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1 Introduction 1

2 Use of Lean Concept in Nestle 2

3 Waste Management in Nestle 4

4 Recommendation for Waste Management

ë Just in Time Concept 5

5 Recommendation Impact on Nestle

ë Organisation Human Resource 6

ë Capital Resource 6

6 Nestle Competitiveness 7

7 Nestle Long Term Sustainability 7

8 Nestle Corporate Social Responsibility 8

9 Framework

ë Type of waste in Primary and Support

activity 9

ë Dangerous Signal of waste 13

ë How to respond to Dangerous Signal 14

10 Conclusion 15

11 Reference 16

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The present assignment represents the value chain analysis concept, lean concept,
waste management and framework for the value chain analysis activity. In doing so, I
undertake a Nestle firm to recognize and explain how these concept are implement.

The present assignment is mainly considering the value chain analysis concept
made by Michael Porter which indicates the primary as well as support activities
having certain functions. Also, the lean concept developed by the Toyota assist the
firm to improve its performance, efficiency and effectiveness in terms of productivity
and skill of its employees.

In considering the Nestle, how the lean system used by the firm is initially explained
and also the waste management programme in nestle how undertake is menti oned
with recommendation. Nestle in which manner apply new concept to be efficient and
what factors can be influent is explained.

Moreover, the framework about the value chain analysis prepared with each angle
that indicates the existence of waste in their primary and support activities also the
dangerous signals from these waste are identify to respond and overcome by Nestle.

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In an organisation lean system is like a providing skill to their employees that how
they can control their organisation environment and makes process smoother. On
the other way mass production indicates mind-numbering stress for the employees
and more stuff behind the productionthat does not have enough way for the
improvement of the work environment. While lean system has the better solution for
the complex problems and also separates the manual work. Also, the lean applying
firm have high skill employee and more productively and smooth running system.
(Littek and Charles, 1995)

The lean system assists the Nestle in improving their value added activity but also
required high skill employees to use it, change in the prior system of working and
spending capital.

Nestle can be seen as changing their traditional way of manufacturing and applying
lean manufacturing for the better performance and making an improvement footstep.

In the light of this, much attention can be seen in Nestle that focusing on the lean
operation by µCapital and Work practice investments¶ .To use this lean operation ,
Nestle redesign its manufacturing system and service by µfinancial and
organisational investment ¶. Because of this new technology and lean operation
nestle enable itself to overcome from its recession period of time. (Six sigma, 2010)

In United Kingdom, Nestle the food giant has less ability in applying lean system at
the top level of management. The specialist of the learning and development at
Nestle whose name is Lindsay Coomer alleged that the µµNestlé¶s operation manager
didn¶t have any opportunity for the modern techniques, tool and practice.¶¶ Therefore,
Nestle undertakes Smallpeiece Enterprise who assists the Nestle to bring µlean
knowledge¶. For this Smallpeiece trainer provide ten days course having each three
or four day¶s module to learn the new system for their work.

In Nestle Rowntree confectionery factory in Fawdon, performance development

manager Andrew Willson mainly focused on the applied visual management
techniques and the operation procedure that pursued by the firm which is mainly
improve the existing system.

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At Nestle Castleford plant, Manufacturing Improvement Technique Programme
(MITP) deliveredtraining for the lean technique where the 5S concept and elimination
of the seven wastes which are not-value added activity of the firm focused for the
lean thinking that undertaken by Ian Pickett. (allbusiness.com, 2003)

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In Nestle, solid waste management programme are consider to manage their waste
part and for its best utilization.This programme mainly focuses on environmental
preservation which is aimed by the government to make people known about the
waste effect on the environment. Nestlé¶s this programme indicates µwaste
segregation, recycling and compositin g practices¶ which is undertaken by the
company. To manage the waste segregation nestle has make every wastage bins as
labelled with the colour as µcolor -coded¶ which results in proper waste segregation .
Nestle doing the home recycling and whatever waste emerge , nestle doing
segregation of waste such as food, plastic, metal and canteen. Also the material of
the product which having no more use also been segregated and in the right way
properly it is collected for the recycling and reuse. The part of waste which is not
possible to recycle , it provides in an energy plant that results in heat
source.Moreover, to dispose the products packaging materials which are the waste
part of the company, the name µAurora Factory makes a proper collection of the
waste and giving back to their supplier for recycle process. (Nestle, n.d.)

Moreover, µThe Green Haven Solid Waste Management Association ¶ which

comprises of the 75 households,stands to make an appropriate dispose of the waste.
(Nestle, n.d.)

Nestle also provide their qualitative surplus part of food to the fareshare who is a
charity firms, having partnership from 2005 that providing this surplus of food or
meals to the people who are poor, homeless and community of people who are in
need.Fareshare make assistance to them because as a charity firm they can
properly manage this over production and furnish this nutrition to their people. The
food which cross its selling date, fareshare make recycling or reusing it, for instance
paper, metal, cardboard, wood and glass can be reused by fareshare. (Nestle, n.d.)

With the present waste management programme, nestle concentrate on the

packaging part of the product and try to make a light weight and volume for the
better recycling of the product packaging. (Nestle, n.d.)

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In nestle whatever packaging materials are used about 60 % of the packaging part is
contribute by recycling mate rial. Also the wastage of the cans such as steel, cap and
paper cups mainly recycled by the company. (Nestle, n.d.)

‰ 

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To manage the waste in better way Nestle can apply the following concept:

JUST IN TIME (JIT) CONCEPT :

While studying the nestle production process, it can be come in mind that Nestle can
apply just in time as JIT concept which pay attention only on the requi red need rather
than producing much for more inventory. Well, the just in time concept say that in the
production process only the request for more inventory are made when the previous
production wholly consumed and need more stock. And because of this approach no
surplus can go into the inventory that arise the need for the handling of surplus. Well,
exception of this approach consider the higher production which require the well
storage and inventory facility, more producing goods at every stage require accurate
space area. However, this can be also become helpful when the demands are more
but the prospect also doesn¶t well because the chance of the waste maybe present.
Therefore, applying just in time concept can also reach the demand of the customer
whenever it arise and the elimination can be made by avoiding the over production
that can cease the issue of waste. (Childe, 1997)

As just in time approach indicates delivering the orders on the required terms which
can reduce the transportation carrying of surplus, an additional inventory or wastage
part which can assist the Nestle in reducing CO2 emission from the distribution and
transportation.

In this approach decentralization is made for decision making which assist to take
quick decision for controlling the operat ion. Also, it provides the less lead times to
operation.

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The above recommendation made for Nestle has requisite impact on firm¶s
organisational resourceswhich are as follow:

1. Organisation Human Resource

2. Capital Resource

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An organisation resource can be considered as a µhuman resource¶ of the firm.

Nestle expands its business in over 100 countries and employed around 2, 83,000
people within the company. Nestle develop a good shared value for their employees
and desire the qualitative work from their employees. Nestle believe that for the long
run of business the capacity of the firms to attract employees towards them is very
essential. Nestle wants their employees should be professional and should have
deep relationship with the company. (Nestle, n.d.)

In the sense of this, applying JIT concept can assist Nestle in developing employee¶s
personal skill and professional development . As this lean system require less efforts
and more productivity which basically mean less amount of employees with high
efficiency. Therefore, these new concept can reduce the amount of cost such as
hiring more employees and their rewards as wages and rem uneration. Also, keeping
fewer inventories of goods can save huge amount ofemployee¶s time and efforts.

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Nestle as a global firm have a huge investment to run their business. In terms of
applying concept, nestle can save huge cost by reducing employees as less man
power.Also, just in time concept consider the inventory whenever required therefore,
the cost of overproduction can be save and simultaneously the required amount of
money spend behind the disposal of waste also firm can save. Moreover, the cost for
the purchasing additional material flow can alsodiminish because the firm is not
considering huge inventory. Therefore, the capital resource in terms of investment
has an impact by the applying recommendation.

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Firm competitivenessgenerally indicates its competitive advantage against their

competitor and attractiveness towards the business. Nestle achievement in their
businessis outstanding but the change s in the firms scenario in terms of just in time
concept assist the firm in enhancing consumer trustand superior performance.

Assessing the nestle business,the major competitive advantage a firm can gain is
the qualitative and trustworthy product. As the JIT concept make production as per
demand which can provide the tailor -made product to their distributor in time which is
no longer supplied from the holding inventory. Therefore, Nestle can get consistent
quality and higher performance in the market through their product supply. As the
major rival business whoseproductsupply from the inventory holding cannot get long
life of the product becausethe product is labelledon the date of packed and become
waste at the end of life while nestle through just in time concept can get longer
product life which assist to remain the product in the market.

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The firm¶s organisation culture and applying system greatly affect its long term
sustainability. Also, it relies on organisation commitment that how it making change
and implement strategy. Applying lean system can be challenge for the employees to
face new environment and this required some of the support to face new surrounding
which can be worth of improvement. Whatever strategy applied by the firm make a
change in the employees and organi sation activities and they are not going to look at
the prior method of working. (Shinkle, Gooding and Smith, 2004)

The Nestle applying new approach efficiently change the culture and existing wo rk
method which can show them an improved work environment. Also, the new
competitive advantage of the firm such as lower cost of manufacturing,higher
utilization of resources and newly skilled employedcan sustain the Nestle in market
because the new approaches and idea can be better appliance than the previous
one. Also, the positive approach from the customer about the firm¶s food and other
products qualities can gain the long term holding of existing tools, techniques and
services in Nestle factories.

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As corporate social responsibility represents how firms having a deal with their
operation and what these operations have an impact on their consumer, supplier,
employee and the community around the firms . Also, this shows that how firms
manage their operations to ensure res ponsibility towards their people and their
community. (Slack, Chamber and Johnston, 2007)

Nestle as global corporation have many pressure about revealing the firm¶s
Corporate Social Responsibility reports in which mainly the group of the firm¶s
shareholder and societycomes. For Nestle, it is requisite to gain intensifying
reputation among these people through boosting their Social Responsibility . From
the Nestlé¶s previous Corporate Social Responsibility reports it is found that Nestle
enable itself to gain positive reports but this report criticise by theirsupportive group
such as Baby Milk Action because of nothaving adequate credibility. Asadopting the
new approach can make an impact on the firms manufacturing processbecause the
waste can eliminate or reduce which basically improve the environmental footprint by
minimizing the debris. Also, the impact on organisation resources such as people
can satisfy because of delivering less human efforts.Thus, these new approaches
consider better social responsibility which can assist the Nestle to gain reputation
around the world.

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This framework is about to assist the manager to identify the waste occurring in
Nestle while applying value chain analysis concept and to overcome form its
dangerous signals. This mainly indicates primary and support activities which
consider some of the following key activities.

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Primary activity in the value chain includes the following five key activities: 

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In this primary activity of the Nestle waste can be possible to incur as this step
involves receiving, storing, inventory control and transportation scheduling. (Perry,
2008)

In Nestle as taking this initial stage of the value chain can results in some waste
because Nestle indicates the food and beverage company where some of the milk
product can not possible to store for the longer period of time as if the short time
storage can be presumable. But the storing of milk product consumes much
inventory control and transportation scheduling also require cold storage facilities
where chances of the waste can be exist.

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The second primary activity of the value chain involves machining, packaging,
assembly, equipment maintenance, testing and all other value creating activities that
process from the inputs of the ma terials to the finished product. (Perry, 2008)

In Nestle the operation stage also have the waste part, as this stage is like the
manufacturing department in which waste is like an obvious to come because from
the input of the raw material to output of the product 100 % utilization of the
production process is not an easy job. Therefore, waste can be seen in the material
ingredients, toxic waste from the machinery equipment like pollution andresults of

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the failed tested product. Also, the finished product needs to be check for its quality
and assessment where falling quality comes under refuse product for customers.

a*+ !

The third step of primary activity includes the finishedproduct for the customers,
warehousing, order fulfilment, transportation and distribution management. (Perry,
2008)

In the light of this, this stage most probably process the finished product from the
company to the customer in which the company does not have any concern about
the wastage because the end product is ready to sale passed from the testing of its
quality to consumption.However, the prime concern stands at this stage is only time
which is taken by the distributor to furnish the product that should not be waste.

,- +$ 

The fourth step in the primary activity of the value chain includes the channel
selection, advertising, promotion, selling, pricing, retail management etc. (Perry,
2008)

In this stage, the major waste for the Nestle can become money, as the firm has to
spend much money behind developing the strong perception of the product in the
mind of customers. Hence, the waste of money arises when the promotion such as
advertising of the product is not effective. Still firm has to use enough fund because
without product advertising it¶s difficult to intensifying the selling. Moreover,the
management associated with the firm¶s retail market is also necessary where
sometimes addition cost of high remuneration of employees cannot possible to avoid
even if it does not perform well.

. /! 

The last stage of the primary activity in the value chain is service which indicates
firms supporting product value comprises of customer support, repair service,
installation, training, spare part management, upgrading etc. (Perry, 2008)

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As the service stage indicates improvement as the new advance product which
basically means the change of the firm¶s product such as Nestle Maggi product
improved with the new Maggi product with different flavour .This means that previous
product is not more going to sale in the market and consumers most probably prefer
the new Maggi product .Therefore the earlier Maggi product results in waste and
need to restore in the factory which Nestle has to bear.



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Support activity in the value chain includes the fo llowing four key activities:

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This part of support activity includes Infrastructure or systems, structures and

routines of the organisation.

In Nestle this supporting activity consider the infrastructure where no production

activity taken place that can be results in the major waste part therefore none of the
waste can be found in the Nestlé¶s infrastructure.

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This stage indicates the fundamental activities of t he firm which are recruitments,
selection, training, and development for the firm¶s human resource.

In Nestle firm the Human Resource Management department consider

themanagement cost for consultation where after undertaking numerous people the
recruitment, selection of the efficient and capable employees result whereas others
undertake only cost and efforts of the management which is nothing but the waste

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Firms Technology Development considers the technology knows ± how which mean
mechanisation, redesigning equipment related activities which support the firm¶s
value chain activities.

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In Nestle firm the poor design of technology as well as an up gradation can be seen
over the period of time where the old equipment are replace by the new onetherefore
theprevious heavy equipment result as waste that not more use for production.

,!  

This stage of the support activity include the product purchasing activities in which
raw material gathering, building and equipment accumulating activities are done.

In Nestle firm also the procurement stage comprisesgathering of material

ingredients, building and machinery where an essential amount ofwaste of such
material is not come about.

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The above wastes identify from each of the primary and support activity
involves the dangerous signals which are as follow:

1. An initial inbound logistics steps become a serious signal because the waste
of milk product in the Nestle having no further option of the recycling and
reusing the material. Also, the milk¶s poorest quality can affect the well quality
goods through contamination which can be the bad signal.

2. One of the dangerous signal at the operation stage in Nestlecan be seen from
the heavy equipment when manufacturing take place it affects the air pollution
which become the major problem for the nestle that need to be concentrate.

3. For the Nestlé¶s outbound logistics step, the waste partcan be seen as time
taken by the distribution channel of the firm in which delay supply can be
affect the reputation of the firm orcreate suspicion about the firm¶s inefficiency
or capacity.

4. In the marketing and sales stage of the Nestle waste can be seen as an
additional cost of money which may be signal for the firm as over cost behind
promotion and advertising of new product. Therefore, fund arrangement can
become the problem for the firm when the over cost exceeds the capacity
level.

5. From the restoring of the earlier waste product Nestle has to bear huge loss of
investment behind product, also the cost ofmanufacturing and delivery of
products are not small enough that can be recover from the recycle or reuse.

6. The supporting activity at the firm¶s infrastructure doesn¶t have any particular
or specific waste that identifies the dangerous signal for Nestle.

7. The human resource management in the value chainprocess result as

additional cost behind refusing the unselected candidate which doesn¶t leads
any unsafe sign for nestle.

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8. In the value chain process when replacement of the new technology take
place the installation of heavy equipment are not easy to made because too
much human efforts comes under needand installation in the wrong
mannermay affect the product quality, production efficiency also the chance of
damage occurswhich become the dangerous signal for the Nestle.

9. The procurement stage as having not more chances which leads Nestle to the
dangerous signal.

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The dangerous signal from the waste can be possible to overcome by the
following ways.

1. To overcome from the first dangerous signal Nestle should implement strong
cold storage facility and consistent checking for quality of the product in the
required time period.

2. To overcome from the air pollution Nestle can reduceindustrial emission

through scrubber which assists to reduce gases and chemicals to come out in
the air.

3. Nestle can make time management through developing the strong distribution
and transportation facility especially in USA which identify very weak from the
report. For this firm can acquire punctual wholesaler and distributor or can
develop the efficient time man agement of existing supply chain.

4. In nestle to reduce the addition al cost, firm can use the less but effective
media source to make promotion such as website and television ad
campaigns rather than big banner poster and celebrity promotion.

5. To come out from the waste of the previous product of the market which
replace through new product, at this point of time Nestle can reduce the
supply of the initial Maggi product because the new product is not like an

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 immediate launch, therefore the Nestle can reduce the market for Maggi
product and then after supplying Maggi product with different flavour can
reduce risk of restoring the product.

6. In Nestle firm whenever new technology need to be installing, it should be

perform by special expertise people, insured technology should be
installedand the installation should be check for the number of unit production
until the reliable quality result.

7. As in the firm¶s infrastructure, human resource management and at

procurement stage not any significant dangerous sign al can be found which
needs the way out.

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CONCLUSION:

To recap, I believe the Nestlé¶s existing working for the waste management is better and also the applying lean
system assist the company for the development.Nestle as a food giant running its business in many countriestherefore
the new applying concept as just in time need more stuff for the company but the possible result can also become the
new panacea for the company.

Also,the framework prepared above aboutthe value chain analysis assist the manager to identify the waste and
overcome from the dangerous signal. This can be also be helpful in taking further step when undertaking the value
chain steps because the waste can be predicted and eliminated at the initial stage.

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1. Wolfgang Littek and Tony Charles, 1995. Ô
 
  

  

  
      
  


. Berlin:
Walter de Gruyter & Co.

2. K. P. Bryceson, 2006. 


 

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3. All Business, 2003.   ! 

 
 
 [updated on 1 April,
2003] Available at < ""# 
# "

"$%&''( )*# >
[Accessed 31 December 2010]

4. Nestle in the Community. ! 
+

 
# Available at

< ""# #

# "
 
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"
" 
)
)

) 
#,> [Accessed 24 December 2010]

5. Nestle.
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* - + .

, Available at
< ""#

# #"/ 0

"1
  "0

Ô
2 
"
! 
">[Accessed 18 December 2010]

6. Nestle Professional. 3


 1

 +
 1
. Available at
< ""#



 # ""
"4 
"! "
"
# >[Accessed 20 December 2010]

7. Courtney Thurman and Ashlee Gardner, 2006. 


 
  

 
. Wisconsin: CWL Publishing Enterprises.

8. Stephen J. Childe, 1997. /       
 
   



, UK: Chapman & Hall.

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 9. Bob Perry, 2008. 
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  !
#
Burlington: Elsevier Ltd.

10. Nestle. Creating Shared Value for Nestle Employees. Available at

< ""#

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" " 1
  "





">[Accessed 29 December 2010]

11. George A. Shinkle,Lloyd H. Gooding andMichael L. Smith, 2004.

Ô
 
   
    

  
 



# USA: Productivity Press.

12. Nigel Slack, Stuart Chambers and Robert Johnston, 2007. 
 
+

. England: Pearson Education Limited.

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