I had an assignment to work on a case study in which Nestle and Milkpak made a joint venture of supplying milk a cross Pakistan but due to an incident 1,700,000 cartons of milk were discarded. Here is my report on the analysis as to why the incident occured and what was the best scenario to deal with it.
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Introduction:-

Nestlé is a global brand, manufacturing many different products and commodities. Nestle in Pakistan is operating since 1988 under a joint venture with Milk Pak ltd and took over management in 1992.
The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line with internationally accepted best practices and ethical performance culture. Nestlé’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs are, and for all age groups.

Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Ever since 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today more and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their health and quality of life. Nestlé Pakistan operates in many ways but people, products and brands are the main flag bearers of the Company’s image, continuing to enhance the quality of life of Pakistanis.

Case Analysis

Nestle Milkpak a brand name in Pakistan had a major problem in 2013 with their supply of Milk batch Number 2031. On 27 April 2013 The Batch 2031 was packed and ready to supply, there were 17 lakh cartons of different pack sizes to be distributed. 250 ml, 750 ml and 1 liter packs were ready to be distributed across Pakistan. The product was sent to the distributor on the same day, the next day the main distributor had supplied the cartons to the local city distributers. On 29 April 2013 the research and development department of the company had informed of the mismanagement carried out during the testing phase of the milk of batch number 2031, the batch tested was 2030 and ready to be packed but the pack sent was 2031 without being tested, the milk was not edible and upon heating it was solidifying into a mixture. This was a scary case as the impact of the problem on the consumer market would plummet the reputation of the company to the ground hence the company might lose thousands of loyal customers and distrust is the biggest problem for a global company.
On the same day the company contacted the main distributer informing them about the alarming situation, a similar situation had also occurred in the past, a boycott was launched in the United States on July 4, 1977, against the Swiss-based Nestlé Corporation. The boycott expanded into Europe in the early 1980s and was prompted by concern about Nestlé's "aggressive marketing" of breast milk substitutes, particularly in developing countries, largely among the poor. The nutrition value was lacking and hence many babies had lost their lives due to malnutrition. To save time and money the distributor was advised to take back every carton of the batch number 2031 and discard them by flushing out the milk. The cartons were brought back to the distributor and then from their back to the company this had an added labor and transportation cost besides the losses in the discarded milk. Finally after reaching the company the milk was discarded and some of the cartons were taken for further research to find the problem behind such an incident.

My Opinion:

I would have sent representatives from the company directly to the distribution centers in order to discard the packs there and then saving the company resources and assets. The additional costs of transporting the cartons would be saved and the milk be discarded at the spot. Another batch of employs would be sent to the local distributors enquiring whether they had sold any products from the batch to the retailers and follow the trail of the batch products and take them back to save the company reputation in the eyes of the consumers. Making sure none of the batch were to reach the consumer directly and be brought back or discarded on the spot.

Conclusion:

Such type of mismanagement is intolerable in a global company like nestle and can be important for the company’s huge reputation and sales. The employees involved in the situation must be taken for their actions because this mistake could have taken many lives and in the end it would be the problem of the company. The procedures form the production to the packing of the milk should be made efficient and monitored throughout to avoid any type of incidents in the future.