Nestlé harnesses the power of AI for delivering major operational efficiency

Significant AI upgrades of Nestlé’s key software managing its global operations have taken a crucial step forward, as the business makes key major investment in improving its production efficiency, reports Neill Barston.

As the company explained, the enhancement of its SAP software system  to SAP S/4HANA Cloud Private edition, is anticipated to have a major impact on its international network, including for its confectionery manufacturing around the world.

Moreover, as the company explained, there will be tangible benefits to its upgrades including delivering intelligent order fulfilment for retail customers in-store and online, matching supply with demand in real time.

This will enable shoppers to find products more easily, and foster real-time, data-driven decision-making for consistency across reporting and planning processes. There will be automated and standardised procurement processes in the cloud across global operations, meaning real-time spend visibility and significant cost savings.

According to the company, its digital transformation is set to strengthen its programme for growth in the wake of a challenging period in which the business has been hit by numerous tests including notable increases in ingredients costs, as well as wider economic uncertainty.

Intriguingly, the company said that its latest system will help improve its responsiveness to consumer trends, as well as freeing up resources to invest in its core brands.

Notably, the upgrades include the deployment of AI at scale to achieve better insights as well as the automation and improvement of processes across the company’s business operations.

It involves embedding SAP’s AI copilot directly into Nestlé’s core business systems to help employees access insights, automate routine tasks, and make faster, more informed decisions. This will help Nestlé better respond to changing consumer trends and retailer needs and improve efficiency in areas such as supply chain management, procurement, order fulfilment for retailers and investment prioritisation.

Anna Manz, Nestlé CFO and responsible for Integrated Business Services, said: “Driving growth through innovation is a top priority. We are transforming our business to invest more boldly in the best opportunities. We need to combine great consumer insights and innovation with flexibility and scale, to provide great quality products to consumers around the world when, where and how they want them. This upgrade will help us build multi-year innovation pipelines, more agile production and digital-first marketing and sales platforms for areas like cold coffee, therapeutic pet food and modern cooking aids.”

The move means that 50 000 Nestlé users across 112 countries in the company’s Asia, Oceania and Africa region are already able to benefit from the new system’s capabilities.

Thanks to Nestlé’s streamlined tech architecture, the company will be able to complete the upgrade across the rest of the Group within only two years, significantly faster than similarly sized peers.

Thomas Saueressig, Member of the Executive Board of SAP SE, Customer Services & Delivery, added: “Nestlé’s successful go-live of SAP S/4HANA Cloud Private Edition showcases how scale can be a strategic advantage for innovation. As one of the world’s most recognisable and forward-thinking companies, with the go-live on SAP S/4HANA Cloud Private Edition, the company exemplifies how cutting-edge technology empowers global brands to anticipate consumer trends, optimise operations, and deliver exceptional experiences at scale.”

Nestlé’s SAP Enterprise Resource Planning (ERP) software connects core business processes, from manufacturing and sales to supply chain, finance, and human resources, end-to-end in a single system, enabling streamlined operations and improved decision-making. This unmatched global ERP core and strong data foundations are the basis for Nestlé’s global digital transformation.

Chris Wright, Head of Nestlé IT and CIO, said: “We are building a future-ready enterprise – one that works smarter and faster. Having a common ERP system as our backbone is already a tremendous advantage for Nestlé. It provides a unified platform and data foundation that allows us to execute end-to-end and have visibility across our entire company and beyond. With the upgrade, we gain more flexibility, capabilities and insights that will help us roll out new products globally faster to meet the needs of our customers and consumers. And with the use of AI and automation at scale, we’ll drive efficiency and effectiveness, throughout our value chain.”