In 2000, Hershey’s problems ware identified and fixed and was ready for
Easter 2000 by hiring new CIO George Davis. He set up testing raining program, developed
new process around the system and functional areas. Implementation of
enhancements was better than the original ERP implementation (Roberts, 2013)
the functional areas ware in the system so, there was no way to tell the
warehouse how many orders placed (Not integrate data and information).
employees were training on the new system, they have ignoring the major job.
different systems were introduced at the same time. Each system had different
methodologies and different functions to serve different functional areas.
Moreover, each system had own bugs, learning curves to overcome.
developed to change business process not to improve the current process.
company ignored the old system and didn’t had an accurate data for their peak
the system in 2.5 years while the recommended time was 4 years.
used “Big Bang” implementation approach which implement the remaining elements
of ERP system all at once with no user testing to make up for lost time.
to Jesse Roberts (2013):
Reasons for Failure
In 1999, Hershey’s faced
some problems while they implementing ERP system. Because they had poor ERP
adoption, they couldn’t handle over $100 millions of orders while having the
products in their warehouse. The order take 12 days shipping to customers. That
lead to decrease in their stock price then for Nine months, the analysts
couldn’t believe that Hershey can serve and deliver orders to their customers.
Hershey’s company was in bad statement. (accenterp.com, 2015)
Impact of ERP Failure
In 1996, Hershey’s
management approved and start implementing ERP system. Hershey selected SAP’s
R/3 ERP software, Manugistics SCM software and Sebel’s CRM software and IBM
Global Service to manage the integration for those three systems. They invested
$10 million, and implement the system in 2.5 years. They have used “Big Bang”
implementation approach. (Roberts, 2013)
ü Hershey have different competitors such as
Mars, Cadbury and Nestle.
ü Hershey’s sales are depending on 80% chocolate
& 20% non-chocolate.
ü Hershey product sold worldwide in 16 countries.
ü Hershey company started in 1894.
ü The headquarter of Hershey located in
ü Hershey’s is considered as the biggest
chocolate company in North America.
Overview of Hershey
Hershey’s case as a failure
invest energy assessing the business procedure re-designing that
will be done in conjunction with an ERP execution.
ERP execution is to put an extensive concentrate on preparing.
Preparing is one of the key components of any ERP usage in light of the fact
that without it workers that will utilize the framework and the new business
forms on an everyday premise won’t be set up to do as such.
ERP usage isn’t the venture that organizations should endeavor to
constrain into a particular course of events.
It is essentially difficult to overhaul work forms without including
a portion of the general population that really take the necessary steps. While
a contention could be made for “excessively numerous cooks in the
kitchen” with respect to ERP executions, it is absolutely preferable to
have more individuals over required rather at that point insufficient when the
eventual fate of the organization is hanging in the balance. It is simpler on
the task calendar to trim the undertaking group amid the venture than it is to
bring new individuals into the overlay and after that need to invest energy
updating them regarding the greater part of the complexities of the task
Nestle USA all together for an ERP usage to be fruitful the correct
people should be engaged with the procedure from the earliest starting point.
Reasons for Success
The issue of 29 unique brands of vanilla has been unraveled and now
with basic databases, every processing plant alludes to vanilla in a similar
way. They additionally utilize normal procedures that disentangle working
strategies and take into account the centralization of capacities, for example,
creating preparing systems. Preparing never again should be redone for every production
line. Since every area takes after similar methods, preparing materials just
should be created once. Also, any Nestle USA worker could migrate to another
manufacturing plant and not need to change in accordance with nearby processes.
Nestlé UK experienced comparable victories with their ERP usage.
Settle the USA has likewise possessed the capacity to meet up as one
In spite of the fact that there were obstructions for Nestle USA’s
ERP usage, it surely is by all accounts paying for itself. Starting in 2002,
Nestle USA asserted they had effectively understood funds of over $325 million.
A large portion of these reserve funds came in the range of store network
enhancements, particularly request to conjecture. “The old procedure
included a business fellow giving a number to the request organizer, who says,
‘Those folks don’t recognize what the heck they are discussing; I will give
them this number’. The request organizer turns that number over to the
manufacturing plant, and the industrial facility says the request organizer
doesn’t comprehend what the heck he’s discussing. At that point the processing
plant changes the number once more. With SAP set up, basic databases and
business forms prompt more reliable request conjectures for the different
Nestle items. Moreover, on the grounds that all of Nestle USA is utilizing
similar information, Nestle can figure down to the conveyance focus
Impact of ERP Success
In 1997, Nestle USA
started its own ERP venture known as Best (Business Excellence through Systems
Before the Nestle SA ERP choice, Nestle UK had effectively
actualized an ERP framework. The British backup of Nestle SA actualized SAP R/3
over a time of five years in 18 UK producing locales. This execution wrapped up
in 1999 and was one of the UK’s biggest ERP frameworks with more than 6,000
clients. Likewise, with the Nestle SA sending, the objectives of the Nestle UK
usage were fixated on utilizing the extent of the association and taking care
of the store network and re-building work practices and procedures.
In 2000, Nestle SA
concluded that it needed to use its size and start acting like the monster it
is. To do as such, it marked a $200 million contract with SAP to reveal an ERP
framework to its 230,000 workers in 80 nations around the globe. Notwithstanding
this aggregate, Nestle SA likewise dedicated to an extra $80 million to be
spent on counseling, upkeep, and overhauls. Administrators at Nestle SA
understood that the organization expected to institutionalize its business
forms in the event that it needed to be aggressive. The rollout was planned to
take three years for Nestle SA’s biggest locales with the others to take after.
Incorporated into the execution were the mySAP.com financials, creditor
liabilities, debt claims, arranging, generation administration, acquirement,
coordinate obtainment, inventory network, request arranging, satisfaction, and