www.foodtechblog.in use of enterprise resource planning (ERP) in food industry.introduction of ERP in food industry.history of ERP ,what are the objectives of ERP,use of ERP in food industry,Regulatory complains ,quality ans supply chain management,inventory management,production process management,financial management,potential benefits of ERP,vendors of ERP,reason for success of ERP in cadbury,failure of ERP implementation (IN CASE OF HERSHEY'S),reasons for failure.

1. Use of
Enterprise Resource
Planning(ERP)
In Food Industry
Name:Ansari Sana

2.  Contents:-
 Introduction
 History/ Evaluation
 Objective Of ERP
 Benefits Of ERP
 Use Of ERP in Food Industry
 Vendors of ERP
 Success of ERP implementation (Case of Cadbury)
 Failure of ERP implementation (Case Of Hershey)
 Major challenges For implementation of ERP
 Conclusions
 Reference

4.  Introduction:-
 ERP is business management software that allows an organization to use a
system of integrated application to manage the business.
 “Integration” is the key word for ERP implementation .
 A typical ERP system will use multiple components of computer hardware and
software to achieve the integration.
 It adopts a set of “best practices” for carrying out all business processes.
 Broken down into business processes
• HRM
• Distribution
• Financial

5. Major Reasons for Adopting ERP
• Integrate financial information
• Integrate customer order
information
• Standardize and speed up
operations processes
• Reduce inventory
• Standardize Human Resources
information

6.  History Of ERP:-

7.  History Of ERP:-
 1960's - System just for inventory control.
 1970's - MRP -Materials Requirement Planning (Inventory with material planing and
procurement ).
 1980's - MRP 2 - Manufacturing Resource Planning (Extended MRP to shop floor and
distribution management.
 MID 1990's - ERP :Enterprise Resource Planning (covering all activities of an enterprise)
 2000 inwards ERP 2 - Collaborative commerce (extending ERP to external) .

8.  Objective Of ERP:-
 Integrate financial information
 Integrate customer order information.
 Standardize and speed up operations processes.
 Reduce inventory.
 Standardize Human Resources information.
 Common database .
 Common definition .
 Update one module, automatically updates others.

9.  Use of ERP in Food Industry:-
 Within the food industry,there are a range of recent trends that add complexity to the
companies functions.
 One of the best way to handle the growing complexity of this industry is to invest in efficient
technologies such as an ERP system.
 A well designed ERP system can put together all these aspects into a single set of
information,facilitating the company's management.
 An ERP play major role in the following functions of an Food Organization.
 Regulation Control
 Account and Financing
 Sale Management
 Production Process Management
 Inventory Management .

10.  Regulatory Compliance:-
 This aspect is no greater aspect than that of regulatory -
control.The need for raw material isolation, traceability ,
environmental guidelines must be provided at highest level.
 It meets the FDA regulatory compliance.
 The ERP have the capability through and rapid solution
system if the product recall occurs.
 Additionally, Provide regulations that are continues and more
exact.

11.  Quality and Supply Chain Management:-
 ERP system have the ability to control production quality is very crucial.
 System manage quality process from receiving raw materials to shipping the finished goods.
 Food Industry ERP system have the capability to record real time data on Various aspects of
supply and manufacturing during production and store the data for future reference.
 It gain the confidence to recall the product quickly with complete forward and backward
traceability.

12.  Inventory Management:-
 In Food industry excess inventory is more than just wasted cost for example when
perishable raw materials are involved, delays in processing and surplus, inventory may lead to
safety and quality issues that is why inventory optimization /management is ERP features.
 The ERP system have Material Requirement Planning (MRP) functionality and serviceability
features thus enabling 'Just -in-time ' delivery of raw materials and ingredients.
 It provides effective tools to improve forecasting and planning, match supply with customer
demands.

13.  Production Process Management:-
 ERP manage the Production process which save time and money and increases production by
maximizing staff hours .
 Also it ensure accuracy, increase productivity as well as increases supply chain.
 ERP have the penetrability of ingredients materials, resources throughout the production
process to manage the business.
 Shorten time to market for product innovation by integrating design and manufacturing
process and collaborating effectively with suppliers, partners and customers.

14.  Financial Management:-
 The ERP has the huge business Capital / Financial Management capabilities and is one of
the reasons many food industry invest in implementation of this system.
 By proper administration and calculations ERP reduces the potential human errors in
accounting that results in increased efficiency and fewer financial losses due to inaccuracy.
 As well ERP reduces the manufacturing, distribution, and shipping cost ultimately manage
the business capital.

15.  Potential Benefit Of the ERP:-
 A real-time systems.
 Increased productivity
 Reduced operating costs
 Improved internal communication
 Foundation for future improvements
 Improved communication with suppliers and customers
 Enhanced competitive position
 Increased sales and profits
 Improved customer service and order fulfillment.

16. Vendors Of ERP:-

17. Cadbury)
 Company background:-
 ERP Implementation:-
 Cadbury / Kraft Implemented SAP ERP 6.0(System Analysis
and Program Development) in the year 1995.and they went ahead using a big bang
approach.
 Cadbury was left with a glut of chocolate products at the start of the year,after installation of
new SAP based ERP system lead to an excess of chocolate bars building up at the end of 2005.
 11000 employees were sending data to company's SAP solution & is linked with 1750
applications.
 In order to carry out the ERP implementation, Cadbury had to align with an external vendor.
For ERP partnership with Siemens and for infrastructure management partnership with IBM.

18.  Reasons for Success of ERP in Cadbury:-
 It was completely top management driven.
 Cadbury had a proper MIS.
 Data is entered only once.
 The entire system gets updated.
 One can see the consolidated data from anywhere and make decisions.
 From manual entries it has become a totally system driven data entry now.
 Cadbury has tried to combine all these phases into a single phase and
implemented BIG BANG method to implement its ERP Practices.

19. Failure Of ERP Implementation(Case of Hershey) Company Background:
 ERP Implementation:-During 1996,Hershey
approve the project named Enterprise 21.
 For this Hershey selected SAP, R/3 ERP,Statisticians SCM,&Sibelius CRM and IBM global
service so as to manage integration among these 3 system.
 Overall project cost was us$10 millions and implementation time was 4 years.
 Impact of Failure:-Due to malfunctioning of newly implemented system Hershey's stock price
plunged by 35% .
 Hershey fail to implement ERP on time. Cost the company US$150 millions in sales.
 Profit dropped by 19% and sales declined by 12% in its annual reports.
 Earning drop by 18%.
 Order fulfillment time doubled to 12 days.

20. Reasons for ERP Failure in Hershey:-
 Squeezed deadlines:-
 Project originally scheduled for 4 years.
 company forced the implementation to 30 months
 Wrong timing:-The company went live at their busiest time
 Released the solution just before the Halloween
 Big-Bang Approach:- To quicken the implementation process, Hershey opted for Big Bang
implementation.
 Simultaneously implemented a customer -relation package and a logistics package even
without testing some of the modules.
 Increase the overall complexity and employee learning curve.
 UN-entered data:-
 Surge storage capacity not recorded as a storage points in the ERP.
 Order from many retailers and distribute could not be fulfilled even though Hershey had the
finished product stocked in its warehouses.

21.  Conclusions:-
 It is very important that the ERP system which the industry chooses can answers to several
issues which industry have to face.
 By adopting the right ERP system specific to Food Industry it will be proficient in meeting
industry demands demands by alternatively increasing its profits, satisfying customers add
ultimately improving the productivity.

22. References:-

23. Thank You!