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Nestle: Quality Control Management

Since it began over 130 years ago, Nestlé’s success with product innovations and business acquisitions has turned it into the largest Food Company in the world. As the years have passed, the Nestlé family has successfully grown to include soups, coffee, cereals, frozen products, chocolates, yoghurts, mineral water and other food products. In the beginning in the 70s, Nestlé has continued to expand its product portfolio to include pet foods, pharmaceutical products and cosmetics as well.
Nestlé wants to be known as a ‘Respected, Trustworthy, Food, Nutrition, Health and Wellness Company’. All the actions are guided by a series of business principles. Market research showed that customers of Nestlé have a genuine and growing interest in information about its brands. In particular, consumers want more information about what they eat and drink. They felt this information should be supplied as part of the product and they have the right to know it.
So, in this assignment, we will discuss about the quality management of nestle. Quality management can be divided into three components: quality control, quality assurance and quality improvement. In nestle, quality is the number one priority. Other than that, they also continuously improving their product, known as kaizen. The important of quality management to Nestle is to win customer trust and preferences, it everybody’s commitment, strive for zero defects and no waste, guarantee food safety and full compliance.
“Thinking globally – acting local” What is Quality Management? Quality management consists of three main components. There are quality control, quality assurance and quality improvement. Quality management is the organization activities to ensure the product is achieving the quality requirement. Therefore, in order to achieve the quality requirement, the component in quality management is used to achieve it.
Quality Control Quality control is a process of review the product or service to ensure that they reach a certain standard or requirement.
From the above definition, we can say that the requirements will achieve by the done the organization activities in the process of products manufacture or services provided. To uncover defect, the organization need to monitor the standard, make measurement and take corrective action.
Quality control (QC) is a procedure to ensure that a manufactured product or performed service meets the requirements of the client or customer.
Quality Assurance Quality assurance defined as a tool in quality system to fulfilled quality requirements of product and service by planning and systematic activities.
From the above definition of quality control, we can say that to make sure a qood quality of product and service, a set of procedures is used in the process. Besides that, this quality assurance tries to avoid and minimize the defect in process by improving and stabilizing production.
QA is refers to a set of procedures intended to ensure that product or service under development before work is done to achieves specified requirements.
Steps of Quality Assurance ØPlan: Establish objectives and processes required to deliver the desired results.
ØDo: Implement the process developed.
ØCheck: Monitor and evaluate the implemented process by testing the results against the predetermined objectives
ØAct: Apply actions necessary for improvement if the results require changes.
Quality Improvement Quality improvement is a continuous improving of quality in manufacturing goods or services. There are various models used and there is some quite often discussed which is:
FADE
PDSA
Six Sigma (DMAIC)
CQI: Continuous Quality Improvement
TQM: Total Quality Management
FADE
There are 4 broad steps to the FADE QI model:
FOCUS: Define and verify the process to be improved
ANALYZE: Collect and analyze data to establish baselines, identify root causes and point toward possible solutions
DEVELOP: Based on the data, develop action plans for improvement, including implementation, communication, and measuring/monitoring
EXECUTE: Implement the action plans, on a pilot basis as indicated, and
EVALUATE: Install an ongoing measuring/monitoring (process control) system to ensure success.

PDSA Another commonly used QI model is the PDSA cycle:
PLAN: Plan a change or test of how something works.
DO: Carry out the plan.
STUDY: Look at the results. What did you find out?
ACT: Decide what actions should be taken to improve.
Repeat as needed until the desired goal is achieved
Six Sigma
Another model for improvement is Six Sigma. Six sigma is a statistical method based on the quality control process to improve the product process and service.
Six sigma refers to the statistical evaluation showed that the rate of 3.4 errors per million products.
To complete the process of improvement, there are two model used in Six Sigma: DMAIC and DMADV.
DMAIC (define, measure, analyze, improve, control) also pronounced, as “duh-may-ick” is an improvement system by minimize the defect in quality of product process and service and looking for incremental improvement.
DMADV (define, measure, analyze, design, verify) also pronounced, as “duh-mad-vee” is an improvement system used to develop new processor products at Six Sigma quality levels.
Total Quality Management (TQM) TQM is a quality management process that change the whole organization based on customer oriented quality, continuous improvement, organizational involvement in processes and solving a problem in a team. This will fulfilled the customer requirement by producing the product and service, which exceeds the customer needs.
In total quality management, the customer determines the quality of output. The output with the high quality will meet the requirement and expectation of customer. From managing outcomes to managing and improving processes there are shifting in focus: from what to do to how to do the processes better. Quality performance expands to include how well the relationship of each part to the process and each part of the process works. Also, process improvement focuses on continuously achieving the greatest potential benefit for our customers.
Continuous Quality Improvement (CQI) In improving the quality management, total quality management stress on a process of continuous improvement.
Principles in the quality management, there are some of management principle that can be used as a guideline for upper management in improving organization performance. The are eight principles cover customer focus, leadership, involvement of people, process approach, system approach to management, continual improvement, factual approach to decision-making and mutually beneficial supplier relationships. Among from the 8 principles, we have chosen Leadership to describe in Nestlé group.
Principle : Leadership Leadership refers to the ability to influence people to achieve the organization goals and ability to create a climate of innovation and to think outside the box. Leadership also must have willingness to accept change and the ability to manage it. At all levels, members of the Nestlé Management are more concerned with continuously adding value to the Company compared to exercising formal authority. A high involvement of each employee and a common mindset geared to results is materializing. Contributing to results through project work and special assignments becomes more frequent, reaching beyond conventional boundaries in order to contribute to wider group performance. All those issue that allows others to progress in their work and to develop their capabilities by their ability to motivate and to develop people. As well as a high level of interest in other cultures and life-styles there also curiosity and open mindedness. As well as to sharing knowledge and ideas freely with others, this also includes a commitment to continuous learning and improving.
Inspection Under traditional quality control, inspection of products and services, which is checking on the process to make sure that what’s being produced is meeting the required standard and takes place during and at the end of the operations process.
Nestlé Quality Management of Nestlé In Nestlé group, they prioritized quality. There are over ten million people through out the world enjoying Nestlé’s products each and everyday. Nestlé conducts business on a global scale; everyone pays careful attention to the cultural bias and personal tastes of each country, because each food culture is based on the distinct characteristics of that particular region. However, it will not going to be too far in the pursuit of food safety and quality management. Nestlé has attained a world-class level by applying “Nestlé Quality Management System” to all their products. Nestlé respects to all relevant laws and regulations of each country, but also implements their own independent high standards of total quality management throughout every aspect of the manufacturing process, from raw materials to end products, in order to consistently bring safe and quality products to consumers around the globe.
Furthermore, they are continuously “improving” their products (KAIZEN) in the global network, which the headquarters of the quality management department in Switzerland, and through the performance of regular inspections that ensure their quality management system is functioning at the highest level.
What is Kaizen? Kaizen (Japanese for “improvement” or “change for the better”) refers to practices on continuous improvement of processes in manufacturing, engineering, supporting business processes, and management. It also applies to processes, such as purchasing and logistics that crosses organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to get rid of waste. After the Second World War, Kaizen was first implemented in several Japanese businesses influenced in part by American business and quality management teachers who visited the country. And now, it has spread throughout the around world.
The importance of quality in Nestle Quality is the foundation of Nestlé food, nutrition, health and Wellness Company Nestlé strives to create value that can be sustained over the long term by meeting consumer needs for nutrition, enjoyment and Quality they can trust. Everyday, millions of people all over the world show their confidence in us by choosing Nestlé products and brands. This confidence is based on our Quality image and a reputation for high standards that has been built up over many years. Every product on the shelf, every service and every customer helps to shape this image. A Nestlé brand name on a product is a promise to the customer that it is safe to consume, that it complies with all relevant laws and regulations and that it constantly meets high standards of Quality. Each and every Nestlé employee is involved in and dedicated to achieving high Quality standards for our customers and consumers.
Quality is to win consumer trust and preference They are committed to offering products and services to their customers and consumers that meet their needs have their preference and provide sound nutrition. Nestlé wants to win the trust of their customers and consumers by continuously listening to them by understanding their expectations and consistently satisfying their needs and preferences. Their customers and consumers are at the center of their attention and they recognize their legitimate interest in the behavior, beliefs and actions of Nestlé behind brands in which they place their trust.
Quality is everybody’s commitment Demonstrates its commitment towards quality by practicing and living what they reach. All Nestlé functions across their Value Chain are fully responsible for observing mandatory principles, norms and instructions for maintaining agreed Quality standards and for constantly improving them. Their quality personnel at all levels are the guardians of Quality Food Safety and Regulatory Compliance. They promote quality awareness, assess, performance, and challenge the organization to sustain and improve quality standards. They communicate their quality standards to their Business Partners who are expected to share the same commitment to quality and to meet their requirements consistently.
Quality is to strive for zero defects and no waste They focus on facts and results and they strive for zero defect and excellence in everything they do. They adopt a “no waste attitude” and they constantly look for competitiveness and opportunities for continuous improvement of the Quality Standards delivered to their customers and consumers. They provide adequate resources equipment procedures and systems to ensure high quality standards. They build the necessary competence and technical skills. They develop training and teamwork that are crucial to the successful implementation of these standards and to the achievement of excellence and competitiveness.
Quality is to guarantee food safety and full compliance They enforce full compliance with the mandatory standards and principals of their quality management system, which include Food Safety Regulatory and quality requirements in every step of their Value Chain. They measure their quality performance as well as the satisfaction of their customers and consumers by listening to them. Shortcomings and mistakes are analyzed and trigger an immediate action plan for correction and improvement. Their quality management system is aligned with international standards and full transparency is ensured through verification by independent external bodies. They strive for the flawless execution of their quality activities throughout their organization based on rigorous discipline on pro-activeness and on factual and open communications
Quality Policy Intentions, direction and aims regarding quality of its products and processes in top management expression.
Success is built by quality Quality is very important for their success. Nestlé product has been chosen by millions of people in this world because they trust Nestle brand. This confidence comes from the quality image and a good reputation for high standards of quality that has been built up over many years by Nestlé. Every product, service and customer contact helps to build up this image in Nestle. Customer confidence that the product are safe to consume is based on the look of Nestle brand name on a product, that it complies with all regulations and that it meets high standards of quality. People, equipment and instruments are made available to ensure safety and conformity of Nestlé products at all times. Companies with high quality standards are able to minimize the possibility of making mistakes, waste less time and money and are more productive. Therefore, quality is the most vital criteria and it is the key for Nestlé to achieve success for today and future.
Quality is a competitive advantage Nestlé is a world brand and live in a competitive world and must never forget that customers have the right to make their choice. If the customers are not satisfied with a Nestlé product, they are free to switch to another brand. For Nestlé’s company goal, they want to provide superior value in every product category and market sectoring which they include in market to complete and promote they brand. The pursuit of highest quality of product at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive benefit is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction of cost.
Quality is made by people Building quality needs adequate equipment, procedures and systems, including dedicated people. Each and every Nestlé employees must be confident in doing his best to produce higher quality products and services. Therefore, training and teamwork are important to the successful implementation of high quality standards. Teamwork allows us to achieve results that are better than the sum of individual job or efforts. They motivate employees by demonstrating management commitment to quality, by setting effective goals and giving them responsibility and recognition. It is through employee involvement that mission of goal can be achieved in the shortest time.
Quality is action Quality is the result of deliberate action. The senior manager is responsible to present the quality objectives and to provide the necessary resources for the implementation. It is then up to all employees to make provide quality throughout the company. Progress is followed by listening to our customers’ comment and by measuring nestle product performance. Shortcomings problem and mistakes must be analyzed and corrected. Problems must be expected and prevented before they occur. We also must identify and take advantage of opportunities to make sure stand still and will not fall behind or left out. Contend for continuous improvement for every Nestle product sell area. It is through every little improvements as well as through major breakthroughs that nestle will perform excellence.
General Principle Of Nestlé Nestlé is more people, product and brand adapt than systems oriented. Nestlé helps in building long-term successful business development and works hard to be a preferred company for long-term lead shareholders. However, Nestlé does not lose sight of the necessity to improve short-term results and remains conscious of the need to generate profit annually. Nestlé seeks to gain consumers’ confidence and preference and to follow consumer trends, creating and responding to customer demand for its products. Therefore Nestlé is followed by an acute sense of performance, support and favoring the rules of free competition within a clear legal framework. Nestle is conscious for social responsibility, which is natural in its long-term orientation. Nestlé is as decentralized as likely, within the framework imposed by fundamental policy and strategy decisions requiring to increasing flexibility. Operational efficiencies, as well as the group-wide need for combination and people development, may also set limits to decentralization. Nestlé is committed to the concept of continuous improvement of its activities, thus they try avoiding more operatic one-time changes as much as possible.
What is Standard? A document that established by agreement and approved by a recognized body that provides for public use and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the maximum degree of order in a given meaning.
Standardization It refers to setting of fixed size, type and measurement in addition to quality of different products manufactured by different organizations in the industry. It is an agreement whereby each manufacturer undertakes to follow the set standards. Standardization is a proses of develop and agreement upon technical standard
Level of standardization Industrial standards-which relate to the engineering requirements
Commercial standards- which are of primary concerns for users who will use and bought the product.
Industrial Standards An engineering or industrial standard is a desired description or definition of a product, a raw material and a manufacturing process, which has been established by one company or by a group of companies in an industry.
Standards are undertaken by statutory bodies and authorities established by the government e.g.:
•Director general of supplies and disposals.
•Research design and standards organization of railways.
•Directorate for standardization for defense production
•Directorate of marketing and inspection
Commercial standards A standard of commerce, also call consumer standard is designed to protect the purchaser or ultimate consumer or manufacturer. It is the measure of
quality
performance,
dimensional characteristics
It covers terminology, grades, sizes, and use characteristics of manufactured products.
Agreement for establishing a standard may include method of listing, rating and labeling order that a product made in submission with the standard may be readily recognized by distributors and consumers.
For example: NESTLÉ Pure Life materials are tested to relevant ANSI, ASTM , ISO 14001, 22000, and OSHAS certification and ISO standards to ensure durability.
American National Standards Institute (ANSI) – empowers its members to strengthen the marketplace in the economy while helping to assure the safety and health of consumers and the protection of the environment.
American Society for Testing and Materialsis (ASTM) – is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and service
International Organization for Standardization (ISO) is an international-standard-setting body composed of representatives from various national standards organizations
Standard and certification Food

Analyse The Factors Affecting The Strategic Plans

Tesco plc is a well-established and consistently growing food retailer global company operating in UK and many other countries like USA, Europe, Thailand, China, Japan and so on. It was established in 1919 by Jack Cohen, when he sold some groceries in the stall in East London and then it later lead to the opening of the first Tesco store in 1929 in North London. Using the well-researched and consistent strategy for growth, Tesco has been able to strengthen their core UK business and lead them to expand into new markets. Tesco has already been declared as the no.1 superstore in UK against its rivals Asda, Sainsbury and Morrison. Tesco is still aiming to broaden the scope of their business to enable it to deliver strong sustainable long-term growth by following the customers into the basic and the large expanding markets at cheaper price. Currently, Tesco has over 2200 stores in UK and has been able to reach every possible customer through its different types of outlets as superstore, metro, extra, express and by various means as online shopping through Tesco direct, Reserve and collect plus loyalty/club cards, insurance, clothing, banking and financial services, telecoms, insurance.
So this report will be identifying Tesco’s vision, Mission, its current strategic objectives, evaluates them and analyses the factors that will be affecting strategic plan. The purpose of this case study is to review and determine the organizational strategic aims and objectives identify and analyse the progress towards organizational strategic aims and objectives and to determine and evaluate strategic options to support a revised strategic position.
1.1 Identify the current strategic aims and objectives
TESCO’S STRATEGY
Our well-established and consistent strategy for growth has given the business momentum to grow through the downturn. (1)
Long term Strategy According to Tesco’s official website it is clearly evident that Tesco has a well-established and consistent strategy for growth. The rationale for the strategy is to broaden the scope of the business to enable it to deliver strong, sustainable long-term growth by following customers into large expanding markets at home – such as financial services, non-food and telecoms – and new markets abroad, initially in Central Europe and Asia and more recently in the United States.
Objectives:- The objectives of the strategy are:
Successful global retailer Tesco aims to be one of the most successful global retailer organisation in the world. With this idea in mind they have opened stores in many other countries like Canada, USA, Europe, Thailand, China and Middle East.
Growth in core UK business Tesco also aims on growing its business as the core UK business as it is originated here. It had 1500 stores in UK in 2007 whereas the number has reached to over 2000 by now. And it has diversified its market from only being a food retailer to selling fuel, clothes, housing, finance, banking, insurance, mobile broad band and electronics.
Strong non food retailer As Tesco has been known for its food items and is the leader in food retailing, Tesco also aims to develop the rest of the retailing it has been doing. They are working hard to be as strong in non-food as they are in food.
Developing banking and finance Tesco is also working for developing retailing services – such as Tesco Personal Finance, Banking, Telecoms and Tesco.com. This is showing that Tesco is determined to help its customers even with the financial and banking services. As the name specifies, Tesco is all set to deliver ‘Every little helps’.
Community friendly Approach Tesco is determined to put community at the heart of what they do and help maintain the natural balance.
Values and aims According to the official website, Tesco feels that: ‘No-one tries harder for customers than Tesco’ They have mentioned that they understand their customer’s needs and they want to be the first to meet their needs and at the same time they want to act responsibly to their community in order to avoid any kind of degradation in the environment and ethnicity.
Tesco promises to treat people as we like to be treated:
”Work as a team…Trust and respect each other…Listen, support and say thank you…Share knowledge and experience….so we can enjoy our work.”
Tesco has been taking regular feedbacks from customers by asking them and the staff what can be done to make shopping with them and working with them better.(2)
1.2 Undertake an evaluation of the component parts of a strategic plan
Tesco’s strategy to diversify the business in 1997 has been a very important landmark and the base to the success of the company. Product Diversification from being only food retailer to non-food retail was the best decision that has made Tesco to be the market leaders in many of their markets in and outside UK.
According to Tesco’s official website (www.tescoplc.com), its vision and mission are:
Vision- Every little helps. Tesco’s vision is very simple as it is stated. It simply focuses on providing every little helps to the customers. Tesco is willing to follow the customer’s and their basic needs and be the only retailer to help them out with every kind of help they need -small or big
Mission Tesco aims to broaden the scope of their business to enable it to deliver strong long-term sustainable growth by following their customer into large expanding markets at home – such as financial services, non-food and telecoms – and new markets abroad, initially in Central Europe and Asia, and more recently in the United States
Chairman s statement Over the past decade Tesco has transformed itself into a diverse international business- we are well-positioned for long-term growth. Tesco is scanning the external environment as much as possible in order to develop its mission and vision. All these efforts from Tesco is making them able to meet their strategic plan to be everywhere, to sell everything and sell to everyone . Managers are taking further actions to full fill their promise. They are satisfying and identifying customer needs through affordable prices, quality products, home delivery, 24 hrs service, recycling, business expansion and technological developments such as online shopping and home deliveries. These evidences shows that; there is a clear alignment between their mission. Vision and strategies. This helps tesco in being market leader in UK retail super markets.
1.3 Analyse the factors affecting the strategic plan
For any business to run and meet its long-term strategic aims and objectives, there is a great involvement of the environment. The environment is divided into Macro/external and Micro/internal environment and there factors which are affecting the long-term organisational strategic planning. Some factors both external and internal for Tesco are discussed below:
Internal factors are those factors which come from the business and affect it without any regards to the external factors like suppliers, customers, distributors and so on. Some examples are Research and Development, Employee Turnover/employee satisfaction, Physical assets, mission and objectives and so on. The internal environment consists of variables (Strength, Weakness, Threat and Opportunities) that are within the organization itself and are not usually within the short-run control of the Top management. This variables form the context in which work is done. They include the cooperation’s structure, culture and resources, Key strength form a set of core competencies which the organization can use to gain competitive advantage.
(Thomas L. Wheelen, J. David Hunger (2000). Strategic Management Business Policy. p10)
By analyzing PEST Analysis, it is observed that Tesco’s strategic plan is affected by various external factors. They are:
1. POLITICAL FACTORS Government interferes in the economy of every company. Factors such as tax policy, labour law, environmental law, trade restrictions, tariffs and political stability makes the major impact on the business and the society as well as the global market. This year the government has increased the tax from 17.5% to 20%. This has affected the profit of Tesco and is affecting the long-term aims, mission and vision of Tesco.
2. ECONOMICAL FACTORS Economic factors include economic growth, interest rates, exchange rates and the inflation HYPERLINK “http://en.wikipedia.org/wiki/Inflation_rate / Inflation rate”rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a Tesco’s revenue and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.
Example: increased fuel tax, impact of credit crunch on sales.
SOCIAL FACTORS Social factor includes the cultural aspects and include growth rate of population, age distribution, health consciousness, career attitudes and health and safety. Changes in the social factors affect the demand for a company’s products and how that company operates. For example, the new trend of health consciousness has resulted in Tesco to produce more organic and low fat foods such as skim milk, organic milk, organic vegetables, Lighter choices with nutritional value mentioned in the product and local charities and getting Thailand over fit- 3 million people involved in aerobics Tesco has changed various management strategies to adapt to the social trends such as recruiting older workers and long term unemployed people as a part of social responsibility; Regeneration: where people who are unemployed for more than 6 months had been trained for several weeks and were guaranteed jobs; Community Champions and many volunteers helping the community and local charities. (UK supporting cancer research with race for life to fight against cancer) (4)
4. TECHNOLOGICAL FACTORS Technological factors include technological aspects such a Research and development activity, technology incentives and the rate of technological change. Technological changes in Tesco can affect costs, quality, and lead to innovation. Example: Use of self check out service, online shopping and reserve and collect service(new) has saved huge amount of labour cost, has avoided customers from being charged for same product more than one time plus has saved time of the customers. Or use of security system and CCTV cameras has prevented Tesco from having huge amount of stock variances and made the staff more work efficient with the fear of being caught while doing irresponsible activity during their duty hours.
5. ENVIRONMENTAL FACTORS Environmental factors are growing awareness of the potential impacts of climate change is affecting how tesco operates and the products they offer, both creating new markets and diminishing or destroying existing ones. Zero carbon foot prints, Recycling, sustainability are the areas of focus for tesco, so that the products have been labeled with the message of recycling. Using local resourced products is attracting customers towards the specific food products.Example: climate change affecting Tesco’s supply and transport.
6. LEGAL FACTORS Legal factors include discrimination law, consumer law, data protection law, antitrust law, employment law, and health and safety law. Assuring Health and safety in all the regions wherever it is expanded is one more challenging Legal responsibility of Tesco. These factors can affect how Tesco operates, its costs, and the demand for its products.
Example: Tesco to avoid the legal opposition to expand on the high streets LO2: Evaluate alternative strategies to meet the desired future strategic position. 2.1 Apply a range of strategic analysis tools to audit progress towards strategic aims and objectives
SWOT ANALYSIS FOR TESCO INTERNAL FACTORS Strength Weakness
· Giant Leader in superstores · Financial stability · Huge Brand name · Bulk goods importers and sellers · Product Diversification from being food retailer to non food plus electronics, telecom, insurance, banking and finance · Competitive pricing-providing goods and services in low price · Ensuring Health and Safety in different parts of the world · Maintaining Quality issues as the goods are supplied from different suppliers abroad, out of which some are not very experienced with maintaining high quality. · Stabilizing itself as a good non food retailer. · Maintaining their presence and growing customer loyalty in the recently expanded countries · Expansion in more developing c countries · The competitors: Asda being competitively cheaper Sainsbury, Morrison being food retailers with comparative pricing · Environmental issues and corporate Governance responsibility Opportunities Threats EXTERNAL FACTORS Strengths Giant leader in superstore and financial stability Tesco has over 2200 stores and Tesco holds more than 71% share in the UK retail market
Its strategic capability explains that it will continue to grow share in food, while increasing space contribution from supermarket will allow it to drive a higher share in non-food.
Tesco’s business growth shows no sign of failing. In the UK, Tesco’s late 2006
investment into West-midlands based convenience store group T

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