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December 15, 2017
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Nestlé puts 36,000 supply chain minds to work

Forward Thinking
The global food manufacturer is using internal crowdsourcing to solve problems and develop new business solutions worldwide.

Crowdsourcing—the collaboration by many people to solve a problem, answer a question, or fund a project—is usually associated with technology startups helmed by Millennials who are fresh out of (or maybe still in) college. But the global food manufacturer Nestlé is demonstrating that it can also be an effective technique in supply chain organizations.

The Switzerland-based conglomerate has approximately 36,000 employees who are directly involved in its supply chain, according to Chris Tyas, Nestlé's global head of supply chain. To facilitate two-way communication about supply chain challenges, problems, ideas, and solutions, Nestlé has launched a crowdsourcing initiative, called "InGenious," to engage supply chain teams worldwide, Tyas said in a keynote presentation at the 2016 Gartner Supply Chain Executive Conference in Phoenix, Ariz., in May.

Tyas described the program as a "safe place" for supply chain personnel to share ideas, including proposals for startups with business potential. Employees can post an idea on an internal website, and others can comment and vote on it. To date, nearly 900 ideas have been proposed, and 15 have been accepted and are in development, according to Tyas. Proposals that are chosen receive the necessary technical and financial support from Nestlé headquarters and are developed and led by the employees who proposed them.

Nestlé also "employs all of the communication technologies of today and tomorrow" to share supply chain knowledge, Tyas said. The food manufacturer has developed more than 70 supply chain-related massive open online courses, or MOOCs, in multiple languages. About 5,500 employees complete the function-specific courses annually, Tyas said. This year, Nestlé will roll out courses especially designed for employees and service providers in Africa.

Spotlight on responsible sourcing

The company is also turning to crowdsourcing to help with its focus on responsible sourcing. According to Tyas, the Swiss conglomerate buys approximately 10 percent of the world's coffee production, 10 percent of the cocoa crop, and 2 percent of the milk and sugar. Some 700,000 farmers and their families sell their products to the company, the vast majority of them as indirect suppliers. "It is humbling for us in supply chain to recognize how many agricultural communities depend on us" for their livelihoods, especially in developing markets, Tyas said.

Responsible sourcing is therefore a "huge focus" for Nestlé's supply chain organization, Tyas said. Tracking and tracing of food products is becoming increasingly important and must be more comprehensive further up and down the supply chain, he said. But the complex web of suppliers that typifies large, international companies today makes this difficult to achieve, he said, citing the example of the 2013 scandal in Europe, when it was discovered that some of Nestlé's products contained horsemeat that was not listed among the ingredients. The meat, Tyas said, originated with an abbatoir in Poland that "neither Nestlé nor its direct suppliers knew of."

No one company or enterprise resource planning (ERP) system could keep track of all the agricultural suppliers in the world and where their products go, Tyas said. "Conventional ERP systems as we know them today will not provide the answers," he added. Instead, such a necessary but monumental task will require the business equivalent of crowdsourcing and the "sharing economy," where many minds tackle a problem and develop numerous potential solutions, he said.

In that spirit, Nestlé is participating in the United Nations' (UN) "Blue Number" program, which also involves the International Trade Centre (ITC) and the global data standards organization GS1. The program, launched in 2015, is a digital platform that gives farmers an online presence, encourages them to improve their sustainability practices by enabling self-assessment of voluntary standards, and connects them to buyers. It also assigns a unique global location number (GLN) and bar code issued by GS1 to farmers around the world. The UN is collaborating with GS1 and the industry association Consumer Goods Forum to develop an information system to manage the global registry, Tyas said.

Toby Gooley is Editor of CSCMP's Supply Chain Quarterly.

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