ERP Implementation Failure at Hershey Foods Corporation
| Case Code: ITSY059 Case Length: 19 Pages Period: 1980-2007 Pub Date: 2007 Teaching Note: Not Available |
Price: Rs.400 Organization: McKinsey & Company Industry: Consulting Countries: US Themes: Knowledge Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Implementing ERP
Hershey priced its products low, and to achieve sales of almost US$ 5 billion, huge quantities of the products needed to be sold. This called for highly efficient logistics and supply chain systems duly supported by information technology (IT). In the early 1990s, the spending on IT in the food and beverage industry was among the lowest...
The Problems
Initially, the rollout appeared to be smooth. But slowly, problems pertaining to order fulfillment, processing and shipping started to arise. Several consignments were shipped behind schedule, and even among those, several deliveries were incomplete. However, it was too late for Hershey to respond to this problem...
What Went Wrong?
The top management of the company as well as industry analysts began looking at the reasons for the problems at Hershey. Though SAP was blamed for Hershey's debacle, the company's management viewed it differently...
Bouncing Back
After the debacle, Hershey made efforts to stabilize SAP and other systems. The company appointed a CIO, George Davis from Computer Sciences Corporation. Under his leadership, a rigorous software testing program was implemented...
Exhibits
Exhibit I: Hershey's Products
Exhibit II: Hershey - Stock Price Chart (1998 - 2002)
Exhibit III: Hershey Foods Corporation - Statement of Income
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