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ERP IMPLEMENTATION AT

CADBURY’S
SUCCESS STORY

• With annual revenues of approximately $50 billion. COMPANY INTRODUCTION • Cadbury India is a fully owned subsidy of Kraft Foods Inc. • They employ approximately 140. The corporate office is in Mumbai. Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi. After 60 years of existence. Induri (Pune) and Malanpur(Gwalior). . Mumbai. it today has five company- owned manufacturing facilities at Thane.000 people and have operations in more than 70 countries • In India. Cadbury began its operations in 1948 by importing chocolates. the combined company is the world's second largest food company. making delicious products for billions of consumers in more than 160 countries. Kolkota and Chennai).

Éclairs and Celebrations . Milk Food Drinks. • In the Chocolate Confectionery business. Candy and Gum category.• Currently. Chocolate Confectionery. Perk. Some of the key brands in India are Cadbury Dairy Milk. Cadbury has maintained its undisputed leadership over the years. 5 Star. Cadbury India operates in four categories viz.

ERP IMPLEMENTATION METHODOLOGY CHALLENGES • Cadbury’s India was the very first organisational unit all over the world to implement ERP in its processes. . • The implementation process in India was started from scratch as they were the first to implement that in all over global application of the Cadbury. They tried to inculpate the best practises of the company and tried to build on the strengths the past systems in new ERP systems. • Cadbury’s knew that for implementation will they will be standardizing the processes in 16 different locations.

The major processes being procurement system. finance system. • Cadbury’s have four branch operations and 13 manufacturing operations and each had their own systems running in isolation.• The ERP initiative was to bring about a complete integration of the major processes in the business. • These were functioning in a completely decentralised manner. • ERP served as an integrating system and a solution for their then existing decentralised model. the Human Resources and other departments. . • The finance department was the only one common to all.

• ERP served as an integrating system and a solution for their then existing decentralised model. IT to help the management work better than before with the existing systems in place. • Cadbury’s had one major expectation from ERP ie. . Cadbury’s had to align with an external vendor. • In order to carry out the ERP implementation. They did the implementation company wise. For ERP partnership with Siemens and for infrastructure management partnership with IBM. • The implementation methodology adopted by Cadbury’s happened in 1995 and they went ahead using a big bang approach.

. Data is entered only once. Cadbury’s have a proper MIS now.• Initially Cadbury’s went with Finance and then subsequently to production and supply chain. • It was completely top management driven. They went for a function based big bang approach in India and then implemented the whole module all across company in span of 1 year so it can be said as big bang as whole. One can see the consolidated data from anywhere and make decisions. From manual entries it has become a totally system driven data entry now. The entire system gets updated.

• Cadbury’s has tried to combine all these phases into a single phase and implemented BIG BANG method to implement its ERP Practises.• The ERP methodology implemented by Cadbury’s can be explained on the basis of the general methodology approach taken by companies. .

• Phase1: Project Preparation Hire key project members. Project Orientation. Prepare for blueprint phase – Configure WHV prototype system – Detailed work plan – Revised cost estimate . Train internal IT transfers. Install pre-configured client. Select systems integrator. Install Development system.

Project risks & opportunities. Finalize global scope. Draft change management. . Global application map. Global template system. Identify business implications.• Phase 2: Detailed design & requirements – Process – Reporting – Forms Business improvement Measures. Revised capabilities roadmap.

Exceptions configuration. Readiness assessment. Communicate cutover plan. Global template configuration. Production system prep. Day-in-the-Life (DIL) Tests . End-user training. Cycle integration testing. Issues resolution. Cycle unit testing. Documentation. Exceptions agreement (statutory/local must do’s). Inform external partners as necessary. Finalize cutover plan.• Phase3: Master data conversion. Begin global training material preparation • Phase 4: Finalize training program.

Communicate on-going support process.• Phase5: Production master data conversion. On-site support. Issue resolution. . Execute cutover plan. The big bang approach promised to reduce the integration cost in the condition of thorough and careful execution. Monitor process & system usage.ESC update at end of phase The installation of ERP systems of all modules happens across the entire organization at once.

. • The downside of the big bang implementation approach is that the project is often rushed. This often helps address long-term resource shortages.• The appeal of the big bang implementation strategy is that it focuses the organization for an intense and relatively shorter period of time than if the project were phased. and changes to business processes may not be the best ones for the organization. details are overlooked. It also condenses the pain and difficulty of an ERP project into a shorter period of time. Projects that implement an overly aggressive big bang approach are more risky and result in less satisfaction with the system's abilities to meet important business requirements. although the pain is typically more pronounced using this approach.

The Cadbury’s Supply chain network is as shown. . ERP has brought about modifications for the better in these processes.

ERP implementation handled all the issues and added efficiency and guided the fast paced growth • Cadbury standardized the processes within the 16 locations thereby benchmarking the best practices in the locations and having a marked increase in the efficiency by bringing all the locations to the same page and the best page. The management was looking at ways to sort internal problems and this is where SAP had come to the rescue • Cadbury was on a fast paced growth and could not continue with the existing systems and the pace was too slow due to added inefficiencies down the chain. Benefits specific to Cadbury • Cadbury had operations in 16 locations and 26 depots and all of these were highly decentralised. • The implementation of ERP brought in a new way of warehouse management system and brought in structure to branch offices and the depots .

the company has built it up on the past strengths of the company thereby not losing out on its competitive advantage and at the same time saddling itself up for a fast paced growth • The initial implementation took time and then the successive implementations took lesser time and cost and there is a huge advantage in saving cost while in the implementation phase itself • The reaction from competition does not matter in this because this is not a change that was advertised to the market.• The manufacturing in itself had 13 operations and each was operating in a silo. This had increased the work in progress and the integration of the processes has done well for the company • While implementing the ERP systems. This is an internal process restructuring and was a welcome change within the company which badly needed the change .

The entire implementation is cross functional and hence it is important that there is a high increase in the efficiency. • The system has also been deployed up to the vendors.• The company also has built in a robust regular feedback system to monitor the changes and check if they go according to the initial plan. They have a portal called vendor connect where they can see their inventory movement and make plans accordingly. Hence the restructuring happens not only internally but also across to the supplier which will add on to the benefits that are accrued • It was considered a low cost and high result implementation which by itself highlights the success and the benefits. . • The ERP vendor was also selected from among the best in class vendors which helped the process occur in a streamlined fashion and avoided any possible chances of hiccups during the initial implementation phase.

The real time data was made available to the company wide function for e. bill material receipts and inventory getting updated. Instead the company hired manpower • Bill material. No manpower elimination took place. automation and integration happened from completely manual process. This helps to keep the people in the same page and ensures proper integration • The company achieved 70% automation in processes and has not eliminated any process specifically • The company has a proper MIS (Material Information System) because of this implementation and the entire process is top driven • The jobs were classified into complexity base and the high complex jobs were targeted and automated.• There is increase transparency in the organization though there is authorization involved.g. • A new stock accounting system has been put in place which takes care of freshness of the product . for production function the end of shift data is available. Booking of the finance entries. for finished goods inventory the inventory levels at all our depots reflects on portal.