Case Study – Nestlé Struggles with Enterprise Systems

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Case Study – Nestlé Struggles with Enterprise Systems

1.Evaluate Nestlé’ SA and Nestlé USA by using the competitive forces and value chain models.

Nestlé has plentiful problems with its value chain. This is apparent from the fact that each factory set up their own vendor masters and purchased on their own which lead to scenario where the company was paying 29 different prices for vanilla from the same vendor. This happen because every plant would buy from the same vendor on their own accord and the vendor in turn would just get whatever it thought it could get. Apparently, every division and every factory had assigned different name to the same product which make it impossible for the company to keep track of business transactions and caused excessive overstocking as well as spoilage. Having multiple purchasing systems definitely make matter worse as it prevented Nestlé from leveraging its worldwide buying power to obtain lower prices for raw material. Fortunately, the changes in the company information system and business process resulted in the installment of SAP, an ERP (enterprise resource planning) system and (enable SAP’s system to function in the web environment) which manage to standardize and coordinate the company’s information and is able to produce better sales forecasts. Thus, manage to achieve the company major concern to establish common system throughout global Nestlé to enable group buying which reduces costs.

2.What were the problems and issues that Nestlé SA faced that caused the company to be so decentralized?

Nestlé SA is a big company that operates virtually all over the world. It has more than 230000 employees at 500 facilities in 80 countries. It sales thousand items where each item adapted to fits local market. Each organization in this company has allowed to conducts the business as it fits to the environment, condition and business cultures. This company has 80 different information technology units that run...
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