THE NESTLE STORY

Nestle S.A. the present Switzerland based international food group, originally consisted of two companies and two products: Henri Nestle and his baby food in Vevey, and the Anglo-Swiss Condensed Milk company and its condensed Milk Company and its condensed milk in Cham, both in Switzerland. In 1866 the Page Brothers form the United States set up a new industry in Cham, making condensed milk from a raw material that was available in abundance in the region. In 1867 Henri Nestle a chemist in Vevey, created a milk and cereal based food for babies. The companies competed vigorously until 1905, when they merged and became the starting point of the present food group.

MEANING OF NESTLE:
Henri Nestlé endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company's logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestlé nest represents the nourishment, security and sense of family that are so essential to life.

BRIEF HISTORY OF NESTLE:
1866 -1905

In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to breastfeed. 1905-1918 In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain.. 1918 -1938 . The 1920s saw Nestlé's first expansion into new products, with chocolate the Company's second most important activity. 1938 -1944 Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company's newest product, Nescafe, which was a staple drink of the US military.. 1944 -1975 In 1947 came the merger with Magi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974. 1975 -1981 Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc.. 1981 -1996

Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation. 1996+ The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc

NESTLE TODAY
Nestle is now the world’s largest food company. It is present on five continents, has an annual turnover 70 billion Swiss francs ,runs 522 factories in 81 countries, 200operating companies, 1basic research center and 20 technological development group and more than 231,000 employees the world over. The Nestle factories are operating in the region of      Africa America Asia Europe Oceania

Being a company dedicated to food from the beginning, Nestle remains sensitive to culinary and eating habits, and responds to specific nutritional problems, whilst also setting and matching new trends such as growing out-of-home consumption and caring about the well being of its consumers.

wellness. Nestle strive to bring consumers foods that are safe. Nestle take great pride in bringing us a portfolio of health and wellness because happy. healthy consumers are important to Nestle.MISSION STATEMENT Nestlé. wellness and the role of food in lives. convenience and the good nutrition. Research is a key part of heritage at Nestlé and an essential element of future. believe that research can help them make better food so that people live a better life. As consumers continue to make choices regarding foods and beverages they consume. With over 140 years of experience and expertise. of high quality and provide optimal nutrition to meet physiological needs. Nestlé helps provide selections for all individual taste and lifestyle preferences. NESTLE BRANDS At Nestlé. and continue to search for answers to bring consumers Good Food for Good Life VISION STATEMENT The Nestlé global vision is to be the leading health. and Nutrition Company in the world. In addition to Nutrition. their preferences and health in mind. Good Food is the primary source of Good Health throughout life. . Nestlé products bring consumers the vital ingredients of taste and pleasure. taste. There is still much to discover about health. Health and Wellness. variety. products are developed keeping consumers. Millions of consumers the world over trust Nestlé products for good reason: when they choose a Nestlé product they have the satisfaction of choosing quality.

Guided by their commitment to Nutrition. everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle. Health and Wellness Nestle core aim is to enhance the quality of consumers’ lives every day. Nestle also develop brand communication and information that encourages and empowers . they work to increase the nutritional value of their products while also improving taste and enjoyment. Good Life.The ten principles of business operations Nutrition. Health and Wellness. Nestle express this viatheir corporate proposition Good Food.

regulatory and quality requirements. • to comply with all internal and external food safety. Quality assurance and product safety Everywhere in the world. Nestle continuously challenge theirselves in order to constantly improve and achieve the highest levels of quality. Quality is everybody’s commitment. They ensure the delivery of high quality products through their Quality Management System. Their Quality Policy summarizes the essentials of their passion for excellence: • to build trust by offering products and services that match consumer expectation and preference. Consumer communication . Nestle commitment is never to compromise on the safety of any product. the Nestlé name represents a promise to the consumer that the product is safe and of high standard. It maintain the same high food safety standards in all countries in which they operate.consumers to make informed choices about their diet.

provide equal opportunities for their development and advancement. reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. as well as the attributes needed to be successful in management and leadership . The Nestlé Consumer Communication Principles contain mandatory rules on marketing communication to all consumers. healthier diet. Nestlé Management and Leadership Principles Nestle Management and Leadership Principles describe the culture and basic values they expect their employees to uphold. salt. protect their privacy and do not tolerate any form of harassment or discrimination. including accurate representation and portrayal of foods in a way that does not encourage over‑consumption. Their core business strategy is built around helping consumers to have a balanced. including clear limits on energy and healthsensitive ingredients such as sugars. Nestle recruit competent and motivated people who respect their values.Nestle is committed to responsible. Human rights in business activities Nestle fully support the United Nations Global Compact’s (UNGC) guiding principles on human rights and labor and aim to provide an example of good human rights and labor practices throughout nestle business activities. Advertising to children from 6 to 12 years is restricted to products that meet predetermined nutritional profiling criteria. They respect consumer privacy. It treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. specific principles guide their communication to children including no advertising or marketing activity to children under 6 years of age. Leadership and personal responsibility Nestle success is based on their people. saturated fat and trans fatty acids. In addition.

they are committed to their own customers. health and environmental . rural communities and in production systems to make them more environmentally sustainable. the social and economic status of farmers. and promote awareness and knowledge of safety and health to employees. safety. The Supplier Code includes requirements such as business integrity. To ensure that their factories obtain raw materials competitively and at required quality and safety specifications . contractors and others involved along the value chain. and to adhere to their non-negotiable standards. Nestle Policy on Safety and Health at Work establishes safety as a non-negotiable priority of their culture. contractors and other people related to or impacted by their business activities by setting high standards. Nestle monitor their performance through the Nestlé Occupational Safety and Health Management System to assure a safe and healthy life. subcontractors and their employees to demonstrate honesty. Agriculture and rural development Nestle contribute to improvements in agricultural production. They recognize and require that everyone play an active role in providing a safe and healthy environment. In the same way. labor standards. integrity and fairness. Supplier and customer relations Nestle require their suppliers. injuries and illness related to work. agents.practices. and to protect employees.Safety and health at work Nestle is committed to preventing accidents. sustainable operating and agricultural practices.

Water is a particular area of focus for Nestlé. The Nestlé Commitments on Water set out their priorities and objectives on responsible water usage. It recognize that the world faces a growing water challenge and that responsible management of the world’s resources by all water users is an absolute necessity. environment. Nestlé is a founding signatory of the United Nations Global Compact CEO Water Mandate. These are to continue their efforts to reduce the amount of water used in their operations. including the opportunities offered by bioscience when their positive effect on food safety. • Nestle support the application of new technologies and advances in agricultural science. agricultural practices and production efficiency are scientifically confirmed and accepted by consumers. Water Nestle is committed to the sustainable use of water and continuous improvement in water management. and target zero waste. and reach out to others on water conservation and access. At all stages of the product life cycle they strive to use natural resources efficiently. ensure that activities respect local water resources. favor the use of sustainably managed renewable resources. especially among farmers. engage with suppliers to promote water conservation. viable incomes for farmers and the transfer of agricultural knowledge to suppliers. ensure that the water they discharge into the environment is clean. They invest continuously to improve their environmental performance.• Nestle engage in developing sustainable agricultural practices and systems that contribute to long-term production efficiency. It monitor and improve water efficiency through their water resources management specialists and in their factories with their environmental Nestle specialists . Environmental sustainability Nestle commit themselves to environmentally sustainable business practices.

in line with the Nestlé Environmental Management System. It recognize the right of all people to have access to clean water to meet their basic needs. .

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They produce quality products according to the specification of customer. they give absolutely no attention toward promoting them despite the fact that if we consider the trust people have on nestle brand there is a large market for candies. Then special trucks take it to factory.SWOT ANALYSIS: Strengths: The first and the most important strength of Nestle is the name of company itself. We can take the example of candies produced by Nestle. They collect milk from selected people and check its purity at the location. There milk contains 3. They never compromise on quality. The reason behind this discrepancy is that they have limited budget to promote their products. Weaknesses: One of the weakness of nestle is the product range of Nestle. While they are promoting their milk products effectively. They try to convince ultimate consumer. which is recommended internationally. . Their system of sale & sale promotion is also one of the strength of Nestle. Where they boil milk at 140 degree centigrade and then cool it. In this area they monitor the sale and increase the production. This process is repeated for 3 to 4 times. The other weakness of Nestle is that the company has a very limited number of sales staff in the southern Punjab due to which they are losing some market. so they cannot give equal attention toward the promotion of each product. The milk collection procedure of Nestle is also one of its strength. In the area in which they want to sell the product they hold seminars and shows.5% fat. As there product line is very vast.

Threats: In Pakistan Nestle face threats from lower companies. Nestle also face threat from Cadbury. Cadbury sell candies and chocolates and it affect the sale of Nestle products in the field of candies . Haleeb is well promoted than the Nestle Milk Pak. So. Nestle can increase its share by focusing on lower middle class. The sales of these products have badly affected the sale of Nestle Milk Pack.Opportunities: Nestle can increase their share if they focus on lower middle class. We can take the example of small pack of Every Day tea whitener whose introduction increases the sales of nestle tremendously. By selling directly to customers means that they provide milk to the people at their doorsteps. The reason for this was that the price of Every Day tea whitener was with in the range of lower middle class. We can take the example Haleeb and Dairy Queen. which is multinational company. The other opportunity for Nestle is that if they introduced milk bottle like Candia and sell them directly to the customers they can increase their share.

Research & Development Nestlé's research and development centers have two primary objectives: to create new products and manufacturing processes and to improve those that already exist.  processing methods that minimize water and energy consumption. Along with product quality and safety. the conservation of resources 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 sourcing criteria for agricultural raw materials. as well as waste generation  packaging designs that reduce total waste and enable environmentally sound disposal options while safeguarding product safety and quality .

in conjunction with detailed information on the potential manufacturing site. Of the 807 million Swiss francs spent in 1998 on Nestlé R&D throughout the Group. significant progress has been made in recent years in energy and water intensive blanching and cooking operations. from the sourcing of raw materials. have been turned into a valuable animal feed ingredient. R&D IS MAKING A DIFFERENCE As an example. In another example. these expenditures improved our production process. created better packaging. water consumption was reduced by 80% and product losses during cooking were more than halved. to the packaged consumer product and the end-life of the packaging material. extraction residues from the production of chicory-based instant drinks. Additionally. At the end of these processes water must be removed which resulted in wasted energy and raw materials — vegetables or pasta for example. This study is carefully evaluated. through processing. to ensure that new projects meet Nestlé's environmental standards. a good part went towards enhancing the wholesomeness of our products. This means lower costs for energy and for wastewater treatment. which were expensive to dispose of. This covers significant aspects in the product life cycle. while at the same time increasing the product yield by 6%. and avoided waste and unwanted residues. . For important product or process innovation and renovation. Nestlé's research and development centers prepare an environmental impact study. Now water is replaced by steam at low pressure. As a result. innovative ways to recover by-products and thus generate secondary raw materials and energy.

Over the past few years. SUPPLY CHAIN Agricultural Raw Materials In general. this issue has attracted increasing recognition and much is being done today to preserve the earth's biological diversity. In addition. Preserving Species The disappearance of many species and varieties of animals and plants is a reality. One conclusion of R&D is that what is good for the environment is often synonymous with good industrial practice. Wherever possible. Nestlé is not directly involved in the production of raw materials. High on the agenda are integrated farming techniques involving minimal use of fertilizers and chemicals. Nestlé R&D units are determined to build environmental protection into products and processes right from the start. Nestlé applies the following principles when sourcing raw materials: . They are either obtained directly from producers or purchased through trade channels. In the future. Industry plays an important role in these efforts since many business sectors depend on nature's diversity for their sustainable success. Nestlé collaborates with public research institutes to share its experience and makes its results freely available. lives up to its responsibility by developing the most advanced preservation techniques for many different coffee and cocoa varieties threatened by extinction. locally available raw materials are used. Nestlé.A recent processing improvement for french fries showed product quality can be significantly improved while also saving energy. as the world's largest single buyer of coffee and cocoa. and recourse to biological pest control methods whenever possible.

 whenever possible. energy. all raw materials must meet both legal and internal quality criteria.  farmers are encouraged to apply sustainable farming methods and. where appropriate. and reduce waste generation and emissions as much as possible. water. and.    minimize the use of environmentally-hazardous substances. Regular environmental assessments of Nestlé's manufacturing practices are conducted to: . including limits on possible environmental contaminants.g. continuously seek improvement in the efficiency of production facilities. including the environmental aspects. air. the manufacturing practices of the Group:  respect natural resources by emphasizing the efficient use of raw materials. Manufacturing Manufacturing comprises all processes that are necessary to transform perishable raw materials into safe and convenient food products for consumers. are provided with assistance in crop production and dairy farming. integrated crop management). Nestlé strives to achieve optimal performance in its manufacturing activities. consider recycling of waste a priority and dispose of non-recyclable waste in an environmentally sound manner. As such. bio-diversity) and techniques for reducing environmental impact. water and energy. Such assistance includes the provision of recommendations for the conservation of natural resources (soil. preference is given to raw materials that are produced by environmentally sound farming methods (e.

Nestlé exchanges information on environmental protection technology and practices in order to ensure a wide use of best practices. in a few exceptional cases. In .  evaluate factory performance. These surveys also allow us to put concrete figures to our efforts: Over the past years. Nestlé has invested an average of some 100 million Swiss francs per year in specific measures to protect the environment. Nestlé complies with relevant regulations or. Many times. has initiated action to do so. review factory compliance with applicable legislation and Nestlé's own standards. we periodically review environmental performance of the entire Nestlé Group. This amounts to approximately 3% of total capital expenditure and includes only readily identifiable environmental investments.  fully investigate incidents that could affect the environment and take relevant measures. Therefore. and  compare results with previous targets and set new improvement objectives. Nestlé encourages its contract manufacturers to use environmentally sound manufacturing practices. The results are very encouraging:   Nestlé has no major environmental problems.  Measures taken are proactive and often anticipate future regulations. Environmental Performance of Our Factories Minimizing the environmental impact of our factories has always been a prime consideration. In addition. measures taken to improve the environment also reduce costs.

. without jeopardizing the safety. Packaging may also provide tamper-evidence features. and maintenance costs for wastewater treatment facilities. Nestlé is committed to reducing the environmental impact of packaging. take into account new packaging materials and processes that reduce the impact on the environment.addition. satisfying consumer requirements and expectations. at the same time. substantial amounts were expended as part of regular capital investment projects and factory environmental operating costs. It is Nestlé's objective to develop safe and wholesome packaged foods using the most efficient and appropriate packaging materials available. quality or consumer acceptance of its products. environmental training of personnel. including nutritional information and serving instructions. Nestlé seeks packaging solutions that:   result in the lowest possible weight and volume of packages. and provides the convenience demanded by today's consumers. It protects food products from spoilage and ensures safety from manufacture through storage. including package manufacturing. It communicates information. while. Examples of these additional expenditures include environmental aspects related to factory construction and renovation. use and disposal. distribution and consumption.  avoid the use of substances that can adversely impact the environment during packaging production and disposal.  decrease packaging waste at all stages. Packaging Packaging serves a major role in our daily lives.

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 source reduction. recycling. This is not a recent effort by the food industry. The most direct opportunity to reduce the scale of the problem is to use as little material as possible. the gap is wide between reality and perception: While food packaging accounts for less than 1% of total solid waste in most countries. a steel food can by 66%. and landfill. However. and an aluminium beer can by 81%. Over the last four decades. it is nevertheless an important issue for Nestlé. Nestlé encourages suppliers of its packaging materials to adopt sound environmental practices.  increase the use of recycled materials wherever possible. Even though packaging source reduction has always been a consideration. energy recovery. Packaging Source Reduction Packaging waste is one environmental issue that affects the entire consumer goods industry. . we decided to reinforce these efforts in a more systematic way. reuse. between the 1950s and 1990s. composting. and increase the recyclability and compatibility of its packages with existing packaging waste management schemes. Even if the problem of food packaging is small in relation to overall environmental problems. The first world-wide environmental packaging survey was completed in 1991 for the Nestlé Group and has been repeated annually ever since. the weight of a glass milk bottle has been reduced by 36%. it is highly visible to consumers.

000 tons compared to 1990. Efficient management of the distribution system is essential to preserve the safety and quality of Nestlé's products. In Columbia the display box for Maggi bouillon tablets was eliminated. Nestlé. Distribution Distribution of products from the factory to the customer involves transport and storage. was replaced by an aluminium stand-up pouch. respectively. without compromising product quality. and saves 290.000 Swiss francs per year. or 47 tons. which consisted of 4 bags in a display box.The last survey revealed that by the end of 1998. This resulted in a waste reduction of 38 tons and saved nearly 100. reduced our use of packaging materials by nearly 150. Nestlé: . The new design resulted in a 31% reduction in use of paper board. to ensure a high level of customer service. While important progress has already been achieved. In Indonesia the Nestlé Dancow 200 and 400g display boxes were reduced in size by 18 and 25%.000 Swiss francs per year. In Pakistan the Nestlé NIDO package. This resulted in a reduction of 303 tons of packaging material and represented a savings of over one million Swiss francs per year. and to meet its commitment to environmentally sound business practices. To this end. A few recent examples that underline Nestlé's efforts: In Australia the Easter Egg Novelty cartons were reduced in size by altering the design to provide support for the egg. This resulted in a 39% reduction. we strive to continuously identify opportunities for further reduction.

selects appropriate transportation modes, with particular attention given to optimum unit loads (pallets), vehicle-capacity utilization, route planning, and consolidation with outside partners, scheduling, and fuel conservation;

optimises warehouse and distribution center locations and environmentally efficient operational systems; and

identifies and implements measures to reduce energy consumption and waste.

Nestlé encourages its distribution service providers to use environmentally sound practices. Distributing our goods from factory to retail centers consumes some 400 million liters of fuel each year. While we undertake every effort to reduce this, it is useful to put this figure into perspective: the distribution of 10 kg of our products from factories to retail outlets in Europerequires an average of 0.25 liters of fuel. To transport the same amount from the supermarket to home, consumers burn, on average, one to two liters of fuel.

Efficient Container Loading
Improving transport efficiency benefits the environment, but it also makes economic sense. Seemingly simple measures, such as replacing bulky wooden pallets by thin, carton-type slip-sheets, have the potential to save more than 600 international truck journeys a year in our European operations alone. Optimizing shipping cases to fill transport vehicles without leaving gaps between differently shaped containers, together with optimal route planning, Nestlé has already achieved substantial savings.

Pioneering Rail Transport
In countries with competitive railways, moving goods from road to rail is an effective option to reduce road congestion. For example:

Vittel has developed a specially adapted block train concept to supply its regional terminals in France. Vittel transports nearly half of its production, or over 930 million bottles per year, by rail.

Our Swiss, and later the Austrian subsidiary, convinced the railways to offer overnight trains to bring goods from the national distribution centers to terminal stations for local deliveries by road.

Marketing
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, leaflet, and printed materials in light of environmental considerations.

No "Green Marketing"
Nestlé adheres to the Code on Environmental Advertising established by the International Chamber of Commerce. This Code is based on the principle of self-

regulation and self-discipline and is intended to assist companies in making responsible use of environmental claims in advertising.

Sustainable Development
For Nestlé, respect for the environment is part of a broader perspective on sustainable development. Nestlé has adhered to The Business Charter for Sustainable Development of the International Chamber of Commerce (ICC) since its publication in 1991. Measures for environmental protection often trigger beneficial economic and social effects, and vice-versa. Since the Rio Summit in 1992, all of society, be it governments, industry, NGOs or others, have tried to translate the sustainable development concept into reality. As part of this effort, we participate in the work of several organizations dealing with this subject: For example, we are a founding member of the World Business Council for Sustainable Development (WBCSD) in Geneva, and we contribute actively in the Working Group Sustainable Development in the City of Vevey.

Nestlé Working with Communities
South Africa
Nestlé is supporting several community-based organizations in putting sustainable development into practice. Recently, in South Africa, we have given support to Eco Link and LEAP to finance and help manage programs which clean up the environment and improve hygiene in rural areas. The Eco Link project is aimed at providing assistance through education. People are taught to collect litter such as paper, cardboard and cans, which when put in a trench and covered with a compost can then be used to plant vegetables. The litter provides the necessary drainage and moisture retention. The project has dual advantages: it cleans up the environment and provides fresh vegetables for the family, as well as

Nestlé:  communicates its environmental efforts. Within this context. With a wooden cover on top and a tap at the base the villagers have the means to store clean. consumers and other interested stakeholders. Information. Women can spend almost 5 hours a day collecting water for the home. For example. This program is now being presented to school children who are encouraged to grow small gardens at school. stone and sand mixture. including those related to the protection of the environment. People were taught how to identify sources of underground springs and to channel rain water and store it in reasonably hygienic conditions.  fosters strong environmental awareness and responsibility among its employees through training programs. The team taught villagers how to construct a tank to catch the rain water using corrugated iron and wire mesh as a "mould" which is then plastered with a cement. Nestlé is taking part in a project to help villagers establish a supply of clean water near to home. industry. the springs from which they take the water are often used by animals and can be polluted.providing an income when surplus food is grown. to build understanding concerning its environmental commitment. from top management to the factory . In addition. Communication & Training Nestlé provides information on its activities. both inside and outside the Company. our factory environmental surveys involve thousands of people at all levels. We do this through a wide variety of means. and  shares environmental information with governments. local communities. drinkable water. In rural areas water supply is a major problem.

These practical exercises are reinforced by in-house magazines. or create educational materials for the public. industry. As a people-driven company.floor.    supports appropriate voluntary initiatives designed to protect the environment. and consumer associations. These activities are also important to our role in sustainable development. and videos. specialized newsletters. including those involving the environment. and . we emphasize all measures that help them act in an environmentally responsible manner. Legislation Nestlé complies with all laws and regulations which apply to its activities. sponsor re-forestation programs. environmental issues are now a regular part of courses attended by Nestlé's international executives. At our international training center in Switzerland. the scientific community. These efforts are multiplied by countless training sessions organized by our Group companies. To promote an effective regulatory system with respect to the environment. opposes unjustified prohibitions and other discriminatory measures. fosters rational environmental laws and regulations. Internal communication and training are a priority for Nestlé. Nestlé:  participates in legislative and regulatory discussions between international organizations. Nestlé works with organizations that produce films on environmental issues. To help educate the public. government representatives. employees are our most important asset. Thus.

such as ISO 14001 and the European Union Eco-Management and Audit Scheme.  to ensure the continuous improvement of Nestlé's environmental performance. In particular. we have appointed environmental officers. through the conservation of natural resources and minimizing waste. To complement and integrate these efforts. conducted environmental surveys. regulations and standards in order to eliminate existing and future trade barriers. favors the harmonizing of environmental laws. . for example.  to achieve compatibility with international voluntary standards on environmental management systems. applicable legislation and Nestlé's operational standards. The Nestlé Environmental Management System (NEMS) is an essential corporate management tool that consolidates all organizational and technical measures taken by the Group to achieve environmentally sound business practices. and  to build mutual trust with consumers. developed environmental communications. governmental authorities and business partners. we created and implemented Nestlé's own Environmental Management System. issued policies. Nestlé Environmental Management System Nestlé has made systematic efforts to account for environmental concerns of all its activities. The NEMS objectives include the following:  to provide a systematic approach that ensures compliance with Nestlé's environmental policy. and made many innovations in our packaging. reinforced training efforts.

authorities. our factory in Weiding. Weiding Factory Greatly Reduced Disposed Waste Even Prior to EMAS Employing around 900 people and producing more than 550 high-value products ranging from infant foods to condensed milk to chilled deserts. As part of the development of the environmental management system.The Nestlé Environmental Management System is being implemented throughout Nestlé's entire operation. The existence of a comprehensive waste management scheme at the factory was of great assistance in developing the new environmental management system. 1995. the . Germany became the first Nestlé factory in Europe to be registered in the European Eco-Management and Audit Scheme (EMAS). accredited verifier. In addition. environmental manuals were prepared both for the factory and Nestlé Germany. principles. the Weiding factory is one of largest plants in Germany. NEMS in Action: Germany First EMAS Registration of a Nestlé Factory at Weiding. a site-related environmental statement was published that included an "invitation to dialogue" addressed to employees. Germany On December 19. clients. This means that Weiding's environmental management system and public environmental statement have been examined and validated by an external. These manuals provide the foundation of the system setting policies. We believe NEMS will enhance our global performance and contribute to our competitiveness in the world market. and management procedures related to the environmental aspects of the operations. suppliers.

several other Nestlé factories throughout the world have succeeded in obtaining ISO 14001 certification and EMAS registration. the factory reduced solid waste by over 10% resulting in savings of $370. Virginia. These successes were made possible through the dedication of the factory employees and a strong emphasis on training and awareness.000 and solid wastes have been reduced by 41%. USA factory was the first Nestlé US factory to fully implement NEMS .which is based on and consistent with ISO 14001 Danville has shown that good environment is also good business. To date. NEMS in Action: Philippines . and neighboring communities. The EMAS registration has been successfully repeated in 1998 and complemented with an ISO 14001 certification.media. NEMS in Action: USA In 1996. factory savings related to NEMS have exceeded $800. The factory implemented an environmental training program as part of the new employee orientation and the semiannual environmental training for all employees. Following Weiding. Waste Reduced Through NEMS NEMS Supports the Environment and Business Cumulative Savings The continuing nature of NEMS has facilitated similar accomplishments annually. the Danville. In the first year of implementing NEMS.000 and reduced its wastewater impact and concentrations by 8%.

Tilapia. to the Cabuyao and Lipa Factories in 1998. and the Department of Labor and Employment. . often harvested for food.  "Most Environment-Friendly Company" Award given by the Laguna Lake Development Authority to three Nestlé factories (Cabuyao. prepared through an interdisciplinary task force. a highly regarded environmental training program. in implementation of NEMS.Part of NEMS is ensuring a high degree of employee environmental awareness. The success of this program is evidenced by the numerous awards received by Nestlé Philippines manufacturing facilities.  "Anvil Award of Excellence" given by the Public Relations Society of the Philippines for Nestlé's efforts in enhancing the environmental awareness of the public. abundantly grows in the clarifying ponds and discharge canals of their treatment facilities. Aurora.  One of the "Greenest Company" Awards given by the DENR to the Aurora factory in 1996. and Alabang) in 1996. Nestlé Philippines.  "Mother Nature Award" given by the Pollution Control Association of the Philippines in 1998. This program is continuously provided to groups of employees and highlights specific issues related to their job functions and protection of the environment. The water discharge from these facilities is of very high quality. Most notable of these are:  "Outstanding Healthy Workplace Award" given by government agencies including the Department of Health. Department of Environment and Natural Resources. a fresh water fish. As an example.

33/5 . Joint venture between Nestle Switzerland and MilkPak Limited came about in 1988. Block C.: Karachi F . Hyderabad. Pakistan Phone: (021) 5833935-6 Fax: (021) 5833937 Hyderabad 178. Pakistan.CWorkshop RoadSukkur.Clifton. Unit 2Latifabad.L) was incorporated in Pakistan under the Companies Ordinance. KDA Scheme 5. Pakistan Phone: (0221) 860403Fax: (0221) 863202 Sukkur F . Sind. Block 7.Karachi. Sind.Nestle Pakistan Nestlé MilkPak Limited (NESTLE MILKPAK LTD.Phone: (071) 615946Fax: (071) 615946 . Sind. 1984 & listed on Karachi and Lahore stock exchanges since 1980. Nestlé Pure Life was launched in Pakistan in 1998 REGIONAL SALES OFFICES Nestle has 10 Regional Sales Offices in all over the Pakistan.77/1.

Blue Area. Pakistan Phone: (081) 834887Fax: (081) 822297 Islamabad 74-W. Chaman Housing Scheme. Punjab. Yaseen Plaza.D. 1st Floor. Islamabad. Pakistan Phone: (061) 515061Fax: (061) 515061 Quetta 63 B . Baluchistan. Chaman Housing Scheme.1. Baluchistan.Faisalabad. Pakistan Phone: (081) 834887Fax: (081) 822297 Islamabad 74-W. Pakistan Phone: (041)726993Fax: (041) 47438 Gujranwala Plot No: 144-A.D. Punjab.W. First Floor Satellite-Town Market.. N. City Tower. Opposite Askari Park Quetta.Phone: (055) 3733415 Fax: (055) 3733415 Peshawar 201. 824384. 274376 These offices work under their respective zonal offices . Chungi No. 842415Fax: (091)45516 Multan Surij Miani Road.Multan. 1st Floor. Yaseen Plaza. Punjab. Pakistan. B Block. Gujranwala. Pakistan Phone: (051) 271874-75. Blue Area. Opposite Askari Park Quetta. Pakistan Phone: (091) 840859. Punjab.Lahore. Islamabad. 274376 These offices work under their respective zonal offices Registered & Corporate Office Is in Lahore 308 . 2nd Floor. 824384. Lahore PABX: 5757082-95 Fax: 5711820 Faisalabad House No. 24-Y-103 Madina Town. PakistanPhone: (042) 5754335-6.Lahore 29-B.P. Pakistan Phone: (051) 271874-75. Main Gulberg. 5761484Fax: (042) 515061 Quetta 63 B .Upper Mall.824328.F.Peshawar. Jamrud Road.824328.

Lahore PABX: 5757082-95 Fax: 5711 SALES ORGANIZATION HIERARCHY Managing Director IAN Donald Sales Director Zafar Hussain Shah Zonal Sales Manager Ammad Malik Regional Sales Manager Abdul Mateen Khan .Upper Mall.Registered & Corporate Office Is in Lahore 308 .

One in Sheikhupura near Lahore and other in Kabirwala near Multan Product Design Product design can be defined as the idea generation.Area Sales Manager 6 ASM Territory Incharge TI 14 Order Booker FACTORIES 250 Nestle has two factories in Pakistan for the production of different food items. testing and manufacturing or implementation of a physical object or service . concept development.

 Appearance  Shipping Costs  Cost to Manufacture  consumer preferences Nestle Milkpak Ltd. While re-organizing and re-enforcing the production of .The Nestle Pure Life water bottles themselves have a shaped design. cream. and trendy name. In 1988. The Milkpak Sheikhupura factory had commenced operations in1981 as a producer of UHT milk.A. Desi ghee – all under the brand name of MILKPAK and juice drinks under the brand name FROST. give to the product the edge that is needed to be spotted on the shelves INFLUENCES UPON DESIGN  Service Expected. sort of a hour-glass shape with larger top and bottom with indented waist. catchy self-adhesive and glossy label. By 1988. Nestle Milkpak drew up ambitious expansion plans. of Switzerland and Milkpak Ltd. As a consequence of joint venture arrangement between NestleS. The bottom 1/3 of the bottle has ridged lines to help with hold and grip on the bottle There is a bright blue label strip that runs around Unique bottle design. developed by designer’s team. the existing production facility of Milkpak in Sheikhupura became a part of Nestle Milkpak. it had expanded its operation and was also producing butter. Conscious of the large food market that Pakistan offered.

In 1996. The first to come was a milk powder plant. namely Black current and Strong Mint brought the number of POLO variants to five. followed by LACTOGEN 1 & 2 in 1991. first confectionery plant of POLO Mint was installed and the line of NESTL’E PURE ORANGE JUICE was also added. involving a substantial capital outlay. 1998 has been. under the brand FRESH & FRUITY. Packaging of coffee under the brand name NESCAFE CLASSIC was under taken the same year. In 1997 NESTL’E WHEAT and two variants of POLO viz. Significantly. A flexible confectionery line for the manufacture of a wide range of high and low boiled sweets and toffees was commissioned. Nestle Milkpak also contracted to supply dairy mixes to McDonald’s. for its popular soft serves and milk shakes.Local packing of coffee mixes under the name of NESCAFE 3 in 1commenced the same year. Three flavored milk – Vanilla. A new variant Lemony was added to the range of popular FROST fruit drink flavors and a new 1-liter packing of FROST was introduced. The year 1992 saw the introduction of tea whitener EVERYDAY and milk powder in bulk packing named GLORIA.MILO and NESLAC came under production in 1994 and MILO RTD. the factory now houses three new flavors of POLO in addition to two flavors of POLO. In 1995. no less than 17 products were launched during the year. . As a result of the timely implementation of major expansion plans. being the maiden products. by far. came under production on the new Tetra Filling Machine equipped with the modern “slim” format. the most outstanding year for Nestle Milkpak. Strawberry and Mango. the most prestigious project. with TOFFO and two variants of SOOTHERS – Menthol Eucalyptus and Honey Lemon. Nestle Milkpak Ltd. MILO RTD and UHT Cream were also shifted over to this new format. strawberry and Orange were introduced. it lost no time in giving shape to new production lines. With the installation of the roller dryer in1990. And to top it all. which not only began producing NIDO in 1990but was also critical to the production of several milk-based products in the future.existing brands. the first such product to come was CERELAC – an internationally recognized brand on infant cereal.

For co packing of UHT milk under the brand name MILKPAK. The UHT line was discontinued in June 1996 and the same year witnessed the launching of the MAGGI YAKHNI linewith 3 flavors: Chicken. this marked the entry of Nestle Milkpak in the Pakistan water market. Nestle Milkpak acquired KDL in 1990 as a subsidiary and began installation on a MAGGI NOODLES plant in 1991. KABIRWALA FACTORY In 1986 Milkpak Ltd. acquired the services of Kabirwala Dairy Ltd. The new cold sauces production line has been established at this plant. the plant produces NIDO. In view of the growing needs of fruit pulp for its products as well as for exports. this production line became operational in 1992 with two flavors: Chicken and Masala. With the merger of this factory with Nestle Milkpak in April 1997.Kabirwala Factory. Alongside. is a fully owned unit of Nestle Milkpak Ltd. This second milk powder plant was commissioned in September 1996. as it is now called. doubling the output of the spray dryer.NESTLE PURE LIFE was also commissioned in December1998. In the past. based on the latest water treatment and bottling technology. Indus Fruit Products Ltd. In February 1999 the newly installed evaporator came on stream in Kabirwala Factory. GLORIA and skim milk powder. ESTABLISHMENT OF NESTLE MILKPAK. Masala and Chatpata. Nestle Milk pak entered into a 5-year lease agreement with the management enables Nestle Milkpak to put in place its own systems to ensure better product quality and capacity utilization. the warehouse capacity at Kabirwala . has been co-processing fruit pulping for Nestle Milkpak.

YEAR 1981 1983 1986 UHT Milk Butter Milk Desi Frost PRODUCT NAME Pak Cream Ghee Juice Milk Pak UHT Milk 1990 Nido Cerelac 1991 Nestum Lectogen 1992 Everyday Gloria Maggis Noodles Tea Whitener 1994 Milo Neslac 1996 Nestea Polo Nescafe Classic .to handle the increased volumes of finished products was proportionately increased. making Kabirwala Factory independent from Sheikhupura . 1999 also saw the installation of a pouch-filling machine.

Shezan and Bambino Shezan and Bambino is competing Nestle Milkpak’s local brand “Frost”. There is no such competitor that can compete Nestle Milkpak Ltd . These competitors are: Rafhan Rafhan is competing Nestle in infant and follow up cereals. Market Leader Nestle Milkpak Ltd. They are producing high quality well known brands.Maggi Yakhni 1997 Nestle Wheat 1998 Toffo Soothers Nestle Pure Life 1999 Maggi Fruit Butter Skotch Sauces Drops 2001 Nescafe Creamy Flavors Cream milk powder Nestle Milkpak Ltd.in its total product mix. There are a few local competitors of the company in different product item. is the market leader in food and beverage industry. .

CDL and Adar-e-kisan: These two competitors are competing in milk and milk powder products. innovative and superior products which satisfy needs and wants of consumers. The health of consumer and employees is at primary priorities .   Nestle not maximize profit through high market share but use satisfaction of consumer. DIVISIONS OF NESTLE MILK PAK ltd. In spite of this competition.  The major objective of the company is to sell high quality. Production Division Quality asst Department Brand wise production departments Marketing Division Customer Relation Department Distribution Department Research & Development Milk Collection Division Agriculture service Department Logistic Department HR Division Personnel department Finance Division Treasury department OBJECTIVES OF NESTLE MILKPAK LTD. is enjoying about 70-75% market share in Pakistan. Nestle Milkpak Ltd.

Nestle operate to achieve highest standard of ethical conduct.entally sound business practices throughout the world. Opportunities & opportunities they carry on required adjustments in their organization to remain variable and to survive in the face of competition. They have a very skillful and trained workforce. FACILITIES . EXTERNAL ENVIRONMENT NESTLE MILKPAK LTD.  Nestle aim to deal only with reputable suppliers who willing to apply Nestle Quality Standard. programs and practices to conduct operation in an enviroNestle Milkpak ltd.entally sound manner. which acquire company’s activities and relationship world-wide in each business sector. The top management of Nestle MilkPak continuously carries on environmental scanning and within the environmental trends. WORK FORCE Nestle Milk Pak has a small work force as their most of the operations are automated.  Nestle has been committed to enviroNestle Milkpak ltd. CORE COMPETENCIES Nestle Milk Pak has the following core competencies.ent and provide the medical facilities   Nestle establish policies. Nestle provide the pollution free enviroNestle Milkpak ltd.

Consistent quality Development speed Volume flexibility QUALITY Quality is the cone competitive priority of NESTLE MILKPAK LTD. CONSISTENT QUALITY NESTLE MILKPAK LTD. They have special sort of equipments and process which facilitates in maintaining a consistent quality. is the industry leader not only in Pakistan but all over the world. pays special attention for maintaining consistent quality.The NESTLE MILKPAK LTD. High performance design and consistent quality. The organization is well equipped with new developed systems and technologies especially in their operations COMPETITIVE PRIORITIES Following are the competitive priorities of NESTLE MILKPAK LTD. So the each and every unit of its product equally satisfies its customers. offices stores and plants are very well located and have the requisite capabilities. They have a team of very innovative people .’s facilities i.e.. They take quality in two ways.. is an organization which heavily depends upon new systems and technologies to excel in the market. DEVELOPMENT SPEED As for as develop speed is concerned NESTLE MILKPAK LTD. SYSTEM AND TECHNOLOGY Nestle Milkpak ltd. which is a big competitive advantage for them.

So they follow the line strategy. NESTLE MILKPAK LTD. In season when there is shortage of milk their production rate dropped..which consistently focus on the development of new products and to improve the already existing products. has adopted the line flow strategy here the system is organized around the product. In this strategy all products follow linear pattern in facility. It specifies has the operations system to be organized and handled. Based on competitive priorities a flow strategy is selected. For different set of products different flow strategies can be implemented. MAKE TO STOCK STRATEGY . STRATEGIES BASED ON FLOW Following are the flow based strategies adopted by NESTLE MILKPAK LTD. VOLUME FLEXIBILITY Volume flexibility is one of the competitive priority of NESTLE MILKPAK LTD. So they can adjust their volume of production according to their requirements. LINE FLOW STRATEGY NESTLE MILKPAK LTD.. has high volume production with highly automated facility and huge capital investment is there and the standardized products they produce. When the availability of Milk is high in winter season they increase their production as the milk cannot be stored for longer period of time. FLOW STRATEGY Flow strategy is one of the primary element of operations strategy.

there exist repetition of work and a consistent quality is maintained all these priorities lead to make to stock strategy. They have high volume production and the demand for their products can be forecasted quite well.NESTLE MILKPAK LTD. follows the make to stock strategy. PRODUCTION PROCESS Milk Collection & Reception Storing Standardization De-Creaming Cooling Spray drying Evaporation Pasteurization Packing . They have standardized and consistent quality products. STANDARDIZED SERVICE STRATEGY The products which are provided by NESTLE MILKPAK LTD. Ltd. Therefore the standardized service strategy also exist in NESTLE MILKPAK LTD. are standardized.

5% Goat 3% Sheep 6% Human 3. On milk center price of milks is paid at Rs.MILK COLLECTION Milk Collection system of Industry is excellent. The milkmen provide milk on contract basis. According to this system the companies’ trucks reach 140000 milkmen and collect milk daily. Percentage of FAT in Various Kinds of Milk.5% . Buffalo 6% Fat Cow 3. Prices of milk vary in case of self-collection and contract basis.80 per liter at 6% Fats. If the quality of fat is less than required 6% then price will be paid less proportionately. 5.

5%Fats under pure Food Laws. there is no middle man. RECEPTION . Burewala. Milk collection Cocoordinators and Milk Collection Supervisors in each Area for collection of specific amount of Milk in specific time. According to this system milk is collected from area of about 72.At milk collection centers. Ahmadpur There are Area collection managers.000 km . Gerber Test in done for the determination of Fat. It is legal requirement throughout the world Milk collection system of Nestle Milk Pak is excellent. Shorkot. Nestle purchase milk directly few frames. Pindi Bhattian. gerber test is performed for determination of fat. Bahawalnagar. Sarghoda Kabir Wala. At milk collection centers. Village Milk centers Sub centers Main Centers 2273 583 23 On milk centers price of milk is paid according to percentage offers. Chistian. In milk collection centers temperature of milk is kept at 4oC. Kahane wal. Okara etc. Chaniot. Collection Areas are in all over Punjab Nestle Milk Pak divide the areas in following Categories:     Sahiwal. Mian Channu. Companies are bounded to maintain 3. If the quality of fat is less than required (6%) than price will be paid accordingly. Kacha KHU Bahawalpur .

At reception following tests are performed before storing milk to assure the quality of milk. Receiving capacity of milk is 60.6%) 4. there is no rejection on temperature basis.9 Up to reception temp of milk is about 8-10oC. The capacity to store milk is 596 tons.75 Hrs. in factory so that they can in time collect milk for next day. 1.From milk collection centers milk is collected and delivered to factory daily seal of tankers are properly decided.Clot an boiling 3.SNF (Solid non fat) (8.8% . Alcohol precipitation test 2.Fat (5.000 liters. 2 Silos of 10 tons each. Trollers are not preferred to stay more than 1. 1 Silo of 70 tons. Milk can be stored for 36 Hours in Silos. STORING OF MILK Milk is stored in storage tanks called Silos. .5-8. There are 5 Silos of100 tons each.PH test (6.8 – 6.9) 5.

000 rpm in de-creamer. SNF and cream is separated. Cream is send to butter section. Milk powder process activities After pasteurization milk to treated for conversion into powder. Dirt is drained after 30 seconds milk is send for further processes. DE-CREAMING In this process dirt particles. PASTEURIZATION In This Process milk is heated at 92 oC for 5 seconds to remove remaining bacteria’s. So that dirt particles cream can be separated. (b)4-effect falling film . milk is given temp of 60oC and 60. this process is called thermization life of milk is increased by this process and in standardization composition of fats and SNF are standardized. following activities are performed to milk: Evaporation (a) Low heat treatment Milk is heated at high pressure of 889 milli bar so that it start boiling at about 70 oC .STANDARDIZATION All the animals have different composition of fats in their milk indifferent seasons. Standardize milk according to the recipe milk is given temperature of 72oC for 15 seconds to reduce bacteria’s in milk.

62%. 67% and 75% after 1st 2nd 3rd and 4th effect respectively.1% Cooling After drying there is a cooling process.5 % moisture in it. Drying After all these procuress still powder has 5.Milk is evaporated in 4 effect system. Milk is evaporated about 56%. Storing of powder Powder is stored in bins there are 40 bins. After 3rd effect Homogenization is done which uneven composition of fats and SNF is homogenized Spray drying In this process there are 5 lateral high pressure nozzles which exert high pressure on milk after that there which exert high pressure on milk after that there are about 50% water and 50%solids are remained in milk. it is very quick process in which powder settle in base and moisture evaporate in forms of vapors. Packing . That way Nestle Milk Pak say “ Nido is instant Milk” (easily dissolvable in hot ad cold water). Central lecithination Lecithinate is sprayed on powder so that it is converted into highly dissolvable powder. After this step about 320oC hot air is thrown on milk. Powder is dried through xEgran System to reduce moisture level up to 3. in which powder is cooled before storing.

In summer when availability of milk is lower they have their annual shut down (June). They have training session for employees and vacations in that time. LOCATION Facility location is the process of determining a geographic site for a firm’s operations. . otherwise the organization will miss the opportunities for growth & profits. Efficiency of employees is calculated daily.Milk is packed in different packing according to the weight required. The operations manager must provide the capacity to meet current and future demands. There are certain standards for labor utilization. Nestle Pack has located one of its factories at Kabirwala REASONS FOR SELECTING THIS LOCATION PROXIMITY TO SUPPLIERS AND RESOURCES This factory has been located in this area because here the supply of milk is more than the requirement of the local area. it produces 4 tons / Hours & in 20 working hrs it can produce 80tons per day. Capacity Capacity is the maximum rate of output for a facility. villages and small towns. So there is abundant milk available. This factory location is immensely surrounded by Agricultural farms.In flush season when milk is abundantly available they utilize capacity 100% as cleaning time is just 4 hours daily and 20 hours for working. Installed capacity in NIDO plant is 560 tons. The people o f these areas have their own animals and the feudal of the region have their own live stock farms. form tote tilting station from bins. Capacity planning is duty of top management and it is long term .

The suppliers of milk are already oriented with this location. especially the area of whole Punjab. PROXIMITY TO NATIONAL HIGHWAY Kabirwala factory is quite closer to National Highways so the transportation of Raw Material and Finished Goods is also easier. TYPES OF INVENTORIES Following types of inventories are kept by Nestle Milkpak Kabirwala: RAW MATERIALS . (KDL). A basic purpose of supply Chain management is to control inventory by managing the flows of materials. SUPPLY CHAIN MANAGEMENT Supply Chain |Management seeks to synchronize a firms functions and those of its suppliers to match the flow of materials . by locating one factor y at Sheikhupura and the other at Kabirwala the Nestl MilkPak can cover the geographic area of milk collection very well.Furthermore. REPUTATION OF THE LOCATION Placing of the factory at Kabirwala is also advantageous in this way that at the current place there was actually the factory in the name of Kabirwala Dairies Ltd. In the end we can say that the most important and critical factor for locating the facility at this place is the availability of the milk in this area.services and information with customer demand.So the place has thereputation of having a milk factory.

G. The packing material is purchase externally. is produced and stock in this warehouse and the same is released when the Milk availability is lesser and the . Nestle Milk Pak maintains huge amounts of F. They have five silos for storing the milk all have different capacities. WORK IN PROCESS INVENTORIES Work in process inventories are not to huge. which are used to store the milk. There is a huge warehouse within the factory. The milk can remain there for the period of 36 hours without loosing quality. In the warehouse they store the finished goods. From where that is packed through the automatic. Whatever they put into production they stop production after its completion if there is no unusual break down. Inventories of their raw materials cannot be maintained in bulk quality and for a longer period of time. Their Raw Material is kept in Silos .M. The factory can store the milk up to 596000 liters. The unpacked goods inventory can be considered as the WIP inventory. The condensed milk is stored in Bins.Raw Material inventory of Nestle MilkPak consists of milk. hen through an automatic plant the milk is packed. Bins are the big boxes in which the milk powder is stored before packing it. Especially when the availability of milk is high then the L. The butter is stored in huge tubs. inventories. FINISHED GOODS INVENTORY Inventories of packaging material can also be included in WIP inventories.Silos are the big tanks. The supplier of packing material is packages private limited Pakistan.

Nestle Milkpak’s people themselves look after the animals of the former who provide them milk and give them useful tips. They have very friendly and cooperative relations with their supplier’s one hand and here are the suppliers of Milk and on the other hand the suppliers of packing Nestle Milkpak have cooperative relations with both of its suppliers. The whole operations of which are looked after by the operations managers. COOPERATIVE ORIENTATION Nestle Milkpak SUPPLIERS RELATIONS Nestle Milkpak follows the cooperative orientation. Normally it’s the FG inventory the NM has RM & WIP inventories not that huge. There is a centralized system of material management. . SUPPLIER RELATIONS The nature of relations maintained with suppliers can affect the quality. There is also a stores officer which also looks after the materials management. There are two types of supplier relation competitive orientation. timeliness and price of a firm’s products and senior. MATERIALS MANAGEMENT There is a separate department in the factory which is responsible for purchasing the materials and managers its supply.production is also low. RELATION WITH MILK SUPPLIERS Nestle Milkpak has very cooperative relations with its milk suppliers.

PROGRESSIVE FARMERS The progressive farmers are the farmers having lots of animals and supply milk to NM. It also provides them consultancy facilities consultations s provided for improving the milk quality looking after the health of the animals. So NM has very cooperative orientation with its suppliers. So Nestle Milkpak use sole sourcing. Nestle Milkpak provides medical facilities to the animals. In turn the supplier of milk also cooperate with NM PACKAGING MATERIAL SUPPLIERS The packaging material is supplied to Nestle Milkpak by the packages (Pvt)Ltd. The Nestle Milkpak provides loans to these farmers for expanding their farms.Nestle Milkapk provides various facilities to its milk suppliers. Sole sourcing P is the only supplier who provides are the packing material. These are farmers which wish to further grow. How much stock is in the store room how much stock has been further put into warehouse and how much stock has been drawn from the stores? In this way they keep . So that the milk requirements of Nestle Milkpak can be filled. Nestle Milkpak also provides or facility to its suppliers. INVENTORY CONTROL SYSTEMS For controlling inventory the Nesltle Milkpak use Continuous Review CONTINOUS REVIEW Nestle Milkpak use continuous review system. Nestle Milkpak provides them loans for improving their farms and for the purchase of animals. Pak NM have very cooperative orientation with packages and they cooperate a lot with Nestle Milkpak for maintaining high quality of final product. They have the whole computerized system.

PLACEMENT OF FINISHED GOODS INVENTORY The fundamentals decision is where to stock an inventory of finished goods there can be two alternates. FORWARD PLACEMENT In forward placement finished goods are stored closer to customer . Operations manager and the auditing people also check the inventory and its records so that the risks of loss or manipulation may be minimized.Nestle Milkpak use forward placement as they use to keep the stock of finished goods in their regional offices and distribution centers. DISTRIBUTION Distribution is the management of the flow of materials from manufacturer to customer and from ware house to retailers. BACKWARD PLACEMENT In backward placement finished goods are stored at the manufacturing plant where they keep goods stocked.   Forward Placement Backward placement. So in this way they use backward placement also.continuous control over their inventory. So for inventory placement Nestle Milkpak uses a mix of forward placement and backward placement in order to provide goods to the market on time. The stores officer not only maintains records but also makes visits at the warehouses to see the actual situation of materials. The officer can review the inventory at any time. . From the distribution centers the goods are further sent to the retailers. Involving the storage and transportation of goods.

They transport their products at major ten regional sales offices. The organization may fail. Company Distrubition Center Retailers Customers In general. These sales office (distribution centers) have their own vans with sales people who sell and transport goods to the small retailers . Nestle has its own distribution networks equipped with all necessary transportation facilities. which are situated at different cities of Pakistan. Nestle has following two distribution strategies: Selective distribution strategy Extensive distribution strategy For some products. Nestle people go for “extensive strategy” in which they distribute their goods on all possible retail outlets. if its distribution networks are not efficient and unable to provide the necessary items at required place and at reasonable time. Distribution plays important role in success and failure of any organization. Distribution system of Nestle is one of major source of competitive edge over its existing rivals. SELECTION OF TRANSPORTATION MODE .DISTRIBUTION STRATEGIES OF NESTLE MILK PAK LTD. Nestle adopt “selective strategy” in which firm distribute its products on few selective retail outlets while for some products.In general Nestle followed following sequence for distribution of its products. This figure indicates Nestle never sell directly is ultimate customers but follow above sequence.

FORECASTING Fore cast is a prediction of future events used for planning purposes. Forecasts are needed to anticipate changes in prices or costs or prepare for new laws or regulations. reduce productions times and cut inventories. They produce more in peak season (Jan. they have stock in winter to meet this demand. and inventory holdings based on customer requirements and capacity limitations. which are made of special material to maintain the quality of milk. Forecasting methods may be based on mathematical models using historical data available. Feb. As in summer when availability of milk is scarce and demand is high. August). qualitative methods drawing on managerial experience or a combination of both.For transportation of goods to the regional offices Nestle Milkpak has it own vans and other vehicles. July. Accurate for casts allow schedules to use machine capacity efficiently. AGGREGATE PLANNING Aggregate plan is a statement of production rates. They conduct monthly meetings and fine tune the forecast on monthly basis. . competitors. Nestle Milk Pak forecast the demand of products on annually basis with mutual understanding between planning and selling departments on the basis of historical data and sales forecast estimates. work force levels. Forecasts are needed to aid in determining what presences are needed. For the milk collection the Nestle Milkpak has their own tankers. and March) to meet the demand of lean seasons (June. For further distribution to retailer the distributor of each area uses its own vehicles. scheduling existing resources and acquiring additional resources. resource shortage or technologies.

They plan how much production capacity to be achieved . LONG TERM PLANNING HORIZON In long term planning horizon Nestle Milkpak plans for about ten years. The other is the shorter planning horizon normally one year. They got all the information and plan for a longer period of time. total milk requirements. total production etc.PRODUCTION PLAN A manufacturing firm aggregate plan is called as the production plan which generally focuses on inventory holdings and production rates. From where they will collect the milk. TIME The planning horizons of Nestle Milkpak are of two types one is the long term planning horizon which covers the period of ten years. How much milk to be collected in . How much production rates will be required what will be the customer demand how will they collect the milk. Nestle Milkpak has its production plan which is generally developed by the planning department AGGREGATION Nestle Milkpak aggregate their plan on the basis of total milk collection. SHORTER PLANNING HORIZON In shorter planning horizon they plan usually for one year and then further decompose that in seasonal plan How much to produce in a year. How many number of animals would be there in a particular area and from there how much milk we will be collecting.

This yearly plan is further divided into four quarters. Targets are set for each quarter and the efforts are made to achieve the targets. High quality products and services can be priced higher than comparable low quality once. Customer satisfaction Nestle take their customer on top of its hierarchical chart. .one year. QUALITY Quality has no proper definition its vary from person to person. In quality they want to achieve consistent quality and even to improve it continuously. And yields a greater return for the same sales dollars. . Good quality can also pay off in high profits. They design the product in such a way that they confirm their speciation. In general sense quality may be defined as meeting or exceeding the expectations of customers. In general business’s success depends on the accuracy of its perception of customer’s expectations and its ability to bridge the gaps between those expectations and operating abilities. There is strict quality control by computerized system in control room. How much milk to be collected in one year what is the deficiency or surplus. In this regard the stress on customer satisfaction. quality of product are assured at each stage. Nestle Milk Pak has quality as its top competitive priorities along with availability of its products all over. continuous improvement and employee involvement. Poor quality erodes firm’s ability to compete in market place and increase the costs of producing the product or service. fit for use and give support to the company image. How much inventories we will be holding. Its top priority is to satisfy the customer.

which is the best Nestle factory in all over the world. They train the employees for improving quality tools. employees are encourages to give ideas about improvement. As NESTLE is industry leader in food products.Employee involvement Nestle milk pak involves their employees in making decisions and changing in organization. They have idea boxes in factories and offices. good ideas are rewarded to motivate employee’s involvement. TQM often focuses on benchmarking. . employee involvement and develop sense of operator ownership. Nestle Milk Pak Kabirwala is at 2nd number. Employees are given rewards and incentives to involve them more in organization. However. They conduct weekly meetings and discuss the ideas. product and process design. Nestle Milk Pak Kabirwala takes Nestle Tambula factory Australia as bench mark. There are formal training sessions for employees to train them and enhance their capabilities. build team work. Improving quality through TQM Programs for employee involvement and continuous improvement are aimed at improving quality in general sense. Continuous improvement Nestle Milk Pak try to improve the quality of products continuously they conduct continuous improvement meetings to improvement the quality. each factory has its benchmark to improve quality. BENCHMARKING Benchmarking is a continuous systematic procedure that measures a firm’s product and process against industry leaders.

called Nestle Quality Standards.PRODUCT & PROCESS DESIGN Nestle Milk Pak design the produce according to the customer’s satisfaction and process is designed in such a way to maintain purity and nutrition’s of the products. Quality of Materials Quality of Process Distribution Continuous improvement Customer satisfaction Employee involvement CONCLUSION Nestle ambition is to achieve a high level of customer satisfaction through low cost. Nestlé is one of the only companies to have developed an information disclosure policy. In which quality is maintained right from the purchase of raw material to the distribution of the products to the ultimate consumers. highly efficient operations driven by value creation and continuous improvement . In transparency.while their participation capabilities are the worst. To strengthen their . Nestlé’s evaluation capabilities are the most developed dimension of their accountability . QUALITY CERTIFICATION Nestle Milk Pak has its own quality standard certification which has much higher standards as compared to ISO. Nestlé either does not have the necessary policies for fostering consistent implementation of accountability.As the worlds number one food company . Nestle Milk Pak Kabirwala is approved by Nestle Quality Standards. or has policies that lack key good practice principles. But the policy includes no good practice principles.its challenge is to go beyond safe hygienic packaged food. With the exception of evaluation.

In participation. Nestlé only make a general commitment to engaging with those outside the company through their Corporate Business Principles. . They should go further and develop a detailed policy on external stakeholder engagement that identifies the conditions under which stakeholder can expect to be engaged in company decision-making and commits to incorporating stakeholder input into decision-making else providing an explanation. Nestlé needs to strengthen their complaints and response capabilities. Furthermore. the company needs to put in place a complaint mechanism that covers more than a single product and allows both internal and external stakeholder to submit complaints for issues of non-compliance in relation to all the company’s policies and practices.capabilities for ensuring consistent public disclosure of information across the company Nestlé should identify narrowly defined conditions for non-disclosure and commit to responding to information requests within a defined period of time.

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