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The term Supply Chain Management was revealed in the late 1980s, and
then it was exposed to all in 1990s. Before that time Supply Chain
Management was used as different terms like- logistics and operations
management in the business fields. Earlier, supply chain management was
considered just like a concept. Implementation of this concept was very
difficult as there were some necessary components in the total chain to
connect with each other. The focal part of the barrier to full supply chain
management was the cost of communication and coordination among the
many independent suppliers in each supply chain. An entire supply chain
covers the area from the creation of raw materials to the delivery of the
finished consumer goods. So, many supply chains are involved in the entire
supply chain of a product up to the ultimate delivery stage. This is why; it
was difficult to link up actively all the supply chain points. But day by day
companies are being interested to implement the supply chain concept in
their business for three environmental changes.
First, development of the communication technology has made easier the
process to communicate between members of the supply chain.
Second, new management models have been developed that are being used
by the supply chain members to simplify the coordination of tasks.
Third, for the development of highly trained work-force, it has become easier
to assume the responsibility, make decisions quickly and take required
actions to coordinate the supply chain.
These three changes are encouraging the companies to take the challenges
in the competitive market through the utilization of supply chain
management concept.
Introduction:
A supply chain is defined as a system of suppliers, manufacturers,
distributors, retailers and customers where material, financial and
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Slogan:
Good food, Good life
Corporate mission:
At Nestle, we believe that research can help us make better food so that
people live a better life. As consumers continue to make choices regarding
foods and beverages they consume, Nestle helps provide selections for all
individual taste and lifestyle preferences.
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Corporate Vision:
Nestle has an aim to meet the various needs of the consumer every day by
marketing and selling food of a consistently high quality.
Nestle in Bangladesh:
Nestle Bangladesh was established in 1992 and started its first commercial
production in Bangladesh in 1994. First, it was a subsidiary of Trancom Ltd
which is a renowned industry in our country. In 1998, Nestle was separated
from Transcom Ltd and emerged as an individual entity. On that time Nestle
S.A. took over the remaining 40% share from local partner when Nestle
Bangladesh became a fully owned subsidiary of Nestle S.A. Nestle
Bangladesh's vision is to be recognized as the most successful food and
drink Company in Bangladesh, generating sustainable, profitable growth and
continuously improving results to the benefit of shareholders and employees.
Factory Location:
Their factory is situated at Sreepur, 55 km north of Dhaka; the factory
produces instant noodles, cereals and repacks milks, soups, beverages and
infant nutrition products. Today Nestle Bangladesh Ltd. is a strongly
positioned organization. The Company is continuously growing through its
policy of constant innovation and concentrating on corecompetencies and
commitment to high quality, with the aim of providing the best quality food
tothe people of Bangladesh.
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chocolate etc. They always very much concern about the standard quality of
their product.
Some of the products are produced locally like Cerelac
Nido
Maggi Noodles etc.
Foxs Fruit
Coffee Mate
Lactogen,
Corn Flakes etc
About Nescafe:
Nescafe is one of the world's top-selling brands of instant coffee, made by
Nestle. The name is a combination of the words "Nestle" and "coffee". The
beginning of NESCAFE can be traced all the way back to 1930. Nestls
powdered coffee product was introduced in Switzerland on April 1, 1938 after
being developed for seven years by Max Morgenthaler and team.
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Nescafe has two types of supply chain. These are following Primary supply chain management
Secondary supply chain management
Arabica and
Robusta.
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Arabica beans account for around 70% of total coffee production, Robusta
make up the rest. Nescafe products which are available in Bangladesh are
made from both Arabica and Robusta.
Arabica is considered to be the best quality coffee beans it have lighter and
aromatic flavor
Robusta: Have a bitter flavor
Coffee
beans
suppliers
(Farmers)
fromBrazil,
Thailand
Jar
Supplier
s
Nestle
Malaysi
a
(Coffee
Beans)
Nestle
Banglades
h (Import
Coffee
Beans)
Nestle do not compromise with quality for this reason, only the best quality coffee
beans are used to produce the Nescafe products. For Nescafe products Coffee
beans are collected by Nestle Malaysia. They take coffee beans from different
country but majority comes from Brazil, Thailand. They take coffee beans from
different suppliers sequentially so that the supplier cannot create monopoly market
of coffee beans but they do not compromise with quality. Nestle always help their
suppliers and farmers by providing Education and training facilities. These things
help them to produce the good quality coffee beans because educational program
and training give the idea about cultivation techniques, coffee beans sorting etc.
Nestle do have agronomist to conduct these educational and training programs.
Use of fertilizer and chemical is always harmful for the environment for the
environment. For this reason Nestle always encourage their farmers to use
compost of coffee husks. When the farmers or the suppliers of the coffee beans
give the guarantee about the quality of the beans then Nestle is ready to pay more
to their suppliers. Nestle always try to buy the coffee beans directly from the
farmers that means they try to avoid middlemen.
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Plantation:
Normally coffee is grown in small evergreen trees. Cultivation of coffee trees
is very much labor intensive. Young coffee trees demand constant care from
farmers like regular watering, fertilizing weed control and right amount of
shaded sunlight. It takes up to 5 years for a coffee tree to begin producing
good fruit. A good coffee tree can give fruits up to 15 years but if properly
maintained it can be extended to 40 years.
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large tanks to remove any remaining pulp. These wet beans are either
machine dried, or laid out in the sun before being placed in a huller
Blending:
This stage is very much important for the production of Nescafe. Nestle have
experts to closely monitor the blending process. It helps them to maintain
quality and consistent taste over the years.
Roasting:
Supply Chain Management of Nestle by Market Tracker-02
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Roasting is very important to have desired aroma out of green beans. Green
beans are roasted within 180 C - 240 C for 3 to 12 minutes. Different
degrees of roasting are used to deliver different types of coffee. When the
desired color and aroma is achieved, the beans are quickly removed from the
heat and left to cool.
Grinding:
Grinding helps to extract flavor out of coffee beans. Like other processing
part grinding is also very important because taste of coffee depends on
grinding.
Jar with
Coffee Beans
from Malaysia
Factory in
Sreepur
(Packaging
&
Reprocessin
g)
Local
Suppliers
(sugar, label,
Supply Chain Packaging
Management
of Nestle by Market Tracker-02
,
sachetetc)
Warehouse
(Factory &
BMTF)
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Raw
materials
and finished
Nescafe
products
from Nestle
Malaysia
Storein
BMTF
(Banglades
h Machine
Tools
Factory) in
Gazipur.
Factory in
Sreepur
(Packaging
&
Reprocessin
g)
Retailer
s
Warehouse
(Factory &
BMTF)
78 Distributorsin
Five Regions
(Own transport)
Consum
ers
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Finally, finished Nescafe products are received by the distributors. But in this
case, distributors use their own transport to carry Nescafe products. For the
distribution Nestle has divided Bangladesh in five regions.
They are
Dhaka North
Dhaka South
Chittagong
Khulna
Bogra
Nestle have 78 distributors for distributing Nescafe along with other products
of Nestle. These distributors also distribute other products of Nestle. Through
this strong distribution network they are making the products available.
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In case of processing the coffee beans Nescafe is very much careful about
quality. They are not using any kind of preservatives which ensures better
quality.
Packaging:
Their packaging is not only attractive but also helps to keep the coffee fresh
for long time. Nescafe is also helping their packaging suppliers to improve
the packaging quality.
Distribution:
With their strong distribution network they are making Nescafe available all
over the country. They can reach any corner of the country with their
distribution network but others like
Mac coffee may not be able to do so.
Custome
r
Supply Chain Management of Nestle by Market Tracker-02
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Customer order
cycle
Retailer
Replenishment
cycle
Distributo
r
Manufacturing
cycle
Manufact
urer
Procurement
cycle
Supplier
Each supply occurs at the interface between two successive stages of the
chain.
When the customer of Nescafe buys products from, it is customer order
cycle. When the retailers replenish its products (that are already sold) from
distributors it is replenishment cycle. When distributors brings product from
manufacturer, it is manufacturing cycle. When manufacturer like Nestle
collects raw materials from supplier it is procurement cycle.
2. Push/Pull process and Boundary
Pull process
Custome
r
Customer order
cycle
.Push/Pull
Boundary
Retailer
Replenishment
cycle
Distribut
or
Push Process
Manufacturing
cycle
Manufact
urer
Procurement
cycle
Supplier
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Nestle usually use push process for Nescafe. At first the raw materials of any
particular product go to the Nestls factory. ThenNestle produce the product
& send the product to their distributors. The products are inventoried over
the distributors ware house. Whenever the products from retailer finished,
thenthe products completely replenished from the warehouse of distributors.
At the end the products are exhibited in the retailers store and the products
are purchased by the customer. All the promotional activities are taken by
the manufacturer with the help of distributors and retailers about the
products.
Recommendations
After reviewing all the things I would like to make the following
recommendations to Nestle Bangladesh Ltd:
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Conclusion:
Nescafe, which is a popular brand of Nestle, has become very popular among
the mass population of our country over the times. They are successful
because of strong distribution network, through which they are making
Nescafe available in most part of our country. Good product quality, taste
and availability of different sizes of Nescafe products are other important
factors which helped them to cover almost the whole market share in case of
coffee consumption.
http://nestle.bdjobs-server.com/
http://www.maccoffee.com/
http://www.nestle.com/
www.google.com
Books:
Chopra , Sunil , 2013, Supply Chain Management,3rd edition, Prentice Hall, India.
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