cadbury erp case study

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!

case study on ERP implementation , ERP implementation , ERP system selection , ERP systems , success story

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

To get you started on the right path, we created this guide, The Ultimate ERP Selection Guide: Templates, Checklists & Scorecards. It gives you access to the tools and methodologies we use.

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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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Presentation: ERP Case Study on Hersheys vs. Cadbury

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

• Implementation
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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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• not stopping all in-flight IT projects until their value to the new organisation could be assessed
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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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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.