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Final Project
On
“Production Operational Management”
On the topic
“Nestle Milkpak”
Presented To:
“Sir. Asad Hasan Butt”
Pr...
Table of Contents
Acknowledgement............................................................................................
Acknowledgement
We are very thankful to almighty Allah who enables us to complete this project. Man
is not perfect in all ...
Executive Summary
This is an informative report on Nestle Pakistan Private Limited in this report we
have described how Ne...
Introduction
Nestlé was founded in 1866 by Henri Nestlé and is today the world’s biggest food
and beverage company. Nestle...
Goals & Objectives
Goals & Objective of Nestle Pakistan is Simple & well designed with the core strategy
to meet the deman...
PESTLE analysis:
PESTLE
Political
Economical
Social
Technological
Legal
Environment
SWOT Analysis
1. Strength
Brand Name:
Milkpak is the product of Nestle.Milkpak is a trusted brand known throughout the
cou...
Distribution Network:
Nestle MilkPak have very strong distribution network and its cover all over the Pakistan
Big Market ...
Strong Marketing and advertisement campaign:
With the help of store market campaign milkpak can increase its sales.
Credit...
Competitor Analysis
No of Units Nestle
Price
Olper Price Haleeb Price
1000 Ml
500 Ml
250 Ml
Channel Flows on the
attached ...
Supplier network
1000 small village diaries:
 An agent runs the diary. It occupies a small room of about 20 to 30 m eithe...
Main reception and cooling stations:
These constitute the final stage in milk collection before it is delivered to factori...
The factory commenced operations as part of Milkpak Ltd in 1981. At the time it produced
only UHT milk, but by 1988 had ex...
Along with correct cooling, pasteurization is one of the most important processes in the
processing of milk. If carried ou...
Distribution
According to the distribution, Pakistan is divided into three geographical zones and then in
further Regional...
Distributors in Lahore
Promotion
Manufacturer
Distributor
Wholesaler
Retailer
Consumer
• Model Town
• Town Ship
Saeed Brot...
Advertisement:
About 60% of promotional budget is spent on advertisement. Following are the different
Advertisement Medias...
to relief efforts in the shape of food to affected people, water tankers supplying clean drinking
waters, veterinary and v...
 1 liter of Nestle milkpak has the major 55% of total sales.
 250 ml of Nestle milkpak has 25% of sales
 1.5 liter of N...
 Seasonal problem
 Religious matter
 External competitors
Prioritize the problems
Conclusions:
Nestlé Milkpak Limited is a gigantic organization. Basically it is a food concern emphasizing
on producing go...
Annexure
Bibliography:
HISTORY
Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartere...
over management in 1992. For ten years in a row, the company has won a place among the top 25
companies of the Karachi Sto...
Channel Flows
There are some channel flows which show the flow of channel functions among themselves.
Physical Possession ...
Promotion Flow:
In the above diagram, Nestle uses this channel flow for the promotion of Milk. Producer
does promotions of...
Ordering Flow:
In the ordering flow of Nestle Milkpak distribution channel, there is reverse flow in the
channel. Customer...
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Nestle Milk pak, Production Operational Management

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Final Project
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“Production Operational Management”
On the topic
“Nestle Milk pak”

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Nestle Milk pak, Production Operational Management

  1. 1. Final Project On “Production Operational Management” On the topic “Nestle Milkpak” Presented To: “Sir. Asad Hasan Butt” Presented By: Umer Shareef MCE-12163 Salman Anjum MCE-12157 Hafiz Ayaz Ali MCE-12148 Mutahir Bilal MCE-12147 Hina Anjum MCE-12112 Aasia Noren MCE-12173 Class M.Com Semester 4th Evening Superior University Lahore.
  2. 2. Table of Contents Acknowledgement.....................................................................................................................3 Executive Summary....................................................................................................................4 Introduction ................................................................................Error! Bookmark not defined. Situational Analysis:....................................................................Error! Bookmark not defined. PESTLE Analysis: ......................................................................Error! Bookmark not defined. SWOT Analysis:........................................................................Error! Bookmark not defined. Competitors Analysis ..................................................................Error! Bookmark not defined. Supplier Network:.......................................................................Error! Bookmark not defined. Input Process:..............................................................................Error! Bookmark not defined. Bottle Manufacturing:.............................................................Error! Bookmark not defined. Production Process: ....................................................................Error! Bookmark not defined. Water filling in the bottles:.........................................................Error! Bookmark not defined. Cap of Bottle: ..............................................................................Error! Bookmark not defined. Packaging: ...................................................................................Error! Bookmark not defined. Storage:.......................................................................................Error! Bookmark not defined. Distribution: ................................................................................Error! Bookmark not defined. Distribution Channel: ..............................................................Error! Bookmark not defined. Target Market: ............................................................................Error! Bookmark not defined. Production Capacity:...................................................................Error! Bookmark not defined. SKUs of Sufi Water: .................................................................Error! Bookmark not defined. Channel Flows............................................................................................................................4 Problems in the Processes:.........................................................Error! Bookmark not defined. Small Suppliers:................................................................Error! Bookmark not defined. Single bottle filling: ..........................................................Error! Bookmark not defined. Electricity Problem:..........................................................Error! Bookmark not defined. Limited Target Market: ....................................................Error! Bookmark not defined. Prioritization of the Problems:....................................................Error! Bookmark not defined. : ...................................................................................................Error! Bookmark not defined.
  3. 3. Acknowledgement We are very thankful to almighty Allah who enables us to complete this project. Man is not perfect in all the context of his life. Although today man is doing some difficult and nearly impossible things, but his mind is still limited and has minor thinking approaches. It is mercy of Almighty ALLAH who blessed man with mind and knowledge and make him able to do a lot of things. HE is Almighty ALLAH who shows the man light in the darkness and man finds his way to the light. Without blessings of Almighty ALLAH man is nothing but a helpless Creature. Same is the case with us, we also face many difficulties during completion this project and have been successful in my duty only because of the help of Almighty ALLAH. We feel pleasure to admire of Sir. Asad Hassan, whose tireless efforts are fruitful for the students and better educational atmosphere, We are also thankful to Mr. Muhammad Fayyaz project support executive at nestle who helped us a lot to complete this project. We are especially thankful to Superior University who provided us an opportunity to learn by doing work on the project. We are thankful to all those people who help us a lot and provided us an opportunity to understand and learn every aspect.
  4. 4. Executive Summary This is an informative report on Nestle Pakistan Private Limited in this report we have described how Nestle came into being internationally and in Pakistan. Through our research we found out how much Nestle cares about its consumers. Good food Good life is the principle they always follow. We have described the marketing strategies Nestle uses and we have explained the performance of Nestle. Nestle Pakistan Limited, formerly known as Nestle Milkpak Limited is a subsidiary of Nestle a company of Swiss origin headquartered in Vevey, Switzerland. It is listed on Karachi and Lahore stock exchanges. For the 5 years in a row, the company has placed among top 25 companies of the KSE. Its principal activities are to manufacture process and sell food products. The food products include dairy, sweet and cooking products, coffee and beverage and drinking water. The major brands include Milkpak UHT, Nestle Everyday, Lactogen and Nescafe. Nestle has been serving Pakistani consumers since 1988, when its parent company, the Switzerland-based Nestle, first acquired a share in Milkpak Ltd. In line with its parent company's global philosophy, it is proudly committed to excellence in product safety, quality, and value. Today, the company is fully integrated in Pakistani life. And is recognized as producer of safe, nutritious and tasty food, and leader in developing and uplifting the communities in which it operates. In this report, we make the situational analysis of Nestle Milkpak which included the SWOT analysis and PESTLE analysis, in SWOT analysis we focused on the Stength, Weaknesses, Threats, and Opportunity of the company and in PESTLE analysis we focused on the Political, Economical, Social, Technological, Legal and Environmental Factor that effect the milk industry of the Pakistan. The report include brief introduction of the Nestle Pakistan and Milkpak, at second stage it is shading light on the analysis been conducted, later the detailed processing from supply chain to distribution of Milkpak. In the process including  Supplier  Distribution  Storage  Packing  Transfer of raw material  Customer feed back  Distribution claim  Processing At the problems has been identified related to Milkpak and latter suggestion has also been given for the removal of these problems. And then draw the conclusion about the Milkpak.
  5. 5. Introduction Nestlé was founded in 1866 by Henri Nestlé and is today the world’s biggest food and beverage company. Nestle employ around 250,000 people from more than 70 countries and have factories or operations in almost every country in the world. The history of Nestle began in Switzerland in 1867 when Henri Nestlé, the pharmacist, launched his product Farina Lacteal Nestle a nutritious gruel for children. Nestlé Pakistan Ltd is a subsidiary of Nestlé 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 and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took over management in 1992. For ten years in a row, the company has won a place among the top 25 companies of the Karachi Stock Exchange. Nestlé Pakistan now operates the biggest milk collection operation in Pakistan, Currently; Nestlé Pakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq Km's in the province of Punjab and Sindh. Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Ever since 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today more and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their health and quality of life. Vision Statement Nestlé’s vision of making good food central to enjoying a good healthy life for consumers everywhere. This implies gaining a deeper understanding in many areas of nutrition and food research and transforming the scientific advances into applications for the company. Having a broad vision the company is doing its best for their consumers to show the great sense of responsibility. Mission statement To positively enhance the quality of life of the people of Pakistan and all over the world by all that we do through our people, our brands and products and our CSV activities. Nestlé’s aim is to meet the various needs of the consumer every day by marketing and selling food of a consistently high quality. History and Bibliography of Nestle on Attached Annexure
  6. 6. Goals & Objectives Goals & Objective of Nestle Pakistan is Simple & well designed with the core strategy to meet the demand of the consumers & to fulfil the needs of the customers. The goals & objectives are;  To be the best & quality brand in Pakistan  To meet the needs & requirements of the consumers  To capture the desired market share  To dwell in to the life of people & consumers  To be the number one nutritious company of Pakistan Situation analysis SWOT Analysis PESTEL Analysis Situation Analysis
  7. 7. PESTLE analysis: PESTLE Political Economical Social Technological Legal Environment
  8. 8. SWOT Analysis 1. Strength Brand Name: Milkpak is the product of Nestle.Milkpak is a trusted brand known throughout the country for its nutritious wholesome goodness and pure natural taste. Quality: The quality of milkpak is superior and they continuously work to maintain the quality. They believed that quality and persistent commitment t0 continuous improvement are essential t0 our ongoing success. UHT(Ultra Heated Treatment): They used ultra-heated treatment to kill the spores in milk.UHT is the sterilization of food by heating it for an extremely short period, around 1–2 seconds, at a temperature exceeding 135°C (275°F). Research and Development Department: Research and Development Department continuously worked on innovation of milk process and quality. For success of any product its requires t0 continually strive to produce break through ideas that result in improved solutions and services t0 customers. Strength Weakness Opportunity Threats
  9. 9. Distribution Network: Nestle MilkPak have very strong distribution network and its cover all over the Pakistan Big Market Share: The packaged milk category was originated in 1981 by (quaintly named) Milk Pak, which pioneered tetra pack milk in Pakistan have big market share in food industry of Pakistan. Packing: Milk Pack was the first tetra pack introduced in Pakistan in 1981 with green and white packaging .This green and white color associated with Pakistan’s flag. Brand Loyalty: Milkpak is the product of Nestle due to this its have large quantity of brand loyal customers. 2. Weakness External sources for raw materials: Milkpak depend on external sources for raw materials due to this same times they face some problems. Tetra Pak: MILKPAK depend on Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available for nestle milkpak packaging because its having monopoly in the packaging sector in Pakistan. Due to this reason Tetra Pak can charge them higher price and could increase the production cost.Low advertising and Marketing: Milkpak require a stronger marketing campaign to challenge the decreasing product awareness in the market and customers. Weak implementation of CSR: The company has announced and is involved in many programs that aim to make company more eco-friendly and improving the working conditions of its suppliers. Still, Nestlé receives a lot criticism over the effectiveness of its programs. 3. Opportunity Develop its own farms: Milkpak should develop its on farms its help to reduce the cost and maintain the quality of milk. Increased Government Funding/support: Government of Pakistan decided to increase the farmers funding. This is an opportunity for Milkpak because farmers will be better able to produce milk for longer time periods. Explore support from the Government of Pakistan for in-country investment opportunities.
  10. 10. Strong Marketing and advertisement campaign: With the help of store market campaign milkpak can increase its sales. Credit policy: MILKPAK should adopted some more credit polices to increase sales. Suitable environment : Pakistan is the seventh largest producer of milk in the world with annual output of over 22 billion liters. There are substantial growth opportunities considering the average yield of Pakistani animals at only 1,100 liters/annum as compared to 6,000 liters/annum for animals in Europe and USA. There are nearly 20 million milk producing animals in the country. 4. Threats Competitors: Two main competitors Haleeb and Olpers are main threat for MilkPak especially the olpers is growing. New entrants: Market segment growth could attract new entrants. Political and economic issues Economic slow down can reduce the demand and politically Pakistan is not a store country. Religious Extremist: Due to foreign origin company some religious extremist avoid to bus the NESTLE product. Rising raw food prices: With an overall growth of world economy and population, the demand for raw food will rise. The result of that will be higher material costs and squeezed margin for Nestle. Inflation: Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day.
  11. 11. Competitor Analysis No of Units Nestle Price Olper Price Haleeb Price 1000 Ml 500 Ml 250 Ml Channel Flows on the attached Annexure
  12. 12. Supplier network 1000 small village diaries:  An agent runs the diary. It occupies a small room of about 20 to 30 m either in the agents house or in a building that nestle’ rents.  The milk collected on average is two times 150 liters per day  The agent does a quick tasting test on the milk before recording the delivery in the farmer’s personal milk logbook.  The dairy is open two or three hours morning or evening.  The agent transports the milk to one of the 972 secondary receptions and cooling station before closing 972 secondary reception and cooling stations:  These generally occupy about 40 m, divided into two rooms.  One of these houses an electrically powered milk-cooling tank with a capacity of 600 to 2500 liters.  Power cuts are frequent, so 95% of the stations have their own generator.  An agent who also works as a milk inspector to run quality tests runs each secondary station.
  13. 13. Main reception and cooling stations: These constitute the final stage in milk collection before it is delivered to factories.  It also fitted high capacity milk tanks.  8 of them are equipped with plate heat exchangers for getting the milk re cooled before transported to the factories.  The quality analyses run as each tanker of milk arrives are more thorough than in the secondary station.  The 23 main stations also stores the laboratory supplies needed in the secondary stations and village diaries.  Link to the factories by telephone and Internet, the main stations act as the communication and administration center for the entire collection system. Milk Cooling Tanks: Milkpak set up reception centre with cooling facilities where farmers and dodhies, small- time milk merchants, could bring their wares. It was a simple solution, but difficult in practice: importing the stainless steel chilled containers required was prohibitively expensive. By 1988, the company purchased 120tons of milk a day from 26,000 farmers. After acquiring a share in Milkpak Ltd in 1988, Nestlé immediately began investing in milk cooling tanks. Between 1988 and 1992, 100 milk tanks were installed.1992 onwards, with full support from the Nestlé headquarters in Switzerland, reorganization of the milk collection operation and the provision of agricultural technical assistance became top priorities. The investment paid off. Within a decade, Nestlé's purchase of fresh milk had quadrupled, and the number of small farmers selling milk to Nestlé tripled. Milk Processing Nestle Factories: Our products are manufactured in five facilities scattered around the country, from Islamabad in the north, to Karachi in the south. Two state-of-the-art multipurpose factories are located in the agricultural heartland of the Punjab, and the remaining three are dedicated to producing our trusted brands of bottled water. As citizens of Pakistan, we consider it our duty to make sure that our manufacturing processes are clean, hygienic and safe. We are constantly working to reduce emissions at our factories, reducing and treating wastewater, and making our packaging environmentally friendly. Regular audits have confirmed that our factories' environmental management meets the Nestlé international standard. Sheikhupura Factory:
  14. 14. The factory commenced operations as part of Milkpak Ltd in 1981. At the time it produced only UHT milk, but by 1988 had expanded to produce butter, cream and ghee, as well as fruit drinks.  Milk filling machine TBA-22 (most modern and efficient and high speed equipment available in dairy industry)  National distribution centre was also constructed in 2000 with capacity to store 8300 pallets. Kabirwala Factory: In 1990, Nestlé Milkpak acquired the Kabirwala factory, located in Khanewal district of the Punjab, as a subsidiary. By 1997 it was a fully owned unit of Nestlé Pakistan Ltd. 2006 has seen the commencement of Kabirwala Extension Project that would be completed in April 2007 at a cost of about Rs. 4.0 billion. The project has seen expansion of milk processing capacity to triple its current size.  In 2005 Fresh milk capacity was increased from 676 to 800 tons per day.  In 2007 an additional raw and packing and semi finished product stored and a bigger distribution centre, a stick pack filling machine and 1000 gr. Processing Milk Reception: The Milk Reception Unit receives milk for a milk processing plant. The unit measures and pumps the product for buffering or further treatment. Heating & Cooling: Heating and cooling are basic processes within dairy processing and take place in plate or tubular heat exchangers. Tetra Pak heat exchangers have high thermal efficiency for low energy consumption. Standardization: Automatic direct in-line standardization of milk. Accurate control of fat, fat/solids and non- fat ratio gives better utilization and control of the production parameters.  20% Iron  41% Calcium  18% Vitamin A  20% Vitamin C Pressurization:
  15. 15. Along with correct cooling, pasteurization is one of the most important processes in the processing of milk. If carried out correctly, these processes will supply milk with longer shelf life. Temperature and pasteurization time are very important factors which must be specified exactly in relation to the quality of the milk and its shelf life requirements. The pasteurization temperature for homogenized, HTST pasteurized, regular-grade milk is usually 72-75 °C for 15-20 seconds. Nestle milkpak has 3 months of shelf life. UHT Treatment: UHT treatment is a thermal process for preserving liquid milk. UHT stands for Ultra High Temperature and by heating to 137 – 140 °C for a very short time (2-10 s) the micro-organisms are inactivated. If the milk is packaged under aseptic conditions it can be stored at room temperature for months. Packaging Nestlé is committed to reducing the environmental impact of packaging, without the risk of safety, quality or consumer acceptance of its products. As far as milk is concern packaging is very important, it is perishable item which requires special packaging to preserve it for few months. To meet this objective Nestle Milkpak use tetra Pak to deliver fresh milk to its customer without sacrificing in health measures. Nestle have following objectives in mind regarding packaging:  Result in the lowest possible weight and volume of packages while maintain pack reliability.  Take into account new packaging materials and processes that reduce the impaction the environment of unnecessary transportation;  Avoid the use of material that can adversely impact the environment during packaging production and disposal  Decrease packaging waste at all stages in the supply chain, including package manufacturing, utilization and disposal  Increase the use of recycled materials wherever possible, and increase the recyclables and compatibility of packages with existing waste management schemes. Transportation: Logistics concerns finished milk movement from factory to different warehouses located in different cities. The logistics deliver the milk form manufacturing factories at, kabirwala and shaikhupura.
  16. 16. Distribution According to the distribution, Pakistan is divided into three geographical zones and then in further Regional Sales Offices. MilkPak is not sold directly to consumers. A complete distribution process is followed.It uses indirect channels for distribution like: North Zone •Islamabad and north outstations •Peshawar •Jhelum Central Zone •Lahore •Faisalabad •Gujranwala •Multan •ahiwal South Zone •Karachi •Hyderabad •Quetta •Sukker
  17. 17. Distributors in Lahore Promotion Manufacturer Distributor Wholesaler Retailer Consumer • Model Town • Town Ship Saeed Brothers • Airport • Ghazi Road Zakir & Sons • Muslim Town More Deen Distributors • Fatah Garh SMR Distributors
  18. 18. Advertisement: About 60% of promotional budget is spent on advertisement. Following are the different Advertisement Medias used by Nestle to promote its product:  Television  Bill Boards  Shelf show  Print Media  Radio Sale Promotion Activities:  Events: The company conducts different sports event, fashion shows and schoolfunctions in which they sale their product on discount prices. They alsogive their product to participants as a gift or memorandum.  Free Sampling: On different events free samples are given to the people to attract the people towards their products.  Public Relations: Nestle remains committed to Pakistan and is deeply engaged in there cent flood relief activities. By the end of September, 2010 the Company has so far committed around PKR 24 million Promotion Advertisement Sale Promotion Activities Public Relations
  19. 19. to relief efforts in the shape of food to affected people, water tankers supplying clean drinking waters, veterinary and vaccination support to cattle and other related relief. In addition Nestle SA has donated PKR 20 million and Nestle employees from Pakistan and other Nestle Markets have also donated additional PKR 7 million, bringing total contribution to PKR 51 million. Market Segmentation For getting the maximum market share and respect of the product in the minds of the consumer, as per our observation and market survey we have concluded that Nestle MilkPak segmentation is based on two points.  Demographic Segmentation  In-Store Display Segmentation Demographic Segmentation: Family, Age & Income: Milk Pack has made different sizes of Tetra packs which can match theneeds of buyers, ranging from 0.25 liters to 1.5 liter. Buyers can buyaccording to their need between these quantities.
  20. 20.  1 liter of Nestle milkpak has the major 55% of total sales.  250 ml of Nestle milkpak has 25% of sales  1.5 liter of Nestle milkpak has 10% of sales  500 ml pf Nestle milkpak has 10% of sales In-Store Display Segmentation: Nestle have also segmented Milk Pack on the bases of In-Store display segmentation. I n this type of segmentation the company have given different shelves in big stores and also given the chillers to some of the agent having the Milk Pack sticker upon them but in Pakistan unfortunately the shop keepers are not using the shelves properly and they have put other brand products on those shelves. Problems  Diseases  Energy crises  Credit policy
  21. 21.  Seasonal problem  Religious matter  External competitors Prioritize the problems
  22. 22. Conclusions: Nestlé Milkpak Limited is a gigantic organization. Basically it is a food concern emphasizing on producing good food for good health. The seed Henri Nestlé had planted in 1866 is now a tree which provides extremely qualitative food to billions of people all around the world. It is also providing jobs to millions of people in more than 479 factories in 81 countries. Nestle is a market leader due to different reasons:  Its price is high against its competitors but it matches its quality with its competitors.  Nestle is today the worlds largest food and beverage company with its mission to provide healthier lifestyle.  Nestle is using its brand name and its packaging is good to promote its products.  We can easily find Nestle from any retailer shop Energy crises Diseases External competitors Seasonal problem Religious matter Credit policy
  23. 23. Annexure Bibliography: HISTORY Nestlé Pakistan Ltd is a subsidiary of Nestlé 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 and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took
  24. 24. over management in 1992. For ten 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 four production facilities. Two of its factories in Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad and one in Karachi produce bottled water. Through its effective marketing and a vast sales and distribution network throughout the country, it ensures that its products are made available to consumers whenever, wherever and however. Nestlé Pakistan operates in many ways but people, products and brands are the main flag bearers of the Company’s image, and we continue to enhance the quality of life of people. Nestlé Pakistan now operates the biggest milk collection operation in Pakistan, Currently; Nestlé Pakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq Km's in the province of Punjab and Sindh. Nestlé believes in creating shared value and is committed to the communities it works and lives with. In Pakistan, the company is working closely with the communities in areas related to Nutrition, Water and Rural Development, and continues to enhance the quality of life of people throughout its value chain. Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Ever since 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today more and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their health and quality of life. The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line with internationally accepted best practices and ethical performance culture. Nestlé’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs are, and for all age group.
  25. 25. Channel Flows There are some channel flows which show the flow of channel functions among themselves. Physical Possession Flow: In the above diagram, Nestle uses this channel flow for physical possession of MilkPak. Producer transfers the possession of Milk to the other channel members and every channel member does the same according to the upper mentioned flow. Ownership Flow: In the above diagram, Nestle uses this channel flow for ownership of Milk. Producer transfers the ownership of Milk to the other channel members and every channel member does the same according to the upper mentioned flow. This channel flow is from producer to customer. Producer Distributer Wholesaler Producer Distributer Wholesaler Retailer Customer
  26. 26. Promotion Flow: In the above diagram, Nestle uses this channel flow for the promotion of Milk. Producer does promotions of Nestle Milkpak for its end users. This channel flow is from producer to customer. Negotiation Flow: In the above diagram, Nestle uses this channel flow for negotiation between each channel members. Every channel member negotiates with his relevant channel member regarding the transactions and daily work. This channel flow is from producer to customer and customer to producer as well. Financing Flow: In the above diagram, financing flow has been shown among channel members of Nestle Milkpak distribution. Every channel member finances his relevant channel member in the transactions and daily work. This channel flow is from producer to customer and customer to producer as well. Producer Distributer Wholesaler Retailer Customer Producer Distributer Retailer CustomerWholesaler Producer Distributer Retailer CustomerWholesaler
  27. 27. Ordering Flow: In the ordering flow of Nestle Milkpak distribution channel, there is reverse flow in the channel. Customers order to retailer for Milkpak and retailer orders to wholesaler for the demand of water. Wholesaler orders to distributer and distributer orders to producer for Milkpak. Payment Flow: In the payment flow of Nestle Milkpak distribution channel, there is also a reverse flow in the channel. Customers make payment to retailer for water and retailer makes payment to wholesaler for Milk. Wholesaler makes payment to distributer and distributer makes payment to producer Nestle Milkpak for Milk. Producer Distributer Retailer CustomerWholesaler Producer Distributer Retailer CustomerWholesaler

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