Nestlé Marketing and Supply Chain Alignment

This assignment tasks you with analyzing Nestlé's marketing strategy, specifically examining its alignment with the company's supply chain operations. You will investigate how this alignment impacts brand performance and explore both the challenges and opportunities facing Nestlé in optimizing this relationship. The analysis should draw upon relevant academic literature and real-world examples from Nestlé's business practices.

Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
Title: Logistics Management
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
1.0 Outline to the assignment
It is evident that logistics department acts as the control unit of any company. This
therefore implies that a lot of resources have to be channeled towards this sector to ensure the
success of any form of manufacturing company that aims at remaining competitive in this
current business world. This assignment is therefore aimed at discussing the interface
between logistics department and other departments found at the Nestle Company. The study
will also analyze the effect that the current order cycle and inventory management have on
the company’s performance.
1.1 introduction
Nestle is a food and beverage manufacturing Swiss company under the food and kindred
industry which was founded by Henri Nestle in the year 1866. The company invests close to 1.5
billion US dollars annually in research and development activities and its products are marketed
in 130 countries worldwide. The company manufactures close to 10,000 different products with
an employment capacity of 250,000 people (Nestlé, 2017). On a daily basis nestle sells billions
of products to its wide customer base. The company is currently the largest food and beverage
company globally. The company is expected to be the world’s leading industry in wellness,
health and nutrition in the near future. Since its inception nutrition has always been at the centre
of its business activities however a lot of emphasis has now been placed on wellness and health
activities and practices (Forbes, 2017). Two of their units’ i.e. individual business unit and
corporate wellness unit are working in collaboration to ensure the company’s consumers get
good food and life. Some of the leading nestle brands include Milo, magi, kitkat, gerber, coffee
mate, chef-mate, cookie crisp etc (Nestlé, 2017). In doing business the company is guided by
values which are much rooted in respect. Nestle does not work in solidarity instead it works
alongside partners so as to ensure a shared value is created which makes great contributions to
the society to ensure the success of their business is long-term.
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
2.0 Nestle company and operation infrastructure
The main mission of nestle company is to enhance the quality of life of its customers by
making contributions to a future that is healthy. The company aims at assisting in shaping the
world into a better and healthier environment. This is achieved through inspiring people to live
healthier lives (Nestlé, 2017). The top competitors of nestle include Keurig, Nigeria breweries,
starbucks, magi products, unilever, walmart and Amul food and beverage companies.
2.1 Interfaces
Interfacing is the art of interaction among different departments in a company. These
departments are interdependent and any failure on one department may lead to negative impacts
to the others (Morgan, Rebecca and Douglas, 2009). Logistics department at nestle company is
the central body in all the other departments. It interlinks all the other departments within the
industry. The core functional areas in business which include production, marketing, accounting
and finance are all interlinked through the logistics department. The main function of logistics
department at Nestle Company is to plan, manage and control all the activities involved in the
flow of goods and services, data, information as well as human resources from original points
and areas of destination (Morgan et al., 2009). Without the support of an effective logistical
department, manufacturing and marketing activities of nestle company cannot be achieved.
2.1.1 Interface of logistics and production department
For nestle company to be able to produce finished goods there has to be the acquisition of
raw materials, components and parts of manufacturing equipment and this means there has to be
purchasing activities going on. Production is highly tied to logistics because the quality of the
purchased materials and items has to be good so as to have finished products that are of good
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
quality (Park, Cho and Kim, 2014). Any changes in logistics may have either positive or
negative impacts on the different stakeholders in the company. For example any efforts made to
lower the logistics costs by making a consolidation of shipments that are small and using means
of transport that are slow will slow the production process thus delaying the availability of the
company’s products to the market (Gulati, 2007).
Source: https://www.google.com/search
2.1.2 Interface of logistics and marketing department
There is a close link between logistics and marketing departments. This is as a result of
the role these two departments play in the service to customers (Schramm and Morschett, 2006).
There is a great contribution by logistics to the marketing mix dimension of the ‘place’ through
creation of spatial which is the movement of different nestle products to the customer’s
proximity and temporal where inventory is held till the customer places a demand. Al these are
utilities for customers available in the market (Renner and Ringquist, 2016). Similarly, the
information from real time point of sales which is often fed by retailers prepares manufacturers
in the company to make production and keep the right stock level as depicted in the market trend
and leads to reduced need for a large warehouse space.
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
The logistics and marketing interface
2.1.3 Interface of logistics and finance and accounting departments
The finance and accounting department is a critical department at nestle company
because this department gives an oversight as to whether the company is making good returns in
form of money from the sales it makes (Schramm and Morschett, 2006). It’s the same
department that handles the payments of employees and suppliers of different products into the
company. Any activities undertaken by the logistics department will require financing from this
department. There has been a big void between finance and logistics in the current business
world (Smith, 2015). Finance department has to pay attention to logistics on a daily basis using
transactional perspective. It’s the responsibility of the accounting side at the nestle department to
look at how much money is being spent by the company on warehousing, transportation and look
out for any opportunities that may lead to reducing on costs using vendors that are less expensive
and offering discounts. It’s therefore critical to adopt a ‘scorekeeper’ mentality which is able to
get information largely for historical reports (Park et al., 2014).
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
3.0 Order cycle: effectiveness and efficiency of current order processing system at nestle
company
An order cycle refers to the process involved in ensuring an order for goods and services
is carried to term. It’s mostly a routine job with stipulated processes beginning from the time an
order was placed until the goods are delivered to the intended client or customer. At nestle
company this order cycle takes place in four steps just as it is with many companies.
3.1 Order transmissal
Nestle company being one of the world leading companies in food processing and the sell
of such products to its retailers distributed across the world its transmittal process has to be
efficient enough to reach at least all its interested customers (Ravipreet, 2009a). Orders are done
using an electronic data interchange system. Once the order for purchase is approved by the
personnel in charge at the company, the person who placed the order (purchaser) makes a print
out of the order and avails it to the person authorized to make approvals (Krasnikov, Satish and
Kumar, 2009). Once the approvals are made the order is then emailed to the suppliers to release
the goods to the designated purchaser.
Source: https://www.google.com/search/purchase/order
3.2 Order processing
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
Once an order has been received from the customer the next step is the order processing
step where activities are carried out to ensure the customer receives their exact order. This
activity is monitored by the production head so as to ensure everything is done accurately and all
the products requested for by the customer are delivered. At this step the accounting department
ensures the customer has paid for the goods and also checks whether the order has been recorded
in their system (Gulati, 2007). The marketing department puts in a lot of efforts to ensure the
customer can access all the features of the product online and also to sustain long-term
relationships with the client. The ordered goods are picked and parked by the logistics
department (Larson, Poist and Halldosson, 2007). This department also ensures the company
does not run short of stock by keeping inventory records after sell of goods to ensure swift
replacement. Once the goods have been packed as per the customer’s order list, the transport
department makes arrangement for the shipment and delivery of goods to the client (Homburg
and Ove, 2007). The transport mode is dependent on the type of goods that have been ordered
i.e. fragility, heaviness etc.
3.3 Picking and parking of orders
This activity is done by those in charge of the store. Once they receive the list of items
from the production department they carry out the fabrication process. A picking list is used for
purposes of assembling all the needed items (Kathuria, Maheshkumar and Stephen, 2007). If the
items are needed by the manufacturing unit, they are delivered there with immediate effect.
While those that are required by the customer, they are released and made available to the
transporting department for shipping. Before release from the store, the store manager cross-
checks with the available list to ensure every item has been released. It’s the decision of the
manager to add in replenishment items (Kathuria et al., 2007). At the end of the exercise the
store manager will update the stock and make the list available to the purchasing department to
make replacements. The production work is only commenced upon proper checking of the list.
The finished products are then transferred to the packaging sector and to the logistics department
for complete delivery to the customer (Gulati, 2007). Once the goods reach the logistics
department, a barcode is placed on each item packaged for easier record keeping and
classification. The packing list together with the delivery order are then enclosed in the goods
and shipped.
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
Source: https://www.google.com/search/delivery/sample
3.4 Order delivery
In the order cycle system, the delivery stage is the final phase. The best shipping mode is
often selected by the logistics department to ensure goods are delivered to the intended customer.
The type of transportation is arranged together with shipment time. They then make a follow up
until the customer receives the goods. Any lost goods are traced by the logistics department. This
done using a tracking system installed by nestle IT department (Krasnikov et al., 2009). From
this cycle it’s evident that the logistics department plays key roles to ensure goods are delivered
to the customer.
4.0 Recommendations on the order cycle
From the detailed discussion of the order cycle, it’s evident that nestle company has an
efficient system of ensuring orders are delivered to the designated customers. This however does
not rule out the need for improvement in this sector. It’s indicated that most of the work is done
manually and this leads to a lot of delays and time wastage in between the fur steps. Its therefore
recommended that the company makes use of current technology in the order process. Once
systems are put in place most of the transactions can be done online among the various
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
departments. An electronic system is recommended to be put in place which tracks all the
processes that are involved in order processing and delivery. The company should reduce on the
use of paper work which leads to many errors. The tracking system should also be of high
efficiency to ensure no goods are lost and if any then they should be tracked within the shortest
time possible.
5.0 Inventory management at nestle company
Inventory management involves all the activities that are used to move items and
products into and out of the company. Inventories at nestle company are managed on a daily
basis because orders are done on a daily basis and goods are constantly shipped out of the
company. It’s relevant to keep inventory records so as to ensure any inventory problems are
solved on time (Cohen and Roussel, 2005). It’s through this inventory that the company is
restocked with all the goods that are to be sold out. Restocks should be done at a pace that does
not lead to stock-outs or excess stocking of goods. Units of measures and suppliers vary across
countries that nestle supply its products and this has always been a challenge for inventory due to
differences in tax rates and laws. To deal with such challenges, nestle has adopted the use of soft
wares which keep track of records at the company (Charlesworth, 2009). Fishbowl is one of the
inventory management system used by nestle company to oversee multiple locations, make
automatic records of products, track the shipment process, printing and canning of barcodes etc.
this mechanism enables the company to share inventory data with all its online platforms to get
accurately updated inventory quantities.
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
6.0 Conclusion
Nestle company is one of the leading food companies in the world. This success is highly
attributed to the logistics department which is well coordinated and managed by experienced
managers across all the branches. However from the discussion it’s evident that logistics
department cannot operate single handedly. There has to be good coordination between this
department and other important departments at nestle company. These departments include
production, marketing, finance and accounting department. There has to exists a positive
interface among these departments. Once activities are well coordinated at the logistics
department all other activities in other departments are run smoothly. Inventory management
ensures success and continuity of business in the company. Once inventory records are well kept
and on a daily basis, the company is saved a lot of losses that may occur due to under stocking or
overstocking of goods. With all these said and done technology plays key roles both at different
departmental levels and in the inventory process. There is the need to embrace technology and
install developed soft wares to ensure activities are rum efficiently and effectively. Its therefore
recommended that the company makes use software’s such as fishbowls for it to realize a lot of
profits from its business
References
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Running Head: INTERFACE OF LOGISTICS AND OTHER CORE FUNCTIONS AT NESTLE
COMPANY
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