FPE3243 RISK ANALYSIS AND MANAGEMENT SEMESTER SEPTEMBER SESSION 2021/2022 INDIVIDUAL ASSIGNMENT NAME: SORAYA BINTI MOHD SUTRIZENO MATRIC NO: J18A0202 TUTORIAL GROUP: SBT 4 COMPANY: NESTLE NAME OF LECTURER: PROF. FATIMAH BINTI CHANGGROK 1. The Nature of Their Business Food and beverage products are produced and sells by Nestle Products Sdn Bhd. Example of the products are cereals, dessert, cocoa, candy, culinary, beverage and coffee. The type of business conducts by the company is international. Manufacturing production can be known as making and gathering of element and completed product for sale based on Investopedia (2014). Under Nestle Malaysia, there are 10 categories of products that have been produced based on annual report 2013. Dairy Maternal Milk and Healthcare Baby Nourishment Drinks Business Sweets for Liquid Drinks Frosty Diary Ice Cream Foods Nourishment Categories of products offer by Nestle Malaysia Dairy Milk Drinks Business for Watery Drinks Food Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Milo Omega Plus Nescafe Instant Noodles Sterile Milk Ice Cream Sweets Frosty Diary Maternal and Healthcare Baby Nourishment Nourishment Figure 6: Figure 7: Nestle Kit Kat Figure 8: Nestle Figure 9: Nestle Bliss Lactogen 3 Figure 10: Nestle Nutrient Diabetes Drumstick Extreme Choc 1. a) Assistance i.) Nestle Professional According to Nestle Malaysia (2014), Nestle Professional teamed up with the Chefs Association of Malaysia to produce 'Amazing Inspirations,' a recipe book that highlights the nation's best chefs' culinary skills and creative recipes that use MAGGI, in order to inspire aspiring young chefs in the industry. Customers who register will receive a free Nestle Malaysia recipe book to promote and share their secret recipe. ii.) Consumer Service Segment Part for any complaint, recommendation, inquiry, and others for consumers satisfaction after use the products offers in Nestle Malaysia. Nestle Contact Number Malaysia: Toll Free Number: 1-800-88-3433. Phone Number: +603-79656000 Nestle Head Office Address: Nestle (Malaysia) Berhad (110925-W), 22-1, 22nd Floor, Menara Surian, No.1, Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor, Malaysia. Fax: +603-79656767 If you need information about the company, products, you can visit the website. i.) Stakeholders All over year, the table below sum up the standard technique that is use in appealing with the stakeholders. Stakeholders Standard Technique Employees • Ongoing knowledge and coaching programmes • People Development and Performance (PDP) • Intranet (The Nest) • Newsletter (The Nestlé Edge) • Internal e-announcement and news • Townhall meetings and roadshows • Safety, Health and Environment (SHE) • Employee Volunteer Programme (Seeking Out to Community & Kids ROCKS) • Employee events (annual hi-tea, festive celebrations etc.) Customers and Overall Public • Corporate and brand websites • Customers bonding marketing (Dear Nestlé Club) • Media social channels (Facebook and Instagram) • Corporate and brand campaigns • Consumer research (Corporate Equity Monitor) • Advertisements and promotions • Exhibitions and showcases Shareholders and Investors • Annual Report • Annual General Meeting • Analyst talking • Announcements to Bursa Malaysia Securities Berhad Local Communities • Community development programmes • CSV projects • Monthly food contribution programme • Corporate Social Responsibility hard work Board of Directors • Board of Directors meetings • Developing Shared Value update meetings • Corporate & CSV parties Non-Governmental Organizations • Roundtable meetings • Strategic partnerships and agreements • Memberships • Monthly food contribution programme • Key Opinion Leaders (KOL) survey • Corporate Social Responsibility initiatives Government • Advancement meetings • Roundtable affairs conversation • Ministerial meetings and dialogues • Monitoring filings • Expo and showcases • Survey for Key Opinion Leaders (KOL) Media • Physical engagements • Conversation and forums • Media familiarisation tour to sites project of CSV • Events for corporates and brands • Survey for Key Opinion Leaders (KOL) Association in Industry & Trade • Participation of organization in key associations • Advisory experts. • Survey for Key Opinion Leaders (KOL) • Expo and showcases Suppliers Supplier Engagement Day Coaching on the Responsible Sourcing Standard and the AntiCorruption, Gift and Entertainment Policy of Nestlé Malaysia Mentoring Programme for Small & Medium Enterprise (SME) Consumers/ Distributors Academia Campaigns for products. Customers bond activities Collaboration programmes Seminar Workers branding activities (e.g., job fairs) Survey for Key Opinion Leaders (KOL) ii.) Potential Risk and Explanation One of the potential risks is raw material supplies. This is due to unpredicted order from customers, worst weather, and climate change and incorrect of orders receive in supplies or merchandise in hands. Other risk is covid 19 pandemic. Due to pandemic, most manufacturing enterprises has to restrict operating activity, and some has to stop production entirely. The CEO of the company has admitted that the company has being facing production challenge as it is unable to hit its normal production levels during covid 19 pandemic. The company complies standard operating procedure (SOP) for their employees. However, social distancing causes the number of employees to be present is limited. It puts pressure on the workforce and forces to work with a limited staff. Thus, it causes extra time needed to achieve the target production. Lastly is political risk. Changes and policy by government causes production bottleneck at greater risk for Nestle company. The operation may be disrupted if more changes in policy. If the food standards and regulations are changes in a country, the company has to follow it. If not, the government will cut off the products, so the products are unavailable nor consumable. Political risk also causes the price of ingredients to be expensive. The company can provide less quantity of the products. iii.) Issues or Challenges One of the issues faced by Nestle Company is child labour issue. In cocoa production, child labour is used. Children are being used due to poverty and lack of education. Thus, it is violating the law for child labour. It shows that the company enslaved and trafficking the children. Next, boycott and ethical issue. In the America and some European countries, there is a boycott for Nestle product in late 1970s. The marketing for infant formula is unethical. It is coordinated by the International Nestle Boycott Committee. Aside from that, the organisation must be restructured. The question is to what extent the classic hierocracy, pyramidal organisational structure facilitates or hinders such employee contributions. Although a top-down approach may benefit a business, it is not appropriate for personnel who are unskilled and uninformed and require supervisory oversight. Nestle recognised the pyramidal model's flaws and created the "Nestle on the Move" programme to address them. iv.) How to mitigate the risk highlighted above? Make a list of it. Potential Risk/ Issues Risk of raw material supply Mitigation Managers cultivate a variety of relationships with raw material suppliers. Surplus products will be sold at a discount to clear inventory. Create a Dealer Management System (DMS). Supply Chain Management Program Covid 19 pandemic Nestle needs to comply with standard operating procedure to provide a safe workplace environment. High acceptance of measured risk and uncertainty Political Risk High drive and determination To investigate a country's riskiness, either by purchasing for studies from experts who specialise in such assessments or by conducting your own research utilising the many free resources available on the internet. Companies can sometimes negotiate compensation arrangements with the host country, providing a legal basis for action if the company's operations are disrupted. Child Labour Purchase political risk insurance. • Introduces the code provided by Nestle. • Establishing clearer labour rules and monitoring all players in the supply chain. • Provide specialised training on how to address the problem of child labour. Ethical and Boycott Campaign made by WHO should be support in establish complementary food. Restructuring the Organization Commercial. Sampling is free of charge. Communicate to consumer. Change the way managers lead their people. Nestle has to convert the way managers examines efforts from their staffs. Develop Nestle Leadership Program and the Development People initiative. v.) Justify Mitigation Plan To identify all the risk that occurs in company, use process of risk management. The well-ordered utilization of management rules, techniques, and practises towards the activities of setting the context, identifying, inspect, assessing, manage, checking, and in touch is known as the process for the risk management. Steps that need to take to identify, monitor, and control risk in organization. Organization can control risks, removing all the uncertainty. Process of Risk Management 1. Identifying risk Permit organization to know risks so that the operations staff becomes conscious of possibilities problems. Shall be repeated frequently. 2. Analysing and prioritizing risks. Three more elements are added: risk possibility, influence, and vulnerability. Permit operations staffs to classify risks, which in turns allow them to handle many of the energy into controlling the list of top risks. 3. Planning and scheduling risk actions. Create an action plan based on the prioritised risks list. Establish detailed methods and actions for each of the main risks, arrange risk actions and generate and comprehensive risk management plan. 4. Tracking and reporting risk. IT operations collect information about how risks are altering. 5. Controlling risk. Corrective measures are launched deploy on risk tracking data. 6. Learning from risk. Provide quality assurance related the current risk management activities. Capture knowledge and best practices, especially risk identification and victorious mitigation methods. Upgrade the process of risk management by focusing feedback from the organization.
