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Application of Total Quality Management at Nestle
Transcript of Application of Total Quality Management at Nestle
Department of Decision Sciences
Nestlé Quality Management System
Guarantee food safety, compliance with quality standards and to create value for consumers.
Evolution of Quality Management
A Nestlé brand name on a product :
Safe to consume
Complies with all relevant laws and regulations
High standards of Quality
The Quality Standards
A Continual Improvement Management Cycle
A Process-Based Management System
“Lean thinking – in the Nestle way “
Nestlé ‘s lean approach is called
Nestlé Continuous Excellence (NCE)
NCE is single operating system for Nestle operations which will reduce waste and focus on value creation and value adding activities and continuously improve the value creation process.
Lean production aims to reduce waste.
Nestle is adopting “ Zero Waste “ concept.
At Nestle , Waste is broken down into the 7 areas,
“ Waste hunting “ to identify waste related to main 3 areas of the business – Processing , Inbound materials and Outbound products.
Proposed Changes to Reduce Waste
More efficient production line planning .
More efficient and automated warehouse.
Separating an area for forklifts.
Relocation of pallets storage and recycling
A glass frontage to the building to provide natural light
New lightweight bottles using 25% less PET plastic
External accreditation as a zero waste to landfill site
Implementing a sustainable urban drainage system
To date, 72 Nestlé factories (15%) have achieved zero waste
Nestlé also uses a lean production technique called Value Stream Mapping (VSM)
Nestle’s NCE is also backed by other philosophies such as ,
Total productive maintenance
Semi autonomous work teams
At the end of 2010, NCE is implemented in 300 factories in 15 countries and has managed to achieve 5%-6% organic growth each year.
“A part of quality management focused on providing confidence that quality requirements will be fulfilled"
Quality assurance and product safety is one of the Nestle’s 10 corporate objective principles.
Quality assurance is enforced through the Quality management policy of Nestle.
Quality Assurance is implemented through,
Supplier verification audits
Adopting GMP ( Good Management practises )
Food safety management plans
Staff training and development
“ Quality by design “
Adhering to safety standards
Nestle has a dedicated quality assurance department to build quality to the culture.
Quality council is the main driver of TQM engine.
As a recovery action for the recent Maggie scandal Nestle has upgraded its
Quality Improvement Program
Quality improvement process includes,
Food service Operator Performance Testing (FSPT)
Innovation and freshness
Safety and hygiene
Consistency and reliability
Cost of Quality
1. Conformance cost
2. Non conformance cost
Internal failure cost
External failure cost
Non conformance cost
4. Destroyed 400 million packets owing to the scandal.
Pulled down nestle India Q3 earnings
Net sales fell Rs.17.36 billion
Incurred extra cost of Rs 2.4 million to withdraw stocks of the shelf
1. Losing revenue and profits
2. Tarnished goodwill
3. Customer dissatisfaction
Quality assurance to avoid quality non conformance cost.
Respect all levels of regulations in countries they operate.
Application of TQM throughout the supply chain
Conducting quality circles
Applying PDCA cycle for quality assurance
establish objectives and processes to deliver the required results
implement the process developed
monitor and evaluate the implemented process.
apply actions if results need change
The Pareto Chart
Pareto chart is a graphical representation that displays data in order of priority.
This technique helps to identify the top 20% of causes that needs to be addressed to resolve the 80% of the problems.
Quality Function Deployment (QFD) Details
Process used to ensure that the product meets customer specifications
QFD - House of Quality
Adding trade-offs, targets & developing product specifications
Six Sigma is a data-driven approach for eliminating defects in any process.
To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities.
Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-Check-Act Cycle.
DMAIC - used for projects aimed at improving an existing business process.
DMADV - used for projects aimed at creating new product or process designs.
Kaizen is Japanese for "improvement".
Improving efficiency becomes a continuous process; not a one-off activity.
"Just-in-Time" means making "only what is needed, when it is needed, and in the amount needed."
ISO 14001 (Environmental Management Systems)
OHSAS 18001 (Occupational Health and Safety Management System)
Malcom Baldrige National Quality Award