A CASE STUDY ON

HERSHEY'S ERP
IMPLEMENTATION FAILURE
Submitted by – Group OEP7

Students' Name Roll no

Prathamesh Magdum CVCL04A129
Akash Mangale CVCL04A131
Rushikesh Naik CVCL04A135
Ganesh Nikalje CVCL04A136
HERSHEY’S – A BRIEF REVIEW
• One of the leading chocolate manufacturer
across world.
• Large chunk off sales from Valentine's Day,
Easter , back to school Halloween and
Christmas – 40% off profit.
• Need of an efficient and reliable logistics
system to cater to these large no of seasonal
requirements.
• Reliable product availability is critical.
 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.
 WHY HERSHEY’S DECIDED TO
IMPLEMENT ERP :
• Hershey’s redesigned the whole process keeping customer in
mind, to enhance their competitiveness, and to enhance their
customer service.
• Hershey’s need of an efficient and reliable logistics system to cater
large number of seasonal requirement
• Decided to switch over to the ERP system by April 1999.
– The software from Manugistics was to provide for transport
management, production, forecasting and scheduling.
– The software from Siebel was to support Hershey in
managing customer relations and in tracking the
effectiveness of the company's marketing
 EXPECTED BENEFITS
• 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.
 ACTUAL SCENARIO
• 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.
 WHAT WENT WRONG?
SQUEEZED DEADLINES

01
WRONG
02 TIMING
BIG BANG
APPROACH 03
UNENTERED DATA
04
had the finished product stocked in its warehouses.
Orders from many retailers and distributors could not be filled, even though Hershey's
• To quicken the implementation, Hershey's opted for big bang implementation BIG- BANG
IMPLEMENTATION
• Simultaneously implemented a customer relations package and a logistics package
even without testing some of the modules
WRONG TIMING
• The company went live at their busiest time
• Released the solution just before the Halloween
SQUEEZED
• Project originally scheduled for 4 years DEADLINES
• Company forced the implementation to 30 months
WHAT WENT WRONG?
 LESSON LEARNED
Go slow
• Evolutionary way
• Test each module before release
Oversight matters
•Top management
should keep a close
watch
•work for a common goal

Successful Data is King

ERP •Data migration is important
•Descipline in inventory