Comprehensive Problem

Hershey’s Big Bang ERP

Halloween is the biggest candy season of them all, with $1.8 billion in sales. For Hershey’s, Halloween 1999 was the scariest of all time. Hershey’s had planned to implement a $112 million ERP system in 48 months. Instead, it was implemented in an accelerated 30-month time frame. Hershey’s “flipped the switch” in July 1999, right during its busiest ordering season. Issues with inventory and ordering processes promptly gummed up the order-distribution system. By August 1999, Hershey’s was 15 days behind in shipping orders. Many distributors who placed orders in September were still waiting for their shipment at Halloween. Hershey had plenty of candy in inventory; it just could not move the candy from its warehouses to its customers. The implementation problem contributed to a 19% drop in revenue. It took a full year for the company to bounce back.

The new ERP system employed over 5,000 PCs, network hubs, and servers. The ERP software was supplied by three firms and implemented by a large consulting firm. Despite the system’s size and complexity, Hershey’s chose to implement most of it in one step called the “big bang.”

Required

What could Hershey’s have done to properly design, implement, and operate this new ERP?