This is a project report of NESTLE INDIA Tahliwal Plant, situated in Una Himachal Pradesh. This report states all about NESTLE India's Industrial Performance Department, what is Industrial performance (IP) ?, what it actually does ?, why it is important in every organization.
NESTLE India, Tahliwal Plant's Industrial Performance Department, Project Report MBA
ON THE JOB TRAINING REPORT
A STUDY OF PRACTICES IN INDUSTRIAL PERFORMANCE DEPARTMENT
NESTLE INDIA LIMITED TAHLIWAL
THE DEPARTMENT OF PROFESSIONAL EDUCATION
GOVT P G COLLEGE UNA IN THE PARTIAL FULFILLMENT FOR THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION (MBA)
TWO YEAR FULL TIME COURSE (2015-2017)
SUBMITTED TO- SUBMITTED BY-
DEPTT OF PROFESSIONAL EDUCATION NAME: ASHUTOSH SHARMA
GOVTPG COLLEGEUNA UNIV R.NO. 43MB5013236
A STUDY OF PRACTICES IN
DEPARTMENT OF NESTLE INDIA
GOOD FOOD, GOOD LIFE
I, ASHUTOSH SHARMA student of MBA of Govt. College Una H.P. is going to present my
project on NESTLE India’s Tahliwal Factory.
My project provides complete information about my topic" A STUDY ON THE
INDUSTRIAL PERFORMANCE COMPONENTS”
INDUSTRIAL PERFORMANCE (IP) supports in delivering optimal performance to
manufacture products with the prescribed quality at the lowest cost.
In this report I have mentioned the various tools and techniques which are used in
INDUSTRIAL PERFORMANCE to ensure the effectiveness with an effective SWOT
analysis and Internal Factor Evaluation Matrix (IFE) of the Nestle India, Tahliwal Plant
I would like to gratefully acknowledge the contribution of those who played important part
and provided valuable support to me during the course of this project.
I would like to thank those people who helped me in completing my project.
I would like to express gratitude to Mr. JATINDER SINGH RATHORE (Industrial
Performance, Head of the Department). Also, I want to give special thanks to Mrs. TRIVENI
GAUTAM (Industrial Performance Department), for their guidance, support and valuable
suggestions during the period. Without their supervision, project could have not been
My heartfelt thanks also go to entire INDUSTRIAL PERFORMANE department team for
their assistance and willingness towards reply all my queries.
INTRODUCTION: NESTLE INDIA LIMITED
It was founded in 1867 by HENRI NESTLE. After more than a century-old association with
the country, today, NESTLÉ India has presence across India with 8 manufacturing facilities
and 4 branch offices. NESTLÉ India set up its first manufacturing facility at Moga (Punjab)
in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud
(Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and
1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé India set up its 8th
manufacturing facility at Tahliwal (Himachal Pradesh).
The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales
and marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana
HEAD OFFICE REGISTERED OFFICE
NESTLÉ INDIA LTD. NESTLÉ INDIA LTD.
NESTLÉ HOUSE, M – 5A, CONNAUGHT CIRCUS,
JACARANDA MARG, 'M' BLOCK, NEW DELHI, 110001
DLF CITY, PHASE II,
GURGAON – 122002 (HARYANA)
NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland. With eight factories and a
large number of co-packers, Nestlé India is a vibrant Company that provides consumers in
India with products of global standards and is committed to long-term sustainable growth and
The Company insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships. This has earned it the trust and respect of every strata of
society that it comes in contact with and is acknowledged amongst India's 'Most Respected
Companies' and amongst the 'Top Wealth Creators of India'.
NESTLÉ's relationship with India dates back to 1912, when it began trading as The NESTLÉ
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market. Mr Suresh Narayanan is the Chairman and Managing
Director of Nestle India Limited.
After India's independence in 1947, the economic policies of the Indian Government
emphasised the need for local production. NESTLÉ responded to India's aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the
Government wanted NESTLÉ to develop the milk economy.
NESTLÉ has been a partner in India's growth for over a century now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood to
about one million people including farmers, suppliers of packaging materials, services and
The Company continuously focuses its efforts to better understand the changing lifestyles of
India and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings. The culture of innovation and renovation within the
Company and access to the NESTLÉ Group's proprietary technology/Brands expertise and
the extensive centralized Research and Development facilities gives it a distinct advantage in
these efforts. It helps the Company to create value that can be sustained over the long term by
offering consumers a wide variety of high quality, safe food products at affordable prices.
NESTLÉ India manufactures products of truly international quality under internationally
famous brand names such as MAGGI, MUNCH, NESTCAFE etc.
NESTLE PLANT AT TAHLIWAL, DISTRICT – UNA, HIMACHAL PRADESH:
• Nestlé India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh).
• In Tahliwal factory Nestlé does production for 3 products :-
1.) Maggi (Noodles)
MAGGI Noodles is one of the largest & most
loved food brands that defines the Instant
Noodles category in India by being a part of
our way of life. It has been bringing people
together and is the favourite of millions;
living in our hearts it has become intertwined
in some of people’s most memorable
Made out of choicest roasted spices and
quality ingredients through a world class
noodles technology, MAGGI Noodles brings
to you goodness that you can always trust.
2.) Munch (Chocolate)
NESTLÉ MUNCH is the country’s most loved ‘coated wafer’ product. Available throughout
stores across the country, every variant of NESTLÉ MUNCH is a delicious crunchy treat for
3.) Munch Nuts (chocolate)
Presenting the all-new MUNCH NUTS which has crunchy wafer, delicious peanut creme and
roasted peanut bits. A first-of-its-kind product, one bite and You’ll go nuts about it!
• In 2012, Nestlé opened a Rs2.5bn ($45.07m) factory at Tahliwal, Himachal Pradesh
state, for the production of Maggi noodles as well as chocolate products.
• Nestlé Tahliwal factory has 6 major departments. It deals with all factory operations.
2.) Human Resource (HR)
3.) Industrial Performance (IP)
4.) Supply Chain Management (SCM)
5.) Production Culinary (Noodles)
6.) Production Chocolate ( Munch & Munch Nuts )
7.) Quality Assurance (QA)
Nestlé's vision is "to be a leading, competitive, nutrition, health and wellness company
delivering improved shareholder value by being a preferred corporate citizen, preferred
employer, and preferred supplier selling preferred products.
Nestle’s mission of 'Good Food, Good Life' is to provide consumers with the best tasting,
most nutritious choices in a wide range of food and beverage categories and eating occasions,
from morning to night."
These statements reflect the company's long-term business strategy. In keeping with its
claimed commitment to nutrition, Nestlé has invested in scientific research on nutritional
aspects of the kinds of products it sells. For example, it has studied the effects of chocolate on
metabolism and gut bacteria. The Economist describes this as a potentially risky strategy; by
investing in research and development, the company is "playing a long game," in contrast to
the short-term strategies of some of its competitors.
Nestlé has also made an effort to practice "corporate citizenship." It has been involved in a
number of efforts to promote good agricultural and environmental practices, such as the
World Cocoa Foundation, which is "committed to creating a sustainable cocoa economy by
putting farmers first - promoting agricultural and environmental stewardship, and
strengthening development in cocoa-growing communities."
THIS PROJECT REPORT IS BASED ON THE JOB TRAINING IN THE DEPARTMENT
OF INDUSTRIAL PERFORMANCE OF NESTLE INDIA LIMITED, TAHLIWAL, UNA
ABOUT THE DEPARTMENT OF INDUSTRIAL
PERFORMANCE IN NESTLE PLANT, TAHLIWAL
Industrial Performance and Nestlé Continuous Excellence (NCE) supports in delivering
optimal performance to manufacture products with the prescribed quality at the lowest cost
and adherence to manufacturing instructions, quality standards and budgeted costs. The role
will make use of best practices within the company in terms of cost, quality and service.
Nestlé Continuous Excellence is our sophisticated business model around continuous
improvement projects that have extraordinary impact on our business becoming a successful
Lean Enterprise. This global initiative inspires everyone to understand and contribute to what
consumers and customers value most. It's our Total Performance Management (TPM) and our
way of delighting consumers, delivering competitive advantage and excelling in compliance.
It targets zero waste, one team and 100% engagement.
As a foundation to the model, we developed and honour basic management practices to help
align on key priorities, track performance and deliver consistent results. As a result, we've
found our teams to be more empowered, engaged and thinking sustainably – always. NCE
ensures that the external world, our customers and consumers, are perpetually at the forefront
of our agenda in every single aspect of our business.
What's unique about NCE? It applies to more than just our manufacturing practices. It
translates into Human Resources, Finance, Marketing, Engineering and all other functions
behind the Nestlé name. Pragmatic and business-oriented tools and technologies are provided
to each of our teams across the business to maximize efficiencies and drive significant
Our continuous excellence mindset tells us that our work to improve is never done. We must
dare to make every day better. We must lean into the opportunities, challenges and
advantages we encounter to continue doing what's never been done before in pet care.
The study of conducting research is Research Methodology. Research: The word research is
composed of two syllables “Re” and “Search”. “Re” is the prefix meaning ‘Again or over
again or a new’ and “Search” is the latter meaning ‘to examine closely and carefully’ or ‘to
test and try’.
Together they form, a careful, systematic, patient study and investigation in some field of
knowledge undertaken to establish principles / policies.
Research can also be defined as
1. Search for knowledge
2. Systematic and scientific search for getting relevant answers on any specific topic.
3. Scientific enquiry into a subject.
4. Research is a movement from the unknown to the known.
When we talk of Research Methodology, we not only talk of research methods but also
consider the logic behind the methods we use in the context of our research study and explain
why we are using a particular method or technique so that research results are capable of
being evaluated either by the researcher or others.
In Research Methodology, researcher always tries to search the given question systematically
in our own way and find out all the answers till conclusion. If research does not work
systematically on problem, there would be less possibility to find out the final result. For
finding or exploring research questions, a researcher faces lot of problems that can be
effectively resolved with using correct research methodology
IN THIS REPORT THESE TECHNIQUES OF RESEARCH METHODOLOGY ARE
SOURCE OF DATA COLLECTION
TYPE OF RESEARCH
2.1 NEED AND SIGNIFICANCE OF THE STUDY
Quality control is a process within an organization designed to ensure a set level of quality
for the products or services offered by a company. This control includes the actions
necessary to verify and control the quality output of products and services. The overall goal
of quality control includes meeting the customer’s requirements, product satisfaction, fiscally
sound, and dependable output. Most companies provide a service or a product. The control
is important to determine that the output being provided is of overall top quality. Quality is
important to companies for liability purposes, name recognition or branding, and maintaining
a position against the competition in the marketplace.
2.2 OBJECTIVES OF THE STUDY
1. To study the Industrial Performance Indicators in Nestle Plant, Tahliwal.
2. To study the Nestlé Continuous Excellence (NCE) i.e. Performance Management System
at Nestle Plant, Tahliwal
3. To conduct a SWOT analysis of Nestle Plant, Tahliwal.
4. To make a general hypothetical Internal Factor Evaluation Matrix (IFE) of Nestle India
2.3 METHOD OF DATA COLLECTION:
Research design of this study is basically exploratory in nature and will employ inputs from
reports and statistics of agencies of good standing.
2.4 SOURCES OF DATA:
For the present study, secondary source of data is used for data analysis. Secondary sources
like various reports and documents provided by Nestle India Limited, Tahliwal.
ON THE JOB TRAINING EXPERIENCE
1. INDUSTRIAL PERFORMANCE:
DEFINITION: Industrial performance can be defined in terms of numerous criteria to be
synthesized for global control purposes, many of them being of a complex nature, i.e. not
related to one elementary physical measure. Industrial Performance is related to number of
KPIs. Key Performance Indicators (KPI) are a set of quantifiable measures that a company
uses to scale its performance over time. These metrics are used to determine a company's
progress in achieving its strategic and operational goals, and also to compare a company's
finances and performance against other businesses within its industry.
PURPOSE: People credited with this unit standard are able to: follow the approved routine
maintenance schedule for a food processing machine; inspect and maintain the various
systems of the machine and associated support equipment; ensure safety devices are working;
care for gauges and instruments available in the workplace; follow a preventive maintenance
programme; and follow procedures for disposal of waste material.
JOB DESCRIPTION OF AN INDUSTRIAL PERFORMANCE SPECIALIST IN
NESTLE (ROLES AND RESPONSIBILITIES)
1. Provide methods and tools for improvement of practices and optimizing factory
2. Assistance for factory, line, machine layout and design and optimize planning by
providing proposals to determine least cost production scenarios.
3. Promote the application of improvement initiatives and best practices in the markets and
provide training as required and exchange of know-how to achieve improved business
4. Co-ordinate the implementation of Continuous Improvement and Conduct Rapid
Improvement Projects and provide other focused improvement support.
5. Ensure Standard, performance & productivity measurements are applied according to
Nestlé guidelines (GIN 23) and Ensure establishment of key performance indicators and
assist that objectives are linked to improvement initiatives.
6. Organize & Review (DOM) with Production, Engineering, QA, and Application Group to
ensure appropriate use of information systems in the manufacturing environment to obtain
maximum benefit through.
7. Co-ordination of improvements and updates of factory system applications and providing
user training and assistance to factories
Practices of Industrial Performance (IP) in Nestle:
A. Standard Routine
B. Breakdown Analysis (BDA)
C. Go See Think Do (GSTD)
D. Daily Operations Review (DOR)
E. Weekly Operations Review (WOR)
F. Monthly Operations Review (MOR)
A. STANDARD ROUTINE
For Standard Routine, SOP is followed. Standard Operating Procedure (SOP) is a set of
written instructions that document a routine or repetitive activity followed by an organization.
Well-written SOPs should first briefly describe the purpose of the work or process, including
any regulatory information or standards that are appropriate to the SOP process, and the
scope to indicate what is covered. The development and use of SOPs are an integral part of a
successful quality system as it provides individuals with the information to perform a job
properly, and facilitates consistency in the quality and integrity of a product or end-result e.g.
possible interferences, required equipment, personnel qualifications, and safety
considerations. The development and use of SOPs minimizes variation and promotes quality
through consistent implementation of a process or procedure within the organization, even if
there are temporary or permanent personnel changes.
B. BREAKDOWN ANALYSIS (BDA)
In every organisation continuous production is required to meet the demand of the market, so
to make the continuous production machines plays very important role. Breakdown in a
machine will decrease the production. So the BREAKDOWN ANALYSIS is done to find the
accurate reason of the breakdown during production process.
Procedure of BREAKDOWN ANALYSIS
Machine ( Where breakdown happened )
Shift Number ( In which shift breakdown was happened )
Responsible person or cause
Status ( what action was taken against the problem )
C. GO SEE THINK DO (GSTD)
GSTD is a Problem Solving method used to solve day-to-day issues. It is splitted into 3
GO-SEE : In this first part, go to place where the project is based with a group of
people who have experience with problem related.
THINK : After defined what is the current problem, it is analyzed that which of the
actions listed are actually feasible and which of them are the ones that are the most
DO : In this step working on the action is started to solve the problem.
D. DAILY OPERATIONS REVIEW (DOR)
When : It is done once in the morning and in the evening.
Length: 5-10 minutes.
Purpose: To discuss tasks of the day.
Choose project/work according to priorities.
Assign it to appropriate persons.
Move it to today, upcoming or later.
In the evening it is reviewed that what has done today and what has not done, does it there or
E. WEEKLY OPERATIONS REVIEW (WOR)
When: At the beginning of each week, usually Monday.
Length: 10-20 minutes.
Purpose: Re-prioritizing projects and clearing all inbox in preparation for the week.
Go through every project.
Setting the priorities.
Setting the target for the week.
Discussion on strategies.
Go through the later tasks, does anything need to shift to upcoming?
F. MONTHLY OPERATIONS REVIEW (MOR)
When: Once in the month ( first week of the month or depending on time and style)
Length: 30-60 minutes.
Purpose: Balancing attention and effort with roles and priorities, broader
prioritization picture across circles and roles, and clarifying working relationships
Discussion on performance of last month.
Focusing on new opportunities.
Setting of new target and strategies.
2. NESTLÉ CONTINUOUS EXCELLENCE (NCE):
CONTINUOUS PROCESS AND QUALITY IMPROVEMENT
FOUNDATIONS OF NCE
2. Leadership Development
3. Goal Alignment
PILLARS OF NCE
1. Autonomous Maintenance
2. Planned Maintenance
3. Focused Improvement
4. Education & training
5. Safety, Health & Entertainment
7. Early Management
8. Lean Design
9. Lean Office
10. Lean Value Stream
EXPECTED OUTCOME OF NCE
1. Zero Waste
2. One Team
3. 100% Engagement
5 WHY ANALYSIS: The 5 why is a technique used in the Analyze phase of the Six Sigma
DMAIC (Define, Measure, Analyze, Improve, and Control) methodology.
• 5 why analysis is used to go deeper to find and verify the root cause.
• In 5 why analysis the answer of 1st why will become the question of 2nd why and so
Figure 1: Six Sigma – DMAIC Process.
CONTINUOUS PROCESS IMPROVEMENT: It is the task of identifying, analyzing, and
improving upon existing work methods or processes. This is done to reduce waste and
achieve a higher level of optimization or quality. It usually involves a systematic problem
solving approach such as lean, six sigma, Kaizen, and others. Different approaches
bring different methods, tools, and perspectives. None of them are better than another they
are simply different schools of thought.
CONTINUOUS QUALITY IMPROVEMENT An approach to quality management that
builds upon traditional quality assurance methods by emphasizing the organization and
systems: focuses on “process” rather than the individual; recognizes both internal and
external “customers”; promotes the need for objective data to analyze and improve
processes. Source: Graham, N.O. Quality in Health Care (1995).
CQI is a management philosophy which contends that most things can be improved. This
philosophy does not subscribe to the theory that “if it ain’t broke, doesn’t fix it.” It is a set
of concepts, principles and methods developed from quality principles proposed by early
quality gurus, W. Edwards Deming, Joseph Juran, Philip Crosby, Brian Joiner, and others.
These CQI principles, tools, and techniques have been found to work effectively in
manufacturing industries. They have recently been found to also effectively work in
human service industries, including healthcare.
At the core of CQI is serial experimentation (the scientific method) applied to everyday
work to meet the needs of those we serve and improve the services we offer.
CORE CONCEPTS OF CONTINUOUS QUALITY IMPROVEMENT
Quality is defined as meeting and/or exceeding the expectations of our customers.
Success is achieved through meeting the needs of those we serve.
Most problems are found in processes, not in people. CQI does not seek to blame, but
rather to improve processes.
Unintended variation in processes can lead to unwanted variation in outcomes, and
therefore we seek to reduce or eliminate unwanted variation.
It is possible to achieve continual improvement through small, incremental changes
using the scientific method.
Continuous improvement is most effective when it becomes a natural part of the way
everyday work is done.
COMMONLY USED CQI TOOLS AND METHODS
(Source: Brassard, M. and Ritter, D. The Memory Jogger, 1994)
Brainstorming -- Creating bigger and better ideas
To generate a high volume of ideas on any topic by creating a process that is free of
criticism and judgment.
Nominal Group Technique (NGT) –Ranking for consensus
To allow a team to quickly come to consensus on the importance of issues, problems,
Multivoting – Rating for consensus
To allow a team to quickly come to consensus on the importance of issues, problems,
Cause & Effect/Fishbone Diagram - Find and cure causes, NOT symptoms
To identify, explore, and graphically display, in increasing detail, all of the possible
causes related to a problem or condition to discover its cause(s).
Control Charts - Recognizing sources of variation
To monitor, control, and improve process performance over time by studying
variation and its source.
Flowchart - Picturing the process
To identify the actual flow or sequence of events in a process that any product or
Histogram - Process centering, spread, and shape
To summarize data from a process that has been collected over a period of time, and
graphically present its frequency distribution in bar form.
Pareto Chart - Focus on key problems
To focus efforts on the problems that offer the greatest potential for improvement by
showing their relative frequency or size in a descending bar graph.Pareto principle:
20% of the sources cause 80% of any problem.
Run (Trend) Chart - Tracking trends
To study observed data (a performance measure of a process) for trends and patterns
over a specified period of time.
Scatter Diagram - Measuring relationships between variables
To study and identify the possible relationship between the changes observed in two
different sets of variables.
A communication vehicle to display improvement efforts to alert others of changes
being tested or carried out.
Conducting Effective Meetings:7-step meeting process
At Nestle India Tahliwal Plant FISHBONE ANALYSIS OR CAUSE & EFFECT
ANALYSIS Is used for CONTINUOUS QUALITY IMPROVEMENT
DEFINITION: The fishbone diagram or Ishikawa diagram as named after its creator Kaoru
Ishikawa is a way to represent cause and effect. The effect forming the head of the fishbone
and the potential causes forming the skeleton behind. It is a structured way to represent the
results of a brainstorm in specific categories that contribute to problems, Man, Method,
Machine, Materials, Metrics, and Mother Nature being the usual areas that the ideas are
broken down into. A fishbone diagram, also called a cause and effect diagram is a
visualization tool for categorizing the potential causes of a problem in order to identify its
Example: Fishbone diagram for a Food Industry
These are product design and quality defect prevention tools used to identify potential factors
causing an overall effect. Each cause or reason for imperfection is a source of variation.
Causes are usually grouped into major categories to identify these sources of variation. The
categories typically include: people, methods, equipment, materials, measurements, and
3. WHAT IS SWOT ANALYSIS ?
DEFINITION: SWOT analysis is a process that identifies the strengths, weaknesses,
opportunities and threats of an organization. Specifically, SWOT is a basic, analytical
framework that assesses what an organization can and cannot do, as well as its potential
opportunities and threats. A SWOT analysis takes information from an environmental
analysis and separates it into internal strengths and weaknesses, as well as its external
opportunities and threats.
A SWOT analysis determines what assists the firm in accomplishing its objectives, and what
obstacles must be overcome or minimized to achieve desired results. When using SWOT
analysis, an organization needs to be realistic about assessing its strengths and weaknesses.
Analysis needs to examine where the organization is today, and where it may be positioned in
SWOT analysis needs to be kept specific by avoiding gray areas and analysing in relation to
the competition. For example, how do the organization’s products and services compare to
the competitions? SWOT analysis should be short and simple, and should avoid complexity
and over-analysis, as much of the information is subjective. Thus, use it as a guide and not a
Strengths and Weaknesses
Strengths describe what an organization excels at, allowing decisions on how to gain a
competitive advantage. For example, a hedge fund may have developed a proprietary trading
strategy that returns superior results in comparison to its competitors. It must then decide how
to use those superior results to attract new investor capital.
Weaknesses stop an organization from performing at its optimum level. They have the
potential to reduce progress or to give a competitive edge to the competition. An organization
needs to minimize weaknesses and analyse how they can be improved. An inadequate supply
network or lack of capital is example of weaknesses.
Opportunities and Threats
Opportunities refer to favourable external factors that an organization can use it its advantage.
If utilized effectively, opportunities have the potential to create a competitive advantage. For
example, a car manufacturer may be able to export its cars into a new market if tariffs in a
country are substantially reduced. This is likely to increase sales and market share, which
may create a competitive advantage in terms of scale.
Threats refer to factors that have the potential to negatively impact an organization. For
example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the
yield of a wheat crop. Market share is likely to be lost if a competitor has not diversified
operations in terms of location. It is prudent for an organization to have a comprehensive
contingency plan that addresses possible risks and specifies how to deal with them.
SWOT ANALYSIS OF NESTLE PLANT, TAHLIWAL (HIMACHAL PRADESH):
Thus, SWOT analysis of Nestle Plant, Tahliwal reflects that Nestle has high brand value and
strong financial base. Overcoming its weaknesses as nowadays, ill effects of Maggi has been
highlighted; company has to overcome with strong quality control and positive advertisement
as Maggi is the most popular product of Nestle in North India. Company can go for tie ups
and it can launch more products by carrying out proper Research and Development in this
4. INTERNAL FACTOR EVALUATION MATRIX
IFE (Internal factor evaluation) matrix is one of the best strategic tool to perform internal
audit of any firm. IFE is use for internal analysis of different functional areas of business
such as finance, marketing, IT, operations, accounts, Human Resources and others depend
upon the nature of business and its size. Before going into further details, there are some
important terms in IFE matrix which should be known to the individual who shall be using
this tool of internal analysis of any Company or Organization. The explanation of each term
would be clearly explained in order to make it easier to understand the concept for when you
further go into details.
Following are the important components of IFE Matrix:
Internal factors are the outcome of detailed internal audit of a firm Obviously, every company
have some weak and strong points, therefor the internal factors are divided into two
categories namely strengths and weakness.
Strengths are the strong areas or attribute of the company, which are used to overcome
weakness and capitalize to take advantage of the external opportunities available in the
industry. The strengths could be tangible or intangible; such as brand image, financial
position, income, human resource.
Weaknesses are the risky areas which needs to be addressed on priority to minimize its
impact. The competitors always searching for the loop holes in your company and put their
best effort to capitalize on the identified weaknesses.
DIFFERENTIATION OF STRENGTH AND WEAKNESS IN IFE MATRIX
The strengths and weaknesses are organized in IFE matrix in different portions mean all
strengths are listed first under internal factors and then comes the internal weakness. In case
if all the factors are listed altogether then the rating will help you out to identify internal
strength and weakness.
In IFE, Rating is the way out to differentiate internal strengths and weakness. Internal
weakness is further divided in two categories namely minor weakness and major weakness
same goes of the strengths (minor strength and major strength)
There are some important points related to rating in IFE matrix.
Rating is applied to each factor.
Major weakness is represented by 1.0
Minor weakness is represented by 2.0
Minor strength represented by 3.0
Major Strength represented by 4.0
Major weakness needs company attention to change into minor weakness then strength and
finally major strength. As compared to major strength minor weakness need little efforts of
the company to change it into strength. The range of rating start from minimum 1.0 which is
worst and maximum 4.0 which is the best factor of the company.
Weight attribute in IFE matrix indicates the relative importance of factor to being successful
in the firm’s industry. The weight range from 0.0 means not important and 1.0 means
important, sum of all assigned weight to factors must be equal to 1.0 otherwise the
calculation would not be considered correct.
Weighted score value is the result achieved after multiplying each factor rating with the
TOTAL WEIGHTED SCORE
The sum of all weighted score is equal to the total weighted score, final value of total
weighted score should be between range 1.0 (low) to 4.0(high). The average weighted score
for IFE matrix is 2.5 any company total weighted score fall below 2.5 consider as weak. The
company total weighted score higher than 2.5 is consider as strong in position.
STEPS TO DEVELOP IFE MATRIX
1. List key internal factors as identified in the internal audit process. Use a total of from ten to
twenty internal factors, including both strengths and weaknesses. List strengths first and then
weaknesses. Be as specific as possible, using percentages, ratios, and comparative numbers.
2. Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor.
The weight assigned to a given factor indicates the relative importance of the factor to being
successful in the firm’s industry. Regardless of whether a key factor is an internal strength or
weakness, factors considered to have the greatest effect on organizational performance should
be assigned the highest weights. The sum of all weights must equal 1.0.
3. Assign a I to 4 rating to each factor to indicate whether that factor represents a major
weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major
strength (rating = 4). Note that strengths must receive a 4 or 3 rating and weaknesses must
receive a 1 or 2 rating. Ratings are thus company based, whereas the weights in Step 2 are
4. Multiply each factor’s weight by its rating to determine a weighted score for each variable.
5. Sum the weighted scores for each variable to determine the total weighted score for the
EXAMPLES OF NESTLE INTERNAL FACTORS
There are few examples of internal factors of the company.
Strong marketing and promotion
Best product quality
Strong Financial condition
High Market Share
High value assets
High cost operations
Manufacturing cost is high
WHAT IS THE DIFFERENCE BETWEEN IFE AND EFE?
External factor evaluation matrix considers external environment for evaluation by
considering external opportunities and threats whereas IFE is the strategic tool to identify the
internal factors for internal audit.
Nestle India Limited build trust by offering products and services that match consumer
expectation and preference.
It complies with all internal and external food safety, regulatory and quality requirements.
It has gained a zero-defect, no-waste & 100% engagement attitude by everyone in the
It guarantees food safety and full compliance by respecting the policies, principles and
standards with full transparency,
The company ensures preference and consistency to delight consumers and customers by
valuing what they value and by offering products, systems and services that always meet or
exceed their expectations,
The company strives for zero defects and no waste by constantly looking for opportunities
to apply our continuous improvement approach to deliver competitive advantage.
The company follows Continual Improvement Management Cycle to ensure an effective
and efficient management of Quality processes, to measure performance, and drive the
enhancement of our Quality culture.
During my training session, I have experienced that nestle never compromise with the
quality of the product, and it makes Nestle different from their competitors. Nestle serves
international quality products with international standards.
Nestle always ensure the safety of their employees as their priority.
Nestle also provides food and accommodation to their employees.
Nestle organise many cultural and sports activities to their employees during lunch break
to motivate them.
Industrial Performance department helps to maintain that international level quality and
Industrial Performance department ensures that whether all the standards which are given
by govt. or company are being followed.
Industrial Performance department measure the performance of the company on Daily,
Weekly and Monthly basis.
Now at the end I would like to conclude that Industrial Performance department is very
essential for the growth of the organisation. It helps to maintain the standards in budgeted