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nestle supply chain management pdf

Category: Business Paper Type: Homework Reference: APA Words: 1500

Executive Summary
The supply chain management has become a popular phenomenon under the paradigm of best business practices. This study focus on two topics falls under the subject of supply chain management. These are the sustainability of the supply chain and the risk assessment of the supply chain. The general view of sustainability of supply chain and risk assessment has been discussed in the study along with the practical application of these elements. Nestle is selected as the company to assess the supply chain management practices and the theory. The company is assessed for its efforts regarding the sustainability of the supply chain, which involves the Nestle Supplier Code. The research supports that the company is highly motivated for a sustainable supply chain and therefore, the company has conducted annual audit of its suppliers to assess if their practices comply with the company requirements. The risk assessment of supply chain is another topic discussed in this study under the umbrella of supply chain management. The company has a proper risk management four-point plan which is comprises of four elements as defined in the company report “anticipate, prevent, plan and finance”. Prioritization, mandatory actions and objectives is a systematic plan of the company for risk assessment and risk management of the company. Thus, it is concluded in the study that the company is focused on providing best products and services to its customers along with a positive effect to its partners over the supply chain.

Introduction
The supply chain phenomenon has evolved since 1980 as the firms realized that they could not be able to achieve their goals effectively in isolation until a collaborative effort is made. This collaborative effort is referred to maintaining a relationship with the suppliers or any other entities participating in the business of the firm. The word logistics and supply chain management are sometimes used synonymously, while there are a few counter arguments who describe these theories different from each other. In some statements on the supply chain management that it is only logistics widened over across, inter organizational boundaries. (Pagh, Lambert , & Cooper , 1997). According to an article, (Vokurka & Lummus , 1999)supply chain is described in APICS dictionary as: “the processes for the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies”.

Another definition for the supply chain management is stated as “the functions within and outside a company that enable the value chain to make products and provide services to the customer”. Textile and grocery industries were the ones to respond to the supply chain initiative, now every big company is focusing on its supply chain management process to go smooth and to maintain good relationships with the suppliers and other entities. The use of supply chain management was first restricted under the logistics theory and it was taken as an inventory management system. The evolution of the logistics has resulted in the theory of supply chain management today, which does not only look to the next entity, but it looks at the operations of entities across the channels (Ellram & Cooper , 1993).

A Study On Nestle-Supply Chain Management Submitted By: Date: Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc414647644 \h 3Introduction PAGEREF _Toc414647645 \h 4Supply Chain Description: PAGEREF _Toc414647646 \h 5Sustainability and greening of supply chain PAGEREF _Toc414647647 \h 61.Layout your supply chain: PAGEREF _Toc414647648 \h 72.Communicate Your Culture: PAGEREF _Toc414647649 \h 83.Gauging Supplier Performance: PAGEREF _Toc414647650 \h 84.Training and Capacity Building: PAGEREF _Toc414647651 \h 95.Drive Performance Improvement: PAGEREF _Toc414647652 \h 96.Join Industry to Collaborate: PAGEREF _Toc414647653 \h 10Supply chain risk assessment PAGEREF _Toc414647654 \h 10Conclusion PAGEREF _Toc414647655 \h 12References PAGEREF _Toc414647656 \h 13 Executive SummaryThe supply chain management has become a popular phenomenon under the paradigm of best business practices. This study focus on two topics falls under the subject of supply chain management. These are the sustainability of the supply chain and the risk assessment of the supply chain. The general view of sustainability of supply chain and risk assessment has been discussed in the study along with the practical application of these elements. Nestle is selected as the company to assess the supply chain management practices and the theory. The company is assessed for its efforts regarding the sustainability of the supply chain, which involves the Nestle Supplier Code. The research supports that the company is highly motivated for a sustainable supply chain and therefore, the company has conducted annual audit of its suppliers to assess if their practices comply with the company requirements. The risk assessment of supply chain is another topic discussed in this study under the umbrella of supply chain management. The company has a proper risk management four-point plan which is comprises of four elements as defined in the company report “anticipate, prevent, plan and finance”. Prioritization, mandatory actions and objectives is a systematic plan of the company for risk assessment and risk management of the company. Thus, it is concluded in the study that the company is focused on providing best products and services to its customers along with a positive effect to its partners over the supply chain. IntroductionThe supply chain phenomenon has evolved since 1980 as the firms realized that they could not be able to achieve their goals effectively in isolation until a collaborative effort is made. This collaborative effort is referred to maintaining a relationship with the suppliers or any other entities participating in the business of the firm. The word logistics and supply chain management are sometimes used synonymously, while there are a few counter arguments who describe these theories different from each other. In some statements on the supply chain management that it is only logistics widened over across, inter organizational boundaries. CITATION Pag97 \l 1033 (Pagh, Lambert , & Cooper , 1997). According to an article, CITATION Vok99 \l 1033 (Vokurka & Lummus , 1999)supply chain is described in APICS dictionary as: “the processes for the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies”. Another definition for the supply chain management is stated as “the functions within and outside a company that enable the value chain to make products and provide services to the customer”. Textile and grocery industries were the ones to respond to the supply chain initiative, now every big company is focusing on its supply chain management process to go smooth and to maintain good relationships with the suppliers and other entities. The use of supply chain management was first restricted under the logistics theory and it was taken as an inventory management system. The evolution of the logistics has resulted in the theory of supply chain management today, which does not only look to the next entity, but it looks at the operations of entities across the channels CITATION Ell93 \l 1033 (Ellram & Cooper , 1993). The manufacturing companies who respond to the initiative of improving supply chain in the early times are considered Whirlpool, Hewlett-Packard, Wal-Mart, Becton Dickinson, West Co, Baxter and Georgia-Pacific Corp. In this study, a combination of supply chain theories and their application in practice is presented with evidence of previous work. The supply chain theories range on a wide paradigm and as the time has passed; several new theories and practical examples have been a part of the literature. The supply chain management consists of the participants of the supply chain of a company. Supply Chain Description:The company chosen for study purposes here is Nestle, which was inaugurated in 1867 when the founder of Nestle, Henri Nestle launched a product for the children. The history of Nestle started in Switzerland and the founder used his surname as the company name and for the logo of the company. The profile of nestle comprises of the characteristics of a nest which is a symbol of security, family and nourishment. The number of brands under the name of nestle has made it the largest food and nutrition company. Nestle has around 8000 brands working under the name of Nestle banners. According to the company, the success of the company relies on effectively managing the supply chain as a large complex operation. Each party of the supply chain has a strong relationship with the other in order to delivery highest quality services and products. The focus of the Nestle is its customers, thus the whole supply chain has maintained a strong relationship and worked together for the success of the company. In general there are a few operations, a company usually performs. These functions are as follows: Purchasing of raw material for the products, the company make. Manufacturing of the products using the raw materials Distributing the products through proper channels to ensure delivery to end consumers The supply chain of Nestle Company is consisting of the following parties who are somehow involved in the business of Nestle. Suppliers Manufacturers Producers Warehouses/Storage Transporters Distributors Retailers Customers/Consumers Sustainability and greening of supply chainSustainability under the supply chain management comprises of the three elements of ecological, social and economic systems, which are interdependent. Sustainability is another face of the social corporate responsibility, which advocates ethical behaviors under the paradigm of these elements CITATION Sut08 \l 1033 (Sutherland & Hutchins, 2008). The researchers have created studies and reviewed several metrics, pointers and systems for the social steps to their capability to continue social sustainability of supply chain. The national level measures have been emphasized in a study to explore the social sustainability of supply chain organizations CITATION Seu08 \l 1033 (Seuring, Sarkis, Müller, & Rao, 2008). Supply chain sustainability is a business concern linked to a company’s supply chain in factors like environmental, risk and waste costs. In theory of sustainability of supply chain, there are said to be six steps to get a sustainable supply chain. These six elements are important to achieve the practical application of sustainable supply chain. A brief introduction of these elements has been described in the following section of the study. These elements are discussed as well of the point of view of Nestle upon these sustainability criteria. Layout your supply chain:The sustainability impact of the supply chain of companies can only be seen by involving the parties throughout the supply chain. The initiative toward a sustainable supply chain demands toward the suppliers or the inventory suppliers of the company. By taking this initiative, a company can pursue to identify the social and environmental challenges faced by their suppliers. In such a way, companies can prioritize their efforts with their supplier. In practice, it can be seen that the Nestle is making efforts to put these theories into application and use them for the benefit of the company. A company report on the responsibility of developing sustainable supply chains for raw materials is such an effort on the behalf of the company. This report discusses the challenges ahead for the suppliers for their raw materials. The social impact and changes in pattern of consumption by consumers has been discussed in this report. The company has initiated sustainable agricultural stance at Nestle. This initiative comprises of the fact that the company must ensure supply in the coming years and it has to take initiatives to ensure this supply. For this purpose, the company emphasizes on the smarter use of natural resources by Not Wasting Not Polluting Not Destroying By doing so, the company intends to kick-start to eradicate worst practices and promote better ones for the sustainable agricultural practices. CITATION Jöh14 \l 1033 (Jöhr, 2014)Communicate Your Culture:Sustainability of supply chain implies that the company is successfully communicating its culture and corporate values to its suppliers and the customers. Supplier code of conduct is a very legit example of such a communication of expectations. A code of conduct does not only communicate to suppliers what is expected of them but it also communicates the goals of a company and its efforts to make a collective effort toward these goals. At Nestle, communication of expectations is an important factor for the sustainability of the company. The Nestle Supplier Code is a good effort on behalf of the company under the sustainability efforts of supply chain. The purpose of this supplier code is defined to convince the supplier to meet the minimum standards requirement. The suppliers and their sub-tier suppliers must adhere to this standard when they conduct business with Nestle. The expectations are set forth in this code for the supplier to understand while doing business with the company. This code communicates the ways, company wants its suppliers to reach the goals, as well as they should understand that this code is a continuity of the efforts of company for continuous improvement in company’s operations and that of suppliers. The suppliers must acknowledge this code before getting into a contract with the company. CITATION Exe13 \l 1033 (Board, 2013)Gauging Supplier Performance:Once the company set its standards and successfully communicates them to the suppliers, the next step is to gauge the performance of the suppliers by may be simply benchmarking questionnaire or a self-assessment can give an idea of the very start for performance. The supplier code of Nestle is a similar document for the company, which obligates the suppliers to make a self-assessment regarding their practices. The supplier code of Nestle provides “four pillars of the Nestle Supplier Code”. These four pillars consist of human rights, safety and health, environmental sustainability and business integrity. These four elements provide a guideline for the suppliers to enhance their operations and focus on the practices as discussed under the clause of these four pillars. Training and Capacity Building:The training and capacity building of the suppliers is important to ensure a sustainable supply chain. This can be possible to set milestones for the suppliers by supporting them with the external resources. Drive Performance Improvement:The performance improvement is possible only under the audit of the suppliers. The audit of the suppliers would eliminate discrepancies and help the company assess the achievements of the suppliers and the progress toward the improved operations. According to an article, Nestle has announced to audit the sustainability of all its 10,000 tier one suppliers in 2015. The company has pursued this audit in 2014 as well where the 6,500 suppliers were audited and 74% of them were approved of the compliance with Nestlé’s sourcing policy. Not only the audit, the company has devised plans to measure and monitor the practices to ensure continuous upgrade in the operations. CITATION Gre14 \l 1033 (Green, 2014). Join Industry to Collaborate:Sometimes the sustainability cannot be achieved in isolation from the industry. The industry collaboration has been given enough thoughts and companies are focusing on the industry wise collaboration to sustainable supply chain. There are several examples and practices, Nestle has pursued over the years to ensure the best practices. These collaborations include the Sidel and Nestle Waters collaboration, Nestle and confederation of Zimbabwe and transport collaboration etc. Similarly, the greening of supply chain comes under the sustainability of supply chain but its sole focus is the environmental changes due to the effect of different business practices CITATION Rao02 \l 1033 (Rao, 2002). The company has taken several initiatives in regard of the greening the supply chain. These initiatives include the maintaining an environmental policy, the reduction in the packaging sources, developing policies to reduce the impact of packaging material on the environment. CITATION Dor96 \l 1033 (Dorn, 1996). Supply chain risk assessmentSupply Chain risk assessment is another phenomenon, which comprises the company’s efforts to minimize the market risk over the supply chain channels. The risk assessment requires a company to first identify the areas where the market risk can have an influence. The today’ market is characterized by uncertainty, which is enhanced by a number of reasons. Firstly, the demand in every industry has become volatile. The demand volatility can be characterized by the competitive products into the market which has made is difficult to identify the demand and to predict it. The product life cycle along with the technology span has shortened significantly, which is another reason for the unpredictable demand cycle. In addition, the supply chains’ vulnerability has increased substantially. These changes in the supply chains are not just an after effect of the natural disasters but the changes in the business strategies. These business strategies changes with the new policies, laws, researches etc. The risk profile of the companies has changed with the changes in their business models and business strategies. Such an example of the risk profile is the trend of lean practices in the business. These practices have influenced the suppliers’ side of the supply chain and the outsourcing of these operations has led to changes in the risk profiles of the companies. CITATION Chr04 \l 1033 (Christopher & Lee, 2004). Thus, the research explains that the risk associated with the supply chain can be reduced by enhancing the Supply chain information quality. The following is the risk management process defined by the Nestle Company in order to cater the risk along the supply chain. The risk management efforts of the company includes the coordinated activities in SH&E, Quality, Security, Treasury, Compliance, Operations, IT, etc. The report shows the risk management at different level using different tools and a regular presentation of the facts to the general management of the company. The risk management process at Nestle is a simple systematic process, which ensures the identification of risk and the quantification of this risk. The key step defined in the company report is the prioritization, mandatory actions and objectives setting. The prioritization includes the list, which defines the plans, the person responsible for it and the due date to represent the reports in details. The mandatory actions involve the action plan for reducing the high-risk exposures and the objective comprises of the high threats, which should be mitigated adequately. Thus, the risk assessment under the supply chain is an important aspect of the sustainability of the supply chain paradigm. CITATION Sch09 \l 1033 (Schaedeli, 2009). Conclusion Thus, the study concluded that Nestle has put in some real great efforts to ensure the sustainability of the supply chain. Therefore, it can be said that the company does not only focuses on the documentation of the Supply chain management program but it supports the supply chain management at all levels. The focus of the company is to incorporate the improvements in the operations along the supply chain and support its supply chain partners to imitate these upgrades to their operations as well. The company has explicit supply chain management policies, which is an obligation for the supply chain partners in order to engage in business with Nestle. Thus, it can be said that the purpose of this study to build a bridge between the theory of supply chain management and the practical application is well served under the research conducted for this study. References BIBLIOGRAPHY \l 1033 Board, E. (2013). The Nestlé Supplier Code. Retrieved from http://www.nestle.com/asset-library/documents/library/documents/suppliers/supplier-code-english.pdf Christopher, M., & Lee, H. (2004). Mitigating supply chain risk through improved confidence. International Journal of Physical Distribution & Logistics Management, 34(5), 388-396. Dorn, C. A. (1996). Nestle's full-time approach to the environment. Candy Industry, 161(9), 18. Ellram, L. M., & Cooper , M. C. (1993). Characteristics of Supply Chain Management and the Implications for Purchasing and Logistics. The International Journal of Logistics Management, 4(2), 13-24. Green, W. (2014). Nestlé to audit all 10,000 tier one suppliers by 2015 - See more at: http://www.supplymanagement.com/news/2014/nestle-to-audit-all-10000-tier-one-suppliers-by-2015#sthash.0fbT0mSK.dpuf. Retrieved from http://www.supplymanagement.com/news/2014/nestle-to-audit-all-10000-tier-one-suppliers-by-2015 Jöhr, H. (2014). The responsibility of developing sustainable supply chains for raw materials. Retrieved from https://www.gsb.stanford.edu/sites/default/files/Hans%20J%C3%B6hr%20-%20Developing%20Sustainable%20Supply%20Chains%20for%20Raw%20Materials.pdf Pagh, J. D., Lambert , M. D., & Cooper , M. C. (1997). Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management, 8(1), 1-14. Rao, P. (2002). Greening the supply chain: a new initiative in South East Asia. Greening the supply chain: a new initiative in South East Asia, 22(6), 632-655. Schaedeli, M. (2009). Risk Management @ Nestlé. Retrieved from http://www.unece.org/fileadmin/DAM/trade/wp6/documents/2009/SpeakersBio/PPTs/pres_Marc_Schaedel_part_ERM.pdf Seuring, S., Sarkis, J., Müller, M., & Rao, P. (2008). Sustainability and supply chain management – An introduction to the special issue. Journal of Cleaner Production, 16(15), 1545-1551. Sutherland, J. W., & Hutchins, M. J. (2008). An exploration of measures of social sustainability and their application to supply chain decisions. Journal of Cleaner Production, 16(15), 1688-1698. Vokurka, R. J., & Lummus , R. R. (1999). Defining supply chain management: a historical perspective and practical guidelines. Industrial Management & Data Systems, 99(1), 11-17.

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