Analysis of the Story of Nestle: Internship Report

Preface

Internship at Nestle Pakistan Ltd.(Kabirwala Factory) was an attempt to seek experience of the corporate lifestyle, professional exposure to the market, build and enhance professional ethics for future. The idea was to understand the corporate structure, and culture while developing skills needed to thrive, of one of the leading global multinationals whereas applying the knowledge and skills acquired during the academic career. This wonderful experience of just 6 weeks proved to be a high inclination in the graph of my personal learning.

Acknowledgment:

First, all praises & thanks to Almighty ALLAH that I avail this opportunity for completing this period of internship, then I pay all my respect and praises to the greatest man of universe, Holy Prophet Muhammad ( PBUH ) for whom all this universe was created.

I am heartily thankful to Mr. Hammad Nabiwhose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of my projects at every step during this period. I am also thankful to HRSG office staff members they gave me full assistance regarding my area of responsibility. They were very cooperative and willing to help when I faced any problem & asked for help. There was a very good learning environment. I will always remember their cooperation and support.

Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the internship.

Muhammad Zubair, MBA(Marketing), BZU

Nestle History:

Henry Nestle, the founder of “Nestle” created the trademark of the Nest, a translation of his last name. In German , Nestle mean “Little Nest”. The symbol showing 2 young birds being fed by their mother perched in a nest on an OAK tree depicts in motherhood, the arm, and loving, caring, protective and sincere feelings of a mother for her younger ones. So this symbol helps to give a visual sign that nobody other than Nestle can care about its consumers friendly. It shows that the Nestle provides the purest food product to its consumers because it is as sincere with them as a mother. It is universally understood that this reflects the maternity and affection, and thus helps to draw a visual link between the name, ‘‘Nestle’’ and its products. Nestle is the world’s lesding nutrition, health and wellness company. The company employs more than 280,000 people and has 456 shows in 1866 in Vevey, Switzerland, where it is still based, Nestle has often been called ‘‘the multinational among the multinationals’’. Only about 1.5percent of its sales are generated in its home country, and all but 12 of its factories are= situated abroad. The CEO is a Paul Bulcke, and the General Management includes a Belgian, two Canadians, one Dutch, a Frenchman, a German, a South African/British, three spaniards, one Swiss, one American and one Swiss American. Nestle is a truly public company with over 250,000 shareholders of which around one third are Swiss. As the world’s leading nutrition, health and wellness company, Nestle is the worldwide leader in product categories such as soluble coffee, infant nutrition, bottled water, condensed and evaporated milk, ice cream, as well as chocolate and malt drinks, and culinary. The Group is also a co-leader in pet care. The Company is committed to delivering shareholder value through sustainable, capital efficient and profitable long-term growth. Over the past years it has concentrated on furthering organic growth and performance improvement.

Mission statement:

At Nestle, we believe that research can help us make better food so that people live a better life.Good Food is a primary source of Good Health throughout life. We strive to bring consumers food that are safe, of high quality and provide optimal nutritionto meet physiological needs. In addition to Nutrition, Health and Wellness, Nestle products bring consumers the vital ingredients of taste and pleasure.

Vision statement :

The Vision of the Nestle Group is ‘‘Nestle aim is to meet the various needs of the consumer every dah by marketing and selling food of a consistently high quality. The confidences that consumers have in our brands is a result of our company’s many years of knowledge in marketing, research and development, as well as continuity – consumers relate to this and feel they can trust our products’’.

Slogan:

‘‘Good food, Good life’’

A Little about History:

The credit for the foundation of Nestle goes to a real man Henry Nestle.

He said:

“The thought that my invention could save the lives of so many children encounter enormously the financial gain was not the prime motivation”.

(Henry Nestle 1869)

Nestle Pakistan limited

(Formerly Nestle milkpack Limited)

Nestle Pakistan is a subsidiary of Nestle S. A. –a company of Swiss origin headquartered in Vevey, Switzerland. It is a food processing company, registered on the Karachi and Lahore stock exchanges. For five years in a row, the company has won a place among the top 25 companies of the Karachi Stock Exchange. Headquartered in Lahore, the Company operates five production facilities. Two of its factories in Sheikupura and Kabirwala are multi product factories. One factory in Islamabad and two in Karachi produce bottled water. Through its effective marketing and a vast sales and distribution network throughout the country, it ensures that’s its products are made available to consumers whenever, whenever and however.

Nestle has the unique ability to provide a complete range of food products, services and wellknown brands to meet the needs of consumers around the world.It is not a faceless corporation catering to faceless consumers, but a human company providing a response to individual human needs. It respects the cultures of the countries it operates in and recognizes the need for quality of life of their people.

In line with Nestle’s global philosophy, Nestle Pakistan is proud of its commitment to excellencien product safety and quality and to providing value and services to it’s consumers. On the socialfront it acts very responsibly when it comes to environmentally sound business practices and corporate social responsibility. Nestle Pakistan operates in Many ways but people, products and brands are the main flag bearers of the Company’s image. On the one hand, it has brought prosperity to farmers through an assured and growing income resulting from sale of their milk, and on the other, it has enabled Nestle Pakistan to collect better quality milk in quantities it needs.

Realizing that rural women play an important role in animal husbandry and milk production., Nestle Pakistan has pioneered the concept of inducting women milk promoters in its team to educate and encourage rural women to increase per animal yield. Four teams comprising three women each are currently working in the field. Results being encouraging, more teams are planned.

By taking this professional help and guidance to the farmer’s doorsteps, that they otherwise would find dificult to access, coupled with incentives for increased milk production and a good prompt return for their milk, the company is playing an important role in creating opportunities of economic growth for dairy farmers.

Introduction of nestle Kabirwala factory

Kabirwala is situated near Khanewal city and Nestle factory is located at 4 Km Khanewal road Kabirwala. The distance of Nestle factory from Khanewal is 6 Km. It has beautiful and clean building.

Kabirwala factory was established in 1983. Located in front of Punjab province, Kabirwala Dairy Limited (its then name) started its Operations with the production of UHT milk in 1984. It was taken over by Milkpak Ltd. In 1990. Maggi 2 minutes noodles and milk powder plant started their productions in 1992 and 1996 respectively.

In 1996 UHT production was shifted to SKP while production of Nestle Culture Butter started in 2000.

Dry mixing line was installed in 2002 to produce Every Day tea whitner, while Desi Ghee line was installed in 2003. On February 7, 2005 Nestle KBF joine GLOBE GO LIFE that performs as a facilitator to achieve long-term business growth.

As a result of management commitment and dedicated effort and hard work of Kabirwala factory staff at all levels it got the high status in milk powders category amongst all the nestle factories around the world in 2007.

Kabirwala Factory has got the potential of expansion in existing and extension in the new categories in the future.

This Factory Fact book was created with the modest aim to provide the Reader with a flavor of this factory’s growth over the years and the present role.

The brief history of the development of Nestle Kabirwala factory is as under:

• 1980 Established locally by Mr. Syed Fakhar Imam as Faisal Dairies
• 1990 Merge with Nestle
• 1992 Maggi Noodle’s Plant was installed
• 1996 Powder milk Plant was installed(IST Egron)
• 2002 D.C. (Distribution Center) Establishment
• 2003 Desi Ghee Plant was installed
• 2004 N2 Self Generation Plant
• 2006 Installation of Liquid Dairy Plant
• 2007 Powder Milk Plant (2nd Egron)
• 2008 UHT Cream Plant
• 2009 Commission of Probiotics & EVAP 3
• 2010 Production of Eight new products
• 2011 Production of three new products, extension of RP store & fuel storage tank

Currently Nestle is installing Automation Plant for packing

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Product History:

1984 liquid milk based products

UHT milk

Nestle Milkpak LTD:

• 1990 Joint venture with Nestle
• 1992 Maggi noodles local
• 1995 Maggi noodles export
• 1996 UHT production stopped and shifted to skp
• 1996 Milk powder bulk
• 1997 Coffe packing
• 1999 Nido 1000 gm
• 1999 Milo packing
• 1990 Joint venture with Nestle
• 2000 Maggi Yakhani discontinued
• 2000 White butter

Nestle cultured Butter

Nido

• 2002 Packing of Milo and coffee discontinued

Everyday

• 2003 Desi ghee

NIDO MQV-14NIDO MQV-14

• 2006 Liquid Milk
• 2007 E.day04G
• 2008 E.day Mixed Tea (1000g, 400g, 40g)

MilkpakCream 200 ml

2009 NidoBunyad

2010 Nido 1+ and 3+ probiotic

2011 Nesvita

2012 Krunch chocolate

Some other products in pictures

Nestle System

• Nestle has best systems but others are also consulted. Following are the own systems of Nestle
• Nestle quality management system-NQMS
• Nestle good manufacturing practices-NGMP (production, environment, building, designes)
• Safety, health environment-SHE
• Total performance management-TPM (make polices to support business)
• Nestle continuous excellence-NCE
• Certifications
• Certifications of Nestle Pakistan Ltd.are as under
• ISO 14001(Safety)
• OSHAS 18001(Safety)
• HACCP (operation pre-requisite, critical control point, pre-requisite programmed)
• Integrated pest management (IPM)

ISO 2200 granting (combination of HACCP related to safety and ISO 9000 related to quality and many more things).

A successful GLOBE system that works for Nestle around the world in order to communicate confidential data

As a result of management commitment and dedicated effort and hard work of Kabirwala factory staff at all levels KBF got the high status in milk powders category amongst all the Nestle factories around the world in 2001. It was achieved because of continuous improvement drive and passion to become best in the world.

Kabirwala Factory has got the potential of expansion in existing and extension in the new categories in the future.

History of RS & F:

In 1985, Khawaja Salah Uddin established Pak National Distributors, it is the first firm of PND Group. PND is the business partner of highly reputed companies such as Uniliver Private Limited and Nestle Private Limited . Tariq Glass and Asian Food were also the business partners of PND in recent past. Snapshot of PND Group is as follows:

• PND commenced retail franchise for Unilever Pakistan for Bahawalpur City in 1985 and as token of appriciation for the dedication and eamestness of PND towards work, Unilever offered the business to other firms of PND Group.
• PND expanded its business with other leading multinationaals dealing in convinient foods and accepted the retail distribution of Nestle Pakistan Limited in 1987. Later on PND diversified in the related field and accepted handling agent offer from Nestle Pakistan for entire southern Punjab in 1991.
• PND expanded further by business partnering with Tariq Glass Industries (OMROC) which is one of the leading table ware company (glass manufacturer) in Pakistan, by accepting a retail franchise of Multan in 1992. This business was abandoned in2013.
• PND joined hands wath Asian Foods (Private) Limited (MAyfair), one of the largest biscuit and confectionry company in Pakistan, as handling agennt for entire SouthrenPunjab in the year 2009. Subsequently, PND started retail distribution in Bahawalpur and Multan in 2009 and 2010 respectively. This business was also abandoned in 2012.

Task 1: Working of distribution

First of all the working style of Nestle Distribution was identified. This working style includes their hiring system, distributional task such as stock handling, vehicle handling, market handling, team handling and audit through merchandisers. Distributional hierarchy includes Distribution manager, Sales Supervisors, Order Bookers and salesmen. Sales supervisors are responsible for secondary sales and OB’s performance. The person for any post is selected through proper interviews. They are given handsome packages supported by incentives. Stock handling includes stock at distribution and stock to be availed for distribution through primary sale. Vehicle handling is one of the major part of sales. Vehicles are sent on the assigned route for proper supply of stock according to the booking of OB’s.

Task 2 Visit of different market channels

During the internship the market visit of different market channels was completed. There are four different market channels set by Nestle which are as follows:

• General Trade:

GT includes small and big retailers. RSF 2 is covering more than 3000 shops in Multan in its specified area.

Local Market Trade:

LMT includes bakeries and Large Grosser’s in this market channel.

• Wholesale:

Wholesale includes Ghala Mandi of Multan.

• Key Accounts:

Key Accounts include big stores like Chase up, Ideal Mall and Latif Super store.

Task 3 SWOT Analysis was also completed during internship.

During the internship the SWOT analysis was completed on nestle. Neslte has many plus points which give it priority over other companies.

Strength:

The name of Nestle is the one of the best example of its strength. The kind of image it is having in the mind of people is the greatest strength of it. Well, there are many strengths of Nestle in its product line. Fruita Vitals is well reputed and well known brand of nestle. It is a nector having flavors Chaunsa, Red Grapes, Pineapple, Peach, Guava, Kinnow and some other flavors are recently added as well. There is no other competitor of such product of Nestle regarding the quality and taste. Another strength of Nestle is mango fruit drink Nestle Nesfruita which provides a large numbers of sales to the company. In dairy portion Nestle Everyday liquid is known as tea whitener. Marketing strategies of Nestle are also the strengths for nestle.

Weakness:

The target market of Nestle milk pak is upper middle class and higher class and it is not targeting the lower middle class or lower class. Lower middle class cannot afford its premium prices and as we all know that most of the population in Pakistan belongs to the lower middle class. Because of that is not generating the sales which are expected from it. Another weakness of nestle is that it is not properly advertising milk pak. Other competitors are focusing on the advertisement through proper channel while Nestle keeps milk pak at last in advertising and it is causing loss in market share of milk pak. In 2017 the market share of Milk Pak was 52% while all other brands were just 42% of the whole market share while in 2018 the market share of Milk Pak was reduced to 48% and that is alarming for nestle.

Opportunities:

There are multiple opportunities for nestle. It can increase the sales of yogurt through providing quality and proper advertisements. Nestle can also increase the sales of Milk Pak through proper advertisement. Nestle can increase the sales through credit facility. As much as you facilitate your customer, your sales increase. Coffee brands of Nestle are also the opportunities for Nestle. Company can develop the taste of coffee among masses through proper working and there are no well known competitors in coffee products for the Nestle.

Threats:

The biggest threat for the Nestle is the decreasing market share of Milk Pak as the company is costing a large amount on production of Milk Pak and if it is not properly controlled the company can suffer a huge loss because of not just advertising properly. Current economical situation is also a threat for the company. Pakistan’s economical crises are increasing day by day and it can cause a great loss for the company.

Task 4 Safety Tools Check

Safety Tools of all factory have been checked.

Observations

Mostly boxes were not fully equipped with tools. Even most of the boxes were not having the hand sanitizers and cotton rolls. Fire alarm was out of order.

Boxes of UHT need to be changed.

Suggestions

Make office boy responsible for completing all missing items.

Audit of first aid box should also be made in order to maintain safety precautions..