Hershey's Sweet Victory

By David F. Carr Print this article Print

The confectioner's holiday sales melted when it switched software in 1999. Now, a second try is succeeding. Here are the lessons learned.

Was it a fluke? In September, Hershey Foods said it had completed an upgrade to mySAP.com—on schedule and below budget.

It was a significant turnaround for a company that had become an example of how not to do a major software project. In 1999, Hershey stumbled while rushing to complete an enterprise systems overhaul, with a new SAP implementation at its core. PDF Download

Basic order management and fulfillment processes broke down, causing the company to fail to meet many retailers' orders. The immediate impact was about $150 million in lost sales for the year. The damage to sales and retailer confidence lingered into early 2000.

Hershey is still reluctant to discuss what happened and what caused it; the company declined repeated requests for interviews from Baseline over the past year, and asked SAP and Accenture (which helped with the mySAP implementation) not to talk, either.

But we gathered insight from insiders and former employees, and from some public statements Hershey has made about its supply-chain improvements. Here's a look at three things that went wrong at Hershey—and the subsequent lessons learned.

This article was originally published on 2002-12-16
David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.
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