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

ERP IMPLEMENTATION FAILUREIN HERSHEY'S

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

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

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.

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.

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.

REASONS OF FAILURE

• Squeezed Deadlines

• Wrong timing

• Big Bang Approach

• Data Loss

REFERENCES

• www.hersheys.com

• www.Wikipedia.com

• www.ZDnet.com