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By Annu, Arathi & Ashwini

Hersheys A Brief Overview

Hershey's is the largest chocolate manufacturer in North

America. Its headquarters are in Hershey, Pennsylvania,
which is also home to Hershey's Chocolate World.

Chocolate Business was started by Mr. Milton S. Hershey

in 1876 The Hershey Company was established in 1894.

Hershey's sales are roughly 80% chocolate and 20% nonchocolate products are sold in about sixty countries

Large chunk of sales from Valentines Day, Easter, back

to school, Halloween and Christmas 40% of profit.

Need of an efficient and reliable logistics system to cater

to these large no. of seasonal requirements as reliable
product availability is critical.

Existing System

A network of 19 manufacturing plants, 8 contract

manufacturers and more than 20 co-packers.

The company was running on legacy systems, and with

the impending Y2K problems, it chose to replace those
systems and shift to client/server environment.

To tackle Y2K problem Hershey decided to replace

existing legacy systems by new project Enterprise 21.

IT Partners in Enterprise
Enterprise 21 is a project to implement a $10 million worth of
combination of software for CRM, ERP and forecasting.

The recommended implementation time for the project was 4 yrs. and
Hershey demanded for 2.5 yrs.

Hershey decided to go with Big Bang Approach instead of phased


Replace existing mainframe based legacy systems by SAP R/3 ERP


For Production forecasting, scheduling and transportation

management, a supply chain management software by Manugistics
Group Inc.

For managing customer relations and tracking effectiveness of

marketing activities, a CRM software by Siebel CRM.

What is ERP?

ERP (enterprise resource planning) is an industry term for the

broad set of activities that helps a business manage the important
parts of its business.

The information made available through an ERP system provides

visibility for key performance indicators (KPIs) required for
meeting corporate objectives

SAP R/3 is the former name of the enterprise resource planning

software produced by the German corporation SAP AG

It is an enterprise-wide information system designed to coordinate

all the resources, information, and activities needed to complete
business processes such as order fulfillment, billing,
human resource management, andproduction planning.[1]

ERP System

Benefits of ERP

A single system to support rather than several small

and different systems

A single applications architecture with limited


Access to management information unavailable

across a mix of applications that leads to know
about best practice systems and procedures.

Lower costs

Problems With ERP

The time, cost and effort to implement is likely to be


The level of outside expertise required will be higher

than anticipated.

The changes required to Business Processes will be

higher than expected.

There wont be enough training - particularly across

different modules.

Supply chain management

SCM : involves the management of information flows

between and among stages in a supply chain to
maximize total supply chain effectiveness &

ITs primary role is to create integrations or tight

process and information linkages between functions
within a firm.

Manugistics Supply chain

management Software

Manugistics Group, Inc. was a company that developed

and marketed software applications, principally for
resource planning and supply chain management, with
offices in over 30 countries.

Later acquired by JDA in 2006 and Manugistics supply

chain management software renamed as JDA software.

JDA Software is the leading provider of end-to-end,

integrated retail and supply chain planning and execution
solutions for more than 4,000 customers worldwide.

JDA SCM software- key capabilities

The key capabilities of SCM software are;

Multi-level replenishment planning

Finished good allocation flexibility

Date sensitive inventory management

Forecast consumption

Purchase management optimizing

Dynamic deployment

Customer relationship management


CRM: involves managing all aspects of a customers relationship

with an organization to increase customer loyalty, retention, and an
organizations profitability.


CRM enables an organization to :


Provide better customer service

Make call centers more efficient

Cross sell products more effectively

Help sales staff close deals faster

Simplify marketing and sales processes

Discover new customers

Siebel CRM

Siebel CRM provides an open integrated framework for Social

Media giving customers the ability to use Oracle Social
Relationship Management (SRM) cloud services with their
Siebel CRM implementation.

Functional Areas of Seibel CRM

Contact Social Profiles

For individual Contacts, view and store many social media profile. For each
social media profile, view and store detailed profile and attribute data into

Provide a complete enhanced 360-degree view of a Contact in Siebel CRM

Social Marketing

Create Social Marketing Campaigns and link to Siebel Marketing

Social Customer Service

Easily route and respond to customer service issues from social networks
within existing customer support platform

Escalate service-related social messages from Social Engagement &

Monitoring (SEM) into Siebel Call Center

Automatically route to appropriate agent for fast response

Expected Benefits from Enterprise 21

Fine-tune deliveries to suppliers.

Upgrade and

Efficient customer driven processes capable of

managing changing customer needs.

Reduce order cycle times and boost inventory


Reduce inventory costs.

Better execution of business strategy of emphasizing

core mass market candy business.




Actual Scenario

Unable to deliver $100 million worth of Kisses and Jolly

Ranchers for Halloween in 1999.

Stock price down 35%

Order fulfillment time doubled to 12 days!

Lost prominent shelf space for the season!!!

Several consignments were shipped behind schedule, and

even among those, several deliveries were incomplete.

Enterprise software isnt just software. It requires

changing the way you do business.

Impact of ERP
Implementation failure

What Went Wrong?

Hersheys Bouncing Back

Learnings from failure

An ERP implementation project should not be forced

into an unreasonable timeline. Over-squeezing
implementation schedules is a sure-fire way to
overlook critical issues.

Testing phases are safety nets that should never be


Never schedule cutover during busy seasons. Even in a

best-case implementation scenario, companies should
still expect steep learning curves and operational
performance dips.