TQM Report (Nestle Waters)

Introduction:

Industry overview:

In Pakistan there was no concept of water bottles, even no one ever thought of getting in a

business of water. The perception was, who will buy a bottle of water, when it’s free everywhere.

But Nestle was the first company, who made a plan to launch a Pure water with the name

NESTLE pure life. They launched Nestle pure life in 1988. There are many competitors in the

market now including Local companies and MNC’s, who are in this business now. Major

companies in this industry are Kinley, AquaFina , and Nestle.

History of Nestle:

Nestle began in Switzerland in the mid 1860s when founder Henri Nestle created one of the first

baby formulas. Henri realized the need for a healthy and economical product to serve as an

alternative for mothers who could not breastfeed their babies. Mothers who were unable to

breastfeed often lost their infants to malnutrition. Henri’s product was a carefully formulated

mixture of cow’s milk, flour and sugar. Nestle’s first product was called Farine Lactée (“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.

Nestle in Pakistan:

Nestle has been serving Pakistani consumers since 1988, when parent company, the Switzerland-

based Nestle SA, first acquired a share in Milkman Ltd. Today Nestle is fully integrated in

Pakistani life, and is recognized as the producer of safe, nutritious and tasty food, and leaders in

developing and uplifting the communities in which they operate. Nestle Pakistan ensures that

their products are made available to consumers wherever in the country they might be.

Convenience is at the heart of the Nestle philosophy, and there aim is to bring products to

people’s doorsteps. Now Nestle is the biggest market leader in Water Industry of Pakistan, they

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have built their name in water sector with the strongest brand name “Nestle Pure Life”. They

have gain the trust of public in a way, that even they can buy a product of Nestle anywhere in the

country. They have the biggest market share in Water Industry of Pakistan, according to them

they are selling Quality and that is their competitive edge.

Mission Statement:

At Nestle, we believe that research can help us make better food so that people live a better life.

Good Food is the primary source of Good Health throughout life. We strive to bring consumers

foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In

addition to nutrition, health and wellness, Nestle products bring consumers the vital ingredients

of taste and pleasure.

Vision and Strategy:

The Nestle global vision is to be the leading health, wellness, and Nutrition Company in

the world. Nestle Pakistan subscribes fully to this vision. In particular, we envision to:

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.

Lead a dynamic motivated professional workforce proud of its heritage and bullish about

the future

Products:

o Milk pack

o Nescafe

Nescafe Classic

Nescafe Gold

Nescafe 3and1

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o Nestle Pure Life

o Cerelac

o Maggi Noodles

o Breakfast Cereals

Corn Flakes

Honey Gold

Koko Crunch

Milo

Hierarchy of Nestle Pakistan:

Figure1: Hierarchy of Nestle

Source: www.nestle.pk

Definition of Quality by Nestle:

TQM capitalizes on the involvement of management, workforce, suppliers, and even customers,

in order to meet or exceed customer expectations.

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CEO

Supply chain department

Human resource department

Quality assurance department

Finance department

Production department

Engineering department

Quality in business, engineering and manufacturing has a pragmatic interpretation as the non-

inferiority or superiority of something. Quality is a perceptual, conditional and somewhat

subjective attribute and may be understood differently by different people. Consumers may focus

on the specification quality of a product/service, or how it compares to competitors in the

marketplace.

In manufacturing, a measure of excellence or a state of being free from defects, deficiencies, and

significant variations, brought about by the strict and consistent adherence to measurable and

verifiable standards to achieve uniformity of output that satisfies specific customer or user

requirements.

Every Organization has its own definition of quality. We have visited Nestle and met Miss Iram

Shaheen who is working as a Quality Assurance Coordinator. She told us the definition of

quality which is defined by Nestle.

Nestle defined quality as “The corner stone for success and the satisfaction of the customers.

They relate the word quality with the stage on which customer is satisfied and they say that if the

customers are fully satisfied with their products then it is quality. They also say that consistency

in their products defines the quality.”

Quality Assurance Department:

In order to build quality into the culture a quality council is established to provide overall

direction, it is the driver for the TQM engine.

In typical organizations, the council is composed of the CEO, the senior managers of the

functional areas such as design, marketing, finance, production and quality and a coordinator or

consultant.

In Nestle the duties of the quality department are to:

1) Develop, with input from all personal, the core values, vision statement, mission

statement, and quality policy statement.

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2) Develop the strategic long term plan with goals and the annual quality improvement

program with objectives.

3) Determine and continually monitor the cost of the poor quality.

4) Continually determine those projects that improve the process, particularly those that

affect external and internal customer satisfaction.

5) Establish multi functional project and departmental or work group teams and monitor

their progress.

Hierarchy of Quality Assurance Department:

Figure2: Hierarchy of QA Depattment

Source: Miss Iram Shaheen (QA Coordinator Nestle Waters)

Responsibilities:

The Quality Manager is responsible for the administration of the Quality Plan and has the

authority to manage all work affecting quality. The Quality Manager will provide

leadership for the development, implementation, communication and maintenance of

quality system policies and procedures for the Company according to the approved

quality system. A primary goal is to achieve a high degree of joint ownership of quality

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Quality Manager Market

Quality Assurance Coordinator

Analyst

(L3)

Analyst

(L1)

Analyst

(L2)

and compliance strategies with all of the major operational stakeholders in the Company

while addressing regulatory requirements in an effective, timely and responsible manner.

Quality Manager Market is the head of Quality Assurance Department. The responsibility

of quality manager is to monitor overall performance of the quality department. He

insures that every task within the quality department is going in the right direction. He

calls upon the meeting of whole team on weekly or monthly basis.

Miss Iram Shaheen is the QA Coordinator in Nestle. The responsibilities of Quality

Assurance Coordinator are to assigns, reviews, and the work of professional, technical,

and clerical staff. Interprets and implements quality assurance standards. To monitor

unusual occurrences, report follow-up procedures, and report monthly and year-to-date

comparisons. To assist the director with records form revisions and procedures. Reviews

quality assurance standards, studies existing policies and procedures, and interviews

personnel and customers to evaluate effectiveness of quality assurance program.

Responsible for achieving a satisfactory working environment between other departments

performing quality-assurance studies. Another major responsibility of her is to ensure that

the product quality should remain consistent and there should be no compromise on the

quality of the product. That is why there is no compromise on cost for this department.

As she quoted that they; “high cost for high quality.”

Under the QA Coordinator there are three lab analysts. The responsibility is to check the

quality of minerals by applying different international methods on them in the laboratory.

Before sending the product into market the lab analysts check the eminence and then

illuminate it. Miss Iram Shaheen told us that to measure the analytical skills of analysts,

some blind samples came from the main laboratory which is in Switzerland. The analysts

have to test these samples and then conclude their results. On the basis of these results the

analysts are graded, and from the last five years these analysts are getting A grade in this

performance test.

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Quality Circle:

There are three steps in quality circle;

1) KPI (Key Performance Indicator)

2) PPI (Process Performance Indicator)

3) Drivers

A key performance indicator (KPI) is a specific measure of an organization's performance

in some area of its business. It is a very general concept, with different implementations

depending on the type of business and goals of the organization. In Nestle upper level

managers or team leaders are using KPIs. They made the policies, rules and regulations

for assigning the tasks to employees and keeping them in right direction. These are

basically the tasks of the upper level management. For example; machine checking,

training of employees, monitoring, setting sales targets E.T.C.

Process Performance Indicator is used by the plant managers. Plant managers direct and

coordinate plant operations within company policies and procedures. Maintain a clean

and safe plant. Establish and direct plant policies and procedures. Responsible for plant

production goals. Establish and maintain a positive community relationship. Conduct

employee performance reviews. Plant managers used PPIs to ensure that there should be

no gap in manufacturing process and everything is going smoothly. They direct the

workers to different tasks. Plant manager calls upon the meeting with the upper level

management and discuss the current issues.

Drivers are used by workers. Workers are actually implementing the rules which are

designed by the upper level management. If there is any issue during the manufacturing

process, the workers immediately report to the plant manager. Plant manager checks the

level of the issue, if the issue is out of his capacity; he schedules a meeting with the upper

level management.

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Feedback:

In Nestle they take both internal as well as external feedback.

Internal Feedback:

The upper level management involves the employees in the brain storming session for creating

ideas or solving problems. The meeting is on the quarterly basis and it also known as NCE

(Nestle Continuous Excellence). Employees are free to share their ideas with the management.

The ideas are then evaluated, short listed and accepted on the basis of their significance.

We have an example of internal feedback. Miss Iram Shaheen told us that she has also

participated in issue resolving session. There are thirty guidelines for quality in nestle, so there

are thirty different documents for it. She takes an initiative and summarizes those guidelines to

make them easier to understand. This was accepted all over the Asia and she got star award from

the organization on this achievement.

External Feedback:

Nestle take the feedback from customers on monthly basis. The call centers are created for this

purpose and they have the phone numbers of all of their customers in their data base. Another

technique is used to avoid the biasness in taking the feedback, the call center of Karachi calls the

customers of Islamabad and the call center of Islamabad calls the customers of Karachi.

Types of Teams:

1) Process improvement team

2) Cross functional team

3) Self managed team

In Nestle they are working in two types of team:

In process improvement team the members represents the each operation of the process.

Usually the scope of the team’s activity is limited to the work unit. We can take example

of the returnable bottles. The quality department is responsible for the intense cleaning of

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these bottles. So this is the issue of quality department and they have to do this work

within their team. This issue is not in relevance to other departments.

In Cross Functional Team there are 6 to 10 members will represent a no. of different

functional areas such as Engineering, Production etc. In Nestle, they are also using the

cross functional teams but it depends upon the nature of the product. We can take

example of a project of Nestle in which they have extract a limited water from well to

make their environment safe. In this project they were using cross functional teams which

is formed by different department members.

Continuous Process Improvement:

Quality is a never ending quest and Continuous Process Improvement (CPI) is a never ending

effort to discover and eliminate the main causes of problems.

PDSA Cycle:

Nestle strongly rely on PDSA cycle for solving several of its problems. A PDSA cycle is a

system for continuously improving environmental management systems. Following this cycle,

Nestle will Plan (set environmental policies and targets for itself and create a plan to achieve

them), Do (put the plan into practice), Study (check the results and make corrections) and Act

(make revisions and improvements for the next step in the cycle).

Figure3: PDSA Cycle

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Source: Miss Iram Shaheen

Training in Nestle:

They are giving induction training to the new recruits. In this training basic orientation is

given to employees. The trainers told them the rules & policies of the organization. The

trainers also observe the skills, attendance, capabilities of the employees.

For other employees Nestle is giving them on the job training as well as give them the

opportunity for training by a third party. As Miss Iram Shaheen the QA Coordinator

recently got training from a third party in Lahore.

There are different levels for employees; the lowest level is white belt, then going

upwards its yellow, green, black & master black belt.

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Annex:

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Bibliography: Mr. Ijaz

Regional Sales Manager

Mr Taimur Toor

Area Sales Manager

Miss Iram Shaheen

QA Coordinator

Mr. Saqib

Human Resource

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Head Office

308, Upper Mall, Lahore, 54000, Pakistan

Phone - 042 - 5757082 – 95, Fax - 042-5711820

Islamabad Office

Street # 3, Sector I-10/3, Islamabad

www.nestle.pk

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