ERP Implementation Failure: Learning From Hershey’s

Warning sign representing ERP implementation failure

Naturally, ERP implementation failure is scary. In many cases, it translates into big losses. And no, we’re not merely talking about time.

Today, we’re tackling an interesting topic. Hershey’s offers a great example of how ERP can go wrong. In this article, we’ll dive into its case study. Moreover, it’s the first entry in a two-article series.

Make sure to contact a specialist if you spot any of these signs.

Lacking time and ERP implementation failure

The first mistake was underestimating the endeavor. Unfortunately, the project coincided with demand spikes. Moreover, they chose complex modules for crucial processes. This investment backfired as halting said processes took its toll.

But, what triggered Hershey’s ERP implementation failure?

That’s the summary of what happened. But we must analyze the individual mistakes as well. Doing so allows us to see the obvious signs. Of course, hindsight is an untimely benefit. Still, we can learn from others’ mistakes.

Bad scheduling

Firstly, Hershey’s estimated completion around April 1999. By then, demand would be lower. So implementation wouldn’t hinder operations. Unfortunately, several modules fell behind schedule. That meant facing heightened demand amid installation.

Rushing implementation

Then, the company had to opt for a “big bang” approach. You can learn more about it in this article’s “single-step” method. This approach meant higher costs and risks. It made the process faster. Sadly, it wasn’t enough to meet its new needs.

Bad countermeasures

Wisely, they increased inventory size to offset the installation’s stress. However, these products piled up as the project stagnated. That meant a 25% increase in stock volume. This inventory stalled as Hershey’s couldn’t fulfill orders.

Improper data conversion

Finally, the company failed to register storage locations. They used temporary facilities for the extra inventory. Yet, the software didn’t identify these storage sites. Thus, the ERP system neglected these stockpiles. In other words, bad conversion created ignored inventories.

How can you avoid an ERP implementation failure?

Now, better planning would’ve been the best solution. However, that mistake came from other hiccups. We can summarize them below:

  • Not researching the solutions enough.
  • Underestimating the time investment necessary.
  • Improper countermeasure management.

We can list more. But, we’ll talk about what went wrong in the next article. For now, we can offer exclusive advice. We’re offering free consultations for new clients. Book yours here!

Topics:

Zero Point ERP Solutions

Subscribe to our Newsletter

Share to

Recent Post

NetSuite Best Practices for Retail Businesses

NetSuite Best Practices for Retail Businesses

Read more

NetSuite vs. SAP S/4HANA: Which One Is Better?

NetSuite vs. SAP S/4HANA: Which One Is Better?

Read more

SAP Data Intelligence Moves Enterprise Businesses Forward

SAP Data Intelligence Moves Enterprise Businesses Forward

Read more

SAP S/4HANA Trial Systems: Discovering It’s Potential

SAP S/4HANA Trial Systems: Discovering It’s Potential

Read more
Share to