ACHIEVING SUSTAINABILITY AND RESILIENCE: A CASE STUDY OF NESCAFE'S GLOBAL SUPPLY CHAIN MANAGEMENT

Abstract

This study delves into the complexities of managing a global supply chain. It examines the supply chain strategy employed by Nestle to produce and distribute its popular coffee brand, Nescafe. The main focus is on evaluating the key challenges faced by the company, including post-COVID-19 issues, sustainability concerns, climate change, and supplier profitability. In response to these challenges, Nestle has implemented a structured approach to develop a resilient, sustainable, competitive supply chain for Nescafe. The Nescafe Plan, a global sustainability initiative, has provided a competitive advantage to Nescafe’s supply chain. This initiative involves collaboration with suppliers, distributors, and customers at all levels, ensuring accountability and promoting ethical practices. Results show significant positive impacts, including local sourcing of coffee, reduced carbon emissions, and water withdrawal. Nescafe operates its coffee supply chain based on a lean strategy, ensuring supply and demand stability. Customer demand for Nescafe’s products is well-predicted, allowing for unique positioning, high service levels, and cost efficiency. To enhance supply chain resilience, Nescafe focuses on mitigating internal and external risks in coffee lands, addressing issues like labour shortage, child labour risks, climate change, and natural disasters. The study also explores Nestle’s approach to supply chain outsourcing and supplier selection processes. Furthermore, the study examines Nestle’s commitment to sustainable development, encompassing economic, environmental, and social aspects. The company invests in economic development by situating production in developing countries and ensuring growth and long-term success for stakeholders. To continue its journey towards sustainability, Nestle has set ambitious goals for the future, aiming for recyclable packaging, zero net gas emissions, and 100% sustainably produced materials by 2030. The company also plans to empower 10 million young people with economic opportunities globally by the same year. Generally, this study provides valuable insights into the strategies adopted by Nestle to create a resilient and sustainable global supply chain for Nescafe, offering lessons for other manufacturing companies seeking to achieve future success through effective supply chain management.