BPP Business Operations Management Report: Nestle Agro LLC Analysis

This report provides a comprehensive analysis of Nestle Agro LLC's business operations, focusing on key performance objectives such as quality, speed, cost, flexibility, and dependability. It examines the company's processes, identifies problems, and offers recommendations for improvement, including a continuous quality improvement framework, key performance indicators, and implementation strategies. The report explores challenges related to packaging quality, delivery speed, cost management, and product flexibility, while also considering the company's vision, mission, goals, and objectives within the context of the food and beverage industry. The analysis includes a review of the company's operations management performance, addressing issues like customer complaints, production efficiency, and adherence to international standards, providing insights into potential areas for optimization and strategic development.

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Programme IMBA
Module name Business Operations Management
QAA Level Level 7
Schedule Term Spring 2018
Student Reference Number (SRN) BP0182550
Report/Assignment Title Individual Coursework
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(Please attach the confirmation of any
extension received) 01.05.2018
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The word count, excluding contents table, bibliography and appendices, is 2408 words.
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Table of Contents
1. Overview of Nestle Agro LLC.......................................................................................................3
3. Analysis of Operations Management Performance Objectives.....................................................5
3.1.Quality..........................................................................................................................................6
3.2. Speed...........................................................................................................................................7
3.3. Cost.............................................................................................................................................8
3.4 Flexibility.....................................................................................................................................8
3.5. Dependability..............................................................................................................................8
4. Process Analysis............................................................................................................................8
4.1 Problems.......................................................................................................................................9
5. Recommendation.........................................................................................................................10
5.1. Continuous quality improvement framework...........................................................................11
5.2 Key Performance Indicator........................................................................................................12
5.3. Implementations........................................................................................................................13
Reference:........................................................................................................................................14
Appendix..........................................................................................................................................15

1. Overview of Nestle Agro LLC
Nestle is considered one of the world’s biggest food and drink company. Now, it achieved mоre
than 2000 brands going starting with worldwide icons with neighborhood favorites. The goal of
Nestle is to provide better quаlity of life and lead to a healthier future as well as to bring the best
and most significant products to people. Also, it gives a huge opportunity of inspiring people to
lead to a better life.
Established in October 13, 1999 in Uzbekistan, a subsidiary company “Nestle Uzbekistan” LLC
started its food and beverage production processes successfully. Company has obtained financial
investment of more than 60 millon US dollars and opened two branches, particularly one in the
capital city of Uzbekistan, Tashkent and the other in Namangan region.
Initially, company started manufacturing drinking water “Nestle Pure Life” and natural milk
“Nestle Sutim”. Up to now company has added Nesquik and Nescafe production lines producing
total of 22 types of products.
Nestle Uzbekistan LLC actively participates in public affairs supporting sports, culture, and
healthy life style.

Vision
Nestle Agro LLC has a inclusive vision which is to be the most well-known leading Health and
Wellness, Nutrition Company. Nestle Uzbekistan pays more attention to full vision of being the
number one Health and Wellness, Nutrition Company in Uzbekistan. Particularly, the main thing
that we visualize to:
 Meet the food desires of customers of аll agеs – from child to mature, from food to
happiness, with the help of modern portfolio of brand food and drink productions at high quality.
 Distribute value of shareholder throughout beneficial continuing development, while
carrying on to play a responsible and vital position in the Economic, Environmental as well as
Public sector of Uzbekistan
 To lead an energetic, qualified and obsessive staff – to be proud of inheritance and think
positive about the development of the future.
Mission
Nestle Agro LLC is devoted to supplying high quality food to consumers each and every day in all
around the world. Through distinctive practice of foreseeing customer’s wants and making
solutions, Nestle Agro LLC creates facility to your health and increases your life quality.
Goals and Objectives
The aim and goal of Nestle Agro LLC are simply and well planned with the main strategies to
consider the customers’ demand and to accomplish the requirement of the customеrs. The main
goals are the followings:
1. To facilitate value for consumer.
2. To improve sales
3. To achieve its intended market share
4. To be unique and best quality brand amongst other brаnds in Uzbekistan
5. Nestle Uzbekistan has aim which is to have totally combined systems with providers as
well as traders. In so doing, each single market can be hit and focused.

3. Analysis of Operations Management Performance Objectives
Nestle Agro LLC is mainly specialized to produce the products in three categories (nesquik,
nestle, butter) that are given in the above mentioned table. Nestle Agro LLC is composed of a
number of core processes taking place in different parts of the company on a daily basis. These
processes are the building blocks of majority operations at Nestle. Their structure can have a
critical impact on the performance of the operation contributing to the organizational goals and
targets. These operations transform inputs, which consist of methods, processes, actions, into
outputs. However, transformation of inputs into outputs has its challenges because these processes
can vary to perform simple to complex operations and are run by people. These challenges can be
addressed by using operations management performance (OMP) objectives that are Quality, Cost,
Speed, Dependability, Flexibility. A quick review of OMP objectives is as follows;
Figure 1. Source: https://www.globalassignmenthelp.com.au/sample-on-operations-management

3.1.Quality
Quality is one of the 10 principles of Nestle company and it is crucial to manufacture high quality
products to further promote the image and brand of the company. However, variety of products
and their different sizes, features, tastes always challenge Quality Assurance department and force
them to set high targets. One of the major challenges faced by the company is to deal with
customer and/or consumer complaints about the products being sold. The following table indicates
actual vs budgeted figures for set by the Quality Assurance department for consumer complaints.
NESQUIK Chocolate 27x200
NESQUIK Strawberry 27x200
NESQUIK CHOCO 12 x 1
Nido 27x200
NESQUICK Strawberry 12x1L
NESTLE Milk 2 % Slimpack
NESTLE Milk 3,2 % Slimpack
NESTLE SUTIM TBA 2% 27x2
Nestle milk 6% fat sl
NESTLESUTIMTBA 1% 27X200
Nestle cream TBA 35%
NESTLE Milk TetraFino 12x1L
NESTLE Milk TetraFino 3.2%
Butter 72% Fat 1X20 KG
Butter 82% Fat 1X20 KG
nestlebutter82.5% 24x200
nestlebutter82.5% 12x400
ButterNestle72,5%Fat 200
ButterNestle72,5%Fat 400
-
15
30
45
60
75
90
105
120
135
150
165
180
195
210
225
240
255
270
21 31
135
27
142
156
138
35
148
32 32
134 142
3 3
113 115 119 118
31
45
155
34
206
132
256
12
78
23
103
151
106
- -
92
175
131
103
Budgeted Actual
When analyzed and audited those complaints and products by the QA department, it has been
found out that the reason for those complaints was due to the packaging materials used. Packaging
materials bought from the suppliers did not follow the quality standards.
3.2. Speed
Another challenge for Nestle Agro LLC is the time to deliver all those products to the market
and/or customer as quickly as possible. Due to the suburban location of the company, delivery of
the products is getting slower and slower. Different types of products require different freezer
degrees and it costs reasonable high prices in summer times. During summer period, logistics

companies get very busy leaving only a few options available asdelivery transports. This means a
lot of hassle and bargaining costs incurring to the company.
In addition to the abovementioned challenge, Nestle Agro LLC also confronts with the difficulties
of manufacturing different category of products with different sizes. For example, production of
Nesquik is different from that of Milk, Butter, or Sparkling/still water which obviously slows the
speed of production process. Because every time, production changes from one line to another,
appropriate machinery should be changed or made ready through setting the relevant degrees. All
this challenges production department because it is more difficult and time consuming to
manufacture various categories of products than the manufacture of only one category of a
product.
3.3. Cost
Nestle Agro LLC has its own standards when it comes to treatment of its employees. Every labor
should be provided with special uniform from head to foot. Obviously, it involves cost. Local
companies do not concern about their labors’ uniform and do not comply with ISO standards
while Nestle Agro LLC does which means. This leads to the reduction cost of the products
manufactured by the local companies for which they can charge lower prices from the customers.
For Nestle Agro LLC it is a major challenge to reduce the price of the products and at the same
time follow the international standards.
3.4 Flexibility
Nestle Agro LLC boasts itself with the availability of mixed variety of products available for
customer consumption. However, it is a problem for company to achieve sales targets for all those
mixed categories of products. It is not flexible for the company to choose any business model for
all types of products.
3.5. Dependability
When it comes the challenges in flexibility in Nestle Agro LLC, there are several of them can be
met in an organization. Production process has a lot of changes which has impact on quаlity, for
instance storage, holding and setting time of the material. Moreover, in this process, it may depend
on one worker which means it can also influence the manufacturing flow. Besides, there are some
other procedures which may require confirmation and observation of the process.

4. Process Analysis
Nestle Agro LLC has standard function of delivering products to its customers. Basically, it has
some steps from which it starts client order and finished with client’s order completed. When an
order received, Nestle Agro LLC analyses this order carefully and after confirming of analysis it
moves to signing the agreement process. The agreement is also carried out with some departments
of Nestle Agro LLC such as sales department and finance department. After signing the agreement
the ordered goods shipping ordered products and products shipped will be performed. Deciding
the completion of order follows by consumer’s order completed. Ready products are sent to
consumers.

Process Decision Start End Message
Business Process Model
4.1 Problems.
However, Nestle Agro LLC has also some problems and disadvantages in delivering products and
services which are the followings:
 Out of time. Let’s consider that, when there is an urgent time for a consumer to receive the
product and Nestle Agro LLC delivery has three next-business-day choices which usually give a
warranty to deliver the products by tomorrow at 8 a.m. 10:30 a.m. or later at 3 p.m. Also it has a
service which is premium that helps to collect customer’s shipments, puts in a proper position in
order to send on the next round and typically sends the same day. The problem is very critical as it
is very necessary to meet the expectation of the customer. Each customer would expect their
service provider to deliver their services within the proper time. Hence it is extremely crucial to
meet the expectations of the customer and deliver the product within the assigned time of the
client.
 Out of product. A lot of companies face difficulty with fulfillment because they become
swamped with several orders. In addition to this, some small businesses sometimes finish with
product if a celebrity or state publications are interested in them. So, one of the best ways out is
that these companies such as Nestle Agro LLC should call its UPS account leader and sort out
overnight deliveries from its suppliers to pass from that initial crunch. The next step will be
mapping the supply chain to recognize pain points and find ways to accomplish current stock
controls. The company should maintain a detailed list of the stock of their products. They should
be aware of their product stock. This would help in delivering the products as per the expectation
of the customer and there would be no further delays in delivering the products to their clients.
 Lots of returns. Actually, the initial step is to comprehend and analyze the situation which
is happening, says one the solution manager staffs of Nestle Agro LLC. Are the amount and
volume explained in detail? Whether the retailer compares what was advertised is unknown? The
returns within the company are observed as a bad impression for the growth of the company. This
generally depicts the fact that the products are not being liked by the customer.

 Several products delivered in bad condition. The Company says that shipments are sent
safely and carefully as soon as packaging begins. Before shipping a particular type of food and
beverage product or experiment new method in packaging, it is important to consider having UPS
(United Parcel Serving) Solution to evaluate and check the container to lessen the damage. The
online shipping is also available which is free. The products that are delivered by the company
should be properly checked by the company before the delivery of the products. The delivery of
the products in bad conditions is a challenging task for the company and hence it should be
properly taken care of.
 Out of packaging. This means that packaging moved to the territory of higher implication
in current year and it is a problem of considerable visibility to people. Also, packaging can have a
well-built role to play in food protection, decreasing food wastage and resulting environmental
issues as well as supplying food. Improper form of packaging would impact the quality of the
products and this would bring a bad name for the company.
 Sending the product to the wrong place. If you have a parcel which is in shipment and
you understand it may go to the wrong place, you can use Nestle Agro LLC UPS Delivery
Intercept service to reroute a parcel “on the fly”. Other opportunities with this payment based
service contain return-to-receiver, rearrange delivery or grasp the parcel for pickup. This could be
considered as the most crucial problem. The products that are needed to be delivered should be
properly sorted and then they should be delivered to the proper place.
 Food security. It contains foodstuff access and affords to keep high concern to increasing
prices that are input. The security of the quality of the food should be maintained highly so as to
deliver high quality products for the company.
 Labor relations are also another critical problem to business stability and maintain to
grow in a way that is noticeable for a broad variety of stakeholders out of the factory gate.
5. Recommendation
Nestle Agro LLC is a famous food and beverage organization in Uzbekistan with its exceptional
reputation and broad range of products and services for all types of consumers. It started its
business and particular set of processes by concentrating on developing company chances and
make customer to satisfy his/her needs. However, there are some useful suggestions for
developing process and applications of new products/services:
 Implementing for the evaluation of product performance progression is very important in
terms of understanding the requirements in relevancy and modification of products to achieve the
business goals. Moreover, for the product performance appraisal which can be obtained with the

help of using data mining and KPI may facilitate to assess the effectiveness and show the
characteristic patterns of clients which could probably be beneficial for retaining and cross-selling.
 It is highly recommended that before starting the business, it is preferable to have business
plan developing after which market analysis happens. The plan for the approach to the business is
extremely necessary for the strategy of the design of the business. Establishing a well-designed
plan would help in managing the way for the business, applying the strategies for the business and
thus helping in gaining the profits for the business. Due to market research, the manufactured
goods mock-up which include suggestions, benchmark findings, ideas, forecasting. Consequently,
these factors indicate vital reasonable highlights to consider the future product development.
5.1. Continuous quality improvement framework
Continuous quality improvement can be described as enduring proсess that one should follow to
improve the operations output. It includes the following stages:
1. Plan
2. Do
3. Check
4. Act
They are all continual process cycle of quality improvement (HubPages, 2015)
Figure 2: Source: https://www.triex.co.nz/the-plan-do-check-act-pdca-cycle/
 Plan. Plan of the PDCA cycle can be described as putting a proper goal and theory,
identifying accomplishment metrics and implementing the plan with the process. Several goals of

the brand names can be distinguished through its quality as well options that are offered in the
market.
 Do. Do of the PDCA cycle gives us the conception of implementing the development plan
once the planning is finished (HubPages, 2015). In order to achieve the target, operation
management in critical focus needs to be spоtted on delivering necessary сompetitive factors to
clients through developing process operation acts via cost competitiveness in terms of deposit
rates, broad sort of smart deposit goods, rapid services, quality and accessibility of branches.
 Check. Check of the PDCA cycle is about data removal to know the outcomes of the
actiоns taken. This one has a belief in an on-going process in weekly, monthly estimation results.
(HubPages, 2015). Discovering information is essential on the way to forecast the opportunities in
goal reaching as well as determine hidden facts that are previous. For instance, insufficient activity
in marketing, improper terms and conditions in deposit, not enough training in HR and so on.
 Act. Act of the PDCA cycle helps us to modify what we are doing and continue to cycling
till we reach the aims. When the check cycle show states that all activities have accomplished
objectives, we can realize that the process is implemented in an effective and efficient way.
5.2 Key Performance Indicator
Performance
objectives
KPI Explanation Target
Speed Manufacturing time,
minutes
Waiting time to
manufacture
product till being
controlled during
the busy time
4 minutes
Speed Delivery time,
minutes
Delivery process
time in average for
a customer until
controlled
50 minute
Speed Call resolution time,
minutes
Time for solution to
problem in average
for a consumer
according to their
request
5 minutes

Quality New products per
sales
Number of products
per order in a
month
500
Quality Sales conversion Sales rate in a
month
More than 5%
Quality Client attrition Number of clients
to towards the
product quality
More than 100
5.3. Implementations
Nestle Agro LLC can be considered as a unique with its achievement, history, manufacturing
progress in the market but some ideas should be taken into consideration for better productivity
and future growth such as:
 Benchmarking and market analyzing are key stage of new food and beverage products
development. It requires performing as soon as possible and there is no cost if it is done by
Marketing Sector Staff.
 Based on sales efficiency, sales as well as servicing platforms should accept appropriate
data concisely through minimal intricacy. It is very important to implement such strategies,
which would help in increasing the margin of the sales of the company. Of course, it is not
short term process which involves considerable material and academic investments.
 In sales and operations establishing people’s performance management can be achieved
through a high-efficiency culture that has clear expectation. Also, setting up performance
observing system should be complemented by having coaching and training (Duthoit
Christophe). With the implementation of the performance based system of observation, it
would be highly helpful for the company to keep a keen observation over the figure of the
sales of the company. This would also help in keeping a watch over the lack of the
important things that would be beneficial for the organization. It is also a long-term course
of action which involves regular mutual communication in all levels of organizations.
However, it does not cost much if we consider in financial investments.

Reference:
1. HubPages, 2015. Continuous Quality Improvement through PDCS and DMAIC Cycle
[online]. Available at: https://toughnickel.com/business/Continuous-Quality-Improvement-
through-PDCA-and-DMAIC [Accessed 15 Apr. 2018]
2. Slack N., Brandon-Jones A., Johnston R. (2014) Operations Management 7th ed. Pearson
Education Ltd
3. Triex.co.nz. (2018). The Plan-Do-Check-Act (PDCA) cycle - TriEx Health, Safety and
Wellness. [online] Available at: https://www.triex.co.nz/the-plan-do-check-act-pdca-cycle/
[Accessed 15 Apr. 2018].
4. Derek, T.H.L.S.A.C., 2014. Human Resource Management 9th ed. UK: Pearson
5. Galloway Les, R.F.A.M., 2000. Operations Management in Context. Oxford, UK:
Butterworth&Heinemann
6. Globalassignmenthelp.com.au. (2018). Operations Management for Optimum Utilization
of Resources. [online] Available at: https://www.globalassignmenthelp.com.au/sample-on-
operations-management [Accessed 18 Apr. 2018].
7. Nestle.com. (2018). [online] Available at: https://www.nestle.com/
[Accessed 5 Apr. 2018].

Appendix.
Gantt chart for the production of this work