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Here I enclose some additional articles, which are in my opinion really interesting and gives us a better understanding of Nespresso.
https://digital.hbs.edu/platform-rctom/submission/nespresso-protecting-the-worlds-best-coffee/
https://www.houseofexperience.co.uk/nespresso-interactive-retail-experience/
https://medium.com/global-luxury-goods-management/nespresso-is-the-future-of-cpg-1b262e879fa7
IE Business School
Master in Management - February Intake 2019
Operations & Supply Chain Management - Professor Felipe Quintana
Section F1 - GROUP F
Hubert Offner
OPERATIONS & SUPPLY CHAIN MANAGEMENT
Introduction:
I wanted to choose a company which is viewed critically by the public but also a company which is putting many efforts to be as efficient as possible and producing its competitive advantage through operations management.
With this mind map I would like to show you how they evolved over the years and what operational methods they are applying.
So who did I choose in end?
NESPRESSO - WHAT ELSE ;)
Nespresso has changed its capsules material by using Aluminium now, which is infinitely recyclable. Therefore, they apply Lean Management by reducing waste and additionally improving their processes (Kaizen) while being responsible for our environment. In the beginning Nespresso started the recycling program alone, but now for the first time they are opening its global recycling program also to other companies. This decision is aligned with the companies vision of a "waste-free" future and reusing materials. (Lean)
Despite Nespresso's state-of-the-art production facilities and it's supply chain, there are some aspects they can't control but have to keep in mind.
Weather conditions, timing of the harvest and many other factors will have a direct impact on the quality and taste of the coffee and because Nespresso has built its reputation around premium product quality, they really have to oversee this parts in the value chain to ensure consistent quality and this is why Nespresso has build direct relationships with the local farmers.
For more in depth information about the partnership with local farmers: (3-4min read)
https://www.nestle-nespresso.com/newsandfeatures/nespresso-head-of-coffee-explains-why-coffee-quality-and-sustainability-go-hand-in-hand
Inventory management strategy is critical in helping to achieve a healthy financial business position. It is essential to use ERP system to keep track of all stocks.
Nespresso uses ERP to optimize resources and automatize the processes.
Use of Kanban to know when there is the need to place a new order and you do not have overstock or understock.
Because of all the data Nespresso is collecting they have a better forecasting system.
Another benefit is that the waiting lines can be reduced drastically and you won't waste time waiting in the queue (--> increases customer satisfaction)
Nespresso allows you with its app to track your stock to keep track on when to restock (works as an ERP but for the customers)
The boutiques are designed with an attention to detail, with dedicated zones to increase convenience, choice and availability for consumers.
The Coffee Room allows coffee enthusiasts to enjoy the art of Nespressocoffee tasting with a coffee specialist.
The Exclusive Room enables Club Members who are already familiar with the brand to choose a shopping experience at their own pace and check-out automatically thanks to RFID (radio-frequency identification) technology.
And the Pick Up area allows time-pressed customers to quickly pick up orders previously made online or via the CRC.
By allowing the customers to do everything by themselves Nespresso is able to save costs.
George Clooney
He is perfectly aligned with what Nespresso is trying to achieve.
He is responsible, classic, an activist, a morally sound connoisseur.
Guys want to be him, and girls want to be with him.
This Video sums up many of the great operational aspects Nespresso has implemented in its operations:
I'm very impressed on how well the automatic Kassa identifies what flavour we chose and how many.
It is very convenient for customers and you don't need any assistance because it is very intuitive.
Nespresso calls it's own stores boutiques. This is key to its brand image. By serving the customers this experience Nespresso can justify higher prices for this premium product.
Nespresso has optimized the floor plans to serve everyone. For customers, who just want to bring back used capsules, they will have an area next to the entrance. They will make sure that this won't disturb other customers.
The shopping experience is comparable to what we have seen in IKEA (same concept; customer have access to "inventory" and can take whatever want, how much they want)
Additionally, Nespresso offers guidance on separate floors if you need anything specific or if you are a new customer.
By analysing this we can see that Nespresso has optimized its boutique's floor plans by trying many Lay Out studies and tracking the customers. (spaghetti diagram)
Production:
300.000 to 1.400.000 capsules per day
Initially Nespresso machines were targeted to offices and restaurants. This was aligned with the concept of its owner (Nestle), who sells almost every product via retailers.
Nespresso decided to go a different way and started selling directly to individuals. In the following infographic you can see how Nespresso benefitted from this decision.
