ENTERPRISE RESOURCE

PLANNING

ASSIGNMENT - 1

TOPIC – HERSHEY’S ERP FAILURE (CASE STUDY)

Submitted By:
Meghna Madhukar
BFT/16/696
Semester – 6
NIFT PATNA

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 ACKNOWLEDGMENT

This assignment “CASE STUDY ON ENTERPRISE RESOUCRCE PLANNING OF A

COMPANY” under the “ENTERPRISE RESOUCE PLANNING” is an important
assignment to enhance our knowledge about the process related to this subject. I
would like to thank our subject faculty, Miss. Nilima Regina Topno to help us in
the better understanding of the subject and also in the assignment to make it
properly and efficiently, for her constant support and guidance throughout the
class and for always being there when asked for. I would like to thank her with all
respect.

Thank you

Meghna Madhukar

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CONTENTS
1. Hershey’s- An Overview 4

2. Existing System 4

3. What is Y2K? 4

4. Hershey’s IT Partners 5

5. Implementation Plan for Enterprise 21 5

6. Expected Benefits 6

7. Real Scenario 6

8. What Actually Went Wrong?

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9. Learning 8

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HERSHEY’S – AN OVERVIEW
 It is among the leading manufacturing companies of chocolate in the world.
 It has large amount of sales during Valentine’s Day, “back to school”, Easter,
Christmas & Halloween.
 The availability of reliable product is critical.
 Thus there arises a need for an efficient as well as reliable logistics system to
manage a large amount of all the requirements of different season.

EXISTING SYSTEM
 Hershey is a big network of nineteen manufacturing plants, 8 contract
manufacturers and a list of more than twenty packers.
 This company earlier was running on a legacy system, and also with the
imminent Y2K problem, it then chose to put back those system and then
shift it to the client or server.
 To handle Y2K problems, Hershey lastly decided to put back its current
legacy system.

LET’S KNOW, WHAT IS Y2K?

 The Y2K bug was a flaw of computer, or can say a bug, that caused many
problems while dealing with the dates that is beyond 31st of December,
1999.
 This flaw, it was faced by all the programmers of computer and also users
all across the world on January 1, 2000.
 It is also known by “millennium bug”.
 It is also known as year 2000 problem.

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HERSEY’S (IT PARTNERS)
 A $112 million worth combination of software for CRM, ERP & forecasting.
 Replacement of current mainframe legacy systems that is by SAP (R3-
Accenture).
 Scheduling, management of transportation and production forecasting-
Manugistic Group Inc.

IMPLEMETATION PLAN - ENTERPRISE 21

January 1996- Roll out of all the planning

Handle Y2K issues by Replacement of Advanced fonal date
Jan uary 2000 mainframe by SAP R/3 till April 1999

January 1997

Replaced 5000 dekstop computers Installed TCP/IP network hardwares.

April 1999
Enterprise 21 - went on live

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EXPECTED BENEFITS AFTER INSTALLATION
 Up gradation and standardization of company’s business process.
 Fine and tuned deliveries to suppliers.
 Reduces inventory cost.
 Methodical customer driven processes that would be capable in
managing fluctuating needs of customer.
 Reduction in cycle time of order and uplift accuracy of inventories.

REAL SCENARIO
 Stock price down by 35%
 Earning drops 18%
 Lost its eminent shelf space for season.
 A variety of deliveries were incomplete
 Several consignments were shipped behind scheduled.

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WHAT ACTUALLY WENT WRONG?
1. SQUASH DEADLINES:

 Project was originally planned for a period of 4 years.

 Company enforced its implementation to 30 months.

2. INCORRECT TIMING:

 It released the solution just before the Halloween.

 The company was live at its highly engaged in time.

3. BIG – BANG APPROACH:

 Hershey opted for Big Bang implementation, to quicken the

implementation process.
 Implementation of few packages without even testing the modules.

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LEARNING

• Must test each of the module before

GO SLOW releasing the same

• Migration of data is very important.

• Discipline in inventories.
DATA IS KING

• Management must always keep a necessary

watch
OVERSIGHT MATTERS • Work towards a common aim.