...ERP lmplementation Failure at Hershey FoodsCorporation Case study Reference 908-001-1 no This case written InduPerepu, was by under direction Vivek the of Gupta, lcFAl center Management for Research. intended be used thebasis lt is to as for class discussion rather thanto illustrate either effective ineffective or handlinq of a management situation.The was case compiled published from sources. @2008, ICFAI Center Management for (ICMR). Research Nopartof thispublication be copied, may stored, transmitted, reproduced or distributedanyformor medium in whatsoever without permission the of thecopyright owner. DlrtÍibuted by sch,UK and USA NoÍth AmcÍie RestoÍth. woÍld GE - thecase learninqffiffI;ïi" for ;ïl;:llï;:ï a ecchusa@ecch.com ;ïillll;:Íïiï; € êcch@ecch.com PÍinted in UK and UsA 908-001-1 ERP IMPLEMENTATION FAILURE AT HERSHEY FOODS CORPORATION "The Hersheydebacleis not an indictmentof ERPsper se, but it should caution any company that choosesto implementsuch a broad suite to make sure that systemwill function smoothly beforeenteringa peak salesperiod."l - Chain StoreAge, in 1999. "There is no doubt that 1999was a most dfficult and disappointingyear for Hershey Foods Corporation. llhile the year got off to a slow start due to excessiveretail inventories, we fully of expecteda strongfinish in the secondhalf of the yea.r.Instead, the implementation theJinal phase of the Corporation's enterprise-wide information systemcreatedproblems in the areas...
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... Table of Contents I. Hershey Food Corporation o Background 3 o Implementing ERP 3 o Expected benefits 3-4 o What went wrong? 4 II. Denver Airport Baggage System o Background 4-5 o Expected benefits 5 o What went wrong? 5 III. United Kingdom Passport Agency o Background 6 o What went wrong? 6 IV. FBI’s Trilogy Terminated o Background 7 o What went wrong? 7-8 V. Reference 10 Hershey Food Corporation Background Milton Hershey founded Hershey Food Corporation in 1894. Hershey was famous for a lot of innovations and was credited for several chocolate variants like chocolate syrup, chocolate chips, Krackle Bar, ice cream toppings, hot fudge and a lot more. By 1895, Hershey Corporation was manufacturing more than 114 different varieties of chocolates. Their most popular products are Hershey’s kisses, Kit Kat, Reese’s Peanut butter cups and more. Their sales went up from US$334 million in 1969 to $4.94 billion in 2006. Most of their sales that was 40% of their profit came from sales on Valentines Day, Easter, Halloween, “back-to-school,” and Christmas. Implementing ERP ERP stands for Enterprise Resource Planning. It is a business management system that integrates all aspects of the business, including planning, manufacturing, sales, and marketing. Hershey wanted to implement this system...
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...Ans 1: Canada has the world's highest per capita membership in the credit union movement, with over 10 million members, or about one-third of the Canadian population. They should definitely improve their current banking systems which can prove to be a powerful competitive weapon that can be used to capture market share, improve customer service, reduce operating costs, and create new products and services. Management perspective: It is highly unproductive for managers to be spending time collecting, processing, or even locating data and information necessary for decision making. Instead, managers should be spending their time applying information and bringing to bear their knowledge and experience in solving problems. This is possible only if information is readily accessible as and when necessary and in a format that is readily applicable to the problem at hand so that managers can use the information to enhance the quality of decisions that they make. Organizational perspective (Employee, Customer/Client): Better Management Information Systems will ensure more efficiency. Thus, Employees as well as Customers will be elated by them. Upgraded Management Information System will lead to improved processes resulting in lesser errors, easy processing and time saving. Further, customers can be elated by improved CRM system. CRM system can be used to track and organize the current and prospective customers. Information about customers and customer interactions can be entered, stored...
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...Memo To: George Davis CIO From: IS Consultant Date: 11 December 2012 Subject: Hershey’s Enterprise 21 System Hershey Foods is one of the oldest chocolate manufacturers in the United States. Hershey was founded in 1894 by Milton S. Hershey. The company sells approximately 3,300 candy products including variations in size and shapes. The company has annual sales of $6 billion and is the largest producer of chocolate in North America. The candy business is seasonal and Christmas and Halloween account for 40% of annual sales. The company and brand are institutions of Americana and their wide variety of products are sold all over the world. The Hershey Company employs approximately 14,000 employees worldwide and relies on a multitude of suppliers and distributors to deliver their products. The business of selling chocolates and various confectionaries is a high volume-low profit margin undertaking with important seasonal deadlines. The company operates over a dozen manufacturing plants located domestically and internationally. Hershey had been trailing the industry standards with their information technology system. They needed to upgrade their technological resources to provide a more reliable and competitive advantage. According to Rick Benz Hershey vice-president of information systems, in 1996, Hershey initiated a plan to modernize its hardware and software to upgrade its service capabilities. The project dubbed Enterprise 21, was designed and initiated to be implemented...
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...Hershey Foods Inc By David F. Carr | Posted 2002-12-16 Was it a fluke? In September, Hershey Foods said it had completed an upgrade to mySAP.com—on schedule and below budget. It was a significant turnaround for a company that had become an example of how not to do a major software project. In 1999, Hershey stumbled while rushing to complete an enterprise systems overhaul, with a new SAP implementation at its core. Basic order management and fulfillment processes broke down, causing the company to fail to meet many retailers' orders. The immediate impact was about $150 million in lost sales for the year. The damage to sales and retailer confidence lingered into early 2000. Hershey is still reluctant to discuss what happened and what caused it; the company declined repeated requests for interviews from Baseline over the past year, and asked SAP and Accenture (which helped with the mySAP implementation) not to talk, either. But we gathered insight from insiders and former employees, and from some public statements Hershey has made about its supply-chain improvements. Here's a look at three things that went wrong at Hershey—and the subsequent lessons learned. #1: The Big Bang"> What Went Wrong #1: The Big Bang The overriding problem appears clear: Hershey was simply trying to do too much at once. In cosmology, the Big Bang theory tells us the universe sprang into being in an instant, wiping out everything that went before. In Hershey's case, it was the old logistics systems that...
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...covering it up. Both suits were later settled for undisclosed terms. Confirm died and AMR took a $109 million write-off. Snap-On Inc. PROJECT: Conversion to a new order-entry system from The Baan Co. WHAT HAPPENED? Despite three years of design and implementation, a new order-entry system installed in December 1997 costs the tools company $50 million in lost sales for the first half of 1998. Orders are delayed, inventory is miscounted. Snap-On’s operating costs soar 40%, mainly to cover costs of extra freight and temporary workers. Franchisees, frustrated because they can’t operate the new software, turn to Snap-On competitors. Company profits for the period sink 22% compared to 1997. FoxMeyer Corp. PROJECT: SAP ERP system WHAT HAPPENED? A bungled enterprise resource planning (ERP) installation in 1996 helped drive FoxMeyer into bankruptcy, the drug distributor claims in lawsuits still pending against SAP AG, SAP America Inc. and Andersen Consulting. FoxMeyer seeks a combined $1 billion in damages, but defendants deny doing anything wrong. Trials scheduled for next May. W. W. Grainger Inc. PROJECT: SAP ERP system WHAT HAPPENED? Grainger spent at least $9 million on SAP software and services in 1998 and last year, but the ERP system overcounted warehouse inventory and had routine crashes. During the worst six...
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...Case Study Kraft Foods Implementation of SAP Table of Contents INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. 3 INNOVATION………………. . . . . . . . . . . . . . . . . . . . . . . . . . . . ………………3-4 PEOPLE……………….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......5 STRATEGY………………….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..5-7 SUCCESS………………………. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7-8 INTRODUCTION Kraft Foods was founded in 1903 by J.L. Kraft who began by buying cheese at wholesale markets in Chicago and then reselling it to local merchants in the area. Until 2012, Kraft Foods was primarily made up of three major businesses Kraft Foods, General Foods and Nabisco. Each of these businesses had gone through growth and mergers over the years and in 1995 the company was brought under the name of Kraft Foods and consolidated into one company. In 2004, Kraft Foods came to the realization that they needed one Enterprise Resource Planning (ERP) system to consolidate all of their business activities under one system for all locations within North America. Kraft Foods decided to implement SAP, which they had previously chosen for their manufacturing and distribution locations within Europe. SAP is a very popular ERP system that is generally used by large companies who are...
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...to Failure ERP Success Stories Conclusion References Introduction What is Enterprise Resource Planning (ERP)? “Enterprise Resource Planning” is a term originally coined in 1990 by The Gartner Group to describe the next generation of MRP II software. The purpose was to integrate all facets of the business enterprise under one suite of software applications. The definition of ERP would be broadened to include almost any type of large integrated software package.[i][1] Webopedia provides a generalized definition of ERP as “a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing.”[ii][2][iii] Some of the more well-known ERP software developers include SAP, Oracle, and PeopleSoft. This paper will look at both successful and unsuccessful ERP implementations and what contributed to their success or failure. Many lessons have been learned by failed ERP projects, as evidenced by the volume of information available. Many of the failures occurred in 1999, in an attempt to manage Y2K issues, which may suggest that the companies had pressing needs which forced the implementation. Apparently, late adopters are benefiting from the mistakes of their predecessors since the most current research describes successful implementations. What constitutes an ERP implementation failure? There are degrees of failure with ERP projects. The most obvious failure is never actually implementing the ERP system. But...
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...10 reasons for ERP Implementation failures Written by:adminWritten on:April 24, 2013 Comments Add One 3 It is a common saying that technology should work for human and not the other way round. In similar way a company’s Enterprise Resource Planning (ERP) system is like its central nervous system of the body. If it is healthy, it provides the sensory input to management so they can understand what is happening with customers, suppliers, and employees. It helps management respond, by coordinating the company’s resources to win customers, battle competitors, and reduce cost, just like muscles in a body. Implementing an ERP system for your organization is the best investment a company can think of. ERP systems are the basic sales-to-cash, accounting, reporting, compliance, human resources, supply chain, customer, and sales IT systems that companies rely on every day. Yet, despite this critical role ERP systems play, most companies fail when in it comes to implementing or upgrading their ERP system. Negative’s attracts eye balls The horror stories of failed ERP projects are now the stuff of legend. According to one recent report, more than 29% of ERP implementations fail to achieve even half the planned business benefits. Some well known examples include Waste Management suing SAP for $500 million for a failed ERP implementation, Hershey Foods’ 19% drop in profits from a failed SAP implementation at Halloween time a few years ago, the complete bankruptcy of FoxMeyer Drug...
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...The Hershey Company Hershey’s customer base consists of wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, department stores and natural food stores. The company has made significant changes over the past decade to strengthen its relationships with these customers. Primarily, the company has worked on improving its customer relationship management (CRM) which “enables companies to provide excellent real-time customer service through the effective use of individual account information.” (Kotler & Keller, 2009). In 1999 Hershey put in place a $112 million enterprise resource planning (ERP) and CRM system. The new technology was meant to bring the company’s business practices up to date and provide across-the-board automation that would span the process from order-taking to truck-loading. Unfortunately, due to initial problems in getting customer orders into the new system and transmitting the correct details of those orders to warehouse for shipping, Hershey got behind on their delivery and consequently lost over $100 million (Turk & Bligh, 2004). In an effort to repair damaged customer relationships stemming from the serious failures the year before, in 2000 Hershey implemented a new strategy that focused on fulfillment speed and agility. The company understood better than ever its key U.S. customers’ needs: efficient, customer-driven processes...
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...websites to serve Canada, UK, Germany, Austria, France, China and Japan. Gross sales have reached almost $ 50B at the end of 2011 with a net income after tax of $ 556M. Amazon.Com’s Competitive Advantage Capital Efficiency – It does not have retail stores and limits its capital investment to its headquarters and warehouses. It receives payments from its customers on an average of 17 days before it has to pay its suppliers. Inventory Velocity – Averages 16.5 times per year. Technology - Uses information technology to execute supply chain on a large scale to realize economies of scale making its gains in capital efficiency and inventory velocity possible. • Run its warehouses as efficiently as possible. It is so high tech that its ERP has complex algorithms that can analyze relationships among the items customers purchase to find groupings that can be located in the same warehouse, thus reducing shipping costs. Warehouse operating costs has dropped from 20% of revenue to less than 10%. • Optimizes delivery performance and enhances service reputation that minimizes distribution mistakes. • Offers its retailing and supply chain management services to more than 1.1M other retailers both large and small. Amazon.Com’s Competitive Advantage • The heart of Amazon.Com’s business model is information technology. It has been investing an average of 7% of its sales. • Some argue that Amazon has built “a stack of software on which thousands or millions of others can build businesses...
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...PRENTICE HALL MA NAGEMENT INFORMATION SYSTEMS TITLES MIS: Brown/DeHayes/Hoffer /Martin/Perkins, Managing Information Technology 6/e © 2009 JessuplValacich, Information Systems Today 31e © 2008 Kr oenke, Using MIS 21e © 2009 Kr oenke, Experiencing MIS © 2008 Laudon/Laudon, Management Information Systems 10le © 2007 Laudon/Laudon, Essentials of Management Information Systems 81e © 2009 Luftman et aI., Managing the IT Resource © 2004 Malaga, Information Systems Technology © 2005 McKeen/Smith, IT Strategy in Action © 2009 McLeod/Schell, Management Information Systems 10le © 2007 McNurlin/Spr ague, Information Systems Management In Practice 7Ie © 2006 Miller, MIS Cases: Decision Making with Application Software 41e © 2009 Senn, Information Technology 31e © 2004 Database Management: BordoloilBock, Oracle SOL © 2004 Bordoloi/Bock, SOL for SOL Server © 2004 Fr ost/DaylVanSlyke, Database Design and Development: A Visual Approach © 2006 Hoffer/Prescott/Topi, Modern Database Management 91e © 2009 Kroenke/Auer, Database Concepts 31e © 2007 Kroenke, Database Processing 10Ie © 2006 Perry/Post, Introduction to Oracle10g, © 2007 Per ry/Post, Introduction to SOL Server 2005 © 2007 Systems Analysis and Design: Hoffer /GeorgelValacich, Modern Systems Analysis qnd Design 5'/e © 2008 Kendall/Kendall, Systems Analysis and Design 7Ie © 2008 Valacich/George/Hoffer, Essentials of Systems Analysis and Design 31e © 2006 Object-Oriented Systems Analysis and Design: ...
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...How can Play On Toys ensure its information technology systems are ready for growth? Issue: Play On Toys has enjoyed 5 years of success in the European market, experiencing strong growth, particularly in the past year, increasing its staff from 16 to 60 employees. With 200 customers, Play On Toys fulfils 3000 orders annually, with a turnover of 5million Euro and 1.4 million in pre-tax profit. Having expanded its range from 2 to 20 products, Play On Toys now works with 30 suppliers to acquire the 110 parts required to manufacture its wares. Expansion into Asia, Africa and America is planned over the coming three years, with the accompanying growth and challenges of moving into new markets and expanding the operation, Play On Toys is at a critical junction. Ensuring that internal systems are functioning at highest efficiency and are prepared for growth are essential elements for the continued success of Play On Toys. Currently, records and information for critical areas including sales, financial, production, and customer relations are held in isolated electronic and paper files as well as some small databases. Essential reporting and transaction processing are highly dependent on manual inputs. Critically, sales orders submitted via the website must be manually processed by sales administrators in a process requiring printing orders and entering them into a spreadsheet manually. The current system of record keeping and reporting lacks cohesion and efficiency, and coupled...
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...20 Questions Directors Should Ask about IT Projects 2007 How to use this publication Each “20 Questions” briefing is designed to be a concise, easy-to-read introduction to an issue of importance to directors.The question format reflects the oversight role of directors, which includes asking management — and themselves — tough questions.These questions are not intended to be a precise checklist, but rather a way to provide insight into and stimulate discussion of important topics. The comments that accompany the questions summarize current thinking on the issues of leading organizations, and provide directors with a basis for critically assessing the answers they get, and digging deeper as necessary.Thus, although the questions apply to most medium-to-large organizations, the answers will vary according to the size, complexity and sophistication of the individual organization. The Information Technology Advisory Committee 20 Questions Directors Should Ask about IT Projects 2007 Library and Archives Canada Cataloguing in Publication 20 questions directors should ask about IT Projects ISBN 978-1-55385-250-6 1. Project management. 2. Information technology — Management. I. Canadian Institute of Chartered Accountants. II.Title:Twenty questions directors should ask about IT projects. HD30.2.T883 2007 658.4’04 C2007-901684-7 Copyright © 2007 Canadian Institute of Chartered Accountants 277 Wellington Street West Toronto, ON M5V 3H2 Printed in Canada Disponible...
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...Evolution of a Family Business - Godrej Group Case Study Submitted by (Section C- Group 4): Abhishek Kumar(PGP11/129) Balaji Manohar(PGP11/140) Karthik Kumar(PGP11/151) Prashant Gangwal (PGP11/162) Santosh(PGP11/173) Supriya(PGP11/184) Group Assignment – Organizational Behavior II – IIMK Introduction ........................................................................................................................................................................ 4 Executive Summary ......................................................................................................................................................... 5 Overview of the Godrej Group ................................................................................................................................... 7 Organizational Structure .............................................................................................................................................. 7 Godrej Group Companies ........................................................................................................................................ 8 Competition .................................................................................................................................................................... 9 Family Business Model .......................................................................................................................................... 10 Key Success...
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