Goals Of Hershey’s Enterprise 21 Project And Analysis Of Competitive Forces And Value Chain Models

Background of Hershey Chocolate and Enterprise 21 project

What were the goals of Hershey’s Enterprise 21 project? In addition to making reference to the goals described in the case, do your own analysis making reference to the competitive forces and value chain models. What was Hershey’s plan for the project? What risks were recognized at the time and what risks should have been identified but were not?

Hersey Chocolate is a well-known brand and has its origin way back in 1894. The company had a record of continuous rise in sales volume till 1998 to $4.4 billion (hersheys.com 2016). After that it faced a setback in the sales volume due to slow technological process and the Y2k problem of the 21^st century. Hershey also adopted modernized technique to solve Y2K issue in 1996, called as Enterprise 21 which was a four year project and supposed to meet several goals such standardizing and upgrading the hardware of the company and shifting the technology to client-server environment from mainframe-based network.

The goals of Enterprise 21 were at par with the current changing system of strong competition and increasing customer value. As the new project will give the priority to client serving, their satisfaction level will increase and help the company to build good relationship with its client (Whitaker et al.2015).

Management of Hershey expected that Enterprise 21 will help them to execute their business strategy of putting more emphasis to mass market candy business more effectively. The company had put up ERP system that had used the software SAP to support the forecasting, production, scheduling and transportation management system. Enterprise 21 installation demanded a bar-coding system at all the production unit so that the company can easily track the outgoing and incoming materials and improve their logistic management and control their production cost. The problem started when Enterprise 21 asked the company to switch over the SAP system and other associated sin April 1999 and reducing the time required for the completion of the project to 39 months than the original 48 months. The shift in the time had put the company into great risk as the Holloween orders were arriving. The internal staff of IT chose to use a cutover strategy to meet this problem where the risk was high but if met, the company would be able to meet the Halloween orders in time (Ifinedo 2014).

The problem arose when the cutover strategy did not work. The company started losing orders and missing the supply deadlines. The competitors started taking the position of Hershey candy in the store. Internally the company was not able to identify the orders of the client in time and moreover their shipment was getting delayed. As a result the company’s profit saw a continuous fall and they started losing the sales drastically.

Hershey did not convey the right cause of delay in its service to the client and kept the problem of information technology to itself. Due to the lack of transparency with the client, the company faced severe losses in terms of fall in sales and losing the client (Bach et al. 2013).

The company should have kept the transparency with the client from the very beginning. It would have saved the losses. When the company called for suggestions to the problem, several suggestions were found in terms of enhanced training and solution was solved with an enhanced profit in the next year. Similar problems were faced by Leapfrog and transparency was the tool through which they were able to solve the problem efficiently and quickly without much losses.

References

Bach, M.P., Zoroja, J. and Vukšić, V.B., 2013. Review of corporate digital divide research: A decadal analysis (2003-2012). International Journal of Information Systems and Project Management, 1(4), pp.41-55.

Franchise. 2016. Home. [online] Available at: https://www.hersheys.com/en_us/home.html [Accessed 22 Jun. 2016].

Ifinedo, P., 2014, September. An Examination of Information Technology Assets and Resources as Antecedent Factors to ERP Sysytem Success. InMCIS (p. 40).

Whitaker, J., Ekman, P. and Thompson, S., 2015. How Multinational Corporations Use Information Technology to Manage Global Operations.Whitaker, J., P. Ekman, S. Thompson.” How Multinational Corporations Use Information Technology to Manage Global Operations,” Journal of Computer Information Systems, forthcoming.