Nestlé improves its financial reporting with management science

Nestlé's executive information system (EIS) department gathers data from the firm's subsidiaries (reporting units) to provide top management with operational, financial, and strategic information. In 1996, the EIS department decided to improve its service by using business analytics tools based on management science (MS) techniques. It wanted to encourage analysts and controllers to make better use of the information supplied. We developed four OR modules: sensitivity analysis, forecasting, simulation, and optimization, and integrated them into a more global modeling scheme for evaluating the economic profitability of Nestlé's projects and more generally evaluating the value of the Nestlé group and its multifocal businesses. Disseminating this approach within the Nestlé group through training and internal consulting has been a long and important process that has increased the number of managers accustomed to quantitative decision making and established new reporting protocols imposing the use of MS models.