Distribution Strategy

Distribution strategy used by Nestle company is an intensive distribution where a firm tries to place their products into outlets as many as possible to meet the needs of consumers whenever and wherever. Company is able to analyze the source of sales, whether a products is more in demand from local vendors or hypermarket type stores.

Nestle has its own distribution networks equipped with all necessary transportation facilities. They transport their products at major regional sales offices, which are situated at different cities of India. These sale offices have their own vans with sales people who sell and transport goods to small retailers.

Using Improved Vehicle Fill Rate (VFR),Nestle is committed to reducing their carbon emission over a period of time by standardising their vehicle fleet across India through technological and data simulation processes. We have been able to improve our net VFR by 10%, reducing our CO2 footprint by 13,006 MT and vehicle utilisation by 9%, which resulted in annual savings of INR 352 million.

Also, by making use of a 3D simulation approach, they are able to identify the optimal load mix for each vehicle, thereby ensuring maximum utilisation of the vehicle volume available. The method is scalable, replicable and can be extended to their secondary distribution systems as well.