Hershey Chocolate
Company
Yurah Jo
Heeyeon Kim
Inge Slijpen
TABLE OF CONTENT
 About Hershey
 Production process
 Operational Issues
Hershey’s Supply Cain
Inventory
Management and
Logistics
Hershey’s Kisses
Packaging Process
 Technological Failure
 Q&A
About Hershey
 1894: start up to produce sweet chocolate
as a coating for his caramels
 1907: Starts to produce the famous
HERSHEY’S KISSES
 1939: Hershey’s goes to war!!
 Present:
Leading North American Chocolate
manufacturer, non-chocolate confectionery
and grocery products
Exports to over 90 countries
Approximately 13,700 employees
Net sales in excess of $4 billiom
Production Process
 Born in the jungle
 Liquid Chocolate
 Mixing it up
 Perfecting the product
 HERSHEY’S KISSES
Operational Issues
Cocoa Production and
Harvesting
Labor intensive process
 Working policies are met, especially
because cocoa grows large in
undeveloped countries with harsh
circumstances
 Related to Hershey’s Corporate Social
Responsibility
Supply Chain
Hershey’s Supplier code of conduct
Legal Compliance and Business integrity
Social and Working conditions
Environment and Sustainability
Verification and Compliance
Supplier’s Certification of Compliance
Supply Chain
Corporate Social Responsibility Framework
Cocoa Production and
Harvesting
Cocoa harvesting industry is famous
about its child labor
Hershey has been accused for
exploiting its migrant workers in
domestic plants
 Hershey must take actions!
Dairy industry
Importance showed by the fact that
Hershey first had its own Dairy farm
Most Dairy farms produce the cattle’s
food themselves and grow their own
cows
Milking is done by machines
Dairy industry
Concerns
 Animal waste
 Use of hormones
 Animal welfare
 Hershey has to be very cautious and has to
make sure that every supplier is using a rightful
regulation and supplier code of conduct in a
proper way
Inventory Management and
Logistics, problems
1996: After acquiring Leaf Candy co.
Hershey’s got distribution problems.
Inefficient distribution process due to
small truckload lots  increasing
inventory  inflexible distribution 
could not support customers needs
Inventory Management and
Logistics, solutions
They decided to open EDCIII
Taking care of “co-packing”
Advantages
Closing of warehouses  save money
Invested this money in funds to raise
flexibility and establish a better distribution
network
By opening new EDC efficiency increased
Hershey’s Kisses
Packaging Process
Hershey’s Kisses
Packaging Process
Hershey’s Kisses
Packaging Process
Problems
No mechanisms to align the Kisses
The knocking of could create damages
 increase in number of defects 
increase costs
A lot of iteration  ineffective
Hershey’s Kisses Packaging
Process
Solutions
Line chocolates beforehand in the
process
Rebuilding the plant
Technological Failure
ERP System
Technological Failure
Problems
 Failed to implement its
costly ERP system
 19% drop in profits and
8% decline in stock
price
 Overlap with
Halloween and
Christmas
Solutions
 Thorough testing
 Pre-implementation
 Create a learning
environment to
become familiar with
the system
Technological failure
 New ERP system SAP was implemented.
Integration happened following steps
 Though EDI receiving information about customers
 Delivery data is sent to the TM. It provides also the
needed transportation means for the product
ordered
 When transportation is settled data is processed to
the SAP system
 Increases efficiency and leads to higher customer
satisfaction
Any Questions Left??
Thanks for listening and good luck with your exams