A CASE STUDY ON HERSHEYS ERP IMPLEMENTATION FAILURE THE IMPORTANCE OF TESTING AND SCHEDULING

It functionedthrough severalmainframelegacy systems, which were used for different functions ranging from human resourcesto order processing. Hard pressed for time, Hershey went in for Big Bang ERP implementation, which led to several problems pertaining to order fulfilment, processing and shipping. In mid- September,Hersheyannouncedthat it was having problemsin processingordersusing its new computer systems. Business process and systems issues caused operational paralysis, leading to a 19 percent drop in quarterly profits and an 8 percent decline in stock price. Sincethe groundworkwas inadequate,the top managementalso fell short in guiding the company’stechnical and business managers. Enter the email address you signed up with and we’ll email you a reset link. During the SecondWorld rily’ar,the US army demandeda chocolatethat weighedfour ounces,did not melt at high temperaturesand provided high energy.

All fields Reference no. This case is designed to enable students to: Milton aimed to leam how to mass produce milk chocolates,and spent severalyears to try to discover the right combination and methodto producemilk chocolates. Retailersopined that not only short term sales but long term sales of Hershey too would also be affected. After switching over to the ERP system,Hershey was to have a client-serverversion of the same software.

a case study on hersheys erp implementation failure the importance of testing and scheduling

He moved back to Lancasterto start Lancasrer ‘ Manugistics is a softwareapplicationcompanyfoundedin as Scientific Time SharingCorporation. With respect hrsheys the Hershey’s case, many authors have criticized the schsduling decision Testing phases are safety nets that should to roll out all three systems concurrently, using never be compromised. According to analysts, ERP implementation was a complex process and many glitches could occur.

The potential scheduling benefits of skimping on testing outweigh the costs of keeping to a longer schedule. He then starteda candy businessin New York which failed.

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ERP Implementation Failure at Hershey Foods Corporation

For delivery in electronic format: According to experts in the field, anything betweenthree to six weeks was required after implementationto identiff problemsand fix them. Implementxtion testing sets back the launch date, so be it.

In ,the companywas renamedHersheyFoodsCorporation. In mid- September,Hersheyannouncedthat it was having problemsin processingordersusing its importanfe computer systems.

In order to addressthis issue,Hershey built a 1. Knowledge, Information and Communication Systems Management. This called for highly efficient logistics and supply chain systems duly supportedby informationtechnology IT.

a case study on hersheys erp implementation failure the importance of testing and scheduling

Unfortunately, too few companies Here are the relevant facts: In order to quicken the implementationprocess,Hershey opted for Big Bang implementation, where several modules were implementedsimultaneously. The adverseaffects of failed ERP implementationwere immediate,with a significantdrop in the revenuesfor third quarterof Inputs from consultingfirms with experience in SAP-Manugistics integration could have helped Hershey avoid the catastrophe.

According to Jim Shepard,Senior Vice-presidentfor AMR Research3o in Boston,”Thesesystemstie togetherin very intricateways, and things that work fine in testingcan tum out to be a disaster. Case Study Volumes Collection. Taking up the challenge,Hershey produced specialcandy bars meetingthe above specifications.

By following these bits of advice, your company will mitigate failure risks and put itself in a position to drive ERP success. The company said that employeeswere facing problems entering new orders into the systems, and the new systems were not transmitting order details to the warehouses.

ERP Implementation Failure at Hershey Foods Corporation|IT and Systems|Case Study|Case Studies

ERP system,as well as a revampeddistribution facility in the EasternUS, were both much improved during this period of high demandfor our domesticconfectionerybusiness. For our firm, it feels like Groundhog Day every time we are retained to rescue a failed or failing ERP project. Another reasoncited for the debaclewas Hershey’slack of experiencein implementingsoftware solutionsof this magnitude. The companyoperatedmore than 30,stores.

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As a result,there was hardly any buffer left for the systemsto be tested. The companywould have seenthe loads those applications were going to put on its network, and it would havebeenableto identiff potentialproblemareas.

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Instead, the implementationof theJinal phase of the Corporation’s enterprise-wide information systemcreatedproblems in the areas of customerservice,warehousingand schedulign. It also gives employees methodology designed to simulate realistic more time to learn the new business processes operating scenarios; and pay close attention to and systems.

The purpose of Hershey’s made another critical scheduling this phase is to validate the key business mistake – it timed its cutover during its busy processes in the ERP system. Failyre Hersheyplannedto switch over to the new systemsduring April ,which was a lean season for confettionery sales,thesemoduleswere addedon only in July – three months behind schedule.

The software from Siebel was to support Hershey in managing customer relations and in tracking the effectivenessof the company’s marketing through a pricing promotionsmodule. Remember me on this computer. Even in best-case implementation importaance, companies should still expect performance declines because of the steep learning curves.

The retailers who ordered for Hershey’s products could iimportance get them on time, even though the company had ample supplies stocked at its warehouses.