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Erp Failure


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ERP lmplementation Failure at Hershey FoodsCorporation
Case study Reference 908-001-1 no

This case written InduPerepu, was by under direction Vivek the of Gupta, lcFAl center Management for Research. intended be used thebasis lt is to as for class discussion rather thanto illustrate either effective ineffective or handlinq of a management situation.The was case compiled published from sources. @2008, ICFAI Center Management for (ICMR). Research Nopartof thispublication be copied, may stored, transmitted, reproduced or distributedanyformor medium in whatsoever without permission the of thecopyright owner.

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"The Hersheydebacleis not an indictmentof ERPsper se, but it should caution any company that choosesto implementsuch a broad suite to make sure that systemwill function smoothly beforeenteringa peak salesperiod."l - Chain StoreAge, in 1999. "There is no doubt that 1999was a most dfficult and disappointingyear for Hershey Foods Corporation. llhile the year got off to a slow start due to excessiveretail inventories, we fully of expecteda strongfinish in the secondhalf of the yea.r.Instead, the implementation theJinal phase of the Corporation's enterprise-wide information systemcreatedproblems in the areas of by customerservice,warehousingand orderfuffillment. Thesedfficulties were exacerbated our growth in recent years which had resulted ín shipping capacity constraints. As a result, Hershey'ssalesand earnings for fell well short of expectations theyear."' - Kenneth L Wolfe, Chairman & CEO, HersheyFoodsCorporation, in 1999. INTRODUCTION (Hershey),the US basedmanufacturer In the third quarterof

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