Brief History Of Nestle Malaysia Management Essay

Brief History Of Nestle Malaysia Management EssayThe vivacious company that has selected is Nestl (Malaysia) Berhad. This report starts with an introduction and a brief history about Nestl and Nestl Malaysia. This report includes the vision and mission of Nestl and how Nestl is going to achieve them. This report also includes a brief summary of Nestls market segmentation with examples provided. It discusses the strengths and problems of the company followed by the solutions to solve the issues. In the end, there are whatsoever suggestions recommended by our group and a conclusion of this whole report.Nestl is a multinational company and is of the worlds largest in food and beverages assiduity. Heinrich Nestl, whom also known as Henri Nestl, was the founder of Nestl Company (Nestle. 2010, Introduction, Nestl Online available at www.nestle.com), which headquarter is in Vevey, Switzerland in the year of 1866. Nestl Malaysia was established in the year of 1912 in Malaysia as Anglo-Sw iss Condensed Milk Company. Nestl Malaysia head office is now located in Mutiara Damansara, Petaling Jaya, Selangor, and has 6 sales offices with more than 5000 employees nationwide. Besides, Nestl manufactures its own products in 7 factories and markets over 300 Halal products across the nation. (Nestl. 2010, Nestl in Malaysia, Nestl Online available at www.nestle.com.my) Nestl specialized in foods and beverages industry, a some of the many comfortably known brands Nestl has in Malaysia includes Maggi, Nescaf, Milo, Kit Kat, Nesvita (formerly known as Nestum), as well as pet care products such as Purina and Friskies.Nestls vision (Nestl. 2010, Corporate Philosophy, Nestl Online available at www.nestle.com.my) is to be the leader in Nutrition, Health, and Wellness Company by delivering world-class products of the highest consistent quality, reliability, and convenience based on business excellence principles throughout the operation. Nestls mission (The Nestl Corporate Essence Our roots and wing 2007, p.4) is to enhance the quality of life with good food and beverages, everywhere, so heap could live a healthier life. In rule to achieve their vision and mission, Nestl Nutrition Research Centre (Nestl. 2010, Research Development, Nestl Online available at www.nestle.co.jp) pays ample attention to understand the consumers nutritional and emotional needs and utilise todays world superior science and technology to attain high quality products to the world.MARKET dividerEvery consumer has different needs. Hence, it is not possible to satisfy every customer employ a same marketing segmentation, which is also known as pot marketing by offering a single marketing mix to all consumers. Moreover, as a global market has become extremely competitive, and consumers are increasingly take aiming which is very difficult to satisfy. Therefore, Nestl dos target marketing for every product to their customers.For example, in consumer product, Nestl baby milk produc t such as Nestl Neslac Excella Gold is part only to infants and toddlers. However, baby does not have the capacity or capability to buy the food they needed. Therefore, to market this baby milk product, Nestl does not fully centre on babys basic need which is hunger, but also to the babys parents in terms of how the nutrition provided pull up stakesing give their children the best possible advantages in the childrens life and development. other example is Nestl Milo, the milk beverage with chocolate and malt. Don Howart, the executive director of Nestl and Singapore Coffee and Beverages claimed that Milo remains popular among the young and has a 90% (The Sun. 2010, Milo with ProtoMalt to get through the day, Sun2Surf Online available at www.sun2surf.com) market share among chocolate malt drinks in Malaysia. Besides the youngsters, old people and active people are also part of the target markets of Nestl Milo drinks.However, at first, Nestls business was launched internationally and realised the fact that food products have to be taken into account to the local anaesthetic eating and social behaviour due to the particular countrys practices, cultures, and traditions. Therefore, (1) Nestl has always shown respect for diverse cultures and traditions and trying to integrate itself as much as possible into the cultures and traditions, adding also to the local environment its own set of values. Therefore, (2) Nestl embraces cultural and social diversity and does not discriminate on the basis of origin, nationality, religion, race, gender or age. (The Nestl Management and Leadership Principles 2006, p.9)STRENGTHSNestl is a multinational company, not to mention Nestl is also the largest industry in foods and beverages, hence Nestl has every capability to attract more consumers equivalence to the local companies. On account of its high market share and high financial power, Nestl also has greater financial capability in altering existing products in terms of pa ckaging, the formula of the particular product and others or creating new products, as well as to adapt or upgrade latest reading system technology in manufacturing, order processing and other related fields in order to sustain their competitive advantage by delivering disdain cost of goods and services than their competitors in this dynamic environment.Secondly, Nestl has quite an effective strategic marketing capability. For example, Nestl Maggi instant noodles has built a stable patent and is very well known in many countries especially in Australia and Malaysia. This is because Maggi instant noodles is easy to be differentiated from its competitors such as Cintan Instant Noodles. Moreover, Nestl has also developed a very strong brand name for Maggi instant noodles because of strong advertising, which has indoctrinated most of the people to name the other brands of instant noodles as Maggi instant noodle instead of the brands original name.Furthermore, Nestl also has a strong Research and Development operations that helps the company to achieve cross-border synergy such as packaging its global products to local preferences. Nestl also emphasises on using todays information technology, which Nestl believe it will present a long-term opportunity for them to smoothen the companys operation or to increase expertness in packaging, among any other companys operations. Besides, Nestl also has better technological capability, for instance, to renovate the existing products to be more innovative, higher quality, and much healthier product as Nestl realised that consumer-centred innovation and renovation is the most important pillar of Nestls worldwide strategy, which would accelerate Nestl to advance from good to better. (The Nestl Corporate Essence Our roots and wings 2007, p.34) And because of Nestls commitments, more people trust on the products delivered by Nestl because of its proper health and safety measures.Besides, Nestl also has great leadership attri butes. The leaders such as the top executives, branch managers, and others are responsible in building organisation capability. For example, the Chairman and Chief Executive Officer of Nestl S.A., Peter Brabeck, (Castelarhost. 2005, Nestl LC1 S.W.O.T Analysis, Castelar Articles Online available at www.articles.castelarhost.com) emphasises midland growth worldwide, which means to achieve higher volumes of sales by adding value to the products, renovate existing products, and innovate new products, to keep pace in the industry because of rapidly changing of consumer expectations.PROBLEMS AND SOLUTIONSNestl produces hundreds of products, has a global network of suppliers, and multiple distributions and selling channels. Hence, to anticipate and respond in this rapidly changing in market demand condition is very difficult. When forecasting a market demand, Nestl will need information to detect shifts in demand early so they could ad unspoilt for trends and steer the right messages to the suppliers, shippers, and distribution centres before they are flood with unwanted or defective goods or shortages. (Manhattan Associates. 2010, Planning and forecasting Anticipate and Respond to Changes in Demand, Manhattan Associates Online at www.manh.com)However, every company has its weakest links, so is Nestl. The weakest links are issues they are unable to control. (Labs. 2010, Supply Chain Efficiency Starts at the Top, Food Engineering Online available at www.foodengineeringmag.com) Firstly, the most common problem is the sources of render of raw materials. This is due to a sudden and unexpected increased in demand, which will cause extreme supply shortages for commodities that will result in major price increases. For instance, bad weather and natural disasters have always been an issue affecting incoming raw materials. Secondly, the inaccuracy of orders sure in inventory. No company can ever achieve the requirement of zero defects especially in foods and beverages in dustry. For example, when the purchasing department of Nestl ordered 10,000 of mixed berries yogurt from its bar cooker, but what the retailer received was only 8,000 of mixed berries yoghurt, or on another occasion they might received defective inventories. Another example is, when Nestl tells its dealer that they needed extra orders of a particular product to be shipped right away because of unexpected increased in demand, but in fact, the supplier whitethorn already has orders from other customers. This usually happen during special occasion such as Chinese New Year, the demand of Nestl Cornflakes cereal will increase because many people will buy this product to make cookies. This will causes Nestl to encounter a great loss because of inaccurate order of magnitude because they could not produce the actual output needed.Therefore, in order to solve these problems, it is crucial for Nestl to engage with multiple suppliers or dealers in that particular region, so they could acquire inventories from multiple dealers, which will definitely decrease the risk of shortage due to incontrollable situation. Besides, Nestl should also base on their demand and purchase devisening on last couple of geezerhood of sales to forecast current year of demand and supply. Other than that, mutual trust and strong relationship with all the dealers are needed in order to increase the flexibility of material supply management, as well as to enhance the bargaining power of Nestl. However, if there is a surplus, Nestl may need to plan a promotion to clear their inventories, otherwise Nestl will encounter a great loss such as paying high material use cost, waste of warehouses space, or inventories that are not sold became defective and may need to be disposed which no profit will earn. Therefore, when there is a prominent tear downt organized such as Jom Heboh Carnival. Nestl will set up a booth at the carnival to sell its products, which are finis to the expiry date at lower p rice such as Maggi products, Nescaf, Milo, yoghurt drinks, Nestl ice creams and so on. People often buy the products in big quantity because of the lower price than the market price. As a result, Nestl could clear their inventories rather fast and celebrate some space in the warehouses. which is a win-win situation.Thirdly, even though Nestl has a logistics department but it doesnt deal with transportation logistics. Nestl outsourced its supply chain transport to the third-party logistics (3PL) as Nestl tries to cut their supply chain costs and to scale down more on their in-plant operations. Although Nestl doesnt have a transportation logistics department, but they do have a delivery team to cooperate with the third-party logistics in routing protocol. Nestl is using a Dynamic ancestry Routing (DSR), which is a simple and efficient routing protocol designed specifically for use in multi-hop wireless ad hoc networks of mobile nodes. The protocol is make up of the two main mechan isms of Route Discovery and Route Maintenance, which work together to allow nodes to discover and maintain routes on-demand to arbitrary destinations in the ad hoc network. (Maltz. 2003, The Dynamic Source Routing Protocol CMU Online available at www.cs.cmu.edu) Therefore, the delivery team is there to help Nestl and the 3PL that DSR is working as per company direction as well as DSR performance.Next, it is the slimy partnership relationship between dealerships and consumers. Dealers need these capabilities because they, in close partnership with manufacturers Nestl, are a connecting hub of services for the consumers, and other stakeholders. However, Nestl solved this problem by using the Dealer Management Systems (DMS) as well as their dealers. DMS is a software solutions that provide tools for managing sales, services, parts and inventory management, business management, integration, and core architecture. DMS help manufacturers and dealers create integrated marketing campaigns to offer inventory to target markets. This will integrate innovations into traditional in-store sales and service processes and offer technologies for non-traditional merchandising, sales, and service strategies through alternative channels for consumer interlocking via Web, by phone, or in-vehicle. (Microsoft Corporation. 2008, Microsoft Offers the Dealer Management Solution Microsoft Online available at www.microsoft.com/automotive)RECOMMENDATIONSAfter the reviews stated above, those were not the only solutions that are available. MDZ has come up with a few recommended suggestions that may work or solve the problems that were encountered by Nestl. Instead of just finding or having multiple suppliers, Nestl could acquire the inventories from the other outlets from the other region. Because some regions have different demographics, for instance, race. Some areas have higher percentage of Malays such as Kuantan, Pahang, and some may have higher percentage of Chinese such as Ipoh, P erak. The Chinese New Year (CNY) example stated above, in Kuantan area, there might be less demand during CNY, so to prevent shortage, Nestl could just acquire the inventories from Kuantan. However, if there is a surplus, and unable to clear the inventories at a short time, Nestl could consider donation for short-run purpose, this could help to clear the old stocks, as well as to help the donation receivers and build better goodwill and name of Nestl.Secondly, Nestl is a multinational company it definitely has the capability in owning a transportation logistics department. Because of the hundreds variety of Nestls products, 7 manufacturers in Malaysia, as well as thousands of customers such as retailers, wholesalers, distributors and so on, Nestl could handle its own transportation service. Nestl could gain the whole power in such as mode selections, routing, and others. They could do almost anything such as consolidating different type of products but to the same outlet. Besides, t hey could save every penny they use in transportation cost compare to third-party logistics (3PL) because 3PL charges according to the quantity, inventory storage space, value added processes such as special handling, and more. It may benefit in the short run, but definitely not in the long run, as Nestl centred in the long-term business and strives to achieve effectiveness and efficiency.Lastly, Nestl could use both manual and automation system in managing sales, services, and others. This is because one cannot trust wholly to a machine, as it may not be documenting the steps in its own processor. Because some steps cant be automated and may required operator intervention to prevent the escapement processing steps, even though adapting in advance(p) technologies could help saving cost as labour cost is reduced, but if there are still problems occur, it will affect the business such as loss of customers because of the mistake. Therefore, Nestl must update the system software regula rly and full utilisation of available technology as well as the manual operators, which will effectively increase the efficiency and dependability of the supply chain systems.CONCLUSIONNestl exerts great efforts to achieve its visions to be the leader in Nutrition, Health, and Wellness Company by producing better quality of products to the consumers. Nestl also study about the consumers needs from time to time and satisfy the consumers as much as possible. Nestls strengths such as high financial capability, effective strategic marketing capability, strong research and development, as well as great leaderships have helped them through the obstacles. Above all, Nestl focuses on its missions and ensures consistency by making the right decisions to manage and build its business to deliver the promise of Good Food, Good Life all over the world.