Hershey’s “The wrong timing to implement the ERP system

 Hershey’s companydid not implement the new ERP system in the specified time of implementation.In addition, they did not implement the system in the proper manner by testingeach module before launching the system. Moreover, Hershey’s management and ITspecialist needed to focus more on employee training and education. Especiallythe employees who will be dealing with the system. They need to understand andfollow the business process of the implemented system. In conclusion,some of the factors that made Hershey’s disappointing experience with the ERPsystem implementation are:·      Hershey’s company choose the big bang approach inJuly 1999 to implement the ERP system, which implement huge pieces of systemonce. Hershey’s aimed to meet the Halloween order which is the peak season sothey choose the big bang approach of implementing because they will notimplement and test in phases it will be implemented only once.

Which costed thecompany US$ 150 million in sales.” Hershey has lost its credibility in themarket because it could not deliver the ordered products to the retailers anddistributors in the desired time”.  Season.

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Shipmentsof Hershey’s were delayed because they could not meet the deadlines. Instead ofdelivering the products in five days, they delivered the products within twelvedays. “Hershey’s became unable fulfill the orders in the peak season  ·      Squeezing deadline:  The ERP systemscheduled to be implemented within four years but Hershey’s has squeezed thedeadlines to thirteen months. As result of the squeezing in the deadline,Hershey’s has become under pressure during the holiday ·      Wrong timing: Hershey’s plan was to implement thesystem by April 1999, because the sales order in these periods are less thanother time. “Some of the modules like SAP financial, materials management,purchasing, and warehousing was implemented by January 1999,when the othermodules like the critical order processing and billing systems modules fromSAP, the pricing and promotions package from Siebel and planning and schedulingmodules from Manugistics were behind schedule.” Hershey’s movement to theERP system was during the busiest business periods, which is the peak season(holidays).

It is advisable for companies moving to new systems to reduceorders to prevent itself from problems that may be caused by untrainedemployees or unexpected errors. “The wrong timing to implement the ERPsystem costed the company $150 million in sale. Profits for the third quarterwere dropped by 19% and sales declined by 12% in its 1999 annual report.”There were someproblems that occurred during the implementation process of the ERP system thatcause the failure experience of implementation such as, Wrong timing, squeezingthe deadlines and the Big bang approach.Hershey’s companywas using the old legacy system with many problems.

Hershey’s company startedto update its system software and hardware and decided to shift to the clientserver architecture. In 1999, Hershey has implemented an ERP system Enterprise21 to help Hershey’s company to recognize its business process. Moreover,Hershey has installed a barcoding system to work with the Enterprise 21 thepurpose of that barcoding system is to enhance the management logistics,monitor the inflow and outflow of material and to reduce the production cost.

In 1999, Hershey has planned to move to the new ERP system.Some problemsoccurred during the implementation process which, caused mistakes inimplementation.Hershey had adisappointing experience with ERP system implementation. Hershey’sExperience:  Cadbury has chosen the best ERP vendors thathelped them to avoid mistakes during the implementation process. Cadbury hasimplemented the ERP system in small scope first in India’s branch then they hadspread their project. They spent less time and cost on the initialimplementation.

Finally, Cadbury chose to build the new system upon thestrength of the company.In conclusion, some of the factors that madeCadbury’s successful experience with the ERP system implementation are:The benefits for Cadbury from implementing thenew ERP system are saving the time, they had created a strong feedback systemto keep eye on the changes and if they are gaining as planned and the lowercost of implementation. The implementation of new ERP system developed a newway of managing the warehouse system.After the successful ERP implementation, Cadburymanagement get benefit of convenient system that help them make decisions,ability to enter the data only once, combining the data of Cadbury’s branchesand updates the whole system.” It has become totally system driven dataenemy now”.Cadbury started to implement the ERP system firstin India then they extent it all over the company. Choosing big bang approachmethodology to implement the ERP system by Cadbury was a good decision.

Cadburyimplemented the system in short period of time and gained the benefit of thebig bang approach, which is saving time of implementation. In addition, the bigbang approach helped to handle Cadbury’s lack of resources for long term.  Cadbury chose the Big bang approach to implementthe ERP system. Big bang approach used to gather phases of implementation so itwill implement the system at one time rather than implementing phase by phase.

The implementation of the ERP system in Cadburytook place in 1995 to become a solution for the decentralized modules.Cadbury’s main objective from the ERP implementation is to improve managementwork.Cadbury India has done the first ERPimplementation. Cadbury India considered as the first branch that hadimplemented the ERP system to do its business process. Cadbury has implementedthe ERP system to integrate all of its business process (Finance, Supply chainmanagement, Marketing and sales and Human resource departments) in oneintegrated system.

Cadbury ERP system had integrated the business process ofCadbury’s operation branches and manufacturing branches. Before implementingthe ERP system, they were not running on an integrated form except the financedepartment, which was the only common one.Cadbury has had a successful experience with ERPsystem implementation.Cadbury’s Experience: