Nestle Company Purchasing Management

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Supplier 1

Supplier 2

Quality (weight = 50)

Acceptable Units

48

32

Total Units received

54

38

Quality Rating

48/54=0.89

32/38=0.84

Child Labor (weight = 50)

Received complaints

3

1

Total complaints received

4

1

Service Rating

3/5=0.75

1

Total Performance Ratings

0.89*50+0.75*50=82

0.84*50+1*50=92

Supplier 2 will be selected, as the score for overall is higher

2.6 Recommended Criteria to select supplier

Nestle company should choose those company with huge capital as well as good reputation to conduct business with. Most importantly, those company must be self behave. There are few selection process Nestle company can consider to take in such as the following

1. Recognition for suppliers (reliability &accountability)

2. Supply performance measurement (audit & monitor)

3. Feedback portal for supplier

4. Select only minimum ISO certified supplier

5. Build mutual relationship with business partners

6. Ensure quality of incorporated product

3.0 ICT for purchasing operations

There are several ICT systems that have applied to Nestle company in order to ease their operational functions.

3.1 ERP System

The ICT that Nestle company using is ERP (Enterprise Resource Planning), the ERP that Nestle company use is a computer based system that helps Nestle company to be able to control internal and external resources such as tangible assets, financial resources, raw materials as well as human resources. The major function of the software is to support the fluctuation of the information between entire business functions in the organization as well as help to maintain connections of external stakeholders. But this ERP system sometimes could be complicated to impose to some major changes in the staff work which is why businesses always depend on a large number of software, processes and introducing an ERP system (Worthen, 2002).

3.2 SAP System

Another ICT that Nestle company used is SAP system that almost similar to ERP system. The SAP system that Nestle company use includes five modules fall under it namely purchasing, financials, sales and distribution, accounts payable and receivable. SAP system is basically help Nestle company for better accessing, distributing as well as aid the process of sorting the information (Powers, 2016).

3.3 Manugistics Supply Chain system

As for the supply chain department of Nestle company, manugistics Supply Chain system is the ICT system they have applied in order to automate their supply chain operations. Which helps them to transform from manual supply chain to automation supply chain, this also help them to ease their supply chain operations (News, 1998).

3.4 Intranet System

Due to the diversity department in Nestle company, sometimes information are isolated from one department to another department. Intranet is the ICT tool that commonly used by almost all organizations in world include Nestle company. Sharing information amongst different departments become easier with the help of Intranet. Nestle company use it as delivery tools and applications to improve productivity e.g. email, whatapps, collaboration that helps to facilitate work in group or like teleconferencing, corporate directories, etc.

3.5 CRM System

Nestle Foodservice has adopted CRM (Customer Relationship Management). It is a portal or rather say a ICT system that is designed for Nestle company to get closer with its customers (CB, 2013).

3.6 Recommendation for ICT tool

Nestle company should apply a technology for them to use for knowledge sharing. It could be data repositories, a database warehouse or one huge data repository that can store all business related information including all business historical data. Data warehousing consisted with a complex process of forming a data repository in the sense of relational database that allow company to web support or text mining in order to weight, convert and combine the data into useful information. Organizations could use data warehousing to get a better competitive advantage like supportive data for decision making process through overall data analysis.

In order to do data warehousing, there are some key components which are Decision Support Systems (DDS), Data Mining (DM) and Content Management System (CMS). CMS system is a system to collect procedures that has been used and manage the workflow in a collaborative environment. These procedures can be done manually or it could also be computer-based. All these procedures are made to:

- Allow employees be able to contribute and share information.

- Level control access permission based on user roles.

- Easier to store as well as retrieve.

- Prevent duplicated data.

- Improve communication and other field knowledge between users.

4.0 Cost Analysis

4.1 Analyzing the purchasing goal and needs of the organizations

One