Overview of Nestle Company
Nestle is a food and beverage company that was initiated in 1886 by Henri Nestle. The headquarters of the firm is in Vevey, Switzerland. The company is the biggest food company in the world in terms of the amount of revenue. Besides, it is also a leading producer and supplier of food and beverages in the food industry. The company operates over 400 industrial units in 86 countries around the globe. The product portfolio of the company consists of various brands. Nestle has over 8000 products across different consumer markets in the world. Soups and sauces, magi, milkshakes, seasonings, infant food, coffee, beverages and bottled water are some of the products of Nestle company include. The company also heavily invests in food research and development, which links it to the doors of success in the business environment in terms of competitive advantage.
The mission declaration of Nestle is good food, good life and is one of the key factors behind the success of this global food organization. The company is a crucial participant in nutrition supplies the most luscious and nutritious food products to all its customers in the world. Nestle company is a globally operating food organization and hence, has various international competitors. Unilever, PepsiCo, Danone and Mondelez are among the major global competitors of Nestle.
Limitations of using ERM
Companies use various approaches to combat the negative effect of risks that occur in the supply chain. Enterprise risk management is no doubt, the best way of mitigating the impact of uncertainties in the supply chain. However, this method has several drawbacks that make it less effective.
Human errors
The steps in the process of enterprise risk management are many and require human intervention. Human beings often make mistakes in executing these steps. The human mind may not comprehend all the details of each step and might even cause errors in the process that can lead to the collapse of a supply chain with time.
Scoring model
The enterprise risk management uses the concept of metric to calculate and analyze the extent of the risk in the supply chain. The metric analysis is also difficult to comprehend in some risky situations. Risk managers should be keen when handling the resultant metric value to avoid further risks in the company.
Costly and time-consuming
Enterprise risk management has a procedure, which has various steps. Each step requires an individual to execute it. The execution of each step in the process is expensive. Failure in any of the steps might result in another risk. Each person executing a specific step requires a lot of time making the process time-consuming.
Difficulty in recognizing the critical indicators of risk
The method applies complex concepts that the management might not understand. The idea of metric in this method does not directly point out the signs of uncertainty in the company. Therefore, it becomes a challenge for the supply chain manager to identify the exact players in the risk.
Emphasizing low probability risks
The ERM approach may make Managers dwell too much on risks that lesser chances of occurrence. The procedure of this method applies to every threat that occurs in the supply chain. Some risks have low rates of the event, while others have high chances. The approach generalizes all the dangers and stipulates that the same process should apply to all risks. The management may end wasting much time on less frequent risks in the process of using enterprise risk management.
Lack of framework for specificity
This approach does not have provisions on how to address a particular part of a risk in a supply chain. The main objective of this method is to mitigate all risks but nor a specific section of the risk. A risk manager has the mandate to comprehend the steps on the process and choose what action to apply at a particular part of the risk in question.
Benefits of ERM
Maintains customer satisfaction
When companies eliminate risks, the uncertainty in the quality of products reduces. The supply chain runs smoothly without errors, and this benefits the customer. The customer gets high-quality products and their satisfaction increases.
Enhances the flow of communication
Elimination of risks in the technological sector of a supply chain enables for smooth flow of effective communication. cause communication breakdown and lack of connection in a company. Elimination of risks allows for up to date information on the process of the supply chain.
Safeguards the image of your corporation
The presence of risks in a supply chain lowers the reputation of a company due to constant complaints from clients. An uncertainty causes a firm to offer inadequate services to customers and lead to dissatisfaction. An enterprise risk approach enables a company to revive its reputation and gain trust before customers.