erp case study on cadbury

ERP Implementation at Cadbury’s

Here is a short case study and success story on implementing ERP System at Cadbury’s.

Company Introduction Cadbury India is a fully owned subsidy of Kraft Foods Inc. With annual revenues of approximately $50 billion, the combined company is the world’s second largest food company, making delicious products for billions of consumers in more than 160countries. They employ approximately 140,000 people and have operations in more than 70 countries.

The ERP initiative was to bring about a completeintegration of the major processes in the business. The major processes being procurement system, finance system, the Human Resources and other departments.These were functioning in a completely decentralised manner. Cadbury’s have four branch operations and 13 manufacturing operations and each had their own systems running in isolation.

Benefits of ERP System specific to Cadbury’s

• Cadbury was on a fast paced growth and could not continue with the existing systems and the pace was too slow due to added inefficiencies down the chain. ERP implementation handled all the issues and added efficiency and guided the fast paced growth.
• Cadbury standardized the processes within the 16 locations.
• The implementation of ERP brought in a new way of warehouse management system and brought in structure to branch offices and the depots.
• The manufacturing in itself had 13 operations and each was operating in a silo. This had increased the work in progress and the integration of the processes has done well for the company.
• The ERP vendor was also selected from among the best in classvendors which helped the process occur in a streamlined fashionand avoided any possible chances of hiccups during the initial implementation phase.
• The system has also been deployed up to the vendors. They have a portal called vendor connect where they can see their inventory movement and make plans accordingly. Hence the restructuring happens not only internally but also across to the supplier which will add on to the benefits for both parties.

Selected and managed well, ERP Systems can bring extrodinary value to any organization and address many challanges being faced. If you’d like to chat about ERP systems or their selection, give ERP Advisers a call today!

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ERP Selection and Implementation Readiness Self Assessment

Digital transformation and ERP implementation projects have notoriously high failure rates and sky-high costs.

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This is not one of those “hindsight is 20-20” cases. A reasonably prudent implementer in Hershey’s position would never have permitted cutover under those circumstances. The risks of failure and exposure to damages were simply too great. Unfortunately, too few companies have learned from Hershey’s mistakes. For our firm, it feels like Groundhog Day every time we are retained to rescue a failed or failing ERP project . To help companies implement ERP correctly – the first time – I have decided to rehash this old Hershey’s case. The two key lessons I describe below relate to systems testing and project scheduling.

ERP Systems Testing

Hershey’s implementation team made the cardinal mistake of sacrificing systems testing for the sake of expediency. As a result, critical data, process, and systems integration issues may have remained undetected until it was too late.

Testing phases are safety nets that should never be compromised. If testing sets back the launch date, so be it. The potential scheduling benefits of skimping on testing outweigh the costs of keeping to a longer schedule. In terms of appropriate testing, our firm advocates methodical simulations of realistic operating conditions. The more realistic the testing scenarios, the more likely it is that critical issues will be discovered before cutover.

For our clients, we generally perform three distinct rounds of testing, each building to a more realistic simulation of the client’s operating environment. Successful test completion is a prerequisite to moving onto to the next testing phase.

In the first testing phase – the Conference Room Pilot Phase – the key users test the most frequently used business scenarios, one functional department at a time. The purpose of this phase is to validate the key business processes in the ERP system.

In the second testing phase – the Departmental Pilot Phase – a new team of users tests the ERP system under incrementally more realistic conditions. This testing phase consists of full piloting, which includes testing of both the most frequently used and the least frequently used business scenarios.

The third and final testing phase – the Integrated Pilot Phase – is the most realistic of the tests. In this “day-in-the-life” piloting phase, the users test the system to make sure that all of the various modules work together as intended.

With respect to the Hershey’s case, many authors have criticized the company’s decision to roll out all three systems concurrently, using a “big bang” implementation approach. In my view, Hershey’s implementation would have failed regardless of the approach. Failure was rooted in shortcuts relating to systems testing, data migration and/or training, and not in the implementation approach. Had Hershey’s put the systems through appropriate testing, it could have mitigated significant failure risks.

ERP Implementation Scheduling

Hershey’s made another textbook implementation mistake – this time in relation to project timing. It first tried to squeeze a complex ERP implementation project into an unreasonably short timeline. Sacrificing due diligence for the sake of expediency is a sure-fire way to get caught.

Hershey’s made another critical scheduling mistake – it timed its cutover during its busy season. It was unreasonable for Hershey’s to expect that it would be able to meet peak demand when its employees had not yet been fully trained on the new systems and workflows. Even in best-case implementation scenarios, companies should still expect performance declines because of the steep learning curves.

By timing cutover during slow business periods, a company can use slack time to iron out systems kinks. It also gives employees more time to learn the new business processes and systems. In many cases, we advise our clients to reduce incoming orders during the cutover period.

In closing, any company implementing or planning to implement ERP can take away valuable lessons from Hershey’s case. Two of the most important lessons are: test the business processes and systems using a methodology designed to simulate realistic operating scenarios; and pay close attention to ERP scheduling. By following these bits of advice, your company will mitigate failure risks and put itself in a position to drive ERP success .

Our team has been leading successful ERP implementation projects for decades – for Fortune 500 enterprises and for small to mid-sized companies. Our methodology – Milestone Deliverables – is published and sells in more than 40 countries.

This article was originally published by Manufacturing AUTOMATION on July 30, 2010.

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Unsuccessful ERP Implementation Case Studies (common pitfalls to avoid)

By now you've probably heard about Cadbury and Nestle SA's ERP implementation success stories , but not every ERP implementation ends in success, and it's crucial to understand the pitfalls to avoid.

ERP case study #1: Hershey Candies – A Bitter Failure

An expensive lesson on the importance of synergy; this case study reviews the failure of Hershey, a 147-year-old confectioner, headquartered in Hershey, Pennsylvania. The enterprise saw the implementation of an ERP platform as being central to its future growth.

Consequently, rather than approaching its business challenge based on an iterative approach, it decided to execute a holistic plan, involving every operating center in the company.

SAP was then selected for a $10 million systems upgrade, however, management problems emerged immediately.

The impact of this decision represented complete chaos, where the company was unable to conduct business because virtually every process, policy, and operating mechanism was in flux simultaneously.

The consequent result was the loss of $150 million in revenue, a 19% reduction in share price, and the loss of 12% in international market share.

Key takeaway: Poor management can scupper implementation, even when you have selected the perfect system.

ERP case study #2: PG&E – A Case For ERP Consultancy

As a major energy utility, San Francisco’s Pacific Gas and Electric should have known better. Its Oracle ERP implementation had gone well , and there had been no problems of note; until it came time to test the system.

A manager had chosen a live information database to use during pre-launch testing, although no one thought that the regime would uncover any sensitive company information.

Unfortunately, this was untrue, and consequently created a host of costly recovery programs, in addition to losing public confidence in the company’s brand.

Key takeaway: Brief your staff on exactly what they should do and not do. Don't get non-specialist staff to carry out specialist roles.

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Presentation: ERP Case Study on Hersheys vs. Cadbury

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[slideshare id=32339200&doc=erpassignment-140315011402-phpapp02]

This article was written by Elizabeth Quirk on January 17, 2017

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Elizabeth Quirk

Liz is a leading enterprise technology writer covering Enterprise Resource Planning (ERP), Business Process Management (BPM) and Talent Management Suites (TMS) at Solutions Review. She writes to bridge the gap between consumer and technical expert to help readers understand what they're looking for. Liz attended Massachusetts College of Liberal Arts, where she obtained her Bachelor of Arts Degree in English and Communications. You can reach her at [email protected]

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The challenge

After investment in a new ERP system (SAP), Cadbury were experiencing significant business challenges with their product development ‘engine’. Inefficient processes were leading to delays in new products being delivered to market, and this ran the risk of damaging relationships with key customers. Hypotheses around data quality were being explored, but ‘broken data processes’ had become shorthand for issues around people’s understanding of how data supports the business process. It was time for a root cause assessment of what was driving the delays.

Ignite discovered that whilst improvements in the efficiency of the delivery engine for product development were needed, problems existed in processes elsewhere across the organisation. As a result, ‘Project Adrenalin’ – enabling Cadbury to build faster and more effective ways to deliver products and product changes to market – was launched with our support.

Project Adrenalin drove changes to ways of working across a range of areas – a more streamlined and cost-effective process for making minor changes to existing products, a focus on educating staff who needed to understand how their data was used across the whole product development lifecycle, and a clearer project management process for those most closely involved in product development.

What made it successful

• Early engagement with those impacted by the delays – we met a wide range of internal stakeholders to get their views on the root causes of the issues
• A bold approach to collating those views – we ran a full-day workshop for 25+ people, most of whom had never before had the opportunity to talk about the challenges they were facing
• Use of insight – we used the idea of telemetry in Formula 1 races to show how in-flight data can be instrumental in spotting issues before they get too serious. We also talked about how low-cost airlines have found smart ways to optimise efficiency in their processes
• Keeping a relentless focus on outcomes – At the end of the first major workshop, we mapped all the good ideas for resolution onto a wall-sized matrix of impact and do-ability. We tackled the easier ideas first, but kept a clear eye on the big hitting ideas that would take longer to deliver
• Having an organised approach to delivery – We set up 12 workstreams, each focusing on a specific improvement area. We had light touch governance, but a heavy dose of stakeholder engagement, so as to keep up everyone’s interest in and contribution to the solutions.

ERP case study #1: Cadbury success Our first successful ERP implementation case study focuses on..

ERP case study #1: Cadbury success Our first successful ERP implementation case study focuses on Cadbury, a 123 year-old confectioner currently owned by American snack foods conglomerate Modelez International. The company was on an accelerated growth-track while facing problems meeting its production and distribution requirements. Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation; multi-node resources-management was extended throughout its supply-chain, along with a complete revamping of existing warehouse, ERP case study #1: Cadbury success Our first successful ERP implementation case study focuses on Cadbury, a 123 year-old confectioner currently owned by American snack foods conglomerate Modelez International. The company was on an accelerated growth-track while facing problems meeting its production and distribution requirements. Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation; multi-node resources-management was extended throughout its supply-chain, along with a complete revamping of existing warehouse, and distribution processes. The consequent impacts afforded Cadbury an opportunity to reduce overall operating costs, while its newly engaged supply-chain, produced significantly better production efficiencies throughout its manufacturing chain. —————————————————————————————————— Provide an explanation of what went right and what went wrong. What could have been done differently to prevent some of the challenges faced by other classmates' experiences with ERP implementations? What acquisition method would you recommend if you were the project manager for the ERP implementation? Provide an overview of the implementation process (e.g., the ERP life cycle, business process re-engineering, project management, and change management) and the role of staff, vendors, consultants, and the organization in making the ERP implementation process successful.

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ERP case study #1: Cadbury – success Our first successful ERP implementation case study focuses on Cadbury, a 123 year-old confectioner currently owned by American snack foods conglomerate Modelez International. The company was on an accelerated growth-track while facing problems meeting its production and distribution requirements. Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation; multi-node resources-management was extended throughout its supply-chain, along with a complete revamping of existing warehouse, and distribution processes. The consequent impacts afforded Cadbury an opportunity to reduce overall operating costs, while its newly engaged supply-chain, produced significantly better production efficiencies throughout its manufacturing chain.

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Provide an explanation of what went right and what went wrong. What could have been done differently to prevent some of the challenges faced by other classmates' experiences with ERP implementations? What acquisition method would you recommend if you were the project manager for the ERP implementation? Provide an overview of the implementation process (e.g., the ERP life cycle, business process re-engineering, project management, and change management) and the role of staff, vendors, consultants, and the organization in making the ERP implementation process successful.

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The decline and fall of erp, and why colleges should care.

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As summer simmers down and my kids are back from camp, one of the lasting highlights is missives in the mail from 13-year-old Zev. His letters from Tamarack in Michigan usually take a week, but are worth waiting for: zany observations punctuated by junk food he’s managed to get hold of. Here’s one account of a trip he took:

Everyone was complaining about being hungry. And to make it worse, we had a bathroom break in front of a Subway and Dairy Queen. We protested and refused to get back on the bus until we got food (which the counselors were not too happy about). Some people took it seriously, but me and my friends made a joke out of it. As strangers walked by, we acted like we were lost and I sat next to the wall playing my harmonica.

(Yes, Zev took his harmonica to camp.)

The next letter recounted another bus trip out of camp.

I drank an entire bottle of Diet Dr. Pepper. (I was going to get Cherry Dr. Pepper, but it has 70 grams of sugar.) It was SO GOOD, and I also had half of my friend’s Pizza Pringles. So it helped when the bus failed to climb up this super-steep hill. We had to get out and climb up ourselves so the bus had less weight. Half of the kids started crying because they thought the bus was going to fall down the hill. And my friend Daniel threw up, which made five more people throw up. It was pretty crazy. We finally made it to the camp site. By then, everyone was pretty worn out. We had to unload all of our stuff and set up the tents. My friend and I played javelin with the tent poles and he won. ☹

In the best camp stories, something is on the brink of going horribly wrong. Which is precisely the state of career launch in America – with stakes that could not be higher for socioeconomic mobility and American higher education. So bear with me briefly while I introduce a topic I guarantee you’ll greet with about as much enthusiasm as Zev when, years ago, I first talked to him about going to camp.

For over 30 years, large companies and organizations have run functions like finance, HR, supply chain, sales, business intelligence, and project management on enterprise resource planning (ERP) software like SAP and Oracle (formerly PeopleSoft). ERP evolved into the operating system of late capitalism; everything ran on it. As these systems covered so much digital ground, implementations were complex, often to disastrous effect . If you work in higher education, your first exposure to ERP might have been a PeopleSoft implementation that was years behind schedule, millions over budget and yielded a headline-grabbing lawsuit .

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Everything ran on it.

As the primary benefit was to tap a unified database of information from across the organization and connect to a single general ledger, ERPs were one-size-fits-all solutions, neither tailored to any specific industry nor sufficiently specialized to allow functions to be managed entirely in the system (or at least managed well). Because ERPs only captured a portion of workflow, the typical use case involved logging completed work in the ERP rather than carrying out the work from start to finish. For most professionals, engagement with the ERP was more about extracting data to analyze and manipulate outside the system than actually working on the platform.

With software’s shift to the cloud and the emergence of function-specific SaaS products like Salesforce (CRM/Sales), Workday (HR), and ServiceNow (IT), ERP now seems as antiquated as the epistolary tradition, albeit with less charm and fewer zany stories. Specialized SaaS platforms allow professionals to complete most or all of their work entirely in the software. How so? Because they’ve digitized virtually all possible workflow – or at least best practice workflow – for relevant business functions. These new platforms are rigid yet highly configurable digital reflections of the enterprise. And while SAP and Oracle have tried to respond with new modules, they’re limited from not being cloud-native, as well as not having the focus or function, industry, or workflow expertise to compete with specialized SaaS.

Why should we care? Because the decline and fall of ERP has already transformed the entry-level jobs colleges are ostensibly preparing students for.

Back in ERP’s salad days, skills and experience with PeopleSoft or SAP were only found in job descriptions for IT positions: administering, configuring, or supporting the ERP itself. Those numbered thousands – not millions – of jobs accessible to new college graduates. Meanwhile, the finance, HR, supply chain, sales, business intelligence, and project management positions which involved interacting with ERP didn’t demand ERP experience or skills. Why would they? Because ERP’s functionality was limited, those roles didn’t involve living in the ERP, only visiting every now and then. So managers believed new hires could learn what they needed in order to use the system, then get on with the real work. This made millions of ERP-adjacent jobs perfect for college grads.

Today, thanks to digital transformation and the rise of specialized SaaS, nearly all good jobs are no longer adjacent; they live in these SaaS platforms full time. That’s millions – not thousands – of entry-level positions. And because specialized SaaS are industry- and function-specific, job descriptions increasingly demand not only platform skills – usually naming the specific SaaS platform – but also experience in the industry and/or function. Because these platforms aim to encompass 100% of workflow formerly done via ERP + Excel (or paper, or manually), hiring managers now want candidates who already understand the industry and/or function. Because if they don’t, they’ll be at sea the moment they start living in the platform.

In the spirit of selecting an example as enthralling as ERP, let’s talk about finance. Every organization of some scale has a finance function and either a CFO VictoryShares US 500 Enhanced Volatility Wtd ETF or controller responsible for accounting, reporting, and budgeting. 70% of CFOs report continuing to rely on Excel for budgeting and forecasting because ERPs lack the ability to do complete financial planning and analysis (FP&A) in the platform. That’s not ideal for two reasons: (1) reconciling data across disparate spreadsheets can be time consuming; and (2) Excel documents reflect a single point in time and require updating or rework in subsequent months. Hence the rush to specialized CFO SaaS platforms like OneStream – simpler and more affordable than the multiple ERP modules required for FP&A. But the bigger reason is that CFOs are being asked to add more value than simply closing the books and circulating reports. They’re increasingly instrumental in strategic planning and value creation discussions, often directly informing or influencing operations.

Imagine a global manufacturer experiencing sudden price hikes from suppliers. In ancient ERP times, the trend might not be spotted until after the monthly close – typically 2-3 weeks into the following month. Then the CFO (or realistically, a new college grad working as an analyst) would export data to Excel and run scenarios in order to come up with options so the unexpected cost increases don’t lead to a missed quarter. That’s probably another week or two. So there’s no plan of action for at least a month. In contrast, a SaaS platform like OneStream presents real-time data with company-wide reports by location, product, and business unit, alerting the CFO (i.e., a new college grad working as an analyst) the same day. Then – again with real-time data – OneStream runs rolling forecasts across various scenarios and produces a recommendation – all in the same day. The result is an immediate remediation plan, not a month-long delay that could jeopardize the quarter and the CFO’s job. Hence OneStream’s rapid growth and successful IPO last month.

When the aforementioned work was done by extracting data from SAP then manipulating it in Excel, few finance departments bothered listing that detailed workflow in job descriptions, let alone insisted on SAP skills or experience. But now, because the work is increasingly happening entirely in specialized SaaS platforms like OneStream, finance is listing OneStream skills and finance experience in job descriptions.

We’re seeing the same pattern repeating across the enterprise and impacting millions of jobs, primarily in the private sector; the public sector is still catching up on ERP. The consequences couldn’t be more dire for young people looking for a first good full-time position. Jobs that were once entry-level – jobs that didn’t demand prior skills or experience in a specific industry or with a particular job function, let alone a specific SaaS platform – are simply no longer accessible for college grads or even candidates with graduate or professional degrees.

Specialty SaaS’s eclipse of ERP is driving the experience inflation afflicting millions of new and recent grads. A LinkedIn study found that for entry-level positions with a software component, 60% requested years of prior experience. For most good entry-level jobs, career launchers need to show they’ve pretty much already done the job. Which puts the mockers on the whole entry-level job thing. Which means colleges urgently need to pay attention to a topic they’re constitutionally set up to avoid and ignore.

Except colleges can’t really claim ignorance on ERP. Like governments, they depend on them to operate every day. Although colleges are well ahead on leveraging powerful SaaS platforms like Salesforce (CRM) and JAGGAER (procurement) and tapping trusted higher education-focused service providers like Cloud for Good (an Achieve Partners portfolio company) and RiseNow to implement these platforms and make them really work.

As colleges undergo this transition, they’d do well to think about the connection to their many recent graduates who invested and borrowed a great deal in order to get a good first job, but are now more lost than Zev outside the Subway/DQ.

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