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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

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