This is the 33rd business case study presentation at ICMAB as we present cases weekly. This case study on Nestle's use of lean production. It's simple and resourceful, enjoy it.

1. Achieving sustainability through
lean production
We are
Shaan
Asad

2. On
Nestlé'GOOD FOOD, GOOD LIFE'
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3. Nestlé…..
 Nestlé is the world’s largest food and beverage company
 Headquarters is in Vevey, Vaud, Switzerland
 It was founded in 1867 by Henri Nestlé
 It employs over a quarter of a million workers
 In its acquisitions, Crosse & Blackwell in 1950, Findus in 1963,
Libby’s in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007
 Its products include baby food, coffee, dairy products, breakfast
cereals, confectionery, bottled water, ice cream, pet foods
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4. Nestlé’s Product Group
Beverages - (e.g. Perrier) 26%
Milk products, nutrition & ice
cream - (e.g. Coffee Mate) 26%
Prepared dishes and cooking
aids - (e.g. Buitoni) 18%
Chocolate, confectionery and
biscuits - (e.g. Kit Kat) 12%
Petcare - (e.g. Felix)12%
Pharmaceutical products- (e.g.
Alcon) 6%
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5. Nestlé IN RESPONSIBLE BUSINESS
PRACTICE
The Ten Nestlé Principles
Consumers Human rights
and labor
practices
Our people Suppliers and
customers
The
environment
1 Nutrition,
Health and
Wellness
4 Human rights
in our business
activities
5 Leadership
and personal
responsibility
7 Supplier and
customer
relations
9 Environmental
sustainability
2 Quality
assurance and
product safety
6 Safety and
health at work
8 Agriculture and
rural
development
10 Water
3 Consumer
communication
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6. Sustainability
Sustainability
Economy
SocietyEnvironment
It is a long term perspective.
Balancing impact of a business
on economy, society and the
environment.
It’s aim is to limit negative impact
of the business.
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7. (CSV) Creating Shared Value
‘We believe that, to succeed as
a business in the long-term and
create value for our
shareholders, we must also
create value for society. We call
this Creating Shared Value
(CSV).’
Nutrition
Rural
Development
Water
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8. Nestle Waters’ ‘Waste Hunting’
Waste
Area
Production
Inbound
materials
Outbound
products
‘Waste Hunting’ was carried out
in the old factory looking at the
seven areas of Muda.
This exercise established that
waste was present in three main
areas: production, inbound
materials and outbound
products.
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9. Findings of ‘Waste hunting’
Key areas where waste was found included excess handling, waiting time and
defects. For example, raw materials, packaging and finished goods were handled
multiple times.
Waiting issues included blockages, idle machinery and trucks being made to
wait at loading bays.
Waste hunting also revealed other areas that could be further improved. These
included label application on bottles, bottle cap application and finished bottle
damage.
The final area for improvement identified was that of water usage
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10. LEAN Production
LeanProduction
Eliminating Waste
JIT
Continuous
Improvements/Kaizen
Eliminating waste in terms of time, money
and quantity of resources.
Minimising resources using the production
process. Production should therefore aim
to take place using the most efficient use
of space, machinery, labour, materials and,
crucially, be in the shortest time period.
Just-in-time (JIT)
Continuous Improvement (Kaizen).
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11. Eliminating Waste
Waste
Transport
Inventory
Motion
Waiting
items
Over-
processing
Over-
production
Defects
Value can also be added by reducing waste
which in turn reduces production costs.
Any activity which puts cost on a product
without adding value is waste.
Waste can happen at any part of the process.
‘Muda’ is the Japanese term for waste.
Muda is broken down into the seven areas that
make up the mnemonic ‘TIMWOOD’.
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12. Just-in-time (JIT)
JIT means materials arrived
just they are needed,
Focuses on timing of production
Eliminate inventory cost of
both waiting and storing.
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13. Continuous Improvement
 Kaizen is another idea developed in Japan.
 It supports lean production by introducing the idea of
continuous improvement.
 Kaizen is a concept that makes improvement the
responsibility of everyone involved in production.
 Improving efficiency becomes a continuous process, not a
one-off activity.
 Kaizen implies that even the smallest improvement should be
made, as many small improvements can lead to big savings.
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14. Earnings of LEAN Production
Eliminates Waste
Reduces costs
Smooth production
Increases productivity and
efficiency
Employment benefits
Creates social and
environmental benefits
Helps retaining economies
of scale
Sustainable practice
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15. Nestlé and Water
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