Question: Give instances of ERP components in a business that you are aware of or where you are working. Give instances of the equipment, programming, people, procedures, and databases.

CASES OPENING CASE: HERSHEY'S ENTERPRISE 21 PROJECT CASE 1-1 SOURCE: Based on article: David F Carr, "Hershey's Sweet Victory," Dec 16, 2002 issue of Baseline Magazine Hershey Foods, Inc., completed an upgrade to theirReplace existing legacy software due to SAP/R3 enterprise software installation on schec ule in September 2002, and they did it below theirReplace legacy mainframe IS with an projected budget. This was considered a big achievementfor the company that had experienced S150 million dollars in lost sales due to problems associated with its new ERP system just a few years earlier in 1999. Hershey's CIO, George Davis, won- dered why things went so smoothly with the upgrade compared with the original installation Was it a technology problem? Or was it a people and organization change problem? Y2K date-related problems enterprise client-server architecture. The initial plan of implementation was for 4 years with a budget of $112 million. Although Hershey's management vision was excellent, they lacked the necessary people at the top manage- ment level to make proper decisions on the imple- tion plan Hershey did not have a high-ranking IT executive before hiring George Davis sometime in early 2000. They had lower- level managers making decisions that were aligned to their functional areas of business with no one at the top integrating these decisions to create a sys- tem that would work for the whole business. They had lots of committees with little or no oversight The initial implementation was riddled with several problems from the beginning. First Hershey tried to implement too manychangestoo fast. The Enterprise 21 project went for a complete discarding of the older mainframe legacy system used at Hershey and replacing it with the follow- ing three new soft ware applications at the same Hershey's began its ERP journey with the Enterprise 21 Project late in 1996 when manage- ment approved the project in an effort to fix the Y2K problem and, at the same tme, upgrade Hershey's IT environment to a twenty-first cen- tury system. This system was supposed to be an integrated system that used the client-server architecture and an SAP/R3 application suite. This was a complete overhaul of existing legacy enter- prise system involving replacements of current Information Systems (IS) with packaged software solutions with the following goals: Establish a single companywide supply chain strategy across all divisions. time SAP/R3 enterprise application suite portation) Systems The complexity of integrating SAP with . Streamline entire business process by re Manugistics (demand planning&trans- engineering all the functional areas throughout the company Use new supply chain efficiencies to help increase gross margin Maintain sales growth of at least 3 to 4 per Manugistics software and Seibel software was so cent per year Siebel Systems (CRM and sales tools) overwhelming even with the help of an experienced consulting firm that this integration was dropped. In addition, due to project delays and Y2K, the Hershey's IT department decided to gowith a direct Save $75-80 million by the end of 2002 through corporate restructuring and the closing of older distribution sites cut over strategy (Big-Bang implementation) instead of a phased-in approach during their peak sales season right before Halloween. Finally, a lack of top management support and involvement also played a role in the Enterprise 21 project. In addition to lacking a Data entry in the new ERP system was CIO at the top decision-making level, Hershey's another problem. SAP is very rigid soft ware in management took a hands-off approach by not terms of how, when, and where the data must be getting involved in the decision-making process. entered into the system for inventory tracking and For example, some managers recommended sup- management. Hershey's employees were not plementing the major consultants for this pro trained for this rigid data entry because their jec IBM Globa Services, with another legacy system was flexible in terms of how the data consulting firm that had more experience witlh were stored. This created a major crisis when the SAP-Manugistics. Top management stayed away new system was used during the Halloween sea- from making any decision in this area. In general, son. Customer orders were missed despite suffi Hershey's management did not understand the cient inventory on hand. System workarounds amount of effort necessary for both the technical causedmany headaches for workers. Extra capac- and organizational change issues for this project. ity in warehouse space was not recorded into the SAP system, which caused communication failure egy? What lessons can be learned from the Hershey between logistics and I What do yo tnk about Hershey's ERP strat experience? CASES OPENING CASE: HERSHEY'S ENTERPRISE 21 PROJECT CASE 1-1 SOURCE: Based on article: David F Carr, "Hershey's Sweet Victory," Dec 16, 2002 issue of Baseline Magazine Hershey Foods, Inc., completed an upgrade to theirReplace existing legacy software due to SAP/R3 enterprise software installation on schec ule in September 2002, and they did it below theirReplace legacy mainframe IS with an projected budget. This was considered a big achievementfor the company that had experienced S150 million dollars in lost sales due to problems associated with its new ERP system just a few years earlier in 1999. Hershey's CIO, George Davis, won- dered why things went so smoothly with the upgrade compared with the original installation Was it a technology problem? Or was it a people and organization change problem? Y2K date-related problems enterprise client-server architecture. The initial plan of implementation was for 4 years with a budget of $112 million. Although Hershey's management vision was excellent, they lacked the necessary people at the top manage- ment level to make proper decisions on the imple- tion plan Hershey did not have a high-ranking IT executive before hiring George Davis sometime in early 2000. They had lower- level managers making decisions that were aligned to their functional areas of business with no one at the top integrating these decisions to create a sys- tem that would work for the whole business. They had lots of committees with little or no oversight The initial implementation was riddled with several problems from the beginning. First Hershey tried to implement too manychangestoo fast. The Enterprise 21 project went for a complete discarding of the older mainframe legacy system used at Hershey and replacing it with the follow- ing three new soft ware applications at the same Hershey's began its ERP journey with the Enterprise 21 Project late in 1996 when manage- ment approved the project in an effort to fix the Y2K problem and, at the same tme, upgrade Hershey's IT environment to a twenty-first cen- tury system. This system was supposed to be an integrated system that used the client-server architecture and an SAP/R3 application suite. This was a complete overhaul of existing legacy enter- prise system involving replacements of current Information Systems (IS) with packaged software solutions with the following goals: Establish a single companywide supply chain strategy across all divisions. time SAP/R3 enterprise application suite portation) Systems The complexity of integrating SAP with . Streamline entire business process by re Manugistics (demand planning&trans- engineering all the functional areas throughout the company Use new supply chain efficiencies to help increase gross margin Maintain sales growth of at least 3 to 4 per Manugistics software and Seibel software was so cent per year Siebel Systems (CRM and sales tools) overwhelming even with the help of an experienced consulting firm that this integration was dropped. In addition, due to project delays and Y2K, the Hershey's IT department decided to gowith a direct Save $75-80 million by the end of 2002 through corporate restructuring and the closing of older distribution sites cut over strategy (Big-Bang implementation) instead of a phased-in approach during their peak sales season right before Halloween. Finally, a lack of top management support and involvement also played a role in the Enterprise 21 project. In addition to lacking a Data entry in the new ERP system was CIO at the top decision-making level, Hershey's another problem. SAP is very rigid soft ware in management took a hands-off approach by not terms of how, when, and where the data must be getting involved in the decision-making process. entered into the system for inventory tracking and For example, some managers recommended sup- management. Hershey's employees were not plementing the major consultants for this pro trained for this rigid data entry because their jec IBM Globa Services, with another legacy system was flexible in terms of how the data consulting firm that had more experience witlh were stored. This created a major crisis when the SAP-Manugistics. Top management stayed away new system was used during the Halloween sea- from making any decision in this area. In general, son. Customer orders were missed despite suffi Hershey's management did not understand the cient inventory on hand. System workarounds amount of effort necessary for both the technical causedmany headaches for workers. Extra capac- and organizational change issues for this project. ity in warehouse space was not recorded into the SAP system, which caused communication failure egy? What lessons can be learned from the Hershey between logistics and I What do yo tnk about Hershey's ERP strat experience