HERSHEY’S
BY: Noora….
Hershey’s – A Brief Overview
The Hershey Company is the largest chocolate manufacturer in North
America, with its headquarters in Pennsylvania.
 It was founded by Milton S. Hershey in 1894 as the Hershey
Chocolate Company and is one of the oldest chocolate companies in
the United States.
The Hershey Pennsylvania plant is the largest chocolate factory in the
world.
Existing System
• 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.
IT Partners
• 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
• 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.
What went wrong
• Squeezed deadlines
• Wrong timing
• Big-Bang approach
• Un-entered data
• Lack of IT understanding
Learning
• Go Slow
• Data is King
• Oversight Matters
The Turnaround
• Hershey made sure to take the time and resources to
thoroughly test the computer systems.
• Testing included putting bar codes on empty pallets and going
through the motions of loading them onto trucks so that any
kinks would be worked out before the distribution center opened
for business.
Hershey’s Today
Revenues of nearly $5 billion and almost 13,000 employees
worldwide.
In 2005 & 2006, Hershey acquired the Berkeley, Californiabased boutique chocolate-maker Scharffen Berger, Joseph
Schmidt Confections, the San Francisco-based chocolatier and
Dagoba Organic Chocolate, a boutique chocolate maker in
Oregon.
Question – Answer Time
Click To Start
Q1: Analyze Hershey's business model using the competitive
forces and value chain models. Was an ERP system and related
software a good solution to Hershey's problems? Explain your
responses.
• Yes an ERP system and related software would have been a
good solution if it wasn’t for the flaws. If Hershey took ERP in
slowly not all at once and offered better training and education,
they would be better at collecting data and customer service
thus increasing their profitability.
Q2: Classify and describe the problems with the Enterprise 21
project using the categories described in this chapter on the
causes of system failure. What management, organization, and
technology factors caused these problems?
• Enterprise 21 was a plan to modernize Hershey's software and
hardware but unfortunately lots of problems occurred because
of (organization) shortening the time from 42 months to 39
months of work and having an (Management)aggressive
schedule even though the full SAP system did not come online
until mid-July. (Technology) Also information system staff
decided to use direct cutover strategy where all the system goes
live all at once.
Q3: What role did enterprise software play in the failure? Were
Hershey's system problems the fault of the software vendors,
Hershey, or both?
• Enterprise software failure caused supplies to fall behind, slow
shipments, and wrong number of shipments sent that was the
affected untrained and uneducated workers who didn't know
how to use the system well. Hershey's system problems was the
fault of Hershey's and not software vendors.
Q4: Who was responsible for the failure of Enterprise 21?
Assess the role of Hershey's IT group and its managers.
• The business process transformation of Hershey possibly caused
enormous complexes making the managers responsible for the
failure. Also Major changes came and Hershey’s employees
including the IT group didn't receive the right job and training.
Q5: Evaluate the risks of the project as seen at its outset, and
then outline its key risk factors. Describe the steps you would
have taken during the planning stage of the project to control
those factors.
• This project has a risk of declining the company and losing
customer loyalty. Some risk factors are the inexperienced IT
employees and bad management. During the planning stages I
would have put a longer time line and more experienced and
better trainers to educate the employees.
Thank You For Listening