OUTSOURCING AT NESTLE

People

Functions

Material

Services

Technology

All Labor
Class

Logistics

Tetra
Pack

Janitorial
Services

Computer
Aided
Designs

Trainers

Suppliers

Plastics

Pallet
Management
Team

Ecodex

Delivery
Boys-Nestle
Waters

Distributor
s

Cocoa

Farms

IT System

Suppliers

Packaging

Raw Milk

Dairy Farms

Enterprise
Recourse
Planning

Chefs

Pallets

Laboratory

Fruits

Assistants
7

Doctors

Vehicles

Researchers

Packaging
Material

Psychologist
s

10

Designers

11

Nutritionists

 OUTSOURCING OF PEOPLE

All Labor Class

In our Interview, manager told us that Nestle has
330,000 employees and among them all factory
workers are completely outsourced
All these tasks are performed by workers who are
outsourced
Nestle outsource them to save its labor cost and paid them their daily wages

Delivery boys-nestle waters

One of the product divisions of Nestle Pure Life initiated a home and office delivery system
of its 19 ml water bottle and for delivery purpose; it outsourced 10 delivery boys or more as
per need.

Suppliers
In Nutrition
Division
Dairy Farmers

In Nestle Waters

In Confectionary

Plastic Suppliers

Cocoa suppliers

In Nestle
Professionals
Farmers
who
provide Vegetables &
fruits

Shepherds

Raw
Chocolate
suppliers

Chemical Suppliers

Graziers
Poultry Farmers
Tetra Pack Suppliers

Outsourcing of Trainers
Nestle sometime outsource trainers for some specific type of trainings for a limited time
period

Adult Based Education Training

This program was actually initiated in in South Africa, under the apartheid regime; many
people were seriously deprived of elementary education. These include a significant percentage
of the older employees at Nestl factories today.
A special remedial program had been designed and put in place for them: ABET, Adult Based
Education Training.
Adult Based Education Training (ABET) has been in operation for almost three years.
It is a team-based program teaching four levels of math, reading and writing, and success is
recognized with a National Diploma.
As a result, it involves a two-hour session twice a week; one hour is donated by Nestl from
the working day, the other is in the employees time in which an outsourced teacher or
instructor taught them.

Driver Safety Training Program

In the year 2007 Nestle established the first drivers training institute near Sheikhupura with the
objective of safety and well-being of the communities it operates in.

Nestle outsourced driving trainers from National Highway and Motorway Police (NH&MP)
and

The lack of proper knowledge and the absence of safe driving practices and procedures

The training facility allows participants to acquire specialized driving practices and curb
accident rates on the roads.

More than 600 drivers from the Company were trained at the institute during 2014.

Farmers Training Program

In the year, 2000 Nestle established two dairy farmer training and demonstration farms Sarsabz
and Sukheki and outsourced almost 103 experienced farmers to train young ones
Trained over 8,500 farmers and2000 students

International Training Program

Nestls success in growing local companies in each country has been highly influenced by the
functioning of its International Training Centre Rive Reine, located near their companys
corporate headquarters in Switzerland.
For over 30 years, the Rive-Reine International Training Centre has brought together
managers from around the world to learn from senior Nestl managers and from highly skilled
professionals and successful entrepreneurs who are outsourced to spend their time along
with Nestle managers and provide them with valuable insights

Other Schools Outsourced for Training

IMD, the International Institute for Management Development in Lausanne.

Other schools are also regularly used, such as INSEAD in France and
Harvard or Wharton in the United States as well as local business schools for employees who
are going to remain in the country concerned.

Out sourcing of Chefs

For some specific functions like a recently held competition Cook for Mom, Nestle outsourced
some well-known chefs of food industry who provided valuable insights and methods to
enhance quality of its products

Laboratory assistants

Lab assistants who do testing of raw milk, water and other ingredients important for processing
are also outsourced at Nestle

Doctors & Psychologists

The safety, health and environment management department at nestle also outsources doctors
and psychologists to ensure that the health of their employees is good
The outsourced Psychologists observe cognitive abilities of employees and analyze their metal
condition

Researchers
The manager at Nestle told us that on 5-6 % researchers are outsourced. These researchers
think as a customer and tell their market judgment and intuitions.

Designers
Product designers who are experts in developing Computer Aided Designs are outsourced
because product designs need not to be changed daily so these personnels are hired whenever
company want an incremental and some radical innovation.

Nutritionist
At Nestle Nutrition Institute along with Nestle professional team there are some outsourced
nutritionists who deliver lectures at portal ilearn@Nestle

OUTSOURCING OF FUNCTIONS

Logistics Function
Nestle outsources both its outbound and Inbound logistics
Inbound Logistics
Suppliers are the major participants of inbound logistics and their outsourcing by Nestle has
been explained above
Outbound Logistics

Distributors and major participants of outbound logistics whom Nestle outsources

People who distribute Nestle products to all over Pakistan are outsourced

Packaging
When Nestle finalizes its packaging designs, the products along with selected design is
transferred to an outsourced packaging company who them performs final tasks of
implementing that design into original product packaging.

OUTSOURCING OF SERVICES

Janitorial Services
At Nestle, janitorial services in all 4 factories and in all Nestle offices in
Pakistan are being outsourced. They provide services of

Blind cleaning

Hard surface floor care

Carpet care

Inventory control

Clean room services

Light industrial

Computer room cleaning

Matting programs

Construction clean up

Pressure washing

Document disposal

Production line support

Medical waste disposal

Recycling services

Emergency services

Restroom sanitation

Escalator cleaning

Special event services

Food service sanitation

Supply management

General maintenance

Upholstery cleaning

Green cleaning

Window cleaning

Pallet Management Teams

Nestl has seen its product demand increase several-fold over the past decade.
Supporting this exceptional growth is a 15 year relationship with a company Common
wealth handling equipment pool (CHEP), providing wooden pallets to transport and store
the many Nestl product lines.
From its early days, Nestl factories ran its own pallet pool to move and store products inhouse as well as to distribute products to dealers and retailers.
In 1994, Nestl was rapidly expanding and
decided to outsource its pallet management to
CHEP, the world's leading experts in pallet
pooling.
OUTSOURCING OF
TECHNOLOGY
Nestle outsource some of its soft wares
from SAP

SAP is a German
multinational software
corporation that makes
enterprise software to
manage
business
operations
and

customer relations. SAP is headquartered in Walldorf Germany, with regional offices in 130
countries.

Enterprise Resource Planning

Software for suppliers to view its production information and ensure it can meet fluctuations
in demand for its products.

Ecodex by Selerant Company

Enterprise Resource Planning

EPR is a management information system (MIS)

that integrate and automate many of the business
practices

Attempts to integrate all departments and functions into one computer system
A system that standardize and coordinate Information systems
Ecodex

A new web-based tool installed by Nestle for the life cycle assessment of its products.

Ecodex was created experts of an information technology company called Selerant.

The tool uses information specific to the food and beverage industry to provide rapid and

accurate data that allows our product development teams to assess sustainability performance
across multiple product lines.

Importantly, it presents complex results in a simple, user-friendly format, so you dont have to
be a life cycle assessment expert to use it.

Benefits of Outsourcing to Nestle

This business process outsourcing contracts allows Nestle to meet their corporate cost
savings goals for each country, while remaining focused on core objectives and
competencies,"
Costs that Nestle has to bear for outsourcing

Currently Nestle has a risk of losing sensitive data and the loss of confidentiality
because many of its soft wares has been outsourced
Losing management control of business functions mean that you may no longer be able
to control operations and deliverables of activities that you outsource
Major Problem Tetra Pack Outsourcing
There is a belief among people that tetra pack in not safe for health

The milk is packed between five to six layers of cardboard, polythene and aluminum
sheets. This is done to preserve the milk for a longer period of time. The shelf life of milk in
Tetra Pak is six to eight months and can be kept at room temperature without curdling.
It doesnt curdle or get contaminated because it is kept away from light and bacteria.
However, this is not healthy. Tetra Pak packing has been found to release chemicals in
to milk such as urea. And of course it is also simply not fresh.