Nestle is a large food and beverage company founded in 1867 that has grown through mergers and acquisitions. It implemented an ERP system from SAP in 2000 to standardize processes across subsidiaries. The implementation faced challenges from employee resistance and turnover. However, it resulted in cost savings, improved forecasting and data sharing between subsidiaries. Nestle also uses technologies like e-commerce and a transportation management system to further streamline operations and reduce costs.

1. Rahul Todur

2. ABOUT THE COMPANY
• Founded by Henri Nestlé
• World’s biggest Food and Beverage Company
• Developed first milk product in 1867
• Merger with the Anglo-Swiss Condensed Milk
Company.

3. ABOUT THE COMPANY
• Nestlé's first expansion into chocolate
activity
• Introduction of Nescafe, a staple drink
of US Military
• In 1947 came the merger with Maggi
seasonings and soups.
• Acquisition of American Food Giant and
Dreyer’s

4. PRINCIPLES AND OBJECTIVES
• To create value
• Nestle does not favor short term profit
• Create trust among the customer
• Ensures that the highest standards are met throughout the
organization.
• Recruitment of the right people & on going training & development
• Continue to maintain its commitment

5. BUSINESS LEVEL STRATEGY
• Wide range of products (over 20 categories: coffee, milk,
mineral water, pet foods, cereals…)
• Nestlé Nutrition-
→ Strengthening their leadership in this market is the key element of their
corporate strategy.
→ Deliver superior business performance by offering consumers trusted,
science based nutrition products and services.
→ Strives to closely align Nestlé’s scientific and R&D expertise with consumer
benefits.
→ Addressing current customer concerns as well as anticipating future
consumer trends.

6. PROBLEM IDENTIFICATION
• 2,30,000 employees and 500 facilities in 80 countries
• to support the decentralized strategy it has 80 different information technology units that’s runs nearly
900 ibm as/400 mid range computers ,15 main frames , and 200 Unix system
• despite its size the company has had no corporate computer center
• local difference created inefficiencies and extra costs that could prevent the company from competing
effectively in electronic commerce.
• the lack of standard business processes prevented it from obtaining lower prices for its raw material.
• at first project decide not to use sap’s supply chain software because that module was brand new and
appeared to be risky
• the staff that would be directly affected by the changes were not included in the key stake holder team.
• the lower level worker did not understand how to use the new system and also did not understand the
changes ,nobody was prepared for the new ways of doing things.
• Turnover among the employees who were to use the Manugistics software to forecast product demand
reached 77 percent. Those who remained found it easier to use their familiar spreadsheets.
• the simultaneous installation of the y2k changes also caused some trouble.

7. GLOBE SYSTEMS & NESTLE
GLOBE (Global Business Excellence)
• Its objective is to improve the efficiency of performance of the businesses
on a global scale
• The GLOBE programme is based on three main principles:
→ Good Practice.
→ Standardisation of Data and Management.
→ Information Systems and Common Technologies.
• facilitate better cross functional communication and knowledge
management and help in standardizing products.

8. WHATS AN ERP?
• Enterprise Resource Planning (ERP) systems seem to be
the silver bullet for every company’s problems.
• Enterprise Resource Planning is MIS that integrate and
automate many of the business practices
• Attempts to integrate all departments and functions into
one computer system
• A system that standardize and coordinate Information
systems

9. ERP AT NESTLE
• In 2000 Nestle SA signed a $200 million contract with SAP to
roll out an ERP system.
• Nestle SA also committed to an additional $80 million to be
spent on consulting, maintenance, and upgrades.
• Keeps track of customer orders
• reduce overstocking
• Enables group buying of materials
• data sharing among subsidiaries

10. MANAGEMENT PROBLEMS
• Employees thought it to be a software project rather than a business
process re-organization.
• Failure on the part of stakeholders to realize the feasibility of the
project.
• Inability to understand the usage of the new system by the workers.
• Failure to integrate various modules.
• Delay in the project due to employees’ resistance to change -
inefficiency on the part of project co-leader to handle situations.

11. IMPLEMENTATION STRATEGY
• Involvement of right individuals from the beginning.
• Avoid heavy customization.
• Defining the business goals of the project and then create a
timeline.
• Time should be spent evaluating the business process
re-engineering that will be done in conjunction with an ERP
implementation.
• Provide training to employees throughout the project

12. RESULTS
• All of Nestlé USA are using the same software and data.
• Producing better sales forecasts
• Costs were cut down and had already saved $325 million by
spring 2002.
• Nestlé SA has learned from that project and expects to have
an easier success with its project.
• By the end of 2004, about 10% of Nestlé’s global food and
beverage business was operating with standard processes,
datas and systems.

13. STRATEGIC BUSINESS DECSIONS AND MIS
Load Control Center(LCC):-
• Was introduced to streamline and standardize processes, reduce costs
and gain control over transportation operations
• By centralizing control, they could manage transportation and logistics
costs, live up to carrier expectations about freight volumes and improve
customer service.
• Improvement in on-time delivery, maintain stable costs while business
increased, better manage carrier activity, and reduce the number of
carriers used to a small fraction of the original number.
• Load planning, carrier selection, scheduling and real-time
communication of that information is virtually automatic in the LCC.
• Red Prairie's DLx[R] Transportation TMS software-Modules of the
software in use include Load Builder, Matcher, Asset Manager, Assign,
Offer, Rate and Pay, Routing Manager and Status

14. MARKETING AT NESTLE
• Marketing strategy
• Setting of objectives
• Production
• Communications
• Supply chain and information systems
• Sales administration
• Trade marketing
• Key account management
• Regional Sales

15. Marketing information systems
• Divided into four subsystems:-
1. Internal accounting systems- Order shipping-billing
2. Marketing intelligence systems- A user oriented
system
3. Marketing research systems- improving
timeliness of sales reports
4. Analytical systems- Horizontal Marketing
Ex. Collaboration of Coke and Nestle

16. Marketing and Nestle
Marketing
strategy?
Core
Marketing
Units?
Nutrition
Chocolate and
confectioneries
Dairy
Coffee and
beverages
Food
Pet care

17. Marketing and Nestle
• Nestle uses the World Wide
Web/Intranet/Extranet
• Nestle – E-commerce- Increased Effieciency
• Nestle- Interactive Marketing
• Nestle- EIS
• Nestle implemented six -SAP modules-purchasing,
financial, sales and distribution,
accounts payable, accounts receivable and
advanced planning and optimization.

19. Integrating Internet Strategy
• Looks after buying of raw materials such as cocoa to
producing, marketing and selling products such as Kit Kat
chocolate biscuits and instant coffee, every business process
of the organisation has seen change.
• Since July 2000, store owners in the US order Nestle chocolate
and other products at NestleEZOrder.com
-Helps slash order processing costs and cut inventories.
Example:- Sainsbury and Tesco

20. Integrating Internet Strategy
• Within 2 years, 20 %of annual advertising budget will be
spent on the Web.
- It will be used to fund sites such as VeryBestbaby.com, which
offers articles about parenting and baby nutrition, as well as
banners advertising baby foods.
• Nestle also has a site for coffee lovers, and a Club Buitoni site,
for lovers of Italian food.
- These sites will help Nestle discover more about their
consumers, a practice which may further help to kick start
innovation when it comes to marketing.

21. Nestle on . Net Enterprise Servers
• Nestlé now is using the Internet to collect and leverage
information about consumers and drive new marketing
initiatives.
• The flexibility of the Microsoft platform allowed Nestlé to
develop component-based Web architecture—the
Nestlé Internet Resource Framework (NIRF).
• Standardization of the platform is allowing Nestlé to
gather consumer information
-Enables nestle to know about common trends for
marketing initiatives.

22. Benefits:-
• Increased productivity - Helps eliminate tedious and repetitive
tasks associated with campaign planning and execution
• Reduced costs - Has given companies insight into campaign
effectiveness, so they can abandon unsuccessful initiatives before
they drain financial resources.
• Enhanced flexibility - Has made marketing teams more agile;react
instantly to changing marketplace conditions and shifting
communication strategies.
• Advanced intelligence - It provides timely, valuable information
that can be analyzed to determine what works, what doesn't, and
most importantly, why.
• Improved personalization - marketing teams have the tools they
need to launch initiatives based on the specific needs and wants of
a target audience, so content is more targeted and more relevant.

23. CONCLUSION
• first deal with organizational issues, including having the
right people in the right places.
• Second, look at the processes and then choose and
implement the right technology to achieve objectives
• executive level sponsorship and ongoing support is
critical.
• Processes and people's mindsets must be changed first,
supported by technology