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Informist, Thursday, Mar. 6, 2025

 

By Rajesh Gajra

 

NEW DELHI – Nestle India Ltd. is integrating milk supply sourcing information from farmers in newly added states of Haryana and Rajasthan into its in-house supply chain and customer-end data, and monitoring systems, Atul Jain, head of supply chain-north region, said. Jain was speaking on the sidelines of Confederation of Indian Industry-organised conference on responsive supply chain for Indian manufacturing.

 

"Earlier we were sourcing the milk from Punjab, now it is from Rajasthan and Haryana as well," he said. Connecting all the farmers from the new sourcing points to the integrated in-house monitoring system is a challenging task, Jain said.

 

The move could potentially reduce the company's dependence on prices set by milk farmers from Punjab. According to analysts, Nestle India's milk category has been ailing in the current financial year, according to analysts. The company's management had admitted last month during December quarter earnings meet with investors and analysts that the price increases had restricted the volume growth in the milk and nutrition category, noting that competitive pressures from a lot of milk cooperatives was a major contributing factor.

 

Over the past few years, the company has been using data tracking and analytics to manage the operational resources better. The supply chain management of Nestle India gets daily updates and insights from the company's enterprise-wide, proprietary, multi-intelligence data analytics platform that was built around one-and-a-half years ago. The system incorporates different facets such as automation, e-commerce, direct-to-consumer sales, and consumer insights, into business operations and for smarter and faster decision-making.  

 

"This platform helps us to track sales and back-end inventory on a day-to-day basis," according to Jain. It helps to capture information from the market that helps the company understand the demand generation, Jain said. Nestle India had said its in annual report for 2023-24 (Apr-Mar) that this system contributed about "half a percent of the company's (sales) growth through improved forecasting and enabling quick, granular, decentralised and robust decisions across the operating canvas."

 

In the supply chain management, apart from milk suppliers, the company tracks data on wheat flour, coffee beans, and other input materials, according to Jain. "Take the case of coffee beans: we get a lot of information, understand what the (demand and production) trends are, what the seasonality is," he said, and the company uses it to make two-year forecasts. According to Jain, Nestle India is using AI (artificial intelligence) and machine learning tools together to get the information "so that we can make a responsive supply chain."

 

In the December quarter earnings meet with investors and analysts on Feb. 4, Nestle India's management had said the company was using artificial intelligence for predictive models of demand generation from the ability to track ground level data and analyse it. For distribution planning, the management said, the company had a geo-hash model that enabled it to optimise resources at a sub-pin code level by identifying which brands to promote at which outlets, localities, brands. "We do not land up spraying and praying and putting budgets all across," the management had said.

 

Thursday, shares of Nestle India ended 0.19% up at INR 2,201.20 on the National Stock Exchange of India.  End

 

Edited by Deepshikha Bhardwaj

 

 

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