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Nestle Coffee is the company which requires top quality raw material to produce the coffee which may compete with other brands at the international market. The competency at the coffee market is too high, therefore, Nestle manages to remain one of the leaders of the coffee niche.
Producing different types of coffee, the company need top quality beans. The procurement of Nestle Coffee’s coffee bean products is based on the direct purchase of the beans with the farmers. It allows the company to follow the quality of the raw materials. However, there are situations when direct procurement is impossible and the purchase with dealers takes place.
Procurement of Nestle Coffee’s Coffee Bean Products
The procurement of Nestle Coffee’s coffee bean products is provided on the basis of the Nestle corporate business principles, quality policy and Nestle procurement policy.
According to the Nestle Corporate Business Principles (n.p.) and the quality policy (n.p.) the company procurement programs are based on (1) consumers, their nutrition, health and wellness, quality assurance and product safety and communication; (2) human rights and labor practices in business activities, (3) staff when the advertising dwells upon the leadership and personal responsibility along with safety and health at work; (4) suppliers and customers, their relations and agriculture and rural development, and (5) the environment which bothers people from different parts of the world. The procurement strategy is based on these principles in order to satisfy the needs of the most demanding consumers.
The procurement of the Nestle coffee beans is based on the direct purchase of the product from the farmers. However, sometimes the purchase from dealers takes place, specially in such companies as UK, where it is impossible to find the farmers who will be ready to satisfy the needs of the country (Nestle 2).
The company tries to offer the best prices for the farmers and it is aimed at engaging the farmers in niche markets. This will allow the coffee makers to increase their production. The company tries to make sure that the farmers are given an opportunity to diversify the product (the green beans are used as one more source of income for farmers). Nestle refers only to direct procurement, which helps the farmers to retain more value of the sold coffee.
The company cares for the quality of their product, therefore, they feel responsibility in assisting the farmers (“What can be done?” 5). To make sure that procurement is based on the quality, the Nestle company financed the farmers and delivered to the farmers it worked with 220 million high-yield disease-resistant plants in 2010 (Thong “Nestle pumps up coffee supply chain” n.p.). This year Nestle is going to help farmers with managing the crops in such regions as India where conditions are different (Thong “Nestle India stirs up a plan” n.p.).
Demand Management of Nestle Coffee
Nestle demands from the farmers top quality products which correspond to their policy. The management strategy is based on the principles of quality and mutual exchange when the company supports the farmers financially and with the technologies and the farmers offer the company top quality products. The raw material is to be of top quality, Nestle cannot allow itself to use bad quality beans which may result in poor quality final product.
It seems that Nestle is interested with working with the farmers they have used to, therefore such strategies as postponement and support are not new for the company. The farmers make sure the company that they will be able to support Nestle with the specific amount of the product while the company makes sure that hey will buy all the beans of the corresponding quality which are going to be produced.
Working in a highly competitive environment, the company managers understand that without close collaboration with the farmers they are unable to make sure that the quality of their raw material is high enough and the price is appropriate. Investing in farming, the company makes sure that the outcome of the collaboration is going to be rewarded. It has been stated that supporting the Indian farmers the company has developed a specific strategy which may help the farmers to work in the strange climate environment.
The demand management of the company is based on the activities of the previous year. Moreover, the company tries to support the farmers and make sure that the raw materials, beans in this case, are going to be delivered on tie. The contracts are signed and the demand is predicted. Such huge company as Nestle cannot work without strong support from the side of the farmers without being sure that the volume of the required raw material is to be met.
The information technology plays an important role as living in the world where information plays vital part of the development of the society Nestle company tries to be at the same raw. The information technologies are used by both the company managers and farmers as the contemporary world is impossible without those.
Nestle Corporate Business Principles, 2010. Web.
Nestle. “Coffee – The Supply Chain.” The Times 100 1999. Web.
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“Quality Policy.” Nestle Quality Management System. Web.
Thong, Kristie. “Nestle India stirs up a plan.” Procurement Asia 2012 Web.
Thong, Kristie. “Nestle pumps up coffee supply chain.” Procurement Asia 2010. Web.
“What can be done?” Nestle, 2003. Web.