Hershey’s “The wrong timing to implement the ERP system

 

Hershey’s company
did not implement the new ERP system in the specified time of implementation.
In addition, they did not implement the system in the proper manner by testing
each module before launching the system. Moreover, Hershey’s management and IT
specialist needed to focus more on employee training and education. Especially
the employees who will be dealing with the system. They need to understand and
follow the business process of the implemented system.

In conclusion,
some of the factors that made Hershey’s disappointing experience with the ERP
system implementation are:

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·      
Hershey’s company choose the big bang approach in
July 1999 to implement the ERP system, which implement huge pieces of system
once. Hershey’s aimed to meet the Halloween order which is the peak season so
they choose the big bang approach of implementing because they will not
implement and test in phases it will be implemented only once.

Which costed the
company US$ 150 million in sales.” Hershey has lost its credibility in the
market because it could not deliver the ordered products to the retailers and
distributors in the desired time”.

 

Season. Shipments
of Hershey’s were delayed because they could not meet the deadlines. Instead of
delivering the products in five days, they delivered the products within twelve
days. “Hershey’s became unable fulfill the orders in the peak season

 

·      
Squeezing deadline:  The ERP system
scheduled to be implemented within four years but Hershey’s has squeezed the
deadlines to thirteen months. As result of the squeezing in the deadline,
Hershey’s has become under pressure during the holiday

·      
Wrong timing: Hershey’s plan was to implement the
system by April 1999, because the sales order in these periods are less than
other time. “Some of the modules like SAP financial, materials management,
purchasing, and warehousing was implemented by January 1999,when the other
modules like the critical order processing and billing systems modules from
SAP, the pricing and promotions package from Siebel and planning and scheduling
modules from Manugistics were behind schedule.” Hershey’s movement to the
ERP system was during the busiest business periods, which is the peak season
(holidays). It is advisable for companies moving to new systems to reduce
orders to prevent itself from problems that may be caused by untrained
employees or unexpected errors. “The wrong timing to implement the ERP
system costed the company $150 million in sale. Profits for the third quarter
were dropped by 19% and sales declined by 12% in its 1999 annual report.”

There were some
problems that occurred during the implementation process of the ERP system that
cause the failure experience of implementation such as, Wrong timing, squeezing
the deadlines and the Big bang approach.

Hershey’s company
was using the old legacy system with many problems. Hershey’s company started
to update its system software and hardware and decided to shift to the client
server architecture. In 1999, Hershey has implemented an ERP system Enterprise
21 to help Hershey’s company to recognize its business process. Moreover,
Hershey has installed a barcoding system to work with the Enterprise 21 the
purpose of that barcoding system is to enhance the management logistics,
monitor the inflow and outflow of material and to reduce the production cost.
In 1999, Hershey has planned to move to the new ERP system.

Some problems
occurred during the implementation process which, caused mistakes in
implementation.

Hershey had a
disappointing experience with ERP system implementation.

Hershey’s
Experience:

 

 

Cadbury has chosen the best ERP vendors that
helped them to avoid mistakes during the implementation process. Cadbury has
implemented the ERP system in small scope first in India’s branch then they had
spread their project. They spent less time and cost on the initial
implementation. Finally, Cadbury chose to build the new system upon the
strength of the company.

In conclusion, some of the factors that made
Cadbury’s successful experience with the ERP system implementation are:

The benefits for Cadbury from implementing the
new ERP system are saving the time, they had created a strong feedback system
to keep eye on the changes and if they are gaining as planned and the lower
cost of implementation. The implementation of new ERP system developed a new
way of managing the warehouse system.

After the successful ERP implementation, Cadbury
management get benefit of convenient system that help them make decisions,
ability to enter the data only once, combining the data of Cadbury’s branches
and updates the whole system.” It has become totally system driven data
enemy now”.

Cadbury started to implement the ERP system first
in India then they extent it all over the company. Choosing big bang approach
methodology to implement the ERP system by Cadbury was a good decision. Cadbury
implemented the system in short period of time and gained the benefit of the
big bang approach, which is saving time of implementation. In addition, the big
bang approach helped to handle Cadbury’s lack of resources for long term.

 

 

Cadbury chose the Big bang approach to implement
the ERP system. Big bang approach used to gather phases of implementation so it
will implement the system at one time rather than implementing phase by phase.

The implementation of the ERP system in Cadbury
took place in 1995 to become a solution for the decentralized modules.
Cadbury’s main objective from the ERP implementation is to improve management
work.

Cadbury India has done the first ERP
implementation. Cadbury India considered as the first branch that had
implemented the ERP system to do its business process. Cadbury has implemented
the ERP system to integrate all of its business process (Finance, Supply chain
management, Marketing and sales and Human resource departments) in one
integrated system. Cadbury ERP system had integrated the business process of
Cadbury’s operation branches and manufacturing branches. Before implementing
the ERP system, they were not running on an integrated form except the finance
department, which was the only common one.

Cadbury has had a successful experience with ERP
system implementation.

Cadbury’s Experience: