Hershey's ERP failure

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  • Hershey Drop, a lot of people like that. ANd I really like the name. I don’t know where do they\nAnd yes, they sale did drop significant in 1999 due the failure of ERP implication \nAnd today\n
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  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
  • $400m in 1969 to $5b in 2006\n
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  • demand from retailer for integrated the data about product delivery\n
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  • Employee overload in training\n
  • DIdn’t have CIO\nVice predient was head of IT department\nDo mostly small project\n
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  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
  • sale reach 4.2B\nless schedule and save 20% budget\nAccurate 99%\n
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  • Hershey's ERP failure

    1. 1. 1 GROUP HLe Vu Nguyen Hong Nhung Dao Hong Linh Sophia E Sitorus200912396 201000084 201000071 201000079 Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.com Enterprise Wide Information Company System
    2. 2. HersheyEnterprise Wide InformationCompanySystem
    3. 3. HersheyEnterprise Wide InformationCompanySystem
    4. 4. Start Here OVERVIEW ERP RESULTS PROJECT Contact Us©SolBridge WeaBook / P. +82 10-8061-2356 / brian@weabook.com
    5. 5. Hershey ABOUT HERSHEY’S ERP IMPLEMENTATION Company ANALYZING PROCESS AND SUGGESTION HERSHEY IS THE LARGEST CHOCOLATE MANUFACTURER IN U.S Start Here OVERVIEW ERP RESULTS PROJECT Contact Us©SolBridge WeaBook / P. +82 10-8061-2356 / brian@weabook.com
    6. 6. 1Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    7. 7. 1 BUSINESS OVERVIEWHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    8. 8. Hershey’s 2 HISTORY 1873 Was found in Philadelphia by Milton S. Hershey as a candy shop Business was failed 4 years laterHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    9. 9. Hershey’s 2 HISTORY 1893 Moved to Pennsylvania Selling chocolate coating for caramelsHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    10. 10. Hershey’s 2 HISTORY 1900 Sold his company for $1.000.000 and focus on making chocolateHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    11. 11. Hershey’s 2 HISTORY 1927 Incorporated as Hershey Chocolate Corporation and went IPOHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    12. 12. Hershey’s 2 HISTORY 2006 600 450 300 150 0 1999 2000 2001 2002 2003 2004 2005 2006Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    13. 13. 2Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    14. 14. 290HersheyEnterprise Wide InformationCompanySystem Contact Us 3.30 WeaBook / P. +82 10-8061-2356 / brian@weabook.com
    15. 15. 1 NEEDS FOR ERPHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    16. 16. 4 Old System / Legacy Environment Project named ENTERPRISE 21 Legacy SystemHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    17. 17. 4 Old System / Legacy Environment Project named ENTERPRISE 21Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    18. 18. 4 Improve Customer Relation To share data about product delivery Keith Costello Project Team Member of Enterprise 21Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    19. 19. 4 Improve Customer Relation To share data about product delivery “We redesigned the whole business process with the customer in mind. We’re implementing this No.1 to enhance our competitiveness, and No.2 to enhance our customer service...” Keith Costello Project Team Member of Enterprise 21Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    20. 20. 1 ABOUT ERP PROJECTHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    21. 21. 1ABOUT ERPHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    22. 22. 1ABOUT ERPHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    23. 23. 1ABOUT ERPHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    24. 24. 1ABOUT ERPHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    25. 25. 1 PROJECT PLANNINGHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    26. 26. 1 PROJECT PLANNING Jan-96: Roll out plan Project design and requirement analysis Installing new hardware to replace the mainframeHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    27. 27. 1 PROJECT PLANNING Jan-96: Roll out plan Jan-99: Building ERP Project design and Modules like finance, sale, requirement analysis marketing was build Installing new hardware to Implement the new system replace the mainframe in companyHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    28. 28. 1 PROJECT PLANNING Jan-96: Roll out plan Jan-99: Building ERP Jan-00, Enterprise Project design and Modules like finance, sale, 21 live requirement analysis marketing was build Installing new hardware to Implement the new system replace the mainframe in companyHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    29. 29. 1 PROJECT PLANNING Jan-96: Roll out plan Jan-99: Building ERP Jan-00, Enterprise Project design and Modules like finance, sale, 21 live requirement analysis marketing was build $112 Installing new hardware to Implement the new system replace the mainframe in company miHersheyEnterprise Wide InformationCompanySystem Contact Us ion WeaBook / P. +82 10-8061-2356 / brian@weabook.com
    30. 30. 4 Hershey’s ERP 3 Vendors and IBM put together in the ENTERPRISE 21 SAP Manu Customer Finance, Purchasing Transportation Relation Materials Management Production Tracking Warehousing, Order Forecasting and Effectiveness Processing Scheduling of Promotion BillingHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    31. 31. 4 Hershey’s ERP 3 Vendors and IBM put together in the ENTERPRISE 21 SAP Manu Customer Finance, Purchasing Transportation Relation Materials Management Production Tracking Warehousing, Order Forecasting and Effectiveness Processing Scheduling of Promotion Billing IBMHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    32. 32. 1 EXPECTED BENEFITS ๏ Fine-tune deliveries to suppliers ๏ Upgrade and standardize companies business process ๏ Efficient customer driven processes ๏ Reduce order cycle times and boost inventory accuracy ๏ Reduce inventory costsHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    33. 33. 1 PROJECT PLANNINGHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    34. 34. 1 PROJECT PLANNING April 1999Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    35. 35. 1 PROJECT PLANNING 3 MONTHSHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    36. 36. 1 PROJECT PLANNING BIG BANGHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    37. 37. 1 NETWORK PLANNIN G MODELHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    38. 38. 1 CPM METHOD Processes detail Step PJ a m b ET varian ces Planning and requirement analysis A _ 1 3 5 3 0.44 Design B A 1 3 9 4 1.78 Installing new hardware C B 2 6 15 7 4.69 Building Finance Module D B 5 9 12 9 1.36 Building Material Management E B 8 10 15 11 1.36 Building Purchasing Modules F B 6 15 17 14 3.36 Building Sale Modules G D, E, F 7 9 12 9 0.69 Building HR Modules H G 6 8 11 8 69 Building Marketing Modules I G 8 9 17 10 2.25 Building CRM Modules J G 5 7 9 7 0.44 Implementation Stage K C, H, I, J 4 5 6 5 0.11 Training and Education M K 2 4 7 4 0.65Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    39. 39. 1 CPM METHODHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    40. 40. 1 CPM METHOD C (7) D H (9) (8) A B K A (3) (4) (5) (4) E G I (11) (8) (10) F J (14) (7)Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    41. 41. 1 CPM METHOD C (7) 25 D H0 (9) 5 (8) 2 4 A (3) B (4) K (5) M 8 (4) E G I (11) 3 (8) (10) F J (14) (7) 3Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    42. 42. 1 CPM METHOD C (7) 25 D H0 (9) 5 (8) 2 4 A (3) B (4) K (5) M 8 (4) E G I (11) 3 (10) 48 (8) F J (14) (7) 3Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    43. 43. 1 CPM METHOD C (7) 25 D H0 (9) 5 (8) 2 4 A (3) B (4) K (5) M 8 (4) E G I (11) 3 (8) (10)HersheyEnterprise Wide Information F (14) Contact Us J (7) WeaBook / P. +82 10-8061-2356 / brian@weabook.com 3 40CompanySystem
    44. 44. 1 Z 40 - = -2 . 48 = 9.32 62Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    45. 45. 1 Z 40 - = -2 . 48 = 9.32 62 Z 4 % FAIL<40HersheyEnterprise Wide InformationCompanySystem Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.com
    46. 46. 1 ACTUAL RESULTSHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    47. 47. 1 ACTUAL RESULTS $150 million sales lost 19% drop in profit 12% drop in sales 0.5% lost in markHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    48. 48. 1 WHAT’S WRONG?Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    49. 49. 1 UN-ENTEREDHershey Contact Us DATASEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    50. 50. 1 UN-ENTEREDHershey Contact Us DATASEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    51. 51. 1 UN-ENTEREDHershey Contact Us DATASEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    52. 52. 1 UN-ENTEREDHershey Contact Us DATASEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    53. 53. 1 Tony Bear IT analysis WRONG TIMINGHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    54. 54. 1 “Who really was culpable in this situation? Was it Hershey’s management for not realizing that its business sales period probably was not the best time to activate the new ERP system? Tony Bear IT analysis WRONG TIMINGHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    55. 55. 1 SAP Manu Customer Finance, Purchasing Transportation Relation Materials Management Production Tracking Warehousing, Order Forecasting and Effectiveness Processing Scheduling of Promotion Billing UNNECESSARYHershey Contact Us COMPLEXITYEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    56. 56. 1 SAP Manu Customer Finance, Purchasing Transportation Relation Materials Management Production Tracking Warehousing, Order Forecasting and Effectiveness Processing Scheduling of Promotion Billing UNNECESSARYHershey Contact Us COMPLEXITYEnterprise Wide Information WeaBook / P. +82 10-8061-2356 / brian@weabook.comCompanySystem
    57. 57. 1INEXPERIENC ED MANAGEMENTHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    58. 58. 1 THE TURNAROU NDHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    59. 59. 1Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    60. 60. 1 CIO GEORGE DAVISHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    61. 61. 1 $4.2B in 2000Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    62. 62. 1 myASP in 2001Hershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    63. 63. 1 1.2m squareHershey Contact Us WeaBook / P. +82 10-8061-2356 / brian@weabook.comEnterprise Wide InformationCompanySystem
    64. 64. Thank you…Question And Answerss©WeaBook Think Contact Us Different WeaBook / P. +82 10-8061-2356 / brian@weabook.com

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