CHAPTER II BACKGROUND INFORMATION

Transcription

1 5 CHAPTER II BACKGROUND INFORMATION 2.1 History PT. Nestlé Indonesia is one of holding company of Nestlé S.A., a worldwide food producer: whose headquarter is located at Vevey, Switzerland. Nestlé s slogan is Good Food, Good Life, describes their commitment to use technological science and also their well-known brand names, to cover basic need of nutritious food, easy consume; for better living of human being. th By the end of 19 century, many Indonesian had already been introduced to Nestlé s MILK MAID milk products, more popularly known as Tjap Nona. In 1910, marketing of Nestlé products in Indonesia was carried out by Nestlé s Singapore branch. Nestlé products dominate the sweetened condensed milk market in Indonesia so rapidly that consumers identified all kind of milk as Tjap Nona milk. By the 1930 s Nestlé had the largest market share in Indonesia for this product. The opening of foreign investment opportunities after 1965 led Nestlé, and its eventual partners, to investigate the possibility of processing products locally in Indonesia. Nestlé Headquarter in Switzerland, together with local companies established holding company at Indonesia, named PT. Food Specialties Indonesia on

2 6 March 29, Later, the company s name changed into PT. Nestlé Indonesia by the end of 1993 (December 29,1993). In 1972, the first factory was built at Waru, Sidoarjo (East Java), an area 15 km south of Surabaya, and began to produce sweetened condense milk commercially in Soon after the first commercial production of Milkmaid, worked with local milk cooperatives began, delivering 160 kg of fresh milk in May The rapid increase of milk production in early 1980 s led Nestlé to build another factory. Then, in 1984 the second factory was build at Pasuruan (East Java), and began to produce commercially in March 1988, and officially opened by President Soeharto on June Kejayan factory was the first factory in Indonesia that only use fresh milk to produce powdered milk. By using Nestlé technology, Kejayan became the most efficient milk-processing factory in Indonesia. Starting on June 2002, Waru factory had been liquidated and joined with Kejayan factory at Pasuruan. In order to get raw materials of fresh milk from local farmers, Nestlé has developed partnership with milk cooperatives in East Java under GKSI (Indonesian Association of Milk Cooperatives) since The fresh milk volume increased rapidly from year to year, and today the plant is the source of livelihood for 43 cooperatives and over 22,000 diary farmers. In order to support the Instant Coffee business, PT. Nestlé beverages Indonesia (previously PT. Indofood Jaya Raya) was built in 1970 to increase productivity and more facilities for coffee processing plant in Panjang, Bandar Lampung. Panjang factory occupies 6.2 hectares of land and produces the famous

3 7 instant coffee Nescafé. By using its advanced technology of instant coffee, PT. Nestlé Beverages Indonesia increase the production capacity of instant coffee, Nescafé 3 in 1 in August 1992 and Nescafé 2 in 1 in May In 1989, PT. Food Specialities Indonesia took over the management of PT. Multi Rasa Agung, a year after Nestlé S.A. made acquisition with Rowntree Mackintosh in UK. PT. Multi Rasa Agung was establishing in 1984 through the combining of PT. Gunung Agung and Rowntree UK, who produced FOX s candy. Since 1992, the factory of PT. Multi Rasa Agung, which is located at Cikupa, Banten province, was starting to produce POLO candy. Afterward, PT. Multi Rasa Agung changed the name into PT. Nestlé Confectionary Indonesia on January Subsequently, in 1995, PT. Supmi Sakti was acquired to support further diversification of products in Indonesia. It is dedicated to producing high quality culinary products under International MAGGI brand; such as MAGGI instant noodles for export consumption, and MAGGI bouillon. To meet distribution requirements, Nestlé Indonesia is supported by Nestlé Distribution Indonesia. The important function of this company is to ensure all Nestlé Products reach customers throughout Indonesia in good condition. Since 1999, PT. Nestlé Indonesia had conducted merger program sequentially among their groups to make efficient and effective business process, as follow:! December 1999: PT. Nestlé Indonesia and PT. Nestlé Asean Indonesia merged into PT. Nestlé Indonesia.! The end of year 2000: PT. Nestlé Confectionary Indonesia and PT. Nestlé Indonesia merged with PT. Supmi Sakti and became PT. Nestlé Indonesia.

4 8! The end of year 2001: PT. Nestlé Beverages Indonesia and PT. Nestlé Distribution joined PT. Nestlé Indonesia. On December 14, 2002, the US Federal Trade Commission (FTC) approved the Ralston Purina, the largest food company in the US, by Nestlé, in an effort to expand its pet care business ever since Nestlé acquired Carnation in 1985, which include Friskies Pet Care. Its sole distributor, PT. Purina Putra Jaya since 1992, has represented Purina in Indonesia. Currently, Nestlé Indonesia is trying to find the best form of co-operation with PT. Purindo Putra Jaya, to maximize the presence of Friskies and Purina products throughout Indonesia. Nestlé products are distributed by PT. Nestlé Indonesia, using 188 distributors throughout Indonesia. The number of Nestlé employees is about 1900 peoples, spread over at Nestlé Head Office, Factories (Kejayan, Cikupa, Panjang), and also State Sales Office in Medan, Jakarta, Surabaya, Makassar. PT. Nestlé Indonesia really concern about social responsibility, and they usually had social programs, such blood donor program, donation of various school equipment for the schools surround, factory, supported the Indonesian athletes, Apprenticeship Development Program (ADP) for high school students, as a part of Nestlé contribution to Indonesian education, and so on.

5 s 1980s s 1990s 2000s Figure 2.1 History of Nestlé (Worldwide) 2.2 Organizational Structure Our group was placed in Supply Chain Development during the project and closely with Operation Development Department. The organization structure within Supply Chain Development is called orbital structure, because it looks the moon with orbits around the planet. The attached chart shows the evolution of PT. Nestlé Indonesia organization from a traditional organization to a flexible and dynamic network. It supports today and tomorrow s business requirements for an alert and inventive organization.

6 10 From Hierarchy Command Experience Competition Disipline National-Functional Task Orientation To Network Alignment Insight Cooperation Initiative Cross-Border/Cross- Functional Result Orientation Figure 2.2 Nestlé Future Organizations On The Move

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9 Types of Product Nestlé products are comprised of 10 products categories (Table 2.1). Some categories use umbrella brand strategy to support several products in different market each with its own communication and individual, such as Nestlé Dancow, Nestlé Omega, Nestlé Bubur Susu, etc. Nestlé also implement line-brand strategy to extend its specific concept across different products, such as Nescafé and Milo with different size-pack. Type of Nestlé product categories: 1. Adult Nutrition is milk product with balanced nutrition for adult people who are concern about their quality of life. 2. Children Nutrition is milk product for children to support their nutritional needs in growing periods. 3. Beverage is Nestlé s product to be consumed during pleasure time, such as coffee. 4. In Home Culinary is Nestlé s product to be used as supported material in home cooked, such as ketchup, seasoning, etc. 5. Confectionary is chocolate and candy product. 6. Infant Nutrition is Nestlé s product to support the nutrition for infant growth. 7. Breakfast Cereal is a kind of extrusion product for breakfast meal. 8. Out of Home is Nestlé s product, such as tea and coffee to sell in bulk for outlet, hotels, malls, schools. 9. Special Import is special imported products from Nestlé s overseas, and some of them to be sold as A plus product for high-class consumer.

10 Pet Care in Nestlé s product for pet food especially cats and dogs. Table 2.1 Nestlé Products in Indonesia No Product Category Brand Name 1 Consumer Nutrition Nestlé Dancow, Nestlé Omega, Nestlé Calcium Plus, Bear Brand, Nutren 1.0, Nutren Fibre, Nutren Diabetes, Peptamen 2 Children Nutrition Nestlé Dancow, Milo, Nutren Junior 3 4 Beverage In Home Culinary Nescafé Maggi, Carnation, Milkmaid 5 Confectionery Kit Kat, Polo, Fox s, Smarties, Frutips, Crunch 6 Infant Nutrition Lactogen, Nan, Nestlé Bubur Susu 7 Breakfast Cereals Koko Krunch, Honey Star, Honey Gold, Milo Balls, 8 Out-of-Home Corn Flakes, Nestlé Trix Nestea, Coffeematé 9 Special Import Nesquik, Nescafé Gift Set, Milo Ready-to-Drink (RDT), Nescafé Frothe, Nescafé RTD, Quality Street, Milo Bar Biscuit, Kit Kat Biscuit, Milky Bar, Kit Kat Chunky, Nestlé Ultra High Temperature (UHT), Milk Nesquik UHT, Nestlé Yogurt, Nestlé Ice Cream 10 Pat Care Alpo, Friskies, Purina, Trusty Source: Public Relation Department of PT. Nestlé Indonesia (2003)

11 Vision and Mission Statement Nestlé corporate vision is Nestlé a leading diversified food company known every village through both its people and its product their reliability, caring quality, and honesty. PT. Nestlé Indonesia visions are:! To be presented and known in every Indonesian Household as an excellent and reputable company with high quality Food and Well-being products.! To be preferred by business partner and employer in Indonesia.! To be at the leading edge of innovation within Nestlé.! To be well-being company in Indonesia. - Our People: Trusted - Our Government: A socially and environmentally responsible corporate citizen - Our Consumers: Rusted, Innovative, Nutritious - Our Customers: Pragmatic, Business focused partner that fulfill the customer satisfaction Nestlé Indonesia is Good Food, Good Life. In line with the vision and mission, Nestlé corporate culture is based on a set of fundamental principles, which are strongly influenced by the value of Nestlé home country, Switzerland: respect for individuals; understanding different culture; global thinking but local action; favoring decentralization and networking; being pragmatic rather than dogmatic; being committed to work and quality, and Nestlé prefer the long term perspective to short term thinking.