ENTERPRISE RESOURCE

PLANNING

ASSIGNMENT - 1

TOPIC – HERSHEY’S ERP FAILURE (CASE STUDY)

Submitted By:
Meghna Madhukar
BFT/16/696
Semester – 6
NIFT PATNA

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 ACKNOWLEDGMENT

This assignment “CASE STUDY ON ENTERPRISE RESOUCRCE PLANNING OF A

COMPANY” under the “ENTERPRISE RESOUCE PLANNING” is an important
assignment to enhance our knowledge about the finishing process related to this
subject. I would like to thank our subject faculty, Miss. Nilima Regina Topno to
help us in the better understanding of the subject and also in the assignment to
make it properly and efficiently, for his constant support and guidance
throughout the class and for always being there when asked for. I would like to
thank her with all respect.

Thank you

Meghna Madhukar

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CONTENTS
1. Hershey’s- An Overview 4

2. Existing System 4

3. What is Y2K? 4

4. Hershey’s IT Partners 5

5. Implementation Plan for Enterprise 21 5

6. Expected Benefits 6

7. Actual Scenario 6

8. What Went Wrong? 7

9. Learning 8

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HERSHEY’S – AN OVERVIEW
 It is one of the leading chocolate manufacturing companies across the world.
 It has large chunk of sales from Valentine’s Day, “back to school”, Easter,
Christmas and Halloween.
 The availability of reliable product is critical.
 Thus there arises a need of an efficient and reliable logistics system to cater to
this large no. of seasonal requirements.

EXISTING SYSTEM
 Hershey is a big network of 19 manufacturing plants, eight contract
manufacturers and a list of more than 20 co-packers.
 This company was earlier running on legacy system, and with the
impending Y2K problems, it chose to replace those systems and shift to
client/server environment.
 To tackle Y2K problem Hershey finally decided to replace existing legacy
system.

LET’S KNOW, WHAT IS Y2K?

 The Y2K bug was a computer flaw, or bug, that may have caused problems
while dealing with dates beyond December 31, 1999.
 The flaw, it was faced by all the computer programmers and users all across
the world on January 1, 2000.
 It is also known as the “millennium bug”.
 It is also known as year 2000 problem.

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HERSEY’S IT PARTNERS
 A $112 million worth of combination of software for CRM,ERP and
forecasting.
 Replacement of existing mainframe based legacy systems by SAP R3-
Accenture.
 Scheduling, transportation management and production forecasting-
Manugistics Group Inc.
 Managing relations with customer and tracking effectiveness of marketing
activities – Siebel CRM.

IMPLEMETATION PLAN FOR ENTERPRISE 21

Jan 1996- Roll out of the plan

Tackle Y2K issue by Replace mainframe Advanced fonal date
Jan 2000 with SAP R/3 to April 1999

Jan 1997

Replaced 5000 dekstop computers Installed TCP/IP network hardware.

April 1999
Enterprise 21 went live

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EXPECTED BENEFITS AFTER INSTALLATION

 Up gradation and standardization of company’s business process.

 Fine and tuned deliveries to suppliers.
 Reduces inventory cost.
 Efficient customer driven processes capable of managing changing
customer needs.
 Reduce cycle time of order and boost accuracy of inventory.
 Better execution of business strategy of emphasizing core mass market
candy business.

ACTUAL SCENARIO
 Stock price down by 35%
 Earning drops 18%
 Unable to deliver $100 million worth of Kisses and Jolly Ranchers for
Halloween in 1999.
 Lost its prominent shelf space for the season!
 Several deliveries were incomplete
 Several consignments were shipped behind scheduled.

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WHAT WENT WRONG?
1. SQUEEZED DEADLINES:

 Project was originally scheduled for 4 years.

 Company forced the implementation to 30 months.

2. WRONG TIMING:

 It released the solution just before the Halloween.

 The company went live at their busiest time.

3. BIG – BANG APPROACH:

 Hershey opted for Big Bang implementation, to quicken the

implementation process.
 Implementation of customer-relations package and a logistics package
even without testing some of the modules.
 Increase the overall complexity and employee learning curve.

4. UN-ENTERED DATA:

 “Surge Storage” capacity not recorded as storage points in the ERP.

 Even though Hersey had the finished product stocked in its
warehouses.

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LEARNING

• The evolutionary way

• Do test each module before making it
GO SLOW release.

• Migration of data is important.

• Discipline in inventory.
DATA IS KING

• Management should always keep a must

watch
OVERSIGHT MATTERS • Work towards a common goal.