General Management Project

“A STUDY OF SUPPLY CHAIN MANAGEMENT AT NESTLE INDIA”

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

Master of Management Studies (University of Mumbai)

2022-2024 Batch

Name of the Student – JAYESH SHRIDHAR BARVE

Roll Number: C03

SUBMITTED TO:

DR. V. N. BEDEKAR INSTITUTE OF MANAGEMENT STUDIES, THANE.

1
 DECLARATION BY THE CANDIDATE

This is to certify project report entitled “A STUDY OF SUPPLY CHAIN MANAGEMENT AT NESTLE
INDIA” which is submitted by me in partial fulfillment of the requirement for the award of Master of
Management Studies, (University of Mumbai) Dr. V.N. Bedekar Institute of Management Studies,
comprises of my original work and due acknowledgment has been made in the text to all other material
used.

Wherever references have been made to intellectual properties of any individual / Institution /
Government / Private / Public Bodies / Universities, research paper, text books, reference books, research
monographs, archives of newspapers, corporate, individuals, business / Government and any other source
of intellectual properties viz., speeches, quotations, conference proceedings, extracts from the website,
working paper, seminal work et al, they have been clearly indicated, duly acknowledged and included
in the Bibliography.

____________________________________
Date & Signature of Candidate

2
 CERTIFICATE BY THE GUIDE

This is to certify that project report entitled “A STUDY OF SUPPLY CHAIN MANAGEMENT AT
NESTLE INDIA” which is submitted by JAYESH SHRIDHAR BARVE in partial fulfillment of the
requirement for the award of Master of Management Studies, (University of Mumbai) Dr. V.N. Bedekar
Institute of Management Studies, is a record of the candidate's own work carried out by him under my
guidance. The matter embodied in this report is original and due acknowledgment has been made in the text
to all other material used.

Guide's Name:

Authorized Signatory:

Date:

3
 ACKNOWLEDGEMENT

Sincere gratitude to everyone who helped with the completion of this report are given. I want to express my
deep thanks to DR. MAHESH BHANUSHALI Sir for giving me the space I needed to finish my project
effectively and for his important advice and congratulations during the entire project effort. I want to express
my heartfelt thanks to our director at V.N. BRIMS THANE. DR. NITIN JOSHI sir.

JAYESH BARVE

4
 INDEX

Sr.No Particular Page No

1 Introduction 6

2 Litrature Review 7

3 Objective 8

4 About company 9-13.

5 Suppy chain management at nestle 14-17

6 Objective fulfilment 18

7 Conclusion 19

8 Suggestions 20

9 References/Bibliogaphy 21

5
 Introduction

The study emphasizes the present supply chain management at Nestle and primarily focuses on the
significance of information technology in supply chain management. Without the use of IT, supply chain
management cannot progress. The IT technologies facilitate the organization's ability to gather and evaluate
real-time data from several sources, producing tangible insights that are valuable for overseeing various
processes inside an organization's supply chain. By enhancing speed, efficiency, and effectiveness,
information technology tools in the supply chain are primarily used to prevent bottlenecks in corporate
processes. The supply chain can manufacture the appropriate product in the right amount and deliver them
to the right place thanks to IT technologies.

This study sheds light on how Nestle is attempting to achieve the objective of keeping an appropriate
amount of inventory at the lowest feasible cost by utilizing contemporary management principles like
supply chain integration and just-in-time management.

6
 Literature Review

(Inda Sukati, 2012) The purpose of this research is to explore the relationship between supply chain
management strategy and chain management practices on supply chain performance. The main tools of data
collection instrument used was a questionnaire which was administrated to a total sample of 200 managers
are classified by job title and respondents are also classified by their job functions are corporate executive,
purchasing, manufacturing/production, distribution/logistic, SCM, transportation, material, and operation
from Malaysia manufacturing industry. The response rate was 62% while 51% was usable questionnaires.
Sample selection was based on convenience sampling. The data were analyzed using mean, standard
deviation and correlation between independent and dependent variables. The analyses involved statistical
methods such as reliability and validity tests and multiple regressions. The finding showed that supply chain
management practices have a significant relationship with supply chain performance statically. However,
supply chain management strategy is a weak predictor of supply chain management performance

(Mohammed Saad a, 2002) This paper examines the early progress towards the adoption of supply chain
management (SCM) relationships in construction. It is based on a literature review and survey of the views
of construction practitioners. We contend that SCM has many of the features associated with a ‘fifth
generation innovation’. This paper suggests that although construction practitioners have some knowledge
of SCM they need a better conceptual understanding of it and new and more systematic approaches to its
implementation.

(Cristina Giménez, 2008) The purpose of this paper is to analyse the interaction of two topics: supply chain
management (SCM) and the internet. Merging these two fields is a key area of concern for contemporary
managers and researchers. They have realised that the internet can enhance SCM by making real time
information available and enabling collaboration between trading partners.

(Kevin B. Hendricks a 1, 2006) This paper documents the effect of investments in Enterprise Resource
Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM)
systems on a firm's long-term stock price performance and profitability measures such as return on assets
and return on sales. The results are based on a sample of 186 announcements of ERP implementations, 140
SCM implementations, and 80 CRM implementations. Our analysis of the financial benefits of these
implementations yields mixed results. In the case of ERP systems, we observe some evidence of
improvements in profitability but not in stock returns. The results for improvements in profitability are
stronger in the case of early adopters of ERP systems. On average, adopters of SCM system experience
positive stock returns as well as improvements in profitability. There is no evidence of improvements in
stock returns or profitability for firms that have invested in CRM. Although our results are not uniformly
positive across the different enterprise systems (ES), they are encouraging in the sense that despite the high
implementation costs, we do not find persistent evidence of negative performance associated with ES
investments. This should help alleviate the concerns that some have expressed about the viability of ES
given the highly publicized implementation problems at some firms.

(Hendrik Sebastian Birkel, 2019) The purpose of this paper is to offer a comprehensive overview of
challenges and risks of the Internet of Things (IoT) in supply chain management (SCM) and provide a
structured framework for classifying and analyzing the relevant literature to deduce insights for research
and practice

7
 Objectives

 To examine Nestle's supply chain management situation as it stands today.

 This study aims to investigate how the notion of supply chain management has
undergone revolutionary changes as a result of IT breakthroughs.

 To get aware of Nestle's initiatives to create and advance E-SCM.

 To investigate the degree of adoption of cutting-edge technology in the context of the

Indian supply chain when it comes to integration.

 To determine which technology advances are driving Nestle's supply chain management.

8
 About Company

Since its founding as The NESTLÉ Anglo-Swiss Condensed Milk Company (Export) Limited in 1912,
NESTLÉ has maintained a connection with India through the import and sale of completed goods in the
indian market.

The Indian government's economic policies after the country gained independence in 1947 placed a strong
emphasis on the necessity of domestic production. In response to India's ambitions, NESTLÉ established a
firm there and opened its first facility in 1961 at Moga, Punjab, where the government intended NESTLÉ
to advance the country's dairy industry. The development of Moga necessitated the launch of NESTLÉ's
Agricultural Services, which provide farmers with information, guidance, and assistance in a range of areas.
From using better dairy farming techniques to increase the milk yield of their cows to irrigation and
scientific crop management techniques, as well as assistance with the In addition to guaranteeing timely
collection and paying fair rates, NESTLÉ established milk collecting centers to foster community
confidence in the dairy industry. In order to achieve progress, wealth had to be created continuously and
sustainably. This is how Moga became not just a successful industrial hub but also a prosperous and lively
milk area.

For more than a century, NESTLÉ has contributed to the development of India and has developed a unique
bond of dedication and trust with the Indian populace. The Company's operations in India have helped
create both direct and indirect jobs and support a million or more individuals who work as farmers or as
suppliers of goods, services, and packaging materials.

Through constant attention on understanding India's evolving lifestyles and anticipating consumer
demands, the company aims to provide Taste, Nutrition, Health, and Wellness through its product offerings.
The company has a significant advantage in these efforts due to its innovative and renovative culture, access
to the NESTLÉ Group's patented technology and brand expertise, and its enormous centralized research
and development facilities. It assists the Company in generating long-term value by providing customers
with an extensive range of safe, high-quality food items at competitive costs.

Under globally recognized brand names like NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE,
MILKMAID, and NESTEA, NESTLÉ India produces goods of genuinely international quality. In recent
years, the company has also introduced goods for everyday consumption and use like NESTLÉ Milk,
NESTLÉ SLIM Milk, NESTLÉ Dahi, and NESTLÉ Jeera Raita.

As a socially conscious company, NESTLÉ India supports programs that raise standards of living in the
areas in which it works.

9
 History of the company
One of the leading businesses in the FMCG (fast-moving consumer goods) industry, Nestle has a lengthy
history in India that can be summed up as follows:

• On March 28, 1959, Nestle India Limited was incorporated in New Delhi.

• Nestle Alimentana S.A., a division of Nestle Holdings Limited, advertised the company.

• In 1961, Nestle established its first manufacturing plant in Moga, Punjab, marking the company's entry
into the Indian market.

• Nestle established its second facility in Choladi, Tamil Nadu, with the primary goal of processing tea
that was grown there in an effort to establish itself in the beverage market.

Now, in order to grab a good market region, Nestle chose to construct a factory in 1989 at Nanjangud,
Karnataka.

• Nestle’s start in the confectionery market in 1990 was marked by the introduction of Nestle Premium
Chocolate.

• In order to produce goods based on soy, Nestle and the BM Khaitan Group formed a joint venture in
1991.

• Nestle made a significant choice to develop its two facilities in Goa, in Ponda and Bicholim,
respectively, in 1995 and 1997.

• This is not over yet, Nestle in the year 2000, decided to step in the milk and iced tea market as well. •
Nestle’s 7th factory was set up at Pantnagar, Uttarakhand in the year 2006.

• In 2011, nestle decided to launch one of its plants in Karnataka, which counts up to eight plants in India.

• In order to widen its area of operation, Nestle in October 2020, decided to make an investment of Rs. 2600
crores for establishing a new plant at Sanand, Gujarat. The production at this particular site commenced
from October 1, 2021.

So, currently Nestle has a total of 9 manufacturing setups across India, which are located at:

• Moga, Punjab
• Samalkha, Haryana
• Nanjangud, Karnataka
• Choladi, Tamil Nadu
• Ponda, Goa
• Bicholim, Goa
• Pantnagar, Uttarakhand
• Tahliwal, Himalchal Pradesh
• Sanand, Gujarat

10
 Company Overview
Nestle employs 2,73,000 people and has business in 191 countries. The company deals in a variety of
product lines, including baby foods, bottled mineral water, breakfast cereals, chocolate and confectionery,
coffee, chilled and frozen food, milk products, drinks, healthcare nutrition, ice cream, and pet care and food.
Its more than 2000 brands range from global icons to regional favorites. One of the largest companies in
the FMCG industry is Nestle India. When it comes to Nestle India, the company's graph is showing positive
growth. The company's export figures have also increased significantly. Several explanations for its triumph
can be articulated as follows:

• Better integration efficiency within its supply chain

• Ensuring co-ordination among all its factories, co-packers and outlets

• Increasing manufacturing capacity wherever and whenever possible

• Conducting quality checks at each and every stage till the product reaches to the final consumer

• Improving the sales and distribution channels, especially, in small towns

• Ensuring timely availability of raw material at all the manufacturing units

• Providing efficient training programs for all its employees working at different levels.

Nestle started selling Nestle Anglo-Swiss Condensed Milk in the Indian market when it first arrived in India
in 1912. Nestle ultimately opened up shop in India in 1961 by building its first facility there for the purpose
of producing milk. Following India's independence in 1947, the nation's new economic policies placed a
strong emphasis on localized production. Approximately a million people were given jobs and a means of
subsistence by Nestle as a result.

11
 Nestle’s Mission and Vision

Mission: Nestle is the top nutrition, health, and wellness company in the world. Our goal at "Good Food,
Good Life" is to provide customers the healthiest, most delicious options across a broad spectrum of food
and beverage categories and mealtimes, from breakfast to dinner.

Our vision and values are to be a leading, competitive company in nutrition, health, and wellness that
delivers enhanced value to shareholders by being a preferred provider of preferred goods, a preferred
corporate citizen, and a desired employer.

Nestle's primary objective is to give people a healthy future by consistently focusing on quality
improvement. It focuses on raising awareness of living a better lifestyle in order to achieve long-term
success.

12
 Products by Nestle

Nestle India provides a vast array of products, the most of which are in the food and beverage industry. In
other words, a lot of its brand names were found in India. We can now categorize all of the products into
four main categories in order to list them:

Milk Product & Nutrition Coffee And Nescafe

 Nestle Everyday  Nescafe

 Nestle Milk
 Nestle Nesvita  Nestle Milo
 Nestle French ‘n’ Natural
 Nestle cerevita  Nestea Beverages
 Nestle Milkmade
 Nestle Nido

Prepared Dish and cooking aids Chocolates and confectionery

 Nestle Kitkat
 Nestle Munch
 Nestle Milkybar
 Nestle Maggi  Nestle Bar-one
 Nestle milk chocolate
 Polo
 Nestle Eclairs

13
 Supply Chain Management at Nestle

When discussing the key strategic activities that occur in any manufacturing organization, the process of
supply chain management, or SCM, is unquestionably highlighted. Because SCM is so important to any
organization, it has become even more important in the modern era. Due to the extensive role that supply
chain management plays in a company's operations, it is now regarded as one of the core departments
instead of just a support department. In the current business environment, characterized by intense rivalry,
it is imperative for any enterprise to build and maintain an efficient and effective supply chain management
system in order to thrive the idea of vendor management is also incorporated into modern supply chains,
and it is crucial to the efficient operation of any organization's supply chain.

Nestle is a business that has effectively and appropriately utilized information technology throughout its
supply chain to uphold positive relationships with vendors while considering its future opportunities. The
operations that Nestle carries out in India will be the only subject of this investigation. Due to its
participation in the global supply chain, India is dependent on local milk providers, who are not only
illiterate but also lack the resources needed to operate any kind of business, particularly one that is large-
scale. This is the primary cause of Nestle's difficulties in managing a large number of these regional
suppliers.

Achieve high level of customer satisfaction

through low cost

Highly efficient Operations

Leading food Company

Fig. Supply chain vison of Nestle

Optimize and consolidate Resources

Develop and manage effective SCM Network

Create continuous improvement

Fig. Supply chain mission of Nestle

14
Current supply chain strategy at Nestle –

Speaking of Nestle's production facilities, the company has incredibly excellent ones in the nation along
with a sizable and robust market share that it has been enjoying in India for decades. Nestle's remarkable
success and popularity in India can be attributed in large part to its clever and effective distribution structure
and superior vendor management. The distribution network is a key component of the Indian market, which
Nestle has successfully and efficiently handled by upholding strong ties with its channel and logistical
partners.

Nestle's distribution network ensures that, in order to prevent gaps, the correct product is delivered in the
right quantity at the right time to the right location. This leads to high levels of productivity as well as a
smoother integration process overall. Because there are no communication breakdowns between Nestle's
production facility and distribution network, inventory management is made simpler for the company.

In addition, Nestle places a strong emphasis on managing their vendors by utilizing the just-in-time
management strategy while acquiring raw materials. This makes it possible for suppliers and procurement
to work together in a coordinated manner, with procurement also communicating with the production and
other support departments. Nestle benefits from cheaper costs and the ability to maintain an appropriate
amount of inventory thanks to this supply chain management strategy. Additionally, the just-in-time
management strategy guarantees the prompt delivery of completed goods to the distribution center and raw
materials to the production site.

Raw material
Retailers
production

Suppliers Distributor

Nestle
Production
warehouse

Fig. Current supply chain pattern at Nestle

15
Using Information Technology for Vendor Management-

Many firms nowadays rely on different IT infrastructures to help them manage their business operations.
For many businesses, information technology can be extremely important to supply chain management.
Integration of different organizational departments requires effective use of information technology. Let's
say a company develops a procurement system that works with every other department, including the
finance, production, and so on. In order to successfully implement the just-in-time management idea, the
business must also create an automated IT application that connects vendors across the entire scale of
operations. This will help the vendors plan and schedule their deliveries as well as keep their inventory
levels, in addition to helping the administration of the organization. The organizational goals will be
successfully and efficiently realized if the departments and vendors are integrated via information
technology in the manner described above. Additionally, by using this strategy, the vendors will be
permanently obligated to the company, enhancing business ties.

IT Assistance in Supply Chain Management-

Information technology is essential to Nestle's supply chain operations management. To effectively manage
its supply chain, Nestle's supply chain management department makes use of the newest technologies on
the IT scene. The supply chain can now incorporate several organizational operations, from raw material
purchase to final goods distribution, thanks to the newest technological advancements. All of these
procedures were previously broken apart, which resulted in subpar supply chain management. However,
thanks to developments in the field of information technology, Nestle's supply chain automation is made
possible by the interconnection of all organizational terminals.

Efficient Utilization of Resources by Nestle-

The primary factor contributing to Nestle's operational efficiency is the way the company manages its
supply chain for both input and output processes. The business is fully aware that the supply chain, which
forms the foundation of every organization, immediately raises the price of the final product. Nestle has a
substantial presence in rural markets in addition to having a broad, strong, and active distribution network.
The primary source of Nestle's cost advantage is this channel.

 The following are some of the main methods Nestle use to oversee its extensive network:

 Nestle purchases raw ingredients directly from farmers, such as milk, and collaborates with
multiple NGOs. Additionally, Nestle regularly hosts workshops for farmers to educate them on
quality standards and the newest technologies.

 Nestle is effectively utilizing Enterprise Resource Planning (ERP) technologies to ensure that the
necessary information is flowed in the right way.

 Nestle uses Good Manufacturing Practice (GMP) and Good Warehouse Practice (GWP) to ensure
that the necessary food quality standards are met.

16
  In order to foster enduring partnerships with its channel partners, Nestle also gives them prizes
and incentives. In fact, these tangible relationships help the organizations through difficult
times—like in Nestle's case with Maggi. Maggi was able to return to its previous strength in the
market thanks to all of these initiatives.

 Nestle's R&D department works hard to incorporate the significant advancements occurring in
the business since it believes that production cannot endure long without innovation. The
company has more than 140 years of scientific R&D experience.

Effectiveness of IT in the Indian Market-

Since the Indian market is still in its early stages of development, integrating IT and modern management
techniques in this sector continues to be difficult. However, because it is well aware of the size of the Indian
market in terms of sales, Nestle is doing all within its power to counter this challenge. To run the company
well and profitably, Nestle primarily needs a group of suppliers who can provide them with necessary raw
materials on schedule, such milk. Furthermore, all of these vendors must be integrated with all other
organizational divisions in order to benefit from the just-in-time management technique, and this cannot be
done without the use of information technology. Nestle is consistently making the required efforts to
instruct vendors on the proper utilization of technology for efficient supply chain management. To create
its variety of milk-based products, Nestle India needs a daily supply of fresh milk at the production site.
India's villages provide the milk that is gathered. Additionally, because there is very little IT penetration in
rural regions, the entire collection procedure is done manually. Orders for milk are placed in person with
the farmers, and cell phone communication is used to track the collecting vans. If we use IT practices, we
can easily automate this entire process. It is possible to create a mobile application, Nestle will post its
requirements there, and vendors will reply with quotes and order acceptance confirmation. Additionally,
IT-enabled trackers and global positioning system can be used to monitor the collection vans.

17
 Fulfillment of Objectives

❖ To examine Nestle's supply chain management situation as it stands today: Upon analyzing data from
many perspectives, it is evident that Information Technology needs to become a widely available tool in
India in order to provide a solid foundation for Supply Chain Management.

❖ The goal of this study is to investigate the profound shifts in supply chain management that have resulted
from IT breakthroughs. Information technology has completely improved the idea of physical supply chain
management.

❖ To find out about Nestle's initiatives to create and advance E-SCM: This report outlines Nestle's
initiatives in the field of electronic supply chain management.

❖ To investigate the degree of use of cutting-edge technology in the Indian market landscape when it comes
to supply chain integration: This report clearly identifies a number of factors contributing to the Indian
market's low adoption of technology.

❖ To determine the technology factors that propel Nestle's supply chain management: It is clear from this
study that IT can alter the way that supply chain management is conceptualized. Take the effective tracking
of milk pickup van movements using trackers, for instance.

18
 Conclusion

Information technology currently plays a vital part in supply chain management for all firms, and in the
near future, it will continue to play a much more advanced function. One of an organization's most important
building blocks is its supply chain. Only when a supply chain is aligned and well-integrated can it operate
effectively. Only if we employ information technology tools and procedures appropriately will we be able
to integrate at this level. The following is a summary of some of the main advantages of supply chain
management using IT, as demonstrated by this study:

❖ Widening of supplier contacts

❖ Reduction of numerous costs, such as, transportation cost, warehouse maintenance costs, etc.

❖ Well-timed delivery of raw material at the site of production

❖ Improved customer service

❖ Proper stock management

❖ Opening up of new business ventures Foreseeing all these benefits, Nestle is continuously working hard
to convert its SCM to e-SCM by adopting and utilizing IT infrastructure.

19
 Suggestions

❖ Fast-moving consumer goods (FMCG) companies, such as Nestle, should concentrate on sustainable
supply chain management. By employing IT solutions, these companies may effectively manage the
necessary stock levels, minimizing resource waste.

❖ Utilizing online web portals, which provide real-time updates on raw material requirements, supplier
base information, prices, amount available, and quality deliverable, can assist increase management
efficiency for companies such as Nestle.

❖ Quality checkpoints need to be set up so that, on a regular basis, the produce's and raw materials' quality
are maintained in accordance with the company's quality standards.

20
 References/Bibliography

 Wikipedia

 www.nestle.in

 Cristina Giménez, H. R. (2008). e‐SCM: internet's impact on supply chain processes. Barcelona.

 Hendrik Sebastian Birkel, E. H. (2019). Impact of IoT challenges and risks for SCM. Nürnberg.

 Inda Sukati, A. B. (2012). The Study of Supply Chain Management Strategy and Practices on
Supply Chain Performance. Sukudai malaysia.

 Kevin B. Hendricks a 1, V. R. (2006). The impact of enterprise systems on corporate

performance: A study of ERP, SCM, and CRM system implementations. Atlanta.

 Mohammed Saad a, M. J. (2002). A review of the progress towards the adoption of supply chain
management (SCM) relationships in construction. Bristol,UK.

21
 Summer Internship Progress Report

Name of the Student: JAYESH SHRIDHAR BARVE

Name of the Organization: NESTLE INDIA.

Area of Specialization: OPERATIONS

Reporting Head/ Mentor in the Organization:

Name of the Internal Guide (Institute): DR. MAHESH BHANUSHALI

Title of the project: “A STUDY OF SUPPLY CHAIN MANAGEMENT AT NESTLE INDIA”

Duration of the project:

Progress Report:

Sr. No Date Particulars/ Progress Guide’s Student’s

Signature Signature
1
2
3
4
5
6
7
8
9
10

22