ERP Implementation at

Nestle
 Agenda
O Benefits of ERP in F&B Industry

O About Nestle

O Need for Implementation

O ERP Project Planning

O General Implementation of ERP

O Implementation in Nestle

O Results

O Conclusion
 Benefits of ERP in F&B
O Keeping Inventory lean O Making smarter buying decisions

O Operate more efficiently with reduced costs

O Improve inventory turnover O Streamline product receiving

O Improve quality control O Improve account accuracy and

O Compliance management management

O Traceability of product

O Improve order fulfilment and

accuracy
 About Nestle
O Multinational food and beverage company from 1905

O Presence in 194 countries and headquartered in Switzerland

O Largest In revenues , $ 92.6 billion

O Nestle USA, a subsidiary of the Swiss conglomerate formed in early 1990’s

O Employees: 16,000 and Revenues: $ 8 billion

O Major brands: Alpo, Coffee-Mate, Nescafe, Swee Tart’s and Taster’s Choice

O Year 1997: Leveraging IT to build competitiveness and reduce cost

inefficiencies
Need for ERP implementation
O In 1991, Nestlé USA reorganized itself and different brands were
brought under the parent American control

O Each division was still free to make its own decisions

O Joe Weller, CEO - Nestlé USA, wanted to integrate the company

O Common systems would facilitate data sharing among subsidiaries

& enable group buying

O Problems in the current system were identified – 29 different pries

to procure vanilla
 ERP Project Planning
O BEST: "business excellence through systems technology."

O Three- to five-year plan with estimated cost of $200 million.

O More than a software change - business process reorganization

O Project team of 50 top business executives and 10 senior

information systems professionals developed “Best Practices”

O Smaller technical team - to set up a common data structure

O Plan completed by March 1998

 Supply Chain
Module
(Manugistics)

Distribution Purchasing
Module - SAP
Nestle Module -SAP

USA -
ERP

Sales Module Financial

- SAP Module - SAP
 Implementation in Nestle
July 1998
Development of the modules began

1999 - Employees’ acceptance

Employees did not understand how to use the new system and did not understand the new
work processes they were being forced to adopt

June 2000 - Technical difficulties

In the rush to beat the Y2K deadline the project team had overlooked the integration
points between the modules.

2001 – New Blueprint

Designing a new blue print that would overcome the technical difficulties

2002 - Savings were identified

2003 – Last roll out happened in first quarter of 2003
 Results
By 2002, Nestle USA realized a savings of $325 million
Mostly in the area of supply chain improvements

With SAP, databases and business processes lead to

trustworthy demand forecasts for the various Nestle
products

Nestle USA has come together as one organization.

Simplify operating procedures and allow for the
centralization of functions

Employees responsibility is to stay focused on continuous

improvement rather than simply trying to maintain existing
systems
 Conclusion
• Breakdowns occur in spite of prior planning
• Software Implementation is more about Change management
• Important learning from Nestle USA ERP implementation
• Involve right individual from the beginning of the process.
• Plans must be flexible enough to change mid-stream to overcome
obstacles that appear during the project

• ERP implementations combine disparate data sources, re-engineer

processes, and involve large numbers of users and locations.
• The difference between success and failure is an organization’s ability
to rally and work together during difficult times to reach an end goal.
Queries??