What is Inventory Management?

Inventory control issues frequently result in differences between records and physical counts, which can
lead to higher-than-ideal inventory levels. Accurate inventory records, on the other hand, result in cheaper
inventory investment and serve as the foundation for forecasting, ordering, tracking, vendor evaluation,
and deadstock management programs. Ideation guidelines based on broad systems theory. The presence
of inventory control difficulties in both physical operations and information systems is identified using
guidelines based on general systems theory. Following that, procedures for resolving control issues are
explained. These are examples of specific points.

an observation made ten years ago by Plossl and Welch, "Inventory is a peculiar sort of beast that almost
never seems to act according to theory, nor does it respond to changes in operating activities the way one
might expect" (Plossl et al. 1979)

A commonly used method to calculate safety stocks in the industry is the number of days times average
demand per day, where the number of days is an estimated parameter representing a safety time margin
when replenishing stock-on-hand. This method is hereafter denoted as the number-of-days method. some
80 percent of US companies used this and similar simple rule of thumb methods to calculate safety stocks
(Silver et al 1998). Similar observations were made in the UK (Wilkinson, 1996)

Collection of Raw Material

System to Collect Milk

Follow the journey of Nestlé's dairy products from their humble beginnings on small farms in
Sheikhupura to your table! They use the raw material by taking into consideration the benefits that the
consumers will reap after consuming the milk pack milk. Nestle’s priority is its customers. For customers’
trust, they do not compromise over the quality of the milk that is being provided to them by the milk
sellers.

1st step

A modest farmer in the remote Sheikhupura district milks his buffalo twice a day and transports roughly 4
liters of milk to one of Nestlé's 500 Village Milk Collection Centers.

Step 2
Farmer's milk is poured into aluminum churns at the Village Milk Collection Centre. The agent inspects
the milk for freshness and purity before recording the amount in the farmer's logbook. He transports it to
one of Nestlé's 1308 Secondary Reception and Cooling Stations, which are located approximately 2-4
kilometers away.

Step 3 There is a big electrically powered cooling tank at the Secondary Reception Station. The fat
content, non-fat solids content, and acidity of the milk are all measured by a milk inspector. He takes the
milk to one of the 27 Main Reception and Cooling Stations after he is satisfied.

4th step

The milk is deposited into enormous tanks at the Main Reception and Cooling Stations and rigorously
inspected for purity. The milk is sent to the processing plants.

Step 5

At the factories in Sheikhupura and Kabirwala, the milk is processed and packed into the recognizable
Nestlé cartons found in supermarkets. It is triple-checked for quality before being put on the market.
Some of the milk is used to make yogurt, powdered milk, cream, and other dairy products.

(1)

Picture source Nestle Official Webpage, ( https://www.nestle.pk/brands/dairy/nestle-milkpak-cream )

Suppliers’ supplier
a supplier can directly manage its consumer demand to maximize its revenue or improve energy
efficiency. This is generally based on an agreement between suppliers and consumers. However, a major
drawback of this approach is related to concerns regarding consumer privacy issues (Han . et al, 2017).
The competition that normally had between businesses has now vanished and the real competition
prevails between the suppliers. The more efficient supplier business has the more it will have a chance of
overtaking over its rivals. To spell it out, good suppliers bring you an edge over the others. To ensure the
efficiency of the suppliers Nestle has undertaken certain issues.
Improved Field
For example, they ensured that the cows are provided with fresh fodder during the summer as if not taken
into consideration suppliers would have faced a slump in yield. To educate the farmers, Nestle has forged
a team that is ready to give assistance and to give practical advice to its farmers that how they can
increase the productivity of the milk. We also provide training on animal husbandry best practices.
For example, we emphasize the significance of providing enough water to cattle and provide farmers with
hygiene and milking training
(2).

Picture source: Nestle official page (

https://www.nestle.pk/csv/ruraldevelopment/agriculture-services/empowering-dairy-farmers )

Livestock Breeding & Health

Pakistan's vast milk production comes largely from buffaloes, despite their small yield.
Our agronomists have shown that with artificial insemination we can triple milk production.
Yet artificial insemination is still not widely used.
In 1996, our vets and agronomists independently formed an NGO to promote artificial
insemination using high-quality semen. Today, with help from Nestlé and others. They
have established a training program for inseminators and provide high-quality imported semen to farmers
at a low cost. We focus on preventative measures against the most common diseases that afflict cattle in P
akistan. Farmers know they can call on our trained veterinarians whenever they need them.
(3)

Picture Source: Nestle Official Page

(https://www.nestle.pk/csv/ruraldevelopment/agriculture-services/empowering-dairy-farmers )

Better Equipment:

Our agricultural services staff has created free technical plans for cowsheds, and our mechanics
have created prototypes of machines to cut fodder quickly and cheaply. Beginning in 2004, we took it a st
ep further and proposed a system of small loans for farmers who wanted to improve their farms, such as b
uilding cowsheds. (Nestle Pakistan Report 2019)

927 Secondary reception and cooling stations

These usually take up about 40 m2 and are divided into two rooms.
One of these houses a milk-cooling tank with a capacity of 600 to 2500 liters that are driven by
electricity.

Because power outages are common, 95% of the stations have their generator.

Each secondary station is run by an agent who also serves as a milk inspector to conduct quality testing.

Main Reception and Cooling Station

These are the last steps in the milk collection process before it is supplied to factories. It also
accommodated large-capacity milk tanks.

Eight of them have plate heat exchangers, which allow the milk to be re-cooled before being transferred
to the plants.
The quality checks that are carried out as each tanker of milk arrives are more extensive than those
carried out in the secondary station.
The laboratory materials needed at the subsidiary stations and village diaries are likewise stored in the 23
major stations.
The main stations serve as communication and management headquarters for the entire collecting system,
with telephone and Internet links to the two plants.
(4)

Picture Source Google Image

Maintenance and Breakdown Services.
Taking care of over 1000 generators, as well as the same number of water pumps and related equ
ipment, necessitates a methodical approach.
Full-time mechanics/electricians are employed at each of the 23 main stations.
For more complicated problems, call one of the five Nestle maintenance service stations, which a
re located in five of the main reception stations.
Nestle's repair service was originally based in the facility in Shaikhupura. However, it was eventually
transferred to the department in charge of acquiring fresh milk.
(5)

Picture Source Nestle Official Page( https://www.nestle.pk/brands/dairy/nestle-milkpak )

Reference

Plossl, G.W. and Welch, W.E., The Role of Top Management in the Control of Inventory, Reston
Publishing Company, 1979.

https://www.scribd.com/document/51790429/Project-on-Inventory-Management

Han, K., Lee, J. and Choi, J., 2017. Evaluation of demand-side management overpricing competition of multiple
suppliers having heterogeneous energy sources. Energies, 10(9), p.1342.

Picture 1 source https://www.nestle.pk/brands/dairy/nestle-milkpak-cream

Picture 2 source: https://www.nestle.pk/csv/ruraldevelopment/agriculture-services/empowering-dairy-

farmers )

Picture 3 Source ( https://www.nestle.pk/csv/ruraldevelopment/agriculture-services/empowering-dairy-

farmers )
Picture 4 Source ( https://www.google.com/search?
q=milk+cooling+tanks+of+Nestle+milk+pak+pakistan&sxsrf=ALeKk00OPiynwuW5m0w1Hb1b5fIJjMj
AxA:1623733799339&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiQzsbi75jxAhVHUxoKHdTDAK
oQ_AUoAXoECAEQAw#imgrc=XaEHBD0v8YKXCM )
Picture 4 Source ( https://www.nestle.pk/brands/dairy/nestle-milkpak )