Hershey's Sweet Victory

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.

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.