Download - ERP Implementation Failure Case Study
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ERP IMPLEMENTATION FAILURE IN HERSHEY’S
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Introduction
Existing IT infra
The Plan
Actual Outcome
What went wrong?
Learning(what could have done)
Hershey today – The turnaround
Presentation Agenda
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One of the leading chocolate manufacturer across world
Large chunk of sales from Valentine’s Day, Easter, “back to school,” Halloween and Christmas 40% of profit
Need of an efficient and reliable logistics system to cater to these large no. of seasonal requirements
Brief Overview – Hershey’s
Reliable product availability is critical
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The company was running on legacy systems, and with the impending Y2K problems, it chose to replace those systems and shift to client/server environment
A network of 19 manufacturing plants, eight contract manufacturers and more than 20 co-packers
To tackle Y2K problem Hershey decided to replace existing legacy systems
EXISTING SYSTEM
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Production forecasting,
Scheduling and TM:
Manugistics Group Inc.
Managing CRM and
tracking effectiveness of
marketing activities:
Siebel CRM
A $112 million worth of combination of S/W for
CRM, ERP & Forecasting
Tasks
•This is an example text.
• Go ahead and replace it with your own text.
Replace existing mainframe based legacy systems by
SAP R3 – Accenture
IT PARTENERS
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April 1999
Enterprise 21 went live
Jan 1997
Replaced 5000 desktop computers Installed new TCP/IP network hardware
Jan 1996-Roll out of the plan
Tackle Y2K issue byJan 2000
Replace Mainframe with SAP R/3
Advanced final date to April 1999
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Fine-tune deliveries to suppliers
Upgrade and standardize companies business processes
Efficient customer driven processes capable of managing
changing customer needs
Reduce order cycle times and boost inventory accuracy
Reduce inventory costs
Better execution of business strategy of emphasizing core
mass market candy business
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Unable to deliver $100 million worth of Kisses and Jolly Ranchers for Halloween in 1999
Stock price down 35%
Earnings drop 18%
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Order fulfillment time doubled to 12
days!
Lost prominent shelf space for the
season!!!
Several consignments were shipped behind schedule, and even among those, several deliveries were incomplete
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Squeezed Deadlines
Wrong Timing
Big-Bang Approach
Un-entered
Data
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Successful ERP
• The evolutionary way
• Test each module before release
Go Slow
• Data migration is important
• Discipline in inventory Data is King
• Management should keep a close watch
• Work for a common goal
Oversight Matters
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Hershey now has an inventory location accuracy of 99.96 % and can turn orders within 24 to 48 hours of receiving an order
Hershey built a 1.2 million sq. ft. distribution center, to align its distribution function with the new ERP system
Began work on the upgrade to mySAP in July 2001, and check all the system after installing it..successful !
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Revenues of nearly $5 billion and almost 13,000 employees worldwide.
In 2005 & 2006, Hershey acquired the Berkeley, California-based boutique chocolate-maker Scharffen Berger, Joseph Schmidt Confections, the San Francisco-based Chocolatier and Dagoba Organic Chocolate, a boutique chocolate maker in Oregon
Again Hershey's, Reese's, Hershey's Kisses, Kit Kat, Twizzlers, and Ice Breakers are ruling the Market!!!
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Prepared By:
Yuvraj Zala