Subject category:
Knowledge, Information and Communication Systems Management
Published by:
IBS Center for Management Research
Length: 15 pages
Data source: Published sources
Topics:
Hershey Foods; Enterprise resource planning (ERP); Enterprise-wide information system; mySAP.com; Legacy systems; Enterprise 21 project; Manugistics; SAP modules; Big Bang approach; SAP R/3 software; Inventory problems; Integration issues; Programme management; Executive leadership; Testing and training plan
Abstract
This case examines in detail, the reasons behind the failure of enterprise resource planning (ERP) implementation at the US based Hershey Foods Corporation. In late 1996, Hershey began modernising hardware and software systems in the company. The company was running on legacy systems, and with the impending Y2K problems, it chose to replace those systems and shift to a client / server environment. As per the original plan, it was to switch over to the new ERP system by April 1999. It chose three software vendors: SAP, Manugistics and Siebel for implementing different software modules. The project was running to schedule until January 1999 and when it came to the last leg of implementation, the company faltered and was only able to switch over to the new system in July 1999. Hard pressed for time, Hershey went in for Big Bang ERP implementation, which led to several problems pertaining to order fulfilment, processing and shipping. The retailers who ordered Hershey's products could not get them on time, even though the company had ample supplies stocked at its warehouses. Hershey's revenues dropped by 12% during the third quarter of 1999 compared to the third quarter of 1998.
Teaching and learning
This item is suitable for postgraduate courses.Time period
The events covered by this case took place in 1997-2002.Geographical setting
Region:
Americas
Country:
United States
Featured company
Hershey Foods Corporation
Industry:
Confectionery
About
Abstract
This case examines in detail, the reasons behind the failure of enterprise resource planning (ERP) implementation at the US based Hershey Foods Corporation. In late 1996, Hershey began modernising hardware and software systems in the company. The company was running on legacy systems, and with the impending Y2K problems, it chose to replace those systems and shift to a client / server environment. As per the original plan, it was to switch over to the new ERP system by April 1999. It chose three software vendors: SAP, Manugistics and Siebel for implementing different software modules. The project was running to schedule until January 1999 and when it came to the last leg of implementation, the company faltered and was only able to switch over to the new system in July 1999. Hard pressed for time, Hershey went in for Big Bang ERP implementation, which led to several problems pertaining to order fulfilment, processing and shipping. The retailers who ordered Hershey's products could not get them on time, even though the company had ample supplies stocked at its warehouses. Hershey's revenues dropped by 12% during the third quarter of 1999 compared to the third quarter of 1998.
Teaching and learning
This item is suitable for postgraduate courses.Settings
Time period
The events covered by this case took place in 1997-2002.Geographical setting
Region:
Americas
Country:
United States
Featured company
Hershey Foods Corporation
Industry:
Confectionery