Operations Management: Health and Lifestyles of the Community
Answer:
Introduction
The selected company for pursuing the report is Nestle, which is a Swiss multinational organization with its operations engaged in providing nutritional and health-related consumer goods. The global operations of the company are controlled and monitored from headquarter located in Vevey, Switzerland. The selection of the particular company is based on its leading position within the identified industry measured by the revenues. The operations of the company significantly cover various segments in the global market from baby foods, and adult nutritional products to the snacks and pet foods (Park, Ungson, and Cosgrove 2015). Apart from that, different beverage products are offered by the company to its target market to ensure the growth and achievement of increasing revenues throughout the operating years. The global business operations of the company within the food and beverage industry are governed and controlled by the particular mission and vision statement of the enterprise. The brand tagline of Nestle is “Good Food, Good Life”, clearly indicating the continuous emphasis by the company to produce quality foods and serve those to the identified target market for contributing the promotion of quality regarding the health and lifestyles of the community.
From the initial evaluation, it can be argued that the operations of the company are highly focused on being a leading and competitive nutrition, health and wellness company within the particular market. Such activities are designed to be a preferred corporate citizen and preferred supplier selling the favourite products and ultimately contributing to the increase in shareholder value. The company achieves such objectives with the help of its specifically designed operations effectively aligned by the critical mission statement (Das 2015). The production and management related operations of Nestle always prioritise of providing the best tasting and most nutritious products to its market consumers in its wide range of food and beverage items in the different categories. These products are effectively aimed to provide joy to the various eating occasions from morning to night. Therefore, the operational strategies with the combination of planning and controlling the product and process design will be comprehensively evaluated in the subsequent sections to ensure the establishment of useful understanding regarding the operations management.
Critical Evaluation and Discussion
The operations of Nestle are managed by developing some critical stages like planning the capacity, locating the facility, designing the products, application of Just-In-Time, developing the manufacturing system, and establishing the supply chain management system. These systems and processes are primarily identified to highlight the discussion within the following sections and ensure the formation of proper evaluative understanding related to the specific departments of the organization.
Operations Strategy
The operations strategy of Nestle is highly contributed by the application of nutrition, health and wellness strategy. The particular strategy is designed to support the people desiring to have a healthy lifestyle. The operations are designed by the practical contributions from innovation, which is continuously driven by the company through the industry-leading research and development. The entire scenario supports the constant transformation of the food and beverage portfolio of the enterprise. Apart from that, the research and development activities of Nestle are continuously focusing on exploring the roles of nutritional therapies for ensuring the improvement to the health and lifestyle of people (Kanapathy et al. 2016). With the help of these activities, the company is increasing focusing on creating awareness among the people from different communities for taking more care for their health and wellbeing aspects. Hence, the operations strategy of Nestle is largely based on striving to deliver a positive impact on the numerous societies across the world regarding their activities. In order to achieve the specific aim, Nestle persistently shares various insights regarding the global nutrition, health and wellness challenges, builds superior partnerships with other major companies, and engages with the policymakers, key leaders, and stakeholders from the particular geographical location of company operations.
From the initial information, it can be quite understood that the strategy developed by the company for promoting health and nutrition contributes the development of the overall business successfully. Therefore, it can be stated that the business plan is adequately dependent on the growth and sustainability of health and wellness initiatives designed and performed by the Nestle (Tang, Sodhi, and Formentini 2016). The certain approaches of the company always triggered to empower people within the community to make a decision during the purchase of food products. With the application of the science-based programmes promoting health and nutrition factors of the people, growing numbers of customers are becoming convincing to buy and try the food and beverage products offered by Nestle. For example, the healthy kids programme designed by Nestle aims to promote the healthy eating and drinking habits, especially for the children as they grow older (Ghauri 2015). Therefore, the company’s operational policies are develop to teach nutritional needs and importance to the children and their parents to while encourage to take part in the various physical activities to maintain the certain level of required fitness. Such activities directly influence the business strategy of the company to generate more value for the operations of the company.
On the other hand, constant evolution to the operations strategy of Nestle can be witnessed due to the fundamental influence of the government policies and interventions. Due to such scenario, the significant modifications to the commitments of the company are observed. For an example, the company has successfully reduced the quantity of salt, sugar, and saturated fats from its core products in a mean to remove the portion of trans-fat while meeting the critical preference of the customers (Kusnierczak 2014). The same scenario applies in the labelling and printing GDAs (Guideline Daily Amounts) in the product packaging and development stage of Nestle. The identified evolutions contribute to the betterment of the company operations and making it much more affordable and transparent towards the global customers.
(Fig 1: The Pillars of operation Strategy of Nestle; Source: nestle.com)
Product & Service Design
The product and service design of Nestle is highly based on adequate utilisation of the resources and minimisation of the optimal level of wastes throughout the lifecycle of the product. In this particular context, it is worth to mention that the company leverages increasingly on the incorporation of suitable research and development for maintaining sustainability in the product designing process (Smith 2012). According to Anne Roulin, the head of sustainability for research and development department of Nestle suggests that the company emphasises more on developing a good design for its products, as it believes that the process plays a major role in the preservation of natural environment.
Nestle is known to be the largest fast-moving consumer goods company in the world. The sizeable part of the company’s operational contributions is devoted to generating and maintain environmental sustainability through the product development and designing process. The implication of the particular contribution depends on of the ability of the company to measure the effects of its products to the environment right from the moment of designing or restoring them. For an example, the company considers how the customers dispose the packages during taking vital decisions during the product designing process (Dharni and Sharma 2015). Therefore, the product design practices adopted by the company considers all of the vital factors for the examination. These factors include the agricultural production to the ingredient sourcing, processing, and manufacturing and ultimately the way of utilisation by the consumers.
The products offered by Nestle aims to cover the segments of the food and beverage market in the world by developing full range of goods belonging to the different categories. From the baby products to the adult or pet foods, the company has been able to maintain its reputation for an extended period due to the influence of highly efficient product development and designing process (Cullen and Parboteeah 2013). The individual process is combined with three major stages, which are briefly elaborated below.
Faster and Economic–in order to conduct the in-depth analysis of the products and their impacts on the environment, life cycle assessments are the widely used methodology for the company. However, the significant challenge within the process is the higher involvement of costs and time, as the process takes several months to finish. Therefore, the product designing process of the company should need to be conducted in more economical ways of analysing and determining the environmental impacts. It is one of the specific areas for Nestle, where it is facing the considerable amount of challenges, as the company is continuously working hard to develop a more prompt and economic effort. Such effort can be seen in the emergence of a web-based tool named as Ecodex, which is implemented throughout the worldwide operations of the company (Walker 2013). However, the company should need to focus more to reduce the environmental impact through its products, as the new development will allow the business developing a better progress.
Complex Data – the mentioned system known as Ecodex was created by the life cycle assessment experts of Nestle by forming a partnership with an information technology company called Selerant (Bag, Anand, and Pandey 2016). The particular tool uses the information specifically related to the global food and beverage industry for ensuring the delivery of rapid and accurate data to product development teams of the company. The particular process allows the teams to evaluate the sustainability performance of various product lines of the enterprise. Apart from that, the complex data of the industry are transformed into the straightforward and user-friendly format to ensure the easier understanding. The company is currently engaged to market Ecodex for its availability in the commercial environment, as the particular situation can add value to the overall company.
Sustainable by Design–Apart from the involvement of Ecodex, the company also provides training to the product developers for encouraging them adopting the holistic approach across the critical stages of the value chain (Thoumrungroje and Racela 2013). Due to the implication of such process, the company has experienced the substantial improvements in many of the products and systems. From the application of the sustainability, the company has been able to develop new approaches enabling it to go further and faster.
Process Design
One of the primary aims of Nestle is adapting the particular packaging process of the products for ensuring the reduction of difficulties faced by the customers of all age levels. The specific approach can be highly observed in the operations of the company in its Thailand division. Nestle is one of the first enterprises in the food and beverage industry to adopt the individual approach in its product packaging department following the understanding related to the challenges faced by the environment. In its Thailand division, Nestle had introduced the inclusive design, which aims to seek development in the product designing process and to ensure the needs of the community are fulfilled sufficiently (Alon 2016). The R&D department of the company is continuously focusing on the application of some specialised inclusive design tools for determining how the products can be utilised efficiently.
According to the packaging head of Nestle at Thailand, Nestle is playing the leading responsibility regarding the development of its process design philosophy. With the emergence of inclusive design, the company can shift from good design to great design. With the help of the following statement, it can be proposed that the operations of Nestle in the international market including Thailand aim to develop a pioneering design for benefitting all the customers from different demographics and communities. The basic intention of the company through such design is designing the superior processes and developing the products, which holds the freshness, contributes to the safe usage, and provides easy understanding to the consumers regarding their instructions (Jannat 2015). The identified design in the processes efficiently helps the company to develop and maintain the sustainability of the overall operations through the minimisation of wastes. From the statement revealed by Anne Roulin, the global head of the packaging and designing at Nestle it can be ascertained that placing the customers in the central of operations during the process design is the important approach embraced by the company operating in the multiple countries globally. Due to the implication of the approach, it becomes easier for the company to serve the needs of its global customers regardless of their age or physical conditions.
In its operations in Thailand, Nestle utilises three different factors in designing the processes as part of the packaging and developing stages, such as special pair of gloves, liberating, and key brand asset. The unique pair of gloves is used by the packaging experts of the company during the production of five of the most popular products of the company with the aim of weakening the impact of arthritis (Zhang and Preechawipat 2012). The proper understanding developed by the firm related to the consumers suffering from arthritis, which hampered their strength and movement has driven the company to adopt such a design in the process.
From the overall understanding, it can be suggested that the process designing stage of Nestle is defined by the complete composition of products, the involving packaging, and the nutritional values they consist of their customers. With the help of a diagram, the process design of the identified company can be further categorised.
(Fig 2: Primary Activities related to the Process Design; Source: www.nestle.com)
Planning & Control
Considering the definition of an organization, it is identified as an entity that utilises various inputs like capital and resources to process them and develop the outputs in the form of products and services. In order to ensure the growth and success in the global market, the entities are highly required to invest most of its capital in R&D and marketing for studying the attitudes and perceptions of the target market customers. Every business provides priority to satisfy the customer by the way of providing them effectively and quality comprised products and services. More the satisfied customers contribute to bettering the position of the company in the respective market. Hence, the global competition generates due to providing products and services to the customers according to the prices they pay (Rongwiriyaphanich 2014). Companies engaging in these activities successfully generate increasing brand identity, revenue, and profit. In case of Nestle, the company is engaged in the typical planning process for ensuring the adequate growth in the business operations is maintained and the nutritional health and wellness products are offered flawlessly to the customers in the internal markets. The overall planning and controlling process of Nestle are guided by adopting the capacity planning. Capacity planning is composed of three individual stages, which are briefly elaborated below.
Level Capacity Plan –
this particular stage is committed to control and monitors the individual level of stock with the company. The mechanisms as part of the stage are planned for maintaining the same degree of production capacity for the company regardless of the demand. With the help of the activities adopted in the certain stage, the company aims to stabilise the employment, lowering the cost of unit, and higher utilisation of processes (Park, Ungson, and Cosgrove 2015). However, level capacity planning induces the company the need for production storage and inventory, rather than the falling sales. Therefore, Nestle should need to consider the “shelf-life” factor critically to control the situation efficiently when the production exceeds the demand. On the other hand, Nestle deals with the food products, which are non-durable goods. Based on the understanding, it is evident, that the certain stage of planning also brings some vital challenges for Nestle other than the identified benefits.
Chase Demand Plan –
demand chase plan is exactly opposite to the level capacity planning. Chase demand related planning process deals with the products that cannot be store and should be sold immediately. The food and beverage product sold by the company is the effective example of such type of goods (Mahalder 2014). As part of this particular planning, the production process is controlled by the company to produce the equal number of goods as demanded by the target market. The particular approaches as part of the identified planning are introduced by Nestle under some certain conditions, especially during the picks and falls of demand in the identified market at a given period. Some of the critical measures embraced by Nestle during the period are:
- Reduction or extension of working days
- Recruiting human capital on a part-time basis
- Developing a full-time employment or laying off extra staffs
Demand Management –
another useful stage in the planning process of Nestle is developing the demand management mechanism for dealing with the fluctuations commendably. Some of the well-known benefits of identified functions as part of the specific planning are a reduction of cost associated with the business process, improvement of services, advanced utilisation of company’s resources and capacities, and ultimately contributing to the increase of profits. The planning process is majorly developed by transferring the demands of the customers from more condensed stages to more relaxed phases (Vachani and Post 2012). The company comprehensively does the identified practice thorough creating the alternative products, providing discounts, or offering new outputs to the customers. One of the most compelling examples of the individual approach is cutting the price of an individual food product of the company to increase the client demands and purchasing power in the summer time. Thus, the stored products of the company can be sold to the identified market consumers successfully.
From the overall information, it can be proposed that the selection of appropriate planning and control process influences the achievement of short or long-term goals requires the company analyse and determine the consequences of the activities.
Innovation and Improvement
Continuous improvement is necessary for a company to hold the leading position within the identified market and thrive to respond according to the needs of the market consumers. Improving the products of the company through maintaining innovation within the processes is the vital objective for Nestle, as the practices are the heart of the company’s operation for over 150 years. The company has become the largest private nutrition and food research organization in the world through its internal presence in the major countries across the globe, including the operational hubs at Thailand (Jannat 2015). The company has the diverse range of products committed to serving the needs of multiple communities and demographics in the identified food and beverage markets. The company is largely focused on creating nutritional, and health benefits through the wide range of products offered to the consumers. One of the primary examples of innovations associated with the operations of Nestle is launching the open innovation platform called [email protected] (Alon 2016). The company designs the particular platform by developing collaborations with the various start-ups of the country. On the other hand, the Silicon Valley Innovation Outpost launched in 2013 by Nestle further expanded the platform to work with the new start-ups and promotes the improvement of operations through the inclusion of innovative activities.
(Fig 3: [email protected] Initiative launched by Nestle; Source: www.nestle.com)
Supply Chain
The supply chain aspect of Nestle is highly driven to establish the great platform supporting the involvement of collaborative supply chain professionals. The company achieves the original competitive edge through the effective contributions from the supply chain of the company. With the combination of the Demand and Supply Planning, Physical Logistics, Planning and Procurement, and Customer Services, the management and control mechanism is developed by the company in such a manner to facilitate the development of superior communication with the customers. At the same time, the supply chain management strategies adopted by the company helps it to offer the products according to the market needs of the consumers in the right possible times.
More clearly, the Supply Chain Management of Nestle is the combination of art and science assisting the company to achieve its corporate objectives in superiorly. With the help of the process, the company identifies the particular need of raw components for producing the products or services (Zhang and Preechawipat 2012). Apart from that, the company recognizes the manufacturers for delivering the goods manufactured by the corporation and subsequently offered to the customers. The key supply chain management activities of Nestle is developed by the useful contributions of the important parties like suppliers, manufacturers, distributors, retailers, consumers, and producers. The process can be highlighted effectively with a relevant diagram below.
(Fig 4: Supply Chain Management Processes adopted by Nestle; Source: wordpress.com)
Quality Management
The operations of Nestle is highly committed to maintaining quality and safety in the production process for ensuring the safe and health usage is provided to the consumers. Over the years, quality and safety for the consumers are the fundamental concerns for the formation of key strategies designed by the company for managing quality. The same concept applies to the entire portfolio of the company from food and beverage products to the systems and services. From the analysis to the company’s website, it can be determined that the product safety and quality assurance is one of the top ten corporate business principles of Nestle (Cullen and Parboteeah 2013). The same principles have followed the company for its global operations including the activities of Nestle in Thailand.
The quality management system and its actions of Nestle are designed by the useful guidance obtained from the quality policy developed by the company. The policy describes some of the useful commitments of the enterprise, such as:
- Matching with the expectations and preferences of the market consumers to promote the development of trust in the business operations
- Complying with the quality requirements and regulations regarding the internal and external food health and safety
- Developing and spreading a zero-defect and no-waster attitudes for the members of the organization
- Prioritising quality as the group-wide objective
From the information highlighted in this particular section, it can be ascertained that quality management system is the global platform for Nestle to guarantee the compliance of specific standards followed in different countries. Specific quality standards regarding the food and beverage products are designed to ensure food safety and health related to benefits to the consumers (Smith 2012). Apart from that, the internal quality management system of the company is thoroughly audited by the independent certification bodies to ensure the conformity to the international standards, norms, and regulatory requirements.
Conclusion and Recommendations
The various products of Nestle have become highly popular among the mass population of Thailand over the course of times. The strong growth of the company to become the market leader in the food and beverage industry is highly contributed by the popularity of these products to the identified market and their sales to the increasing number of customers. From the overall analysis, it can be identified that the success of the company is highly proliferated by the presence of efficient distribution network and the suitably defined operational strategy. The strategies and processes are identified to be highly influenced by the sustainability approaches to preserve the environmental balance. Apart from that, the company’s products and services are developed to provide health and wellbeing related benefits to the consumers irrespective of their age or physical conditions. The marketing activities of the company play the significant roles in this particular scenario to inform the customers about the benefits of different products manufactured by Nestle. Therefore, the overall report helps to identify that quality, taste, and availability are the three significant factors Nestle provides higher value and emphasis during the management of its principal operations.
However, it is observed that the food and beverage products of Nestle highly emphasis on the target markets of popular cities throughout the world, while providing a limited highlight to the rural areas. Therefore, the company should need to think of developing different categories of products to target the rural markets across the world. Thereby, the company is recommended to use its strong distribution network and sustainable production process to achieve the identified aim. The particular process will contribute to enhancing more value for the firm.
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