erp failure at heashy chocolates
DESCRIPTION
ERP FAILURE AT HEARSHY unsuccessful implementation of ITTRANSCRIPT
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STERLING INSTITUTE OF MANAGEMENT STUDIES
ASSIGNMENT
ON
MANAGING TECHNOLOGY BUSINESS
SUBMITTED BY
NAME ROLL NO
SHOAIB N PATEL C-48
SUBMITTED
TO
Prof.Anu Binny
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ERP IMPLEMENTATION FAILUREIN HERSHEY'S
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OVERVIEW OF HERSHEY’S
• 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
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NEED OF NEW SYSTEM
• Existing system :A network of 19 manufacturing plants, eight contract manufacturers and more than 20 co-packers
• 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
• To tackle Y2K problem Hershey decided to replace existing legacy systems
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New System
• A $112 million worth of combination of softwares for CRM, ERP and forecasting.
• Replace existing mainframe based legacy systems by SAP R3 – Accenture.
• Production forecasting, scheduling and transportation management – Manugistics Group Inc.
• Managing customer relations and tracking effectiveness of marketing activities– Siebel CRM.
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Expected Benefits
• 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.
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BUT…
Unable to deliver $100 million worth of Kisses and Jolly
Ranchers for Halloween in 1999.
Stock price down 35%
Earnings drop 18%
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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REASONS OF FAILURE
• Squeezed Deadlines
• Wrong timing
• Big Bang Approach
• Data Loss
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REFERENCES
• www.hersheys.com
• www.Wikipedia.com
• www.ZDnet.com
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