Analysis of Planning and Forecasting Strategies of Nescafe Company

Nescafe was launched in Switzerland in 1938 and soon exported to France, UK and the USA.Today consumers around the world enjoy the quality, flavor, aroma, convenience and natural goodness of Nescafe Coffee in many different formats.

The availability of Nescafe across the globe is the outcome of its supply chain management which includes procurement of raw material, its conversion, transportation, storage, warehousing and delivery etc.Here key problem faced in demand planning, procurement and demand forecasting in order to make the supply chain more effective and efficient.

Demand forecasting can be done through consumer survey, understanding what they expect from Nescafe, how much price they are willing to pay, consumption pattern etc. Procurement can be managed by exploring all the alternatives available, comparing them and then deciding the one which best suits the situation and requirement.Introduction Supply chain management in simple terms is managing the supply chain which means managing all activities from procurement till delivery.

Nestle is facing issues in demand planning and forecasting and procurement.Since procurement is just the beginning of making coffee so it plays very important role to procure prior demand is to be planned and forecast since without it the production is a wasteful act until one is aware about the requirements.

Nescafe is amongst world’s most popular coffee brands available in varieties to suit all tastes and occasions. Once you reach that place by putting all the efforts, hardworking, skill and competence. Now the responsibility doubles as to retain such position, improve and grow.

Literature review

Nestle is contributing $344 million throughout the following decade to extend its venture into reasonable espresso cultivating, make its processing plants more productive and lessen its bundling. Past the glass: The Nescafe plan is the organization’s worldwide undertaking that includes onto the almost $200 million effectively spent on espresso ventures.

Nestle intends to twofold the measure of Nescafe, the moment espresso that it says is devoured at a rate of 4,600 glasses every second the world over, that it purchases straightforwardly from agriculturists to 180,000 tons by 2015. Likewise inside the following five years it intends to have the majority of its buys of unroasted espresso beans meet the guidelines spread out by the Basic Code for the Espresso people group Affiliation.

Through little changes to glass containers and single-serve bundles, Nestle has decreased its Nescafe bundling need, and expects to keep lessening bundling weight and volume while utilizing more inexhaustible and reused content.

Analysis

Nescafe purchases directly from growers (who work on small plant of land) and is world’s largest in that.They pay a very high price as higher price means lighter quality. It provides a base price to the sellers/farmers. It procures all material stores it. Planning and forecasting is technical work handed by expertise after conducting proper research and surveys. For planning inventory level, profit forecast is kept in demand. While forecasting the customer is focused to collect data.

Conclusion and Recommendations

Nescafe buys it directly from growers by paying a high price to get high quality. Whereas if they involve some intermediary even if direct buying is available it may help to reduce price as intermediary would scroll all options. It may add to their commission but can help in solving the problem of staring too. As then intermediary would be responsible to ensure timely delivery. No overstocking means no funds blocked in stock such amount can be invested somewhere. Further they can get variety as well. While forecasting demand understand the consumer need, buying habits, consumption pattern, income and taste and preferences. A market segment should be given that product which they need to survive and expand. In order to plan demand the goals decided with regard to profitability should be realistic and genuine. The analysis for revenue forecast should be based on past 5-6 months sales and further considering trade fluctuations too.