Table of Contents
Identified Issue......................................................................................................................................3
Rich Picture............................................................................................................................................3
Root Definition report...........................................................................................................................4
CATWOE............................................................................................................................................4
Solutions:...............................................................................................................................................4
References.............................................................................................................................................5
Identified Issue
Following issue was identified in previous part of this assignment:
Nestle is facing a production issue or supply issue due to Covid-19 as by this they are unable to
produce the normal quantity of their products
By the help of system thinking the root of this issue is the Covid-19 as employees are less and the
demand is more due to the pandemic condition and due to that many people are storing basic food
items in their houses so that they can manage their life. In over all these small issues are causing
major issue for the company to full fill the production demand of their products to manage the
supply demand.
Rich Picture
Rich picture is a presentation of a problem in picture form which uses icons, symbols and arrows to
represent the problem. It is a part of soft systems methodology and helps to open discussion and
come to a broad, shared understanding of a situation. Following id the rich picture of above
identified problem:
Above rich picture clearly represents the production issue faced by nestle. It also highlights the
demand and supply issues that is followed by it and the lack of labor. The challenges faced by
competitors in market and very scrutiny of WHO and other safety regulation bodies due to Covid-19.
Root Definition report
Root definition report summarizes the issue which the organization is facing in terms of why, how
and what. To derive root definition of the issue CATWOE model will be used:
CATWOE
Client: These are the users and stakeholders of an organization. They will certainly benefit if
a change is to occur within the system or process or if a problem is solved. In this issue client
is the existing customer users of products manufactured by nestle
Actors: They are typically the employees of an organisation. They confirm that the required
change in process takes place. They are responsible for executing the change and are
involved with the implementation of changes in the system. The actors in this issue is the
marketing team, supply chain team and production team who are responsible for resourcing
material and maintaining a balance between supply and demand in times of crisis.
Transformation process: Transformation process is the required change that needs to be
achieved by resolving the issue. In this case, it is to determine how to keep in balance the
demand and production to meet the needs of the market with limited resources including
raw material, labor and others.
World view: This part is about the big picture of the issue and studies the different
stakeholders from the atmosphere surrounding a party and the influence they can have. It is
also sometimes seen as the most vital step in the CATWOE analysis. Stakeholders often have
different approaches to the same issue and with other interests that are usually conflicting.
From a world view perspective customers, will want to see the products on shelves as
before, safety related bodies will want adequate safety systems in place regarding
employees, employees will want to work from home or not work at all regarding their safety
perspective.
Owner: This usually represents the person in charge of making decision, who is in control of
implementing the changes and they have the highest authority. In this case Nestle itself or
their board is the owner because they will be taking decisions after analyzing the situation.
They can choose different strategies to resolve the production issues.
Environmental constraints: In difference with World view, this is about the actual
environmental issues that may affect the company and can bound or restrict the system.
Like ethical boundaries, regulations, financial constraints and environmental factors. In this
scenario, environmental constraints include limited raw material supply and logistics issues
and high consumption or storage of products by customers.
Using CATWOE analysis we can see that major issue faced by Nestle is their inability to produce
normal amounts of products. The factors which cause this is the limited availability of resources due
to lockdown caused by the pandemic which eventually caused logistics issues not only for sourcing
of raw material but also delivering the finished products to its required place. Second issue is the
high consumption of the finished products due to the unknown of pandemic and the storage of
finished products by customers.
The root definition derived by this analysis is that Nestle needs to create awareness to its customers
through different marketing campaigns to teach them to use the products just per their use so a
balance can be maintained between high demand and production of the products.
Solutions:
First solution is to source the raw material locally until logistics can be revived so that production can
atleast be maintained 100% of the normal value. Sourcing raw materials locally or from other places
will increase the cost for time being but it will also help in the production deficiency caused by high
demand of products.
Second solution is to create awareness about using the products as per need and not storing them
for later use or reselling them at higher prices when the products are not available in the market.
Nestle can use a series of different media tactics to spread their message and aware customers of
the restrictions and problems arising from overuse and storage of products.
Third solution is to give their workers higher pay for working in these uncertain times but at the
same time ensure that all safety standards and protocols are in place for their workers. By adding
shifts and giving overtime and higher allowances Nestle can overcome their production shortage.
References
Schwarz F. (2002.). Nestlé: The Secrets of Food, Trust and Globalization. Key Porter Books.
Swinnen. (2020.). COVID-19 and global food security. Intl Food Policy Res Inst
Latino M. (2016.). Root Cause Analysis: Improving Performance for Bottom-Line Results (4rth ed.).
CRC Press
Horev M. (2010.). Root Cause Analysis in Process-Based Industries. Trafford Publishing
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