Four ERP implementation case studies you can learn from
Because of high degrees of complexity associated with large-scale ERP installations, over time the proportion of successful, versus failed outcomes tend to become fifty-fifty propositions from a business case perspective. Some enterprises are simply ready for ERP, and some aren’t, some are paying attention to what they’re doing, and others aren’t; but either way, any ERP case study is worth understanding what went right, and what didn’t.
Consequently, here are four examples of what I’m talking about.
ERP case study #1: Cadbury – success
Our first successful ERP implementation case study focuses on Cadbury, a 123 year-old confectioner currently owned by American snack foods conglomerate Modelez International. The company was on an accelerated growth-track while facing problems meeting its production and distribution requirements.
Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation; multi-node resources-management was extended throughout its supply-chain, along with a complete revamping of existing warehouse, and distribution processes.
The consequent impacts afforded Cadbury an opportunity to reduce overall operating costs, while its newly engaged supply-chain, produced significantly better production efficiencies throughout its manufacturing chain.
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ERP case study #2: Hershey Candies – failure
Not every ERP ends in success, 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 on the basis of an iterative approach, it decided to execute a holistic plan, involving every operating center in the company. Subsequently SAP was engaged to implement 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.
Remember: poor management can scupper implementation, even when you have selected the perfect system.
ERP case study #3: - success
As a enormous international candy-maker, Nestle SA headquartered in Konicki Switzerland, had harbored a goal of integrating ERP across all three of its operating companies; Nestle SA, Nestle UK, and Nestle USA. The latter operation had been working toward complete integration of a set of ERP solutions since in the late 90s, but various requirements, organizational, and policy problems had plagued the complete initiation.
By the turn of the millennium, its management finally decided that a holistic re-approach to its business requirements were in order. Consequently, this effort paid dividends that allowed SAP to finally get the $200 million job done.
Ultimately, positive business impacts included the consolidation of an outdated accounting structure, better and more efficient communications throughout its supply-chain, and a much more confident workforce.
Remember: integration across different sites requires a lot of upfront effort - but it pays off in the long run
ERP case study #4: PG&E– failure
As a major energy utility San Francisco’s Pacific Gas and Electric should have know better. Its Oracle ERP implementation had gone well, and there had been no problems of note; until it came time to test the system.
Apparently, 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.
Remember: brief your staff on exactly what they should do and not do. Don't get non-specialist staff to carry out non-specialist roles
ERP case study #5 - ABC Compounding
ABC Compounding, based in Atlanta, Georgia in the United States, provides industrial cleaning supplies to businesses around the world. Most of the products are private-labeled and they are sold through regional and national distributors. They had a legacy ERP that was no longer a good fit and that lacked essential tools such as planning, scheduling, and MRP. The solution for ABC Compounding was Sage ERP X3. ABC Compounding employs about 150 people and presents an interesting study as most examples use much larger multinational companies. ABC is a process manufacturing business. Some of their customers are in food processing and other industries that require FDA and similar control systems.
Myra Hager, chief information officer, had used Sage ERP X3 in a prior position, and was familiar with its comprehensive manufacturing capabilities. “The time was right, and the pricing to make the switch was very competitive,” she says.
New Sage functions
ABC lets the MRP function create work orders for us based on orders and stocking levels. Previously they printed reports, did separate calculations, and manually entered the work orders. There were often several hundred work orders active at once, each with dozens of items. Eliminating the manual data entry tasks has been an enormous time saver.
Intercompany transfers of inventory are common, as are transfers between site locations within each company. Using Sage ERP X3, such transfers are straightforward and easily traceable. Previously, ABC Compounding had to enter separate buy and sell transactions to transfer ownership of the material.
Sales and customer service staff appreciate the software’s easy and intuitive navigation. Six staff members that enter more than 200 orders each day. Speed is of the essence, and Sage ERP X3 provides the tools they need to quickly enter orders and answer any customers’ questions that arise throughout the work day.
Quick Access to Actionable Data
The single biggest benefit of Sage ERP X3 to ABC Compounding is the easy access to critical information. The ability to drill down and tunnel around following a transaction is invaluable. They have access to relevant documents and data with just a few clicks. The staff loves what they call the Left List, a display of tasks and data related to the screen they’re working on. It’s a quick way to navigate and uncover all the information we need.
Hager says it is still too early to accurately measure the actual return on investment ABC Compounding will realize with the switch to Sage ERP X3, but many dividends became obvious from the start. “We have only been live for a short time, but already our team is positive about the contribution of Sage ERP X3,” she concludes. “It is a powerful ERP solution with strong manufacturing capabilities. We have been able to abandon several third-party applications that we had needed, because the functionality they provided is part of Sage ERP X3. That saves us money and effort. In addition, the comfort level of relying on a software solution that uses a modern, industry-standard database and platform can’t be underestimated.”
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