Assignment # 5

Nestle Struggles with Enterprise Systems

1- Evaluate Nestle SA and Nestle USA by using the competitive forces and value chain models.

Nestle SA and Nestle USA competitive force model was out of control because the suppliers they had, they charged different prices even thought it was for the same company. These differences created inefficiencies and extra costs which held the company from competing efficiently.

2- What were the problems and issues that Nestle SA faced that caused the company to be so decentralized?

Nestle SA did not have a centralized infrastructure in running the business; they needed to standardize its information system and business processes, the company was divided into 80 different information technology units.

3- Do you think it was appropriate for Nestle to distribute the decision making so widely? Explain your Answer.

No, it was not appropriate because it got different prices for its raw materials on each local facilities instead of just being one unit doing the purchasing of raw material and that way use its worldwide buying power to get lower prices.

4- Why did Nestle’s initial enterprise project encounter so many problems? What management, organization, and technology factors contributed to those problems?

It encountered problems because the person in charge of the decision of the new stardad for the company did not have the authority to implement it for the whole business. Also, they use different software from different providers, they used SAP for their enterprise resource planning and they used Manugistics for its supply chain module, they used two different companies instead of using just one.

5- If you had been in charge of the Nestle’s enterprise system project, what could you have done to prevent these problems?

I think I would have just stick to one company to provide both resource planning and for the supply chain, I would have chosen SAP just like Nestle SA decided to do.