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Final Paper Presentation on

Nestle Philippines

In Partial Fulfilment
Of the requirements in
SYSTHEO

Submitted to:
Dr. Cristina Lim

By:

Alyssa Martina Kagaoan

Rina Flor Mutiangpili
Andrew Lloyd Pesebre
Frances Mary Clarence Sy

July 30 2019
I. Introduction

Nestle is a Swiss multinational food and beverage company. It has been in the
food and beverage manufacturing industry for over a hundred years. Although their
products have been made available in the Philippines as early as the late 19th century, it
was not until the year 1911 when Nestle and Anglo Swiss Condensed Milk Company
opened in the Philippines. Their first sales office was located in Calle Renta, Binondo,
Manila.
Through the years Nestle has expanded its product offering and covers a wide
range of different food and beverage products. These products include, dairy products
such as milk, yogurt and ice cream; they also offer other beverages such as coffee, and
iced tea. There are also various food products that Nestle offers such as breakfast
cereals (fitnesse, honey stars, koko krunch, corn flakes, etc.); Confectionary products
(Crunch, Kitkat, Fox’s and Polo); and lastly basic food ingredients such as all-purpose
cream, soy sauce, oyster sauce and MSG (Maggi).
Nestle is also the manufacturer of leading milk formulas and food for infants
(Nankid and Cerelac), as well as other powdered milk drinks for children (Nido, Bear
Brand).
Due to the wide range of product offerings of Nestle, the company has divided
itself into different units or departments. Each of these subunits are tasked to handle the
different products and brand offerings that Nestle carries. This paper will particularly look
into the Coffee and Creamer Creations Business Unit (3CBU) of Nestle. This division of
the company handles all of its Coffee products (Nescafe, Coffee Mate, Dolce Gusto,
etc.).
The Coffee and Creamer Creations Business Unit is composed of 37 employees.
The group is headed by the Business Executive Office and is divided into three sub
groups. The first unit is the Pure Soluble Coffee team who is tasked to handle
CoffeeMate, Nescafe Classic Strong, and Nescafe Decaf. The second unit is the Mixers
unit which is concerned with the 3in1 instant coffee mixes such as the Blend and Brew
collection and the Nescafe Creamy White. Finally, the third group is in charge of their
Premium line. This line higher end products catered to the Class A and B segment of the
target market such as Nescafe Gold and Dolce Gusto. The complete organizational chart
of the 3CBU division of Nestle Philippines is shown below (Please refer to Figure 1.1).
Figure 1.1. Nestle Coffee and Creamer Creations Business Unit Organizational Chart.

Figure 1.2. Nestle Coffee and Creamer Creations Business Unit Structure
Figure 1.3. Nestle Coffee and Creamer Creations Business Unit Structure Information
II. Overview and Analysis

In the Coffee and Creamer Creations Business Unit (3CBU) department of

Nestle, there are two units that contribute to the decision making process of the Brand
Team along with the Sales Team, namely Supply Chain and Manufacturing. ​Each of the
departments play a vital role in the creation and production of 3CBU’s products, and
each has their own unique set of goals to achieve.
The Brand team plans and proposes new products and strategies for the
department. They ensure that every product is well thought of to produce high quality
goods that would certainly appeal to the customers. Their main focus is to present great
ideas that serve the interests of the company while preserving the branding of Nestle.
The Sales team aims to maximize profit. They prioritize on generating the largest
sale at the end of each month. They help achieve the overall sales and profitability goals
of the department.
Supply Chain prioritizes on the long-term effects of overproduction. They call for
proper allocation of raw materials alongside fulfillment of demand. They address
concerns related to managing production, that is why they prioritize to control inventory
of raw materials while continuously producing goods.

Manufacturing focuses on converting raw materials into finished goods while

considering cost minimization. This department works on what the Supply Chain
provides them with. They also work for quantity and more importantly quality of their
products.
It is evident in the case of Nestle 3CBU that the units focus more on each of their
own goals over the entire department’s interest. Moreover, there is lack of consideration
which leads to delay in the decision making process of the top management to approve
proposed projects. This is because the units do not agree with each department’s way of
executing their plans and the plans itself. Even though there is a target date and well
planned schedule for processes, it is not always followed due to poor communication.
Currently, Nestle’s 3CBU department faces issues such as misalignment of goals and
lack of proper communication.
 III. Status Report

In order for the 3CBU Department to be able to address the issues and concerns raised
by each department or unit, they hold a Weekly Operations Review - a meeting wherein they
can discuss all ongoing and future projects. It also serves as an avenue for the team to remind
everybody of their specific tasks regarding the current work at hand. Additionally, in this Weekly
Operations Reviews, they will also strategize on how units will be able to come to a compromise
that will cater to all their functional goals.

The Brand Team also has the Integrated Commercial Planning, a mid-year planning for
all their activities scheduled for the next calendar year. The ICP is headed and organized solely
by the brand team, and the plan is then presented to the Sales team in order for the two teams
to be in sync with all of the procedures for the launch of a new product.

IV. Case Problem

The most pressing issue for the brand team is that each unit is driven by a different goal
that does not always align with their goals and intention for a specific product. This then results
to certain delays in decision making wherein the various points of view clash, resulting to a
lengthy decision making process. As stated above, Sales, Supply Chain, Manufacturing and the
Brand Team all have different priorities when it comes to handling a new release of a product.
With varying departmental goals, the entire 3CBU struggles to launch a product in the shortest
time possible.

V. Recommendation

In order to address the department’s problems on misalignment of goals as well

as the poor communication among its different departments, it is important to delve on
their relationship and how they could develop a clear understanding of each of the
department’s goals and purpose. The group recommends the following action
resolutions:
a) Alignment of Needs and Goals among the different units and departments

Figure 2. Diagram showing the alignment of goals of different departments in production

It is important for the managers or project heads to consult with the concerned
units and departments regarding their specific goals and needs before executing
projects and delegating tasks. There is a need for all of the departments to be heard and
their concerns to be considered so that there would be less or no problem on working
interdepartmentally in the long run. Although there is a clear distinction between the
specific goals of the different units in the case of 3CBU, the main goal of the whole
department must be highlighted, and this shall serve as a guide for managers to align
needs and goals of the different units.
As shown in Figure 2, it was stated that 3CBU’s main goal in production is to
minimize overproduction and maximize profit. In order to align all of the concerned units’
goals, their roles in production must be determined accordingly. The Brand team and
Sales team must work together in planning projects. Since the Brand team understands
the customer segment well and Sales team wants to maximize profits, both of the units
could compromise in planning and consider their goals. The plan would then be
forwarded to Supply Chain to ensure that it agrees with Sales and Brand regarding
quantity and managing supplies. Lastly, the plan shall go through Manufacturing for it to
understand the whole process and materialize the product. When all units have aligned
 goals, it would be easier for the department to execute projects and comply with the
top-management’s deadlines.

b) Improve communication among the units and departments

Although there is an existing communication process in the department, it is still
important to consider the efficiency of their communication. This may be possible if each
of the units clearly communicate the outcomes and action items that were discussed
from team meetings to the entire staff involved in a project or product promotion. In this
way, all of the employees will be able to understand their purpose and the importance of
their unit’s role in the whole process. This could prevent misunderstanding and
miscommunication that would possibly lead to missed deadlines or unsatisfactory
outputs, which would eventually cause a delay in the decision making processes of the
top management.

c) Interdepartmental Activities Intervention

The ultimate goal of interdepartmental activities intervention is to foster
collaboration among the different units and departments in an organization. In the case
of Nestle 3CBU, the need to efficiently collaborate is greatly evident. In order for their
problem on poor communication to be solved, the employees in each department should
be able to have a good understanding of their roles. Moreover, the importance of good
relationship with each other is vital in achieving a smooth flow of processes in their
department. In departmental activities intervention, representatives from each of the
departments are brought together to discuss problems or conflicts, diagnose the causes,
and plan improvements in communication and coordination. This may be done in three
ways- Formal team check-in meetings, Interdepartmental reviews, and Informal
“touch-base” meetings.
First, Formal team check-in meetings are done before the “work conversation”
starts. The participants in the meeting will have the chance to be heard. They will be able
to share their current stakes or stands regarding their work environment, the work that
they do, and how they feel about working with other people in the team. This intervention
increases self-awareness and brings clarity about where everyone stands. It is intended
to remind the employees of the commitment to work together. Second, Interdepartmental
reviews aims for the departments to discuss, comment on, and review each of their own
plans, projects, and processes before presenting proposals to the top-management. This
would allow each of the departments to be more aware of the possible constraints or
improvements which they can delve on to make their products or processes better.
Lastly, Informal “touch-base” meetings are meant to encourage the employees to speak
their mind. It is a good opportunity for a manager to get a more well-rounded picture of
an employee while he or she gets to talk, vent, or ask questions about things they might
not usually get to. For the manager, the information gained from these meetings is
invaluable for establishing rapport, and seeing things better in the department.