I congratulate you for this superb, well researched article. The heading and the first paragraph is the gist of everything. What I wish to inform here is not about Nestle but about the general trends in any manufacturing company. Manufacturing companies after launching a new product successfully, immediately start projects to reduce its cost. Reason is that the ad spend and other product launch expenses are so high that in the first three years even a successful product makes losses.
After about 3-5 years, the product starts delivering profit and for the company it becomes a cash cow to milk it dry before the competitors start catching up to launch similar or better product.
The cost cutting exercise to improve profit starts with projects at manufacturing site. This is fine so long; the product formulation is not messed up.
However, the problem starts when purchase or sourcing is asked to reduce raw materials , packaging cost and quality control is asked to reduce testing to reduce time of availability of the product for sales force. Examples of a reduced testing program can be like eliminating time-consuming and /or a costly test or testing one in 100 inputs like raw material or packaging batches. Purchase department if hand in hand with QA personnel then develops any alternate supplier with poor quality and then uses him to pressurise the existing supplier to reduce cost. This naturally reduces the quality of his raw material due to hazardous and non-hazardous contaminants. Further QA releases substandard raw material for production without testing due to reduced testing program.
However, if the product is to be exported to countries like Singapore or Japan , extra care is taken to conduct complete testing of raw materials as well as of the finished product and the best quality raw material is selected. Hence, it is no surprise that the product exported never fails to meet specification. In fact, audit of the documents of these export batches throws light on what is not done during manufacturing of local batches distributed in India.
Only select few insiders in the company or contract / third party manufacturing locations are aware of these covert operation done with managements' approval and hence the real picture/truth never comes out unless manufacturing is audited by very brilliant auditors.