Nestle's GLOBE Initiative: ERP System Implementation Case Study

This case study examines Nestle's implementation of the GLOBE enterprise resource planning (ERP) system, a project aimed at standardizing and integrating the company's global operations. The report analyzes the key benefits and challenges Nestle faced during this transformation, particularly focusing on whether the biggest payback came from IT savings, savings elsewhere in the business, or higher sales. It highlights that significant IT savings were achieved through improved sales order processing, which enhanced efficiency and customer satisfaction. The case study also addresses the complexities of persuading individual countries to participate in a centrally-driven IT project, emphasizing Nestle's approach of framing GLOBE as a company-wide initiative to adopt best practices rather than a purely IT-focused endeavor. The successful implementation of GLOBE enabled Nestle to streamline its supply chain, improve performance, and foster a more integrated global business environment. Desklib provides access to similar case studies and solved assignments for students.

Assessment
Brief:
Component B
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Does the biggest payback come from i) IT savings, ii) savings elsewhere in the business,
iii) higher sales, iv) something else?......................................................................................3
2) How to get the individual countries to take part and be involved in the project? How do you
avoid the 'kiss of death' which would be bestowed on an 'IT project driven from the center?6
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10
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INTRODUCTION
The growth and advancement of information and communication technology and supported
businesses in improving their capabilities and reaching new heights. Both small businesses as
well as multinational corporations have exploited information and communication technology for
a training better position in their industry and acquiring a global audience (Uddin, 2019). This is
specifically through in case of multinational companies as many corporations have adopted
different types of information communication technology to customers to their specific
requirements so that they are able to offer consumers better products and services. It can even be
said that absence of information and communication technology reduces the ability of an
enterprise to succeed on an international level because managing operations at international level
requires some extent of support from information and communication technology.
This report looks at the enterprise resource planning system which was adopted by the
Swiss company Nestle which was also termed as the implementation of GLOBE technology .
This report is based on the case study of Nestle achieving success on a global scale with the help
of one size which all enterprise systems implementation and instead answer the question about
what was the biggest payback from the implementation. In addition to this how individual
countries can be persuaded to take part and be involved in an international information
communication technology project and avoiding damages caused by IT projective in from the
centre (Freudenberg and Nestle, 2020).
MAIN BODY
1) Does the biggest payback come from i) IT savings, ii) savings elsewhere in the business, iii)
higher sales, iv) something else?
Nestle is a good manufacturing company based out of Switzerland with international reach and
white product portfolio. The company is currently headquarters in vevey Switzerland and was
founded in the year 1886. On the basis of revenue and other financial metrics Nestle is
considered as the worlds largest publicly held food company since the year 2014.
It is present on multiple stock exchanges across the world and is there a world renowned
band with huge success in different international markets including Europe America Asia and
Africa. This type of huge success often Nestle across the world cannot be only limited to its
product portfolio and quality of its products. In fact information and communication technology
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play an important better success world Nestle as well as it strong growth and survival in
different international markets across the world.
Nestle has been able to achieve such strong success and high survival in the cut throat
food manufacturing industry because of its wise this is it to invest in information and
communication technology development across the blue with the help of the worlds largest SAP
roll out. The globe initiative was introducing a one size fits all enterprise system implementation
in various global operations of Nestle for improving supply chain management and performance
of the company (Dhanesh and Sriramesh, 2018). This project with global school was completed
in the early 2000s and supported Nestle in developing a strong supply gene which will provide
profitability to the company for years to come.
The project cost was estimated as SFR 3 billion and created a new way for managing
business at the worldwide operations off Nestle. The respective company took a one size fits all
approach in order to deal with implementing one system across single organization combining 70
localized regional information system implementation. Prior to localization the respective
company had followed regional approaches in its information system operations in different parts
of the world. This also led to failure to non-compliance along with ineffective implementation in
various regional areas.
The successful implementation of globe at Nestle provided the company various
advantages and help the company achieve different ERP implementation of objectives such as
integration of operations on a global scale and simplification and standardization of information
technology systems. Out of these the biggest payback came from IT savings as currently Nestle
had integrated operations in terms of information technology which helped the firm build better
technological infrastructures for controlling global business activities.
The globe project helped Nestle develop a SAP template which would provide standard
functionality covering all parts of Nestle business including finance supply chain factories
human resources and payroll sales and marketing (Pinart and Mora, 2022). This humongous task
off integrating information systems of a multinational company which also included covering
various functional areas was completed by group of 700 people who were part of different
department of the company instead of only information technology or information system
employees.
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The primary area of information and communication technology where Nestle received a
payback from implementation of globe was better sales order processing. Prior to the
implementation of globe the process of making and distributing finished product through front of
its salespeople included many different ways of sales order processing depending on the regional
area on international market of Nestle (Behnke and Janssen, 2020). This created differences
between performance of different international markets when it came to sales order processing
main metric which covers this part of the business which is called case and line fill rate Was
difficult to calculate because the meaning of taking and completing an order was different for
different international markets with no sign of a common element which can be taken for
accurately calculating the case and line filler rate of Nestle.
Apart from this the various supermarkets in different international market also control the
rules for trading with the company which affected time taken for completing specific orders.
Nestle aim to improve the case and line fill rate 297.5% with the help of the new globe project.
Under the implementation of globe the main areas which were changed in context of order
processing included introduction of key decision that there were to be no backorders which
means that what the company had in stock in different regional markets at the time the order was
what became the final order anything that was out of stock was crossed off the order or together
and the sales person informed that they need to get the customer to order it again at some point
of time in future.
In addition to this another decision taken for improving order processing under the globe
system included using the customers original order as the basis for what they required and also
using it as a denominator for calculating the case and line fill rate. Before these two decision this
sales order processing department frequently got customers to change their orders to fit in what
they company could have delivered at the time depending on the items available in stock.
The second decision was an important decision for improving sales order processing as it
reduced the denominator used for calculating case and line fill rate which increase the overall
percentage calculation (Voora, Bermúdez and Larrea, 2020). These two changes resulted in
improvement in case and line fill rate performance of many international regions of Nestle and
staff at senior and middle management level also performed better for improving the case and
line fill rate further is their bonuses were also related to the statistics of case an line fill rate.
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Here it can be seen that the company received pay back in terms of information
technology savings as the old technology was not able to help the company reach better
efficiency when it comes to placing orders and also resulted in consumer disaffection and
unnecessary backorders. On the other hand the implementation of global system resulted in
better efficiency in case of ordering and completing orders which helped the company improve
consumer satisfaction and reduce costs related to issues arising because of late order or mistakes
in placing order. In this way the company was able to save money in information technology of
the company and get payback which not only included cost savings but also consumer
satisfaction and improved efficiency (LeClercq, 2021).
2) How to get the individual countries to take part and be involved in the project? How do you
avoid the 'kiss of death' which would be bestowed on an 'IT project driven from the center?
Implementing changes in international information technology systems of a company well
previously the company is utilizing different information systems for different international
markets is a challenging task. It is challenging not only because of the international scope of this
business activity but also because of other factors which may increase the possibility of conflicts
during change into information systems an information technology infrastructure of the
company.
The one size fits all approach taken by Nestle was also challenging because it involved
integrating a common information systems and information technology infrastructure for various
international markets with different product portfolio and workplace culture. The primary
challenge related to this was nice list culture at the time which isn’t it in individual businesses in
different markets being the sole decision maker and having almost total independence on day to
day basis.
This means that annual business plan was signed by headquarters and the CEO of Nestle
and businesses in international markets were free to do various tasks independently and make
decisions without ensuring active participation from the headquarters of Nestle (Johnson and
Duckett, 2020). This type of culture at Nestle was seen as the strength of the company and was
also considered a major barrier in adopting one size fits all approach because it could create
conflict between the vision of headquarters an vision of different international businesses which
are independent.
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One of the rules implemented at Nestle at the time was that staff from the headquarters
had to ask permission to come and visit a country and look at its regional business operation and
it was not uncommon for requests to be turned down which reduces the control and supervision
of various international business outlets of Nestle.
There was also a technical and standards team for information technology at the
headquarters but it was very weak with no control or power over different major national
business outlets (Kumari and Muralidhara, 2021). The different international outlets of Nestle
also avoided following the guidelines provided by the technical and standards team and also took
decisions related to information technology on its own without consulting the team of
headquarters.
This showcases that implementing an integrated information technology system at the
company was completely in opposition of the current culture at Nestle. It was clear that there
would be various challenges faced by nestle in implementing the globe system in different
international markets as it had to deal with different workplace cultures and business practices
adopted by different international regions and look for common business process which can be
used for falling integrated information systems.
The company came to the solution that the project will not be marketed as an information
technology project but as a way of allowing the whole company to benefit from the best practice
that blue would discover within the company and then spread throughout it. The catchphrase
constructed by Nestle for promoting global force global deliver common best practice using
common data based on common infrastructure and it would help the company to be big on the
inside so it could be big on the outside. These types of motivating catchphrases focused on
promoting globe as a change in way of doing work instead of a simple information technology
project so that it can be institutionalized in its cultural values.
This type of marketing would help Nestle avoid failure caused by IT projects division
from the center because it unified the whole company towards adopting best practices so that the
future of the company can be improved. In order to nail down this idea that the glue project will
support business excellence people were formed who worked parallel to but separate from each
other of the functional design teams. This was completed in order to understand the specific
business problems within the area and determine the ways in which things need to be improved
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and was encouraged to work independently without the constraints present within SAP so that
long term solutions for various functional area problems can be determined.
The lack of knowledge about information technology SAP and information systems
initially created possibility of conflicts between the two groups but it was resolved by ensuring
that each group kept the other one honest and transparent communication is facilitated between
the two groups so that the objective of attaining best practices throughout the organization could
be achieved without any barriers.
Another way which helped Nestle overcome the challenges of adopting a standard
template for information system and technology infrastructure was adopting the fit gap practice.
Under the fit gap practice there is need for consistency in factors that facilitate ERP
implementation. This involved focusing on details of how exactly the information system and
information technology infrastructure would work after integrating various international outlets
of Nestle. Across all business areas several thousand process level 5 word defined and
documented which included defining exactly what SAP transaction was to be used to carry out
specific action what input data would be required and where it would be sourced from.
Nestle also ensured that different international markets completely understood all the
documentation which would reach thousands of pages. This meant that any gap reached by the
international businesses for any specific level 5 transaction then they were even to understand
any except the process behind the transaction but understanding the ways in which the overall
process was deemed fit for their requirement. This was an effective action for improving
compliance with the globe system in different international regions. The company was able to
ensure that the guidelines and advises along with the fit gap process was adopted by the company
culture in different international regions after adoption of globe system. In this way the
respective company was able to ensure that different countries will be able to comply with the
new globe system.
Another action taken by the respective organization for improving participation of
individual countries in the below project and avoiding conflicts due to control from the center
was to ensure that organization redesign was also implemented simultaneously with introduction
of the globe system. This was done in order to increase savings as for the motor find the money
get the money keep the money so that all sorts of savings can be identified and organizational
aspects of the form can be changed in order to sustain continue savings in future.
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CONCLUSION
From the above report it is determined that implementation of an integrated information
technology infrastructure is difficult when it comes to multinational organization because there
are differences in culture of international outlets. Disney should be solved by developing detailed
plans and processes for creating a standardized information technology system such as the fit gap
approach. Improvement in information technology system in case of multinational organization
in ascension for their development and growth as they are able to handle supply Jane sale
operates
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REFRENCES
Books and Journals
Behnke, K. and Janssen, M. F. W. H. A., 2020. Boundary conditions for traceability in food
supply chains using blockchain technology. International Journal of Information
Management, 52. p.101969.
Dhanesh, G. S. and Sriramesh, K., 2018. Culture and crisis communication: Nestle India's Maggi
noodles case. Journal of International Management, 24(3). pp.204-214.
Freudenberg, N. and Nestle, M., 2020. A call for a national agenda for a healthy, equitable, and
sustainable food system. American journal of public health, 110(11). pp.1671-1673.
Johnson, D. A. and Duckett, L. J., 2020. Advocacy, strategy and tactics used to confront
corporate power: The Nestlé boycott and international code of marketing of breast-milk
substitutes. Journal of Human Lactation, 36(4). pp.568-578.
Kumari, S. and Muralidhara, G.V., 2021. Nestlé Under Fire Over Unhealthy Product Portfolio:
Will the Company Emerge Unscathed?. IUP Journal of Business Strategy, 18(3). pp.38-
61.
LeClercq, D., 2021. Nestlé United States, Inc. v. Doe. 141 S. Ct. 1931. American Journal of
International Law, 115(4),. pp.694-700.
Pinart, C. and Mora, E., 2022. Ethical AI/ML at Nestlé: From vision to strategy to
execution. Journal of AI, Robotics & Workplace Automation, 1(3). pp.247-255.
Uddin, I., 2019. The influence of growth on return on Assets: A case study of Nestle
Pakistan. Journal of Management Info, 6(2). pp.25-29.
Voora, V., Bermúdez, S. and Larrea, C., 2020. Global Market Report: Sugar. Winnipeg, MB,
Canada: International Institute for Sustainable Development.
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