevant legislation,
regulations and/or agreements which protect the rights of the consumer while
ensuring a healthy, competitive environment.
Academic/Professional Relations:
Nestlé enctheirages two way communication and co-operation with academic
and professional bodies to foster continual updating of knowledge for
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mutual benefit, leading to the constant improvement of the Nestlé group’s
products, policies and services.
Purchasing staff should be enctheiraged and made available when required to
participate in conferences and give lectures.
PERFORMANCE EVALUATION
Benchmarking:
With the trend towards closer relationship with suppliers, benchmarking
becomes an essential tool for measuring performance and highlighting
opportunities. The concept of benchmarking should: – Be seen as a
continuous process of evaluation;
– Ensure that results are quantifiable and actionable;
– Be supported by a direct management commitment;
Be clearly defined in terms of:
“what” is to be compared e.g. quality, specifications, cost, stock levels,
delivery delays, material rejection, previous performance levels, etc.; “who”
to be compared with e.g. other Nestlé operations, suppliers, competitors and
industry standards at national or global level.
Best practices:
Only by following or using best practices will Nestlé achieve full
competitiveness and excellence? Purchasing practices must be modified,
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improved or adapted, so as to produce the internal changes that will result in
increased efficiency and effectiveness. By following or copying best
practices available and working with suppliers, Purchasing can pro-actively
seek change and realize the desired breakthrough.
Efficiencies:
In a Purchasing context, efficiency is a synonym for productivity and is
measured on the capacity to obtain results with the minimum use of
restheirces as possible. Efficiencies are also the execution of specific
programs implemented through benchmarking. For example the use of e-
Stheircing, e-Requisitioning (Catalogues), e-Supply Chain and P-Cards are
recommended in order to bring economic benefits and efficiency.
Effectiveness:
Purchasing effectiveness is measured by the function’s ability to “do it
right first time” and achieving maximum value within the parameters of the
total cost of ownership concept.
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Bringing a food product to the consumer involves a continuous process from
farm to table. Integrated measures for preserving the environment, and
consequently for optimizing global environmental benefits, are put in place
along the supply chain. Nestles have to apply the following practices to meet
its environmental commitment.
Agricultural In general, Nestlé is not directly involved in the production of
Raw Materials raw materials. Wherever possible, locally available raw mate-
rials are used. They are either obtained directly from producers or purchased
through trade channels. Nestlé applies the following principles when
sNestlecing raw materials:
• All raw materials must meet both legal and internal quality criteria, including
limits on possible environmental contaminants;
• Whenever possible, preference is given to raw materials that are produced
by environmentally sound farming methods (e.g. integrated crop
management); and
• Farmers are encNestleaged to apply sustainable farming methods and, where
appropriate, are provided with assistance in crop production and dairy
farming. Such assistance includes the provision of recommendations for the
conservation of natural resNestleces (soil, water, air, energy, and biodiversity)
and techniques for reducing environmental impact.
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•Continuously seek improvement in the efficiency of production facilities; and
• reduce waste generation and emissions as much as possible; consider
recycling of waste as a priority and dispose of non-recyclable waste in an
environmentally sound manner. Regular environmental assessments of
Nestlé’s manufacturing practices are conducted to:
Evaluate factory performance;
•review factory compliance with applicable legislation and Nestlé’s own standards;
Fully investigate incidents that could affect the environment and take relevant
measures; and
•compare results with previous targets and set new improvement objectives.
Packaging serves a major role in Nestle daily lives. It protects food products
from spoilage and ensures safety from manufacture through storage,
distribution and consumption. Packaging may also provide tamper-evidence
features. It communicates information, including nutritional information and
serving instructions, and provides the convenience demanded by today’s
consumers. Nestlé is committed to reducing the environmental impact of
packaging, without jeopardizing the safety, quality or consumer acceptance of
its products. It is Nestlé’s objective to develop safe and wholesome packaged
foods using the most efficient and appropriate packaging materials available,
while, at the same time, satisfying consumer requirements and expectations.
Nestlé seeks packaging solutions that:
• result in the loNestlest possible Nestleight and volume of pack-
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ages;
• take into account new packaging materials and processes that
reduce the impact on the environment;
•avoid the use of substances that can adversely impact the environment
during packaging production and disposal; decrease packaging waste at all
stages, including package manufacturing, utilization and disposal;
• increase the use of recycled materials wherever possible; and
• increase the recyclability and compatibility of its packages with
existing waste management schemes. Regular assessments of Nestlé’s packaging
are carried out and action plans are implemented. Nestlé supports industrial and
governmental efforts to promote integrated waste management that takes into
consideration matters such as Nestles reduction, reuse, recycling, composting,
energy recovery and landfill. Nestlé encNestleages suppliers of its packaging
materials to adopt sound environmental practice
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Marketing is based on the principle of satisfying consumers’ needs. The overall
trust of consumers in Nestlé’s brands and products comes from a quality image
that has been continuously strengthened for over 130 years. Nestlé strives to
increase this trust through its commitment to environmentally sound business
practices. For this reason, Nestlé:
• opposes short-term, opportunistic “green marketing” that can
mislead the consumer;
• bases environmental claims in advertising, promotional material, labelling
and corporate communications on solid scientific evidence; and
• selects materials and printing methods for merchandising materials such as
consumer offers, in-store promotions, display materials, leaflets and printed
materials in light of environmental considerations.
CONSUMER SERVICES
Nestle also believe in maintaining regular contact with Nestle consumers. This
applies both to how nestle present Nestle products and to how Nestle address
Nestle consumers' questions and concerns. When Henri Nestlé prepared his first
boxes of infant formula for sale, he put his address on the packages so people
would know where to go if they had questions. Today, Nestle Consumer
Relationship Panel with the words "Talk to Nestlé" expresses the same
commitment.
This is why Nestle have a worldwide Nestlé Consumer Services network devoted to
caring for Nestle consumers. Nestle people have expertise in a wide range of areas
such as nutrition, food science, food safety and culinary expertise. They provide
the prompt, efficient and high quality service that consumers expect from Nestlé.
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In addition, Nestle teach them talk with consumers and above all, to listen.
Listening helps us to understand what people want. Nestlé uses the insights
gained from relationships with consumers to drive product development.
At Nestlé, Nestle care for Nestle consumers because Nestle success depends on
meeting their needs and expectations. Through listening and understanding,
Nestle can make products that they will want to use all through their lives
34
NESTLE MANAGEMENT
Peter BRABECK-LETMATHE
Chairman of the Board & Chief Executive Officer
Francisco CASTAÑER
Executive Vice President Pharmaceutical and Cosmetic Products, Liaison with
L'Oréal, Human Restheirces, Corporate Affairs
Lars OLOFSSON
Executive Vice President, Strategic Business Units and Marketing
Nestlerner J. BAUER
Executive Vice President Technical, Production, Environment, Research and
Development
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Frits VAN DIJK
Executive Vice President Asia, Oceania, Africa and Middle East
Paul BULCKE
Executive Vice President United States of America, Canada, Latin America,
Caribbean
Carlo DONATI
Executive Vice President Nestlé Waters
Luis CANTARELL
Executive Vice President Zone Europe
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Paul POLMAN
Executive Vice President Finance, Control, Legal, Tax, Purchasing, Export
Chris JOHNSON
Deputy Executive Vice President GLOBE Program, Information Systems, Strategic
Supply Chain, eNestlé, Group Information Security
Richard T. LAUBE
Deputy Executive Vice President, CEO of Nestlé Nutrition
David P. FRICK
Member of the Executive Board, Corporate Governance, Compliance
37
Nestle Products
QUALITY POLICY
Quality is the cornerstone of their success. Every day, millions of people all over
the world show their confidence in us by choosing Nestlé products. This confidence is
based on their 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 Nestlé brand name on a product is a promise to the customer that it is
38
safe to consume, that it complies with all regulations and that it meets high standards
of quality. Customers expect us to keep this promise every time.
The effort is worth it. Companies with high quality standards make feNestler
mistakes, waste less time and money and are more productive. They also make
higher profits.
Quality is their most successful product. It is the key to their success, today and
tomorrow.
Nestle serve various groups of consumers and there is demand for products at
different levels of perceived quality and price. All customers, hoNestlever, expect
39
value for their money - good quality at a reasonable price. When offering quality to
customers Nestle also mean environmental quality. Nestlé shares society's concern
for the environment and is committed to environmentally sound business practices
throughout the world.
Customers are central to their business and Nestle must always respect their needs
and preferences.
Nestle live in a competitive world and must never forget that their customers have
a choice. If they are not satisfied with a Nestlé product, they will switch to another
brand. Their goal, therefore, is to provide superior value in every product category
and market sector in which Nestle compete.
The pursuit of highest quality at any price is no guarantee for success, nor is a
singleminded cost-cutting approach. Lasting competitive advantage is gained from a
balanced search for optimal value to customers, by simultaneous improvement of
quality and reduction of cost.
Success can never be taken for granted. Nestle must watch and learn from their
competitors. If they do something better, Nestle must improve their own
performance. Nestle can achieve competitive advantage through Quality.
Operating companies are fully responsible for maintaining agreed quality standards.
Not only Production units, but also Marketing, Purchasing, Distribution and Sales have
a vital role to play in providing quality to customers. This implies a thorough
knowledge of the products and services Nestle offer.
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Quality units at different levels of the organization provide specific support, promote
quality awareness, assume guardianship and audit the system. Quality departments
monitor operations against agreed standards and must intervene in case of non-
conformity.
Quality policy and principles, the mandatory standards and the recommended tools
for implementation are laid down in the Nestlé Quality System which is applicable
throughout the group. Further directions are given through instructions, norms and
guidelines, often specific to a product.
The quality efforts must be shared by every function and department in the
company as Nestlell as their business partners.
Adequate equipment, procedures and systems are needed to make Quality; so are
involved and dedicated people. Each and every Nestlé employee must do his best to
provide quality products and services.Training and teamwork are crucial to the
successful implementation of high quality standards. Continuous training ensures
that everyone understands his tasks and has the necessary skills to carry them out.
Teamwork allows us to achieve results that are greater than the sum of individual
efforts.
Nestle motivate employees by demonstrating management commitment to Quality,
by setting challenging goals and by giving them responsibility and recognition. It is
through employee involvement that goals and targets can be achieved in the shortest
time.
41
Quality must be a way of life for everyone in the company.
QUALITY IS ACTION
NESTLE AT A GLANCE:
42
and most relevant products to people, wherever they are, whatever their needs,
throughout their lives.
43
NESTLE SOCIAL RESPONIBILTY ALL OVER THE WORLD
44
Nestlé’s technical and monetary support is providing water to 210 000 people
on a sustainable long term basis. The Nestlé Waters team includes a hydro-
geologist and a water restheirces manager who are working with United
Nations High Commissioner for Refugees and the Ethiopian water authority
to design a water supply system maintain a 22 km pipeline and pumping station,
restore Nestlells and test the water.
45
for their shareholders, it is essential to create long-term value for the
societies where Nestle operate. Nestle believe that this philosophy has
been an important factor in creating the long-term business growth which
has made Nestlé the world’s largest food and beverage company
• For Nestlé, Corporate Social Responsibility is not an add-on, imposed
from outside, but is built into their Nestlé Corporate Business Principles and
business strategy. This is explained in depth through the companion document to
this 2005 Management Report, entitled The Nestlé Concept of Corporate Social
Responsibility, as Implemented in Latin America.
• The United Nations Global Compact’s ten Principles on human
rights, labtheir, the environment and corruption, are specifically
incorporated in the Nestlé Corporate Business Principles, and are
fundamental to guiding their business actions
46
• Nestlé recognizes that its consumers have a sincere and
legitimate interest in the behavitheir, beliefs and actions of the company
behind the brands in which they place their trust.
• Nestlé operates in many countries and in many cultures
throughout the world. This rich diversity is an invaluable stheirce for
their leadership.
Nestle are committed to respecting human rights in
Their business activities, and to avoid being complicit in human rights
violations. In addition, through their business activities, Nestle help to infl
uence the human rights environment. For instance, in 2005 Nestlé Nigeria
became the sponsor of a new national television series, aimed at creating
greater religious and social tolerance and respect for human rights
Their people
Nestlé upholds freedom of association and the effective recognition of the right to
collective bargaining, the elimination of all forms of forced and compulsory labtheir
and the effective abolition of child labtheir and the elimination of discrimination in
respect of employment occupation (UN Global Compact principles 3, 4, 5 and 6).
Their people form the backbone of the Company, and their success is a refl ection
of the professionalism, conduct and attitudes of their management and employees.
The Nestlé culture is founded on a strong work ethic, combining integrity and
trust, dignity and mutual respect – and a pragmatic rather than dogmatic
approach.
As expressed in the Nestlé Policy on Health and Safety at Work, Nestle place the
highest priority on protecting their people at work, and fostering their health and
Nestlellness. Nestle integrate the health and safety of their employees and the
prevention of work-related injuries and illnesses into all aspects of their business.
Their key safety performance indicator, the number
of injuries with lost time, continues to show a positive trend. In the last fi ve
47
years, Nestle have reduced this number by 50%.
Several units in the Nestlé Group achieved exceptional performance in
workplace safety. An example is the Nestlé Samalkha factory in India
which won the Indian National Safety Award in 2005, in recognition of
their very low accident rate. The employees in Samalkha completed more
than three million htheirs without any reportable accident. Nestlé does
not tolerate child labtheir in their factories, and their industrial suppliers
are expected to follow the Nestlé Corporate Business Principles, or risk
losing their business.
India, their Samalkha factory received the National Safety Award “for
outstanding performance in industrial safety”.the growth of their
production volume, which amounted to 39%, and their consumption of
natural restheirces during the 2001-2005 period. For the fi rst time,
the indicators have been validated by an independent verifi cation
company, Intertek.
Environmental stewardship
Nestlé supports a precautionary approach to environmental challenges and
undertakes initiatives to promote greater environmental responsibility,
whilst enctheiraging the development and diffusion of environmentally
48
friendly technologies (UN Global Compact principles 7, 8 and 9). Nestle
have continued to achieve signifi cant performance improvements in terms
of reductions in energy and water consumption, wastewater generation and air
emissions. Full information is available on their Nestlebsite and in the
booklet Nestlé and Water.
Environmental performance
History:
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Nestle Vision:
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GENERAL INFORMATION’S:
At head office working time is 8:30a.m to 6:00p.m for all the employee of the
nestle.
Nestle provide ledger time to motivate the employee. It creates a culture of the
organization.
For just only Friday the reason is that Pakistan is a Muslim country so there is
Friday is a holy day. so that on Friday the lager time is 2:45 minutes.
The timing of the working htheirs is variety from factory to factory and sale office
to sale office.
Working days:
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Working day of the sale office and factory is different.
Business attire:
Smoking:
In the nestle an other culture is create of smoke free zone. In the office there is
not alloNestled. So that Nestle can say nestle is a smoke free zone.
In the 308 department area smoking is not alloNestled in the office for any employ
of the nestle.
These area is prohibited for the smoking no and person alloNestled to smoke here
in the Nestle office.
Travel:
The Nestle provide the allowance to his employ on the traveling which is different
in the depending on the type of the vehicle is this all information of the employee
guide and other information of employ.
Canteen Facility:
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Subsidized meals at.308 / factory canteens.
The Nestle provide the meal facility for his employ in the 308 of the factory
canteens on canteen there is different dishes offer for lunch. so that employees
not move out of the office for lunch.
Staff shop:
Nestle provide a facility to their employee purchase the goods on the whole sale
rate and a standardized quality. Which is a big a big facility to employee those who
have no time to shopping. So that they purchase the goods after office timing.
• Htheirs Nestles.
Monday-Thursday 1:00 - 2:00p.m. And 6:00-
7:00p.m.
There is a big facility to the employee to purchase the good from factory shop in
the lager time or after the office timing.
ID Tags:
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These are the specific stickers which are the place on the
company employees car screen which are checked by the security guard when
they park their car in the boundary of the company building.
Leave:
Corporate Office:
At 308 upper mall there are different department are situated (Marketing, Finance,
Supply chain, MD and Chairman)
Factories:
Sheikhupura (SKP)
Kabirwala (KBF)
Currently operates 3 water factories
Karachi (2)
Islamabad (1)
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Nestle Pakistan Ltd. Has sales offices throughout Pakistan
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Company locations in Pakistan
1. North
2. Center
3. South
North:
Center:
South:
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• In Islamabad / R. Pandi there is AVA factory. This is situated in
the north area of the Pakistan.
• In Sheikhuprua there are a milk Factory. There is all process is
done from collecting milk to packed. This is situated in the centre area of the
Pakistan.
• In Kabirwala there are a milk Factory. There is all process is
done from collecting milk to packed. This is situated in the centre area of the
Pakistan.
• In Karachi there is a AVA & Fontalia factory. This is situated in
the south area of the Pakistan.
15.58 Mio tons milk produces in a year from 8.323 Mio milk animals.
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This milk is use home or industrial processing.
98% of the milk is consumed at home in different shapes. Just like (Milk, Khoya,
SNestleet, Desi Ghee etc.)
In over all there are produce 24.58 Mio tons milk is produce in Pakistan.
• From Punjab 15.58 Mio tons (63% of the whole production of the
milk)
• From Sind 5.74 Mio tons(23% of the whole production of the
milk)
• From NWFP 2.97Mio tons(2.97% of the whole production of the
milk)
• From Balochistan 0.51 Mio ton(2% of the whole production of
the milk)
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NOTE:
• Sheikhuprua.
• Kabiarwala.
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MILK COLLECTION INFRASTRUCTURE
Farmer:
1. Nestle have105, 000 non registered farmer who produce milk for
nestle.
2. Nestle have 881 registered farmer who produce milk for nestle.
3. nestle have 2351 dodhi who collect milk for nestle
4. Nestle have 218 mini supplier of the milk.
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Nestle distribute the Punjab into tree areas
1. A
2. B
3. C
All areas further distribute into 23 sub areas and sub areas distribute into
further 8-10 village
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Nestle responsibility in Pakistan
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Study, Nestlé’s Milk District Model: Economic Development for a Value-
added Food Chain and Improved Nutrition “These are not a CSR fad – they
are something Nestlé has been doing for ages.” Prof. Ray Goldberg of
Harvard Business School. Similar initiatives have existed in North China
since 1989, which included building some 220 kilometers of roads to
facilitate transporting 1000 tones of fresh milk per day.
Company Benefits:
Medicinal:
2. After Confirmation.
LFA:
Performance Bonus:
The Nestle also provide the performance bonus for the best
performance of the year in the works.
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Annual Leave:
After one year service the Nestle give the leave to his employ.
Casual Leave:
Encashment.
Medical Leave:
Vehicle Loan:
Gratuity:
Canteen
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Production Strategy
Promotion Strategy
Now Nestle use the promotion strategy after implementing the after distribution
the product in the Market then they use the promotion activity. It is because
Nestle things if product is not available in the Market the promotion strategies are
all in vain.
Placement Strategy
Nestle use a very strong Network of Distribution channel they also touch a single
shop at colonies, Mahala etc. because Nestle want to facilitate every single
member all over the world where they operate.
Pricing strategy
Nestle set the price of the product according to the different brands and different
countries. Which is reasonable price for the country where they launch the
product. Their price is very reasonable that a normal person also afford that price.
All the strategies of the Nestle made by and other organization Nest which made
the strategies for Nestle and Nestle implement these strategies in different
countries.
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FINDINGS
Nestle is the first organization which is first scan the market through distribute the
samples and test the market after getting result then they launch the product in
the market. For example. When Nestle introduced Maggi Noodles in Pakistan for
check the market. They firstly distribute the sample in schools and check the
market of Maggi Noodles when they see the satisfactory response in the market
when they launch the Maggi in Pakistan.
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REFERENCES
r. Nadeem Saraj
IKRAM-UL-HAQ (ENGINEER SERVICES)
WWW.NESTLE.COM
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