David Sheldon, Head of Global Supply Chain Development at Nestle, discusses how to achieve operational excellence through a customer-centric supply chain, major trends influencing decision-making and how digital is presenting a huge opportunity.
What are the key areas for growth that Nestle is focusing on?
There are many opportunities for us to grow as a global consumer packaged goods business. One area we focus on is products in emerging and developing markets. These are products that are high quality, affordably priced, appropriately formatted and easily accessible for emerging market consumers. Another area of future growth is our ecommerce and online business; for example our Nespresso business sells directly to consumers online as well as through its boutiques. We are also developing our healthcare nutritional solutions for people with specific illnesses, disease states or ageing-related nutritional needs.
What are the challenges you’re facing as a supply chain leader?
There are several challenges we face around how we improve our operations and supply chain. Performance is measured in terms of the product availability to consumers, the asset intensity across our network and optimising our working capital to meet business needs. We’re looking to make improvements every day in process efficiency, waste reduction and fulfilment to strengthen and accelerate our supply chain performance.
Another challenge is how we get closer to our consumers to understand and meet their needs, which varies depending on the product category or what part of the world they’re in. We work with customers to ensure the freshest products are available to shoppers on the shelf and online. There are growing expectations from shoppers to produce and deliver products in a sustainable way, minimising the impact on the environment, on societies and communities as well.
We need to make use of emerging digital innovations and concepts that are now becoming available in supply chain. Supply chain functions need to ask: how can we help support our business in the creation of new disruptive business models to stay ahead of competitors.
What innovations have the potential to add the most value for Nestle?
New technologies are becoming cheaper, more intuitive and easy to use. We need to continue to combine advanced analytics and big data sources in supply chain to make better and faster decisions. The cognitive computing idea, where machines use smart algorithm programmes to self-learn, add their own level of analysis and make recommendations on what to do next, is an exciting area to explore. Combining smart technology with smart humans will transform processes.
How and what consumer trends are influencing supply chains? How are you enhancing customer centricity?
Many of the consumer trends are well established but starting to accelerate. Supply chains have to respond to serve consumers. At one end of the spectrum you have consumers wanting low cost, simple options, and at the other end consumers are looking for more customisation and personalisation in products. It is a challenge, but we have to be agile and creative with our thinking. Increasingly, we’ll see this “bimodal” approach grow and the supply chain needs to respond. Consumers expect information about products to be accurate and readily available. The modern consumer goods supply chain is a large complex network of supply chains across suppliers, manufacturers and retailers. It is a challenge to make the right information about a product available, in a way consumers can easily access and use. Improving visibility, traceability and transparency across the supply chain is growing in importance for the consumer packaged goods industry.
What are your most recent efficiency and lean culture initiatives?
The Nestle continuous excellence programme has been ongoing for several years. It is about embedding continuous improvement concepts into ways of working across all operations. For example: goal alignment, regular operational reviews and focused improvement programmes etc. We have implemented a lean value stream programme which takes an end-to-end view of what adds value to the consumer and identifies waste. We constantly have to challenge what we can do differently and how we can improve our processes.
What is your vision for the future of supply chain and what are you doing to prepare for it?
The Nestle supply chain vision is to create a supply chain that is trusted, safer, fresher, and closer to consumers, our customers and suppliers. This is about doing the right thing for consumers every day: improving availability & freshness of products, reducing the environmental impact of supply chain and growing all our businesses. Nestlé is 150 years old. We respect our heritage and we take our next 150 years very seriously. Our vision for how to achieve that is to be brilliant at the basics every day, engage with customers, suppliers and partners, attract talented people and develop them in the right way. We need to respond to the emergence of digital opportunities and make sure our supply chain remains as agile and responsive as possible. Looking forward to discussing with the best in the industry at ESCDF17!