TQM 2nd Assignment on Nestle

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TOTAL QUALITY MANAGEMENT (890)

Presented By: SALMAN AHMAD KHAN Roll No: W-588058

TOTAL QUALITY

MANAGEMENT (890)

TOTAL QUALITY

MANAGEMENT (890)

MBA

Semester – III (Spring, 2011)

MBA

Semester – III (Spring, 2011)

2nd ASSIGNMENT2nd ASSIGNMENT

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ACKNOWLEDGMENT

All praises to Almighty Allah, the one and only, the Merciful,

Beneficent and Compassionate, Billions of Darood-o-Salam upon

Muhammad (S.A.W), Last Prophet of Allah who is the savior of humanity.

Preparing an assignment like this is often the work of a number of

people whose names generally never appear on the cover. Yet

without their help and assistance, an assignment, like this would never

come to fruition. I’d like to recognize some special people who gave so

unselfishly to making this assignment. First of all, my parents and teacher

whose prayers and efforts make this a reality. I also want to thank the

persons from organizations who co-operate very well for assignment.

Thanks to all.

SAMLAN AHMAD KHAN


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ABSTRACT

Quality is defined as Free of contamination and reproducibly delivers

the therapeutic benefit promised in the label to the consumer. Quality by

Design (QbD) is a concept first outlined by well-known quality expert Joseph

M. Juran in various publications, most notably Juran on Quality by Design.

Juran believed that quality could be planned, and that most quality crises

and problems relate to the way in which quality was planned in the first

place Quality by design rationally would be defined as quality should be

built into a product with a thorough understanding of the product and

process by which it is developed and manufactured along with a knowledge

of the risks involved in manufacturing the product and how best to mitigate

those risks.

A design rationale is the explicit listing of decisions made during a

design process, and the reasons why those decisions were made. Its

primary goal is to support designers by providing a means to record and

communicate the argumentation and reasoning behind the design process.

It should therefore include:

The reasons behind a design decision

The justification for it


http://en.wikipedia.org/wiki/Communicate

http://en.wikipedia.org/wiki/Document

http://en.wikipedia.org/wiki/Designer

http://en.wikipedia.org/wiki/Design_process

http://en.wikipedia.org/wiki/Decision_making

http://en.wikipedia.org/wiki/Business_process

http://en.wikipedia.org/wiki/Product_(business)

http://en.wikipedia.org/wiki/Joseph_M._Juran

http://en.wikipedia.org/wiki/Joseph_M._Juran

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The other alternatives considered

The tradeoffs evaluated, and

The argumentation that led to the decision

In this project I have focused on Nestles Pakistan how their designing

of canned Milo is fulfilling customer needs, how they are using different

techniques for marinating superior quality by design by using different tools

in techniques rationally in milk industry.

Nestle is the world largest food company and Nestle Milk Pak is

Nestlé’s famous UHT milk brand. Milo is added to hot or cold water and/or

milk to make a malted chocolate beverage. It does not dissolve readily in

cold milk, and so retains the gritty texture of its raw state. Milo can be

stirred into steamed milk to make a drink akin to hot chocolate or cocoa.

Another possible use is making a normal cup of cold Milo and microwaving

it for approximately 40–60 seconds. This gives the Milo drink a biscuit cover

on top. Is designed to fulfill customer expectations


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TABLE OF CONTENT

SR. NO. DESCRIPTION PAGE NO

1. Introduction to the Issue 6

2. Quality function deployment 7

3. Main Goals in Implementing QFD 8

4. Practical Study on Nestle 10

5. Nestle Introduction 11

6 Nestle Vision & Strategies 12

7. Implementations of QBD in Nestle 15

8. Data Collection Method 20

9. SWOT Analysis 21

10. Conclusion 23

11. Recommendation 24

12. References 25


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Introduction to the IssueDesign Process

The design process is the transformation of an idea, needs, or wants by

consumers or the marketplace at large, into a product that satisfies these

needs. This is usually accomplished by adventurous people that are willing

to take it on. Sometimes an engineer will be involved on some levels but

not always. Product designers follow various Methodology that requires a

specific skill set (usually in engineering) to complete.

Design is basically a problem solving exercise. The design of a new product

consists of the following stages:

1. Design Brief

2. Product Design Specifications

3. Concept Design

4. Testing

5. Detail Design

6. Manufacturing and Further Testing

7. Refinement and Sales

Design Space:


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The multidimensional combination and interaction of input variables

(e.g. Material attributes) and process parameters that have been

demonstrated to provide assurance of quality.

The focus of this concept is that quality should be built into a product

with a thorough understanding of the product and process by which it is

developed and manufactured along with a knowledge of the risks involved

in manufacturing the product and how best to mitigate those risks. This is a

successor to the "quality by QC" (or "quality after design") approach that

the companies have taken up until 1990s.

In business and engineering, new product development (NPD) is the

term used to describe the complete process of bringing a new product to

market. A product is a set of benefits offered for exchange and can be

tangible (that is, something physical you can touch) or intangible (like a

service, experience, or belief). There are two parallel paths involved in the

NPD process: one involves the idea generation, product design and detail

engineering; the other involves market research and marketing analysis.

Companies typically see new product development as the first stage in

generating and commercializing new products within the overall strategic

process of product life cycle management used to maintain or grow their

market share.

Quality function deployment (QFD):

Quality function deployment (QFD) is a “method to transform user

demands into design quality, to deploy the functions forming quality, and to

deploy methods for achieving the design quality into subsystems and

component parts, and ultimately to specific elements of the manufacturing

process.”

QFD is designed to help planners focus on characteristics of a new or

existing product or service from the viewpoints of market segments,


http://en.wikipedia.org/wiki/Market_segment

http://en.wikipedia.org/wiki/Product_life_cycle_management

http://en.wikipedia.org/wiki/Marketing

http://en.wikipedia.org/wiki/Product_design


http://en.wikipedia.org/wiki/Engineering

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Business_process


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company, or technology-development needs. The technique yields graphs

and matrices.

Ultimately the goal of QFD is to translate often subjective quality

criteria into objective ones that can be quantified and measured and which

can then be used to design and manufacture the product. It is a

complimentary method for determining how and where priorities are to be

assigned in product development. The intent is to employ objective

procedures in increasing detail throughout the development of the product.


http://en.wikipedia.org/wiki/Matrix_(mathematics)

http://en.wikipedia.org/wiki/Graphs

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The 3 main goals in implementing QFD are:

1. Prioritize spoken and unspoken customer wants and needs.

2. Translate these needs into technical characteristics and specifications.

3. Build and deliver a quality product or service by focusing everybody

toward customer satisfaction.

Since its introduction, Quality Function Deployment has helped to

transform the way of many Companies:

• Plan new products

• Design product requirements

• Determine process characteristics

• Control the manufacturing process

• Document already existing product specifications

QFD uses some principles from Concurrent Engineering in that cross-

functional teams are involved in all phases of product development. Each of

the four phases in a QFD process uses a Matrix to translate customer

requirements from initial planning stages through production control.


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Practical Study On Nestle

Milo


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Nestle Introduction

Nestle began in Switzerland in the mid 1860s when founder Henri

Nestle created one of the first baby formulas. Nestlé’s first product was

called Farine Lacteal (“corn flour gruel” in French) Henri Nestle. The

product was first used on a premature baby who could not tolerate his

mother’s milk or other alternative products of that time. Doctors gave up

on treating the infant. Miraculously the baby tolerated Henri’s new formula

and it provided the nourishment that saved his life. Within a few years the

first Nestle product was marketed in Europe

In 1980s Nestle had a new Chief Executive Officer. The company

focused on improving its financial situation and continuing to expand. In

one of the largest takeovers at that time, Nestle bought Carnation for $3

billion and parted with any unprofitable businesses.


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Nestle is the largest food and beverage company in the world, marketing

more than 9000 brands in 85 countries with a global workforce of

250,000. Nestle is a human company and offers tremendous opportunities

for career growth and learning at domestic and international levels. The

leading in the food industry, Nestle brings in $81 billion in overall sales

and has 470 factories around the world. Nestle will continue to grow,

introduce new products and renovate existing ones.

The company’s mission is to focus on long-term potential over short-term

performance.

Nestle Vision and Strategies


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The Nestlé global vision is to be the leading health, wellness, and

Nutrition Company in the world. Nestlé Pakistan subscribes fully to this

vision. In particular, they envision to:

Lead a dynamic motivated and professional workforce – proud of its

heritage and bullish about the future.

Meet the nutritional needs of consumers of all age groups – from

infancy to old age, from nutrition to pleasure, through an innovative

portfolio of branded food and beverage products of the highest quality.

Deliver shareholder value through profitable long-term growth, while

continuing to play a significant and responsible role in the social,

economic and environmental sectors of the country.

Nestle have profitable and diversified high quality food and beverage

product portfolio, delivering 60:40+ advantage to consumers, available

across all sales channels.

Nestle brands are the preferred choice in their categories. Consumer

insight drives all aspects of our marketing and communication efforts.

Their communications to the consumer are relevant, cutting-edge, and

adhere to the highest standards of responsible communication.

Nestle is seen as the No. 1 career destination for talented, motivated

and ambitious professionals.

Their result-oriented organizational structure ensures effective

communication and empowered self-management.


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Their milk collection and agriculture services will continue to play the

primary role in development of the dairy sector in rural Pakistan.

Their proactive innovation and renovation culture is the key to our

success in the marketplace.

Fully integrated systems (Nestle Pakistan, suppliers, customers) ensure

efficient business processes.

Non-strategic activities and products are outsourced or discontinued.

Nestle MiloMilo is supposedly high in energy, because the drink has 1,760 kJ in

every 100 g of the drink. It is also for this reason, marketed as the "Energy

Food Drink". It is also supposed to have a low Glycemic Index (GI), that is,

"33 made with whole milk, 36 made with reduced fat milk". This allows the

energy in Milo to be released slowly.

The Milo website states that the drink is high in calcium, iron and the

vitamins B1, B2, B6, B12. It also has Actigen-E that releases the energy stored

in a person's body.

The contents of the above said products have the following fruitful

benefits for health improvement of Human body.

Calcium

It is important for the growth of strong bones and teeth.

Protein

It is necessary for cell and tissue growth.


http://en.wikipedia.org/wiki/Glycemic_index

http://en.wikipedia.org/wiki/Grams

http://en.wikipedia.org/wiki/Kilojoules

http://en.wikipedia.org/wiki/Energy

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Phosphorous

It is important for healthy bones and teeth.

Vitamin A

It improves vision and keeps skin and hair healthy

Competitors of Nestle Pakistan:Competitors of Nestle Pakistan milk industry are:

1. Haleeb

2. Engro chemicals

Total Target Market for Nestle Pakistan for Chocolate Milk

Total Target Market Of Milk (liters) 180,000,000

Annual Production Of Milk (Billion Liters) 33.25

Total market of Gawala (96%) Billion liters 31.92

Total EXISTING market of processed

milk (4%) Billion Liters1.33

Implementations of Quality by Design in Nestle Phase# 1 Product Planning:


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In Nestle Pakistan phase 1 which is the Building the House of Quality. Led by

the marketing department, Phase 1, or product planning, is also called The

House of Quality. Many organizations only get through this phase of a QFD

process. Phase 1 documents customer requirements, warranty data,

competitive opportunities, product measurements, competing product

measures, and the technical ability of the organization to meet each customer

requirement.

Phase #2 Product Design:In Nestles Pakistan phase 2 is led by the engineering department. Product

design requires creativity and innovative team ideas. Product concepts are

created during this phase and part specifications are documented. Parts

that are determined to be most important to meeting customer needs are

then deployed into process planning, or Phase 3.

Phase #3 Process Planning: Process planning comes next and is led by manufacturing engineering.

During process planning, manufacturing processes are flowcharted and

process parameters (or target values) are documented.

Phase#4 Process Control:And finally, in production planning, performance indicators are created to

monitor the production process, maintenance schedules, and skills training

for operators. Also, in this phase decisions are made as to which process

poses the most risk and controls are put in place to prevent failures. The

quality assurance department in concert with manufacturing leads

Steps to the House of QualityStep 1: Customer Requirements - "Voice of the Customer"


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The first step in a QFD project is to determine what market segments will

be analyzed during the process and to identify who the customers are. The

team then gathers information from customers on the requirements they

have for the product or service. In order to organize and evaluate this data,

the team uses simple quality tools like Affinity Diagrams or Tree Diagrams.

Step 2: Regulatory RequirementsNot all product or service requirements are known to the customer, so the

team must Document requirements that are dictated by management or

regulatory standards that the Product must adhere to.

Step 3: Customer Importance RatingsOn a scale from 1 - 5, customers then rate the importance of each

requirement. This number will be used later in the relationship matrix.

Step 4: Customer Rating of the CompetitionUnderstanding how customers rate the competition can be a tremendous

competitive advantage. In this step of the QFD process, it is also a good

idea to ask customers how your product or service rates in relation to the

competition. There is remodeling that can take place in this part of the

House of Quality. Additional rooms that identify sales opportunities, goals

for continuous improvement, customer complaints, etc., can be added.

Step 5: Technical Descriptors - "Voice of the Engineer"The technical descriptors are attributes about the product or service that

can be measured and benchmarked against the competition. Technical

descriptors may exist that your organization is already using to determine

product specification, however new measurements can be created to

ensure that your product is meeting customer needs.


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Step 6: Direction of ImprovementAs the team defines the technical descriptors, a determination must be

made as to the Direction of movement for each descriptor.

Step 7: Relationship MatrixThe relationship matrix is where the team determines the relationship

between customer Needs and the company's ability to meet those needs.

Relationships can either be weak, moderate, or strong or carry a numeric

value of 1, 3 or 9 used by nestle Pakistan.

Step 8: Organizational DifficultyRate the design attributes in terms of organizational difficulty. It is very

possible that some attributes are in direct conflict. Increasing the number

of sizes may be in conflict with the companies stock holding policies, for

example.

Step 9: Technical Analysis of Competitor ProductsTo better understand the competition, engineers then conducts a

comparison of Competitor technical descriptors. This process involves

reverse engineering competitor Products to determine specific values for

competitor technical descriptors.

Step 10: Target Values for Technical DescriptorsAt this stage in the process, the QFD team begins to establish target values

for each technical descriptor. Target values represent "how much" for the

technical descriptors, and can then act as a base-line to compare against.

Step 11: Correlation MatrixThis room in the matrix is where the term House of Quality comes from

because it makes the matrix look like a house with a roof. The correlation

matrix is probably the least used room in the House of Quality; however,

this room is a big help to the design engineers in the next phase of a


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comprehensive QFD project. Team members must examine how each of

the technical descriptors impacts each other. The team should document

strong negative relationships between technical descriptors and work to

eliminate physical contradictions.

Step 12: Absolute ImportanceFinally, the team calculates the absolute importance for each technical

descriptor. This Numerical calculation is the product of the cell value and

the customer importance rating. Numbers are then added up in their

respective columns to determine the importance for each technical

descriptor. Now you know which technical aspects of your product matters

the most to your customer

QFD is a systematic mean of ensuring that customer requirements are

accurately translated into relevant technical descriptors throughout each

stage of product development. Therefore, meeting or exceeding customer

demands means more than just maintaining or improving product

performance. It means designing and manufacturing products that delight

customers and fulfill their unarticulated desires. Companies growing into

the 21st century will be enterprises that foster the needed innovation to

create new markets.


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Data Collection Method

I did this quantitative research by conducted different interviews from

the quality assurance manager of nestle Pakistan and also from the

employees and engineers of nestle Pakistan.

We took many interviews from quality assurance department to get

the overall situation prevailing in nestle.


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SWOT AnalysisStrengths:

Strong Brand image:

Nestle has been serving the Pakistani consumers since 1988, and it

has built a strong brand image due to its quality products.

Quality product:

Solid Financial position:

Annual turnover is Rs.30 Billion which provides it a financial edge

over its competitors.

Strong supply chain network:

Nestle collects Milk directly form the farmers instead of relying on the

contractors. And it distribution is also very strong. In this way it has a

complete control over its supply chain.

Qualified work force

Commitment to High Quality Products

Focus on research and development


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Weaknesses:The target market of Nestle Milo’s upper middle and high class

because lower middle and poor class cannot afford to buy chocolate milk

due to its premium price.

Opportunities: More people are coming towards processed milk because loose milk

is dangerous for health due to a lot of contamination.

Growth of processed milk is increasing with 20% annually so Nestle

Milo has the opportunity to capture a large share of market.

Threats: Two main competitors Haleeb and Olpers are main threat for Milo

especially the Olpers is growing very fast.

Inflation is getting higher and higher so the purchasing power of the

people is decreasing day by day.

There is no entry barrier for new entrants as the Olpers has come in

the market.

Very low quality milk is provided by the milkmen to dairy farms which

is a very big threat for the entire market.

The shortage of milk providing animals is also a threat for entire milk

industry.


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Conclusion

Nestle is the world largest food company. Milo Energy Drink has been

made into a chocolate flavor, called the "Milo” that is manufactured by

Nestle and sold worldwide. Milo has been available for many years in a

malted flavor, marketed in a burgundy can alongside the traditional green

tin. Products based on Milo are available, such as cereal, yoghurt and ice

cream. In addition to the powdered form, there is a pre-mixed version of

Milo that comes in cans or drink boxes.

Nestle is using quality by design technique to get maximum consumer

satisfaction and through rationale ways its implement very profitable and

innovative techniques to get the maximum result from its consumer

benefited products.


http://en.wikipedia.org/wiki/Burgundy_(color)

http://en.wikipedia.org/wiki/Milo_(chocolate_bar)

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Recommendations

Nestle is one of the top companies of the world for the current issue I

give following recommendations to the nestle Pakistan:

It have to make changes in marketing department techniques that is

the Phase 1 of the quality be design method by widening up its target

market, targeting more segments available in the market.

It have to bring new innovative ideas in engineering department by

designing Milo in different other ways due to competitors continuous

changes.

It have to also look ate the quality perspective because one of the

downfall of tetra pack Milo was that in summers the milk became very

unhealthy according to different researches conducted.


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References

1. Through Websides:

http://www.independent.co.uk/environment/green-living/online-

protest-drives-nestl-to-environmentally-friendly-palm-oil-

1976443.html.

2. Sales manager Nestle Pakistan, Islamabad Mr. Naveed Qamar, I/8

industrial Area Islamabad.

http://www.authorstream.com/Presentation/robin_vinnu-623276-pharmaceutical-quality-by-design-

qbd/


http://www.authorstream.com/Presentation/robin_vinnu-623276-pharmaceutical-quality-by-design-qbd/

http://www.authorstream.com/Presentation/robin_vinnu-623276-pharmaceutical-quality-by-design-qbd/

http://www.independent.co.uk/environment/green-living/online-protest-drives-nestl-to-environmentally-friendly-palm-oil-1976443.html.%20Retrieved%2024%20May%202010



TQM 2nd Assignment on Nestle

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