Case Study The largest premium chocolate manufacturer has B2B and B2C customers. It implemented the Enterprise Resource Planning (ERP) as its centralised database in 1999. It is a practical application for inventory management. This case study focuses on value adding to the supply chain via information sharing and information quality. Several information-sharing issues have been identified. They include lack of understanding of ERP's potential, IT skill gap, resistance caused by legacy of previous systems and a disorganisation in transportation. Theories examined in this report focus on information quality and information sharing. Although certain information is considered to be confidential and commercially sensitive, recent research in management underlines the benefits of sharing business intelligence. The main tools are concepts that recognise collaborative planning, forecasting, and replenishment to develop a mutual interest for partners and customers. Implementation of the theories requires time. However, time is not at disposition. The necessity to implement a strategy with immediate result can offer a consensus between short-term and long-term necessities. Recommendations include the creation of a training department. The purpose of this is to encourage a collaborative planning approach amongst all participants of supply chain. It is of utmost importance for this firm to monitor its performance, and surface problems to the board's attention as soon as possible. In conclusion, this firm's has several areas of concern, such ass dis-organisation in transportation and training of employees. On the other hand, it is in its early stage of collaborative planning and a wonderful product. Introduction This report focuses on value adding to the supply chain via information sharing and information quality. Information is one of the most significant factors for a business to gain competitive advantage by improving communication and processes to produce quality goods and services. This case study examines the operation of Chocolate company subsequent to its implementation of the Enterprise Resource Planning (ERP) system in 1999. Specific problems are identified and solutions are recommended for process improvement to add value to the supply chain. Background The chocolate firm was established in 1900 in Pennsylvania. Its client base is B2B and B2C. Its head office and distribution centre are located in Philadelphia and Chicago, prime manufacture is in Guadalajara, Mexico 7. Supply of raw materials does not pose a lead-time problem, however, transportation from the Guadalajara factory to Chicago distribution centre and transit bottleneck have contributed to lead time. This firm has implemented the Enterprise Resource Planning (ERP) as its centralised database in 1999. Problem Identification A number of information sharing and information quality issues have been identified: Lack of understanding of ERP's potential Many researchers have suggested t ...

1. Case Study
The largest premium chocolate manufacturer has B2B and B2C
customers. It implemented the Enterprise Resource Planning
(ERP) as its centralised database in 1999. It is a practical
application for inventory management.
This case study focuses on value adding to the supply chain via
information sharing and information quality. Several
information-sharing issues have been identified. They include
lack of understanding of ERP's potential, IT skill gap,
resistance caused by legacy of previous systems and a
disorganisation in transportation.
Theories examined in this report focus on information quality
and information sharing. Although certain information is
considered to be confidential and commercially sensitive, recent
research in management underlines the benefits of sharing
business intelligence. The main tools are concepts that
recognise collaborative planning, forecasting, and
replenishment to develop a mutual interest for partners and
customers.
Implementation of the theories requires time. However, time is
not at disposition. The necessity to implement a strategy with
immediate result can offer a consensus between short-term and
long-term necessities.
Recommendations include the creation of a training department.
The purpose of this is to encourage a collaborative planning
approach amongst all participants of supply chain. It is of
utmost importance for this firm to monitor its performance, and
surface problems to the board's attention as soon as possible.
In conclusion, this firm's has several areas of concern, such ass
dis-organisation in transportation and training of employees. On
the other hand, it is in its early stage of collaborative planning
and a wonderful product.
Introduction

2. This report focuses on value adding to the supply chain via
information sharing and information quality. Information is one
of the most significant factors for a business to gain competitive
advantage by improving communication and processes to
produce quality goods and services.
This case study examines the operation of Chocolate company
subsequent to its implementation of the Enterprise Resource
Planning (ERP) system in 1999. Specific problems are
identified and solutions are recommended for process
improvement to add value to the supply chain.
Background
The chocolate firm was established in 1900 in Pennsylvania. Its
client base is B2B and B2C. Its head office and distribution
centre are located in Philadelphia and Chicago, prime
manufacture is in Guadalajara, Mexico 7. Supply of raw
materials does not pose a lead-time problem, however,
transportation from the Guadalajara factory to Chicago
distribution centre and transit bottleneck have contributed to
lead time.
This firm has implemented the Enterprise Resource Planning
(ERP) as its centralised database in 1999.
Problem Identification
A number of information sharing and information quality issues
have been identified:
Lack of understanding of ERP's potential
Many researchers have suggested that information sharing can
substantially improve overall supply chain performance(Scott &
R, 1991)(bowersox & closs, 1996)(Closs & A, 1998)(Shapiro,
2001).Management does not understand how ERP can
potentially assist this firm in maintaining quality information
and information sharing, e.g. sales orders, inventory control,
delivery and forecasting demand. Such information sharing can
improve transaction efficiency and reduce information delay
along supply chain, create value so participants can gain
competitive advantage(Handfield & Jr, 1999).
IT Skill Gap

3. The impact of not understanding ERP's potential was
compounded by inadequate training provided prior to
implementation. Employees are unable to use ERP confidently
and data entry errors affect information quality to ensure
information flow and forecasting accuracy.
Legacy of Previous Systems And Experience Cause Resistance
There is a legacy and negative experience with previous systems
implemented. Although some employees embrace ERP's
implementation and actively use the software, others have
resisted this change. The IT skill gap has also contributed to the
resistance in using the software. Therefore, information sharing
is ineffective as supply chain management (SCM) depends on
what, when, how and with whom information is shared (Chizzo
1998;)(Finch, 2006)(Holmberg, 2000)
Parallel Ordering System.
Some employees use a parallel ordering system of fax, phone,
and email. This firm is unable to analyse the ordering history in
the system to forecast demand accurately (Finch, 2006). The
parallel ordering system undermines the quality of information
sharing, particularly in aspects of accuracy, timeliness,
adequacy, and proper information formatting(Gustin &
Daugherty, 1995)(Closs & Goldsby, 1997)(Monzcka & Petersen,
1998)(Moberg & Cutler, 2002).
Appendix A indicates significant problems in information flow
and forecast accuracy, particularly in the areas of warehousing,
distribution and customer services. Task 2 in Appendix B
indicates employee resistance in using the ERP software and
parallel ordering system are the major causes of delays in the
supply chain. As a result, this firm is incapable of generating
value in providing quality customer services. Poor customer
services can become a product loser that will repel this firm's
customers(Finch, 2006).
Excessive Transportation Lead-Time
This firm has 138-day lead-time. The sharing of information and
co-ordination of strategies among firms in a supply chain can
both reduce total logistics costs and enhance value delivered to

4. the customer(Cooper & Ellram, 1997) (Brewer and Speh 2000).
Good information sharing is important for creating effective
collaboration or strategic alliances (Dyer & Singh,
1998)(Handfield & Jr, 1999)(Henriott, 1999)(Mariotti, 1999).
Supply chain partnership as a relationship between two
independent members in supply channels, such as customers and
manufacturers, or manufacturers and suppliers, through
increased levels of information sharing, can achieve specific
objectives and benefits in terms of reductions in total costs and
inventories(Yu & Yan, 2001). In this organisation case, it can
build relationship with transportation providers, raw material
suppliers, B2B, and B2C customers for collaborative planning,
forecasting, and replenishment(Finch, 2006).(Novack &
Langley, 1995) (Jones 1998).
Theory
Quality Management
Quality management is used to break down barriers between
departments. Capacity of suppliers should be used to their
potential. The most frequently used framework for guiding
improvement is Shewhart's Plan, Do, Check, Act (PDCA)
cycle(Finch, 2006).
What is Quality Management?
For inventories: Quality management is matching production to
demand in a short period. High level of standardisation and
shorter delivery period reduce holding costs. Relationship with
suppliers is primordial to the level that they work like a single
entity. Its disadvantage is that any external events can stop
production, especially when production is matching demand of
the next half days. This organization appears to have adopted
this theory. However, the failure is internal rather than not
being able to develop and maintain a relationship with
suppliers.
For capacities: Quality management means all processes are
redesigned to eliminate unnecessary steps in production.
Equipment configuration is arranged around the most efficient
flow of production. Procedures are standardised for training

5. purpose to eliminate errors from deviation. With the help of
automation, this process will maintain a constant quality of
production. Its disadvantage is that the equipment has limited
flexibility when changes in process occur. It also has to
accommodate a maintenance schedule outside peak production.
This firm redesigned its processes when it implemented the ERP
system in 1999. However, it has failed to communicate the
redesign to ERP users and update their job descriptions to
reflect the new requirements.
For facilities: Organisational setting is likely to approve small
independent production with limited interference with other
production. This will reduce handling damage and processing
error during shipping. This firm has put this theory in practice
successfully with no complaint of inventory stock out.
For employees: Quality management empowers employees to
control their environment and take responsibility of their work.
This allows them to correct error directly to the source. They
can become multi-skilled in all procedures; that subsequently
generates value for employee and employer. In this company
case, this is the area of incompetence in ERP users and
coordination of transportation.
Quality management is responsible for driving improvement and
self-education programs. This is to ensure that employees have
the adequate skills to perform their task, or just to keep up-to-
date with technology. This is a failure of this company's
management; it is noticeable in several areas of the company
that employees do not have the sufficient capability to work
competently to generate value in the supply chain.
Business Intelligence
Information Quality
This theory is applicable to this firm; its incorrect data is not
the only cause of error. Analysis suitability and data
interpretation (Appendix B refers) are more likely to affect the
accuracy of forecasting. Information is distributed in several
formats to meet each purpose. This will reduce the risk of
inadequate reading and understanding. Collection of

6. information is not only about the "customer". It is a two-way
communication; customers can have information from the
supplier like capacities and technology at their disposition.
Converters could use the same principle to adjust their
performance to the supplier demand.
Harmonisation of data may enhance the quality of information.
To eliminate the risk of data corruption, business intelligence
will benefit by disconnecting this process from in-house
providers. A separate business entity would reduce the risk of
forecast bias and conduct a neutral analysis. Relevance and
accessibility should result in obtaining the right information
from the right person at the right time. This setting will also
provide a constant flow of up-to-date information.
Information Sharing
As a general practice, this firm shares information internally
only. However, in recent months, it has begun to think whether
this is in the best interest of the supply chain.
Information sharing requires a relationship that is well
established. Trust is a common objective of partners. They must
share forecast information of their performance with other
general information of where and what the business focus is.
This forms the foundation of building a trading relationship for
becoming a preferred supplier. Information sharing is a long-
term investment that requires a large amount of resources,
particularly capital. It also has the purpose to inform investors
of future profits. Its most significant strength is reducing error
of corporate group thinking or coalition, by sharing corporate
views with a wider perspective even outside the industry.
Corporate guidance needs to encourage acceptance of other
opinion of in the supply chain. As a new way of doing business,
despite the perception of many organisations that, disclosure of
information represents a loss of power(Berry & Towill, 1994).
Collaborative Planning Forecasting and Replenishment
This new collaborative approach intends to improve relationship
by planning processes and sharing information. Information
flow does not occur from A to B and subsequently to C, but

7. instead A provides information to B and C at the same time.
This has the advantage of bringing forward forecast difference
to members in an early stage. A supplier is not seen as a
separate entity; in contrast it is a member of an entity. This
collaboration does not focus on what is needed, but rather only,
on how information is supplied. The benefit is to have a
component that fits into an assembly line without any
adjustment. This synchronisation not only affects the physical
product but also the forecast approach that uses the same
data(Finch, 2006). It is the first application that this firm has
made in collaborative planning, not in totality, just enough for
demonstrate an interest.
Quality of Tools Utilised
Detecting cause of transportation, the following tools are used:
"Process flow chart" is demonstrated in the task table shown on
top of Appendix B(Finch, 2006). This is the first step to
identify problem areas. The "Cause and effect chart" is used to
give a wider picture of the relationship between the causes
identified and its resulting impact (Appendix D). The top part of
the diagram has no identified problem; it is the graph in
black(Finch, 2006). The second part of the graph in multi colour
shows the transportation problem. In the last graph, the areas in
red represent the stake of workforce, customer, and
shareholders. A "Pareto chart"(Finch, 2006). is used to identify
error of entry data, which is not the only problem (bottom bar
chart in Appendix B refers). Lastly, Appendix E contains a few
timeliness formulae to numbering waiting period of customer
ordering.
Process Improvement
Transportation is a major area needing improvement. This
company does not have transport problems to bring raw
materials to the factory. However, the rail network surrounding
Chicago is saturated and becomes a bottleneck. B2B
relationship with one of the rail operators, Armstrack, is
working satisfactorily.
This company and its supply chain trading partners are currently

8. negotiating to establish an alternative transport route in
Edwardsville, 450km away from the railway bottleneck. It is
close to the highway circuit. This new arrangement should
eliminate the merchandise in transit into the bottleneck.
The second area of improvement is to reduce lead-times
delivery to customers. A new distribution centre is under
construction, using the same configurations as three other
warehouses (fact). This will be in operation in May 2008.
Warehousing distribution is in a short drive to the consumer.
The Chicago warehouse will distribute the city areas only.
Thirdly, transportation will use tracking system software to
complement the existing ERP system to follow the physical
merchandise movement. From converter to manufacturer, and
manufacturer to distribution centres. Both softwares should be
used to monitor its performance, identify problems, and remove
barriers for a smooth flow of merchandise.
Finally, the parallel ordering system can be removed only by
creating a choc within the company. This helps this firm
identify and select employees to use ERP, and develop a
synergy around the technology.
All those improvements require time to reach their potential.
However, the financial loss of US$1.5 billion is significant.
This firm needs a quick solution to the following associated
problems as below:
B2B requires more than one delivery per month. Two weeks'
delay for B2C is already a sale lost.
The existing factory is in operation, sited in the middle of its
geographical market share. A percentage of its capacities could
used to handle small batch orders to reduce the maximum lead-
time to two or three days for both B2B and B2C. This
configuration can be set in a U-shape operating cycle
format(Finch, 2006).
Implementation
Two approaches are recommended to restore stock market
performance. Until the implemented program is functioning
effectively and the quick temporary measures can cease.

9. Quick Temporary Fix
A survey to identify the current skills level and knowledge of
the ERP users (see Appendix B) indicates younger employees
have higher awareness to embrace the technology. Therefore,
these people are more likely to accept a 6-month offer to
develop their skills in a peer-help workshop to support in areas
where ERP is not performing well. They will provide mentoring
and coaching to their local colleagues. Secondly, proficient ERP
users can provide accurate information to the factory for prompt
delivery.
Program Implementation (Long-Term)
Transportation of finished products suffers long delivery;
therefore, stocking products closer to the customer will be
desirable. The Chicago warehouse has reached its maximum
capacity. This has caused the whole system to move into a
turbulent path. The new warehouse in Edwardsville will rectify
this issue. Some employees have already completed training to
manage the new installation in both software systems (ERP and
tracking systems).
Partial use of the system will not motivate employees to
embrace the change. The temporary quick fix will still leave a
huge gap in the knowledge. Providing in-house training or
organising training with an external training provider to
overview, narrow the full potential of ERP's.
Collaboration with the rail transporters is already at an early
stage of Collaborative Planning Forecasting and Replenishment
(CPFR). It is good practice to show mutual benefit to other
supply chain participants. However, top-level negotiation is
time consuming. It is possible that implementation will take a
decade to reach its full collaboration.
Recommendation
A problem affects the HSY index in the stock market. It is
recommended that the temporary solutions act as compensations
to the current situation until program implementation is
operational.
The first area is to deliver as fast as possible by using all

10. available derivatives to get around problems. B2B and B2C can
use part of the US plant to produce small batches to offer good
customer service.
Secondly, it is recommended to create a department that
oversees all training that the organisation needs to ensure
employees stay abreast with the changing workplace
environment.
Thirdly, this firm should develop a collaborative partnership
with all suppliers, by using the transportation problem to show
both partners using the CPFR approach can benefit from
strategic alliances.
Finally, this firm should create a department with the function
to monitor overall performance, to report to the board at an
early stage of the nature of problems arising. Adjusting
solutions may prove to cause inconvenience and affect
employee, however, this disadvantage will be outweighed by the
reduction of risk that the problem may cause major disturbance
to this firm's core business.
Conclusion
This report examines a number of operational issues this firm's
faces regarding information sharing and information quality,
such as realising ERP's potential, ERP literacy, resistance
caused by a legacy of previous systems, use of a parallel
ordering system and excessive transportation lead-time. Various
theories are covered in identifying and addressing these issues.
Suggested solutions include reducing transport lead-time, and
improving ERP user competency. Building strategic alliances
along the supply chain are recommended to improve information
sharing, information quality, efficiency, effectiveness, to add
value at the supply chain.
This firm's CEO commented, "It is hard to get people to change
the ways they work so that the system will function correctly."
This highlights the importance of change management to
achieve the desired human behaviour for a business to succeed.
Such changes require long-term commitment of all levels of the
business and along its supply chain. Implementing changes is

11. costly; management must ensure the benefits outweigh the costs
before making decisions to change