Supplier development

Nestlé Bangladesh is committed to responsible sourcing of raw materials
Supplier development

Consumers and stakeholders increasingly want to know what is in their food, where it comes from and how it is made.

Nestlé Bangladesh is committed to responsible sourcing of raw materials, which is in compliance with our global Responsible Sourcing Guideline, with the aim of achieving transparency and traceability throughout our supply chains. It is thus an essential part of ensuring a sustainable future not just for our business, but also for our suppliers, farmers and producers on whom we rely upon for our operations.

Programme Description:

With an emphasis on the need and opportunity to source more raw materials locally, the Supply Chain team of Nestlé Bangladesh has taken several initiatives for local vendor development. These initiatives include:

• Start of local rice sourcing from March 2008, with awareness sessions for farmers on fertilizer usage, pesticides usage and sound irrigation methods.

• Start of local honey sourcing from 2011 via partnership with an NGO that specializes on honey collection and processing. The partnership developed local honey vendors, and provided training sessions for farmers on bee colony maintenance, honey extraction technique and hygienic preservation of honey.

• Signing an MOU in May 2012 with a local spice processor to reduce import of spices and sourcing spice mixes and corn starch locally.

• Partnering with an NGO based Dairy Industry in 2012 that now produces skimmed milk powder (wet mix grade) locally.

• Start of local wheat souring, with training for farmers to reduce the issue of high levels of aluminium in local wheat.

Several other initiatives to develop more local sourcing of products are currently under process. Nestlé Bangladesh believes that the well-being of farmers and suppliers is intimately linked with its own success.

Value to Society:

Supplier development has given our partners and suppliers new opportunities to extend their reach, including exports to other Nestlé markets. Furthermore, the training programs and awareness sessions we hold have enhanced employability and promoted the livelihoods of local vendors. This has left a positive impact in not just these rural communities, but also in the capacity of the country to become less reliant on imports by encouraging local sourcing of products such as corn starch and honey. As a people company. Nestlé Bangladesh is focused on the continuity of improvement of our local suppliers, vendors and other third-party vendors.

Value to Nestlé:

The focus on responsible sourcing of raw materials has allowed Nestlé Bangladesh to achieve cost savings by overcoming quality and food safety issues, relying less on imports, and creating a supply base which is dynamic and socially responsible. This has allowed us to initiate ‘On-Shelf Availability’ (OSA) and ‘On-Shelf Freshness’ (OSF) measures in 2015 to further our commitment to Good Food, Good Life. This development is helping us provide our consumers with fresh products. Nestlé Bangladesh has also implemented vendor-management inventory (VMI) that has streamlined our operational activities in alignment with a ‘lean approach’. Together, the above practices has enabled us to create value not just for our business, but for our external stakeholders as well.