HERSHEYS BY Noora Hersheys A Brief Overview q

HERSHEY’S BY: Noora….

Hershey’s – A Brief Overview q. The Hershey Company is the largest chocolate manufacturer in North America, with its headquarters in Pennsylvania. q It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company and is one of the oldest chocolate companies in the United States. q. The Hershey Pennsylvania plant is the largest chocolate factory in the world.

Existing System • The company was running on legacy systems, and with the impending Y 2 K problems, it chose to replace those systems and shift to client/server environment. • To tackle Y 2 K problem Hershey decided to replace existing legacy systems.

IT Partners • A $112 million worth of combination of softwares for CRM, ERP and forecasting. • Replace existing mainframe based legacy systems by SAP R 3 – Accenture. • Production forecasting, scheduling and transportation management – Manugistics Group Inc. • Managing customer relations and tracking effectiveness of marketing activities– Siebel CRM.

Expected Benefits • Efficient customer driven processes capable of managing changing customer needs. • Reduce order cycle times and boost inventory accuracy. • Reduce inventory costs. • Better execution of business strategy of emphasizing core mass market candy business.

What went wrong • Squeezed deadlines • Wrong timing • Big-Bang approach • Un-entered data • Lack of IT understanding

Learning • Go Slow • Data is King • Oversight Matters

The Turnaround • Hershey made sure to take the time and resources to thoroughly test the computer systems. • Testing included putting bar codes on empty pallets and going through the motions of loading them onto trucks so that any kinks would be worked out before the distribution center opened for business.

Hershey’s Today §Revenues of nearly $5 billion and almost 13, 000 employees worldwide. §In 2005 & 2006, Hershey acquired the Berkeley, Californiabased boutique chocolate-maker Scharffen Berger, Joseph Schmidt Confections, the San Francisco-based chocolatier and Dagoba Organic Chocolate, a boutique chocolate maker in Oregon.

Question – Answer Time Click To Start

Q 1: Analyze Hershey's business model using the competitive forces and value chain models. Was an ERP system and related software a good solution to Hershey's problems? Explain your responses. • Yes an ERP system and related software would have been a good solution if it wasn’t for the flaws. If Hershey took ERP in slowly not all at once and offered better training and education, they would be better at collecting data and customer service thus increasing their profitability.

Q 2: Classify and describe the problems with the Enterprise 21 project using the categories described in this chapter on the causes of system failure. What management, organization, and technology factors caused these problems? • Enterprise 21 was a plan to modernize Hershey's software and hardware but unfortunately lots of problems occurred because of (organization) shortening the time from 42 months to 39 months of work and having an (Management)aggressive schedule even though the full SAP system did not come online until mid-July. (Technology) Also information system staff decided to use direct cutover strategy where all the system goes live all at once.

Q 3: What role did enterprise software play in the failure? Were Hershey's system problems the fault of the software vendors, Hershey, or both? • Enterprise software failure caused supplies to fall behind, slow shipments, and wrong number of shipments sent that was the affected untrained and uneducated workers who didn't know how to use the system well. Hershey's system problems was the fault of Hershey's and not software vendors.

Q 4: Who was responsible for the failure of Enterprise 21? Assess the role of Hershey's IT group and its managers. • The business process transformation of Hershey possibly caused enormous complexes making the managers responsible for the failure. Also Major changes came and Hershey’s employees including the IT group didn't receive the right job and training.

Q 5: Evaluate the risks of the project as seen at its outset, and then outline its key risk factors. Describe the steps you would have taken during the planning stage of the project to control those factors. • This project has a risk of declining the company and losing customer loyalty. Some risk factors are the inexperienced IT employees and bad management. During the planning stages I would have put a longer time line and more experienced and better trainers to educate the employees.

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