How COVID-19 pushed Nestle India to decentralise its operations

The work-from-home policy adopted by Nestle India all through the pandemic has pushed the food major to adopt a decentralised approach to its business. Unlike earlier, when bulk of the decision-making about its marketing and sales strategies, distribution or manufacturing happened at its headquarters in Gurgaon, the company decentralised a lot of its decision-making to the factories and local sales areas.  "Because of the pandemic we could not get to offices, sit in teams and make decisions, so we decided to decentralise decision-making. By doing so, we have been able to empower and enable right levels of decision making in this company," Nestle MD and Chairman, told Businesstoday.in.

Decentralised decision-making not just involved forming COVID-19 crisis committees at the factory and local level (which decides whether to pull back number of people in the market if the COVID cases in that area is on the rise or cut down the number of people at the factory and at the same time manage output), but also deciding the SKUs to be manufactured. Nestle India during the peak of the lockdown refocused its portfolio and manufactured only the top 100 SKUs that the consumers needed. "The Centre will have a say on the SKUs they would like to focus on, depending on the deployment of the workforce, but the local teams are empowered to decide whether they will produce more of 200 gm packs or less 500 gm packs," explains Narayanan.    

Nestle's decentralisation move syncs well with its cluster strategy. Last year the company had announced that it had remapped the business into 15 clusters on the basis of geography, psychographic and purchase habits. "Decentralisation will take the cluster strategy one step further," says Narayanan. "We have invested a lot on analytics, empowered our business organisations with data and insights using the power of analytics, we call it the MIDAS (multi-disciplinary analytic system). This is helping us a lot in terms of granular data (market, geography, channel, as well as brand ). This is helping us sharpen our plans, both digital and in the market place and also in terms of media. This will work only when we decentralise decision-making. It will not work if you are sitting in Gurgaon and taking decisions for all parts of the country," he adds.

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