Nestle

Nowadays, given the improved overall quality standards in effect, companies risk becoming complacent about quality issues. However, with supply chains becoming longer and customers becoming more demanding, quality management continues to be a challenge to companies. Three highly publicized incidents related to quality that occurred recently at Coca-Cola, Firestone, and Snow Brand Milk Products had dramatic impact on the company and top management. These incidents highlight the fact that quality must be seen from the total supply chain perspective with the main focus on quality in use. At Nestle, Consumer service group, Purchasing group, Logistics group and Factory performance group each faces different problems ranging from traceability and manufacturing efficiency to managing diverse customers.

Recommendations:

In order to address manufacturing inefficiencies, Nestle should implement six-sigma. Six-Sigma is a project, data and technology driven quality management tool and acts as a business improvement strategy in order to improve the business competitiveness through reducing the defects and improving customer-oriented quality. To implement the six-sigma effectively, process six-sigma should be equal to product three-sigma. Greater process capability means less variability and less chance of product failing to meet customer specifications. If the process output is closely clustered around the mean, in relation to the width of customer specifications, most of the output will fall within the specifications. Thus with higher capability there is less chance of producing defectives even if process goes out of control because of shift in mean from the center of the specifications.

Total employee involvement is also needed, which can be achieved through Kaizen practices. It has two levels of involvement; the first can involve every employee relatively quickly and easily. One of the most basic kaizen practices is called 5S or workplace organization. 5S stands for the five steps of improving workplace organization, namely, Separate and Scrap, Straighten, Scrub (Clean), Standardize (the practices), and Systemize and Spread the methods. A plant wide 5S campaign can be started very easily and can involve every employee. The second level is the focused improvement activity that is applied to work areas and would involve employees in those areas. The process involves doing a series of focused improvement sessions, usually three to five days, on a work process. Each time a session is held, a different improvement approach will be adopted, depending on the constraint or need. The employees learn lean practices as they are implementing them.

Six-Sigma could be a good quality tool to lead the management team through the chain and combating the risk of dependability and complexity in the Supply Chain. Lean Six Sigma along with TQM, JIT or Kaizen can accelerate achieving the Supply Chain objectives through a systematic approach based on performance measurement and data analysis. Integration of quality initiatives internally and with Supply Chain can help to have more effective results to achieve the targets in business strategy and bottom line. The importance of the integrated view of these quality initiatives will enable the management team in SCM to avoid individualistic views and, instead, enlarge their cross-functional view and