ERP Implementation at Nestle -Summary

Edith Carrera Puente – A00759624

Enterprise Resource Planning (ERP) systems seem to be the silver bullet for every
company’s problems. They offer the company the chance to re-engineer business
processes, coordinate the systems of geographically dispersed locations, consolidate data,
and empower users by giving them access to all the company’s data in real time. Obviously,
these implementations come with their pros and cons. They still hold valuable lessons to be
learned for companies considering their own ERP implementation.

In this special case, Nestle SA (Switzerland) is being analyzed when in 2000 they
decided that it wanted to leverage its size and modernize their size. In order to achieve this,
they signed a $200 million contract SAP to roll out an ERP system to 230,00 employees in
80 countries around the world. Executives at Nestle SA realized that the company needed
to standardize its business processes if it wanted to be competitive. The rollout was
scheduled to take 3 years for Nestle SA’s largest sites with the others to follow.

Besides SA’s plans, Nestle UK already implemented an ERP system over a period of
five years in 18 UK manufacturing sites. With this, they were planning to leverage the size
of the organization as well as tightening up the supply chain and re-engineering work
practices and processes. Eventually, UK experienced similar successes with their ERP
implementation. They were able to recoup the money spent on the system after two years.
This success was mainly attributed to their “culture of continuous improvement”, unlike
their American counterpart.

Then in Nestle US their implementation was meant to create a unification that would
be responsible for transforming their separate brands into one integrated company.
This unification in United States came across thanks to a misunderstanding where they were
paying 29 different prices for vanilla to the same vendor. This was not the only problem
they encountered, since most employees were having trouble when trying to adjust and
accept the new system.

In each instance we saw that there was a goal to consolidate the operations of the
different locations so that Nestle could truly leverage their size and buying power.
Additionally, there was a need to centralize and control data so that the financial, reporting
and forecasting numbers were more consistent and accurate. With implementations like
these, enough companies have gone through some that there are plenty of lessons to be
learned if organizations are willing to accept the advice of others.