Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

NESTLE India, Tahliwal Plant's Industrial Performance Department, Project Report MBA


Published on

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.

Published in: Education
  • Login to see the comments

NESTLE India, Tahliwal Plant's Industrial Performance Department, Project Report MBA

  3. 3. PREFACE 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 (Himachal Pradesh).
  4. 4. ACKNOWLEDGEMENT 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 completed. My heartfelt thanks also go to entire INDUSTRIAL PERFORMANE department team for their assistance and willingness towards reply all my queries.
  8. 8. 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)
  9. 9. COMPANY PROFILE 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 shareholders satisfaction. 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 other goods. 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.
  10. 10. 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 :-
  11. 11. 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 experiences. 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 fans.
  12. 12. 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. 1.) Finance 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)
  13. 13. VISION: 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. MISSION: 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 (H.P) ABOUT THE DEPARTMENT OF INDUSTRIAL PERFORMANCE IN NESTLE PLANT, TAHLIWAL (HIMACHAL PREADESH)
  14. 14. 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 category growth. 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. Working together
  16. 16. RESEARCH METHODOLOGY 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 USED: SOURCE OF DATA COLLECTION Secondary Data TYPE OF RESEARCH Exploratory Research
  17. 17. 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 Limited. 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.
  19. 19. 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 performance. 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 performance. 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.
  20. 20. 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.
  21. 21. 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  Analysis Date  Breakdown Description  Machine ( Where breakdown happened )  Shift Number ( In which shift breakdown was happened )  Responsible person or cause  Root 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 parts: 1. GO-SEE 2. THINK 3. DO  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 cost-benefit.  DO : In this step working on the action is started to solve the problem.
  22. 22. 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.  Tasks:  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 move. 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.  Tasks:  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 and processes
  23. 23.  Tasks:  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 1. Compliance 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 6. Quality 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
  24. 24. 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 on. 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
  25. 25. external “customers”; promotes the need for objective data to analyze and improve processes. Source: Graham, N.O. Quality in Health Care (1995). Figure: 2 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.
  26. 26. 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.
  27. 27. 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, or solutions.  Multivoting – Rating for consensus To allow a team to quickly come to consensus on the importance of issues, problems, or solutions.  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 service follows.  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.
  28. 28.  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.  Storyboard 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 root causes.
  29. 29. 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 environment 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.
  30. 30. Analysis needs to examine where the organization is today, and where it may be positioned in the future. 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 prescription. 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.
  31. 31. 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 area. 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
  32. 32. 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 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 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 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.
  33. 33. RATING 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 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.
  34. 34. WEIGHTED SCORE Weighted score value is the result achieved after multiplying each factor rating with the weight. 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 industry based. 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 organization.
  35. 35. EXAMPLES OF NESTLE INTERNAL FACTORS There are few examples of internal factors of the company. Strengths  Strong marketing and promotion  Best product quality  Strong Financial condition  High Market Share  High value assets Weakness  High cost operations  Manufacturing cost is high  Expensive products  Negative publicity 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.
  36. 36. NESTLE IFE MATRIX KEY INTERNAL FACTORS WEIGHT RATING WEIGHTD SCORE WEAKNESSES  Negative Publicity 0.15 1.0 0.15  High Cost Operations 0.10 1.0 0.10  High Manufacturing Cost 0.08 2.0 0.16  Expensive Products 0.06 2.0 0.12 STRENGTHS High Market Share 0.06 3.0 0.18 Best Product Quality 0.08 3.0 0.24 Strong Management 0.12 4.0 0.48 Strong Financial Condition 0.15 4.0 0.60 Strong Marketing & Promotion 0.20 4.0 0.80 TOTAL 1.00 2.83 NESTLE IFE Matrix INFERENCE: Total weighted score below 2.5 indicates internally week business and total weighted score above 2.5 indicates internally strong position.
  38. 38. FINDINGS  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 company.  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.
  40. 40. SUGGESTION/CONCLUSION  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 standards.  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 cost.
  42. 42. BIBLIOGRAPHY/REFERENCES Nestle India Wikipedia Prezi