Resource Planning At Hershey Foods Corporation

Resource Planning At Hershey Foods Corporation Enterprise resource planning (ERP) encompasses virtually every facet of information technology (IT); therefore, its implementation is vital to the overall effectiveness of an organizations IT processes. In 2008, the Hershey Foods Corporation was the focus of a study conducted from 1997-2002 during which time Hersheys attempt to implement ERP was a failure. In 1996, Hersheys moved to modernize its hardware and software from legacy systems to a client/server environment by April 1999. The software module implementation was to be outsourced to three software vendors (SAP, Manugistics, and Siebel); however complications delayed the projected switch to July 1999. To bypass the complications, Hershey chose Big Bang ERP implementation but that choice proved fruitless as retailers experienced problems with order fulfillment, processing and shipping. Hersheys warehouse contained sufficient inventory but retailers still received shipments late. During the third quarter of 1999, Hersheys revenu es dropped by 12%. The purpose of this study is to examine the past failure of Hersheys ERP implementation, while reviewing current information and data to determine the effectiveness of Hersheys efforts since 2002. Studying the circumstances that led to Hersheys ERP implementation failure will aid in illustrating the process of ERP implementation in large organizations with focus on the role management plays in ERP success or failure and how these factors can be avoided in the future. Contents Executive Summary 2 Contents 3 Terms of Reference 4 Literature Review 6 Evaluation of Alternatives 10 Recommendations 13 References 15 Terms of Reference Background In 1894, the Hershey Foods Corporation (Hershey) was founded by Milton Hershey as the Hershey Chocolate Company. Hersheys corporate headquarters is located in Hershey, Pennsylvania. Since its founding, Hershey has grown from a one-product company to a multi-billion dollar corporation with sales exceeding $1.41 billion during the first quarter of 2010 (Wahba 2010). After a tumultuous entry into the twenty-first century, Hershey is finally overcoming some of the obstacles that led to a significant decline in sales. Advertising spending was raised significantly during the first quarter of 2010 with plans to increase advertising spending up to 40% throughout the year. The company was one of many that experienced a decline during the global economic crisis but Hersheys strong leadership and conscious efforts to revamp its image has proven effective in boosting sales. Primary focus during 2010 has been on boosting sales for Hersheys Kisses, Kit at, and Twizzlers brands. Increased advertisi ng is predicted to put these products well above the 25-30% range previously forecast (Wahba 2010). Currently, about 85% of Hersheys sales are generated in the U.S., but it has failed to meet the desired outcome in international markets, putting Hershey behind its major competitor, Nestle. When Nestle began sales in emerging markets its sales rose by more than 10% (Wahba 2010). Problem Hershey has a long history of success and failure, mixed with both effective and poor leadership at the top management level. However, one of the companys most memorable failures is its initial attempt to implement ERP. At present, sales are rising amid a rocky economy but Hershey is still rebounding from the stigma of the failed ERP implementation. Reported sales are lowest among its competitors, indicating Hersheys need for improving its production strategies is of the utmost importance. Effective ERP implementation coupled with a strong top management team is one method of improving productivity and increasing sales -both domestic and abroad. Scope of Study By analyzing the past ERP implementation efforts, this study will illustrate how Hersheys production will benefit from an effective ERP solution. Information reviewed during the course of this study includes, but is not limited to, academic journals, corporate reports, past case studies pertaining to the Hershey Corporation, government resources, and print and online library sources. The information obtained during the course of this study aid in fostering an understanding of the relationship between the information system and the external environment, strategy, business processes, structure and culture, and information technology infrastructure of an organization. The outcome of the references reviewed will provide sufficient data to conduct an evaluation of the potential impact implementing ERP has on Hershey. Following the submission of this report, the reader will understand the importance of implementing ERP as a vital component of an organizations IT system, particularly for He rshey and its expanding needs amid the global marketplace. Literature Review When Hershey began planning to implement an enterprise resource planning (ERP) system, the companys top management was unaware of the potential pitfalls it would encounter. ERP systems are management information systems that incorporate and automate many of the practices linked to general operations and production of a company, including manufacturing, logistics, distribution, inventory, shipping, invoicing and accounting. An ERP system is integrated with a relational database system that, when implemented effectively, can improve the efficiency of the organizations business processes. However, the process involves extensive employee training and retraining and the development of modified or new work procedures. Due to the cross-functional and extensive nature of the ERP system, all functional departments must be involved in operations and productions. The benefit of an ERP system for Hershey is the systems effectiveness in improving and automating much of the processes linked to the supply chain while improving timelines for shipments. Hershey opted to implement SAP because of its reputation as a leader among IT solutions in the early 1990s. Hersheys initial attempt to implement SAP spanned over three years and was conducted during the companys peak periods. The implementation process was to be completed over a period of time to allow the company to continue production and sales; however, the complications that Hershey faced hindered its productivity and sales. The impact of such a drastic change during the peak sales period created a major setback resulting in a significant loss in profits and sales (Analyzing n.d.). The company maintained full compliance with the vendor during the implementation process. However, the problem stemmed from timing issues. Hersheys choice to implement the change during its peak period provided detrimental to production and sales and put the overall organization at risk. In retrospect, the companys primary errors were related to the timing of the planned implementation and the implications regarding workloads. Based on the companys sales history, Hersheys top management should have been aware of the risks implementing a major solution would have on the organizations processes. The impact was felt at all levels, particular during periods when confectionary products are in highest demand. The companys order processing systems were impacted the most. Retailers complained that orders were not received, were delayed or that the wrong products were received (Stedman 1999). The relationship between Hershey and its customers were bruised and trust was dwindling. The fiasco opened the door for competitors to step in and take up the slack Hershey left in the marketplace. As a result, Hersheys annual sales plummeted and the competitors annual sales soared. When implementing an ERP solution, the initial planning process is most important. Hersheys top management was aware of peak sales periods; therefore, the authorization to proceed with a drastic organization-wide change was the first error. The initial proposal for implementation should have raised red flags among the companys executives, but the plans moved forward and the result was devastating for the company, its customers and employees. The use of IT should yield results opposite of what was achieved at Hersheys. IT, particularly ERP systems, are designed to create barriers to competition, lower the costs of market entry, shorten timelines, speed cash flow, cut out intermediaries, build bridges, and keep the organization better informed than its competitors (Benson and Standing 2002). Technology, in the context of organizations similar to Hershey, can change production, business processes and organizations, including the potential to change and maximize the potential of social structures and interactions (Benson and Standing 2002). When contemplating IT changes the organizations management must pay close attention to the areas of the business that may be impacted by the change. Despite the belief that success in one area of business usually comes at the cost of another, this does not have to be true (Benson and Standing 2002). Understanding the organizations strengths and weaknesses aids in the planning process. Management will then be able to plan for potential obstacles and implement an alternative before complications put the organization at risk. Under the same premise, Hersheys decision to implement SAP was not the problem, poor management and ineffective planning was the companys major problem. Hersheys error was linked to ineffective restructuring of its business processes and the amendments needed to accommodate the companys production during the ERP implementation period. Furthermore, the company pushed to implement a process in 30 months when the typical implementation process averages about four year s. The rapid implementation attempt disrupted the companys normal functioning and created mass confusion and conflict at both an internal and external level. Since [Hersheys] attention was wholly diverted to ERP, it was not possible to rectify the uncertainties that emerged in the business as a result of ERP (Analyzing n.d.). The companys efforts, although limited, were unbalanced. Hershey found it difficult to focus on both the regular processes of conducting business and the ERP implementation. The result was a reduction in sales, irate customers, conflict among employees, and a growing reputation as a vendor that could not be trusted. The situation was worsened at the end of the 30 month period when Hershey realized the implementation was not effective because the ERP systems were not working in full capacity due to some final touches which were not done (Analyzing n.d.). The optimal solution for ERP implementation is to plan the process around an organizations peak periods. If Hershey had begun the implementation process during slow periods, the outcome would have been different. However, the impact of missing final touches would still be an issue. Again, the fault falls to the companys management team, who is ultimately responsible for ensuring that such major changes begin only when the company is least vulnerable. Implementing during slow market periods gives the company the time needed to make the change, to prepare its departments and respective employees for the change, and emerge stronger than before the change was made. Evaluation of Alternatives ERP is a complex process that requires stringent maneuvering and processing within the organization. Prior to beginning the ERP implementation, Hershey should have put more effort into ensuring the success of the process. Hershey should proceed with the process only after researching and planning to ensure that ample time and efforts needed to achieve successful change was possible. Instead, Hershey chose to proceed during a time when its sales were highest and risks were compounded. Most disturbing is that the company was no stranger to implementing IT processes. In the past, Hershey had implemented a CRM solution, so it should have been aware of the complications that can arise. The company simply chose the wrong time to implement the ERP solution, and timing is everything. In the contemporary business world, particular amid a time of rapidly advancing technology, Hersheys main focus should be on maintaining productivity. However, the use of ERP solutions is a must to meet the growing demands of the consumer. Customers want easy ordering options, fast order processing, and rapid order receipt. The ERP system is designed to improve these functions in businesses but for an effective implementation process that will yield the desired results, the company must carefully choose the time for the implementation process -even if that means dividing the process into stages. By segmenting the implementation process, Hershey would meet its objectives of a streamlined IT process while maintaining productive operations and retain satisfied customers. An ERP system can help increase a businesses efficiency, which increases customer satisfaction. Instead of focusing on independent departments for processing and meeting objectives, the ERP system streamlines the process from production to shipping and beyond. Prior to beginning the ERP implementation Hershey should have met with department heads who, in turn, would explain the upcoming processes including how the implementation process would impact production within the company. From there the employees would be knowledgeable in how to handle issues that could arise (e.g. order fulfillment issues, shipping, et al). Overall, the bottom line is to plan accordingly so that the ERP implementation process can be effectively achieved while the organizations regular processes are not negatively affected. Inadequate training is a common factor in ERP implementation failure. Hershey failed to train its employees on how to handle potential changes that would occur during the implementation process, while also preparing for training for the new system. All the way around, management failed. While pre-implementation research and planning is one alternative to effective implementation, the companys management team should have been more diligent in handling its responsibilities for the organization. Therefore, the company should have taken a closer look at its management team to determine where the error originated. The complications originated at the management level creating a domino effect where the companys individual departments were impacted and the customer was left in the cold. In a customer-driven market it is not the product or service that matters most; instead the greatest value rests in how the customer perceives their overall relationship with the company. It is the value factor. The management team should have been aware of the customers view; then it should have approached the implementation process accordingly to ensure the customers needs were not ignored. In retrospective, Hersheys management team should have known, prior to the ERP implementation, how the company would maintain customer satisfaction during the process. Both internal and external factors should have been better analyzed. Hershey failed to analyze the very components that achieve customer satisfaction. Management should have focused its change in a way that would not jeopardize its relationship with current customers, their use of the companys products, and their impression of Hersheys service. The information obtained during the pre-planning phase is more important than the overa ll projected change since this information is a guiding point for successful ERP implementation. Recommendations When Hershey decided to implement an ERP system, it failed to analyze the companys history of peak sales periods and plan the implementation process around the most productive periods. Instead, the company began implementation during its peak period which resulted in overload among its workforce nd complications within production and shipping that led to a significant loss of sales, a tarnished reputation, and a loss of trust among its customers. The decision to implement an ERP system was a good idea but the timing was wrong. Timing is everything, especially when the risks involve not only the organization and its employees but retaining customers. Furthermore, Hersheys management team failed to consider its supply chain management functions and the outcome was chaos within the internal and external processes associated with production, order fulfillment, and shipping. The onset of pre-planning begins with reviewing the companys current balance (Caruso 2007). When management has a v iew of what it takes to keep the organization productive, then the planning phase can begin. When accurate planning is achieved the risks to the organization are minimized. Studies reveal that one of the most common reasons the implementation of change results in failure is linked to unplanned or under planned phases of implementation. Planning is crucial for effective implementation of an ERP system. However, there is no universal single point of failure linked to unsuccessful ERP implementations. In the case of Hershey, however, the causes are directly linked to efforts that are easily remedied: inadequate training, corporate culture, timeline flexibility, and unrealistic expectations. Hershey has since worked hard to ensure the same mistakes are not repeated. Its current management team is more in tune to the needs of all the organizations stakeholders. Adequate training within Hershey has become paramount to all other functions. The companys management team realizes that inadequate training, particularly at the management level, is a leading cause of organizational failure. Now, the company focuses on how to do business differently, rather than training on new computer software. While training for the ERP system was a focus, it was not the predominant focus. Hershey learned the hard way that change had to be made internally before an ERP solution could be effective in streamlining its internal and external processes. Many ERP projects are bound to fail because employees are not trained to handle the factors that come with change. Timeline flexibility is imperative to success, as well. In its subsequent attempts to streamline operations, Hershey worked to ensure t hat the system was fully tested and ready for implementation to avoid negative consequences similar to those the company experienced in 2002.

Product Placement in the Film Industry Essay

Introduction Product placement in Movies Product placement is a kind of advertisements, where products or services are placed in a context normally devoid of ads, such as films, TV episodes, or news. Product placement can reach a niche audience, and there are strong reasons for investors to expect that film product placement will increase consumer awareness of a particular brand. However, the movie studio must analyze if the product fits with the image of the film. A star may draw more attention than a product. Therefore this becomes a separate point of negotiation within his contract in many cases. Brand placements are for increasing brand familiarity and sales. Also, there are some other advantages of brand placements in Movies. 1. People would not change the channel or leave room when a brand appears in a movie like they might for TV ads 2. Brand placements often involve an endorsement by the celebrity using the brand which appears to have an influence on attitudes toward the brand. 3. Brand placement allows advertisers to target very specific people. 4. Brand placements have a longer life than traditional advertisements. When a film is released as DVD, the brand placement is still present. 5. Audiences might like brand placements because they improve the realism of a movie or TV show. Literature review: Some examples Product placement is not a recent phenomenon as commonly believed, but dates back to the earliest days of cinema. It originated more than a century ago in â€Å"soap opera† radio broadcasts, a significant means of popular entertainment at the time which often mentioned various soap products within the storyline in exchange for financial support. Here we have some classic examples of product placement in movies. They are all famous films with successful product. Ray Ban: Top Gun Screen shot of the movie: Top Gun(1986) Top Gun had a huge impact on some generations. The movie had a handsome and fearless main character. He not only defeated enemies in the air, but also won the heart of a beautiful lady. He was dressed in jeans, wore a leather jacket and a pair of sunglasses. In Top Gun, Tom Cruise and his Navy colleagues wore Aviators by Ray Ban. The result: the sales of Aviator sunglasses rose by 40 percent in the seven months following the release of the movie. FedEx and Wilson: Cast away Screen shots of the movie: Cast Away (2000) Tom Hanks played Chuck in the movie Cast Away. Chuck is a FedEx employee who is stranded on an island after FedEx’s plane crashes. The film shows his attempts to survive on the island using what was left of his plane’s cargo. He eventual escapes and returns to society, with one lost parcel delivered with a very long delay. When Chuck crashed on the island, he was there alone. But somehow he got company from the resource left. When he opened boxes he found Wilson volleyball. That ball became â€Å"Wilson†, Chuck’s only friend on the island. This product placement is very special: product was not just â€Å"used†, and Chuck didn’t just speak about it – the product becomes a character. Chuck and Wilson’s relationship was great and audiences perceived Wilson as a character, not some brand product. Chevrolet Camaro: Transformers Screen shot of the movie: Transformers (2007) Chevrolet Camaro is a very interesting placement in the Transformers. Camaro played Bumblebee in all the Transformers movies. The fifth generation of this vehicle went on sale in the beginning of 2009. In 2007, when the movie was released, people could not buy this car. It was a long wait but the movie created a buzz and helped building the expectations. Successful and failure attempts of product placement A successful product placement should have 2 sides of success: The product is good for the movie: The used product should be a main character in the film. It should be â€Å"needed† in the film, not â€Å"planted†. The movie is good for the product: The movie is good for showing the product. The product and the brand value is showed properly in the films. The product for the movie Is the product good for the movie? Why this is on the screen? The product or brand showed in the films should be very important for the movie. Audiences try to keep a story coherent while watching it. However, because of limited attention, information in the center activates the highest [1].This is quite easy to understand. We are watching a movie with the story. Anything happened in this story would be noticed. The product in the story and in the center of the screen gets the highest attention. On the other hand, all the objects outside the story are being ignored if they don’t try to get any attention. Audiences might be confused if something unrelated suddenly showed in the center of the screen, or make some noise when audience are watching a film. Here are two examples for the good side and the bad side. Example of success: Mini cooper and the Italian job In the movie, the robbers need to drive into the metro station, block the train and go through the tunnels. The use of Minis seemed absolutely normal for a robbery, since Mini Cooper is a very compact and mobile car. The audiences are expecting some vehicle accomplish the job, and here comes the minis. The car is tiny, fast and reliable. The product is going well with the story, so we can enjoy the movie with starring performance of the product-Mini Cooper. Screen shots of the movie: the Italian Job (2003) The Italian Job original movie is released in 1969 with. Gary Gray directed an American remake with Mark Wahlberg, Edward Norton and Charlize Theron in 2003. The movies are very similar from the product placements points of view: they both use Minis. Product placement is apparently very successful.it is reported that sales of Minis in 2003 had increased more than 20 percent over the year before. Example of failure: China Mobile and the Cellphone With the title of this movie, we can imagine that it is a perfect opportunity for a communication company such as China Mobile to do a product placement in it. However, the shameless attempt made audience feel bad when watching such a wonderful movie. Screen shot of the movie: the Cellphone (Shou Ji) (2003) The main character YAN Shouyi’s wife received a phone call from Shouyi’s cousin. She found that Shouyi was cheating on her. This is the moment she hang up the phone. Normally we need some music with anger or helpless or sad music. Silence is also a good choice we may expect. However, after she hang up the phone and walked away, the television (left side of the picture) is showing the commercial advertisement of China mobile. The audience could hear nothing but the slogan of China Mobile. We got confused: why we are listening to this? Screen shot of the movie: the Cellphone (Shou Ji) (2003) Another screen shot of the movie the Cellphone. Two wives are checking their husband’s calling records. We could find the logo of China mobile in the center of the screen, but we cannot notice it because the logo is outside the story. This is a very bad try of product placement: the product has nothing to do with the story. Screen shot of the movie: the Cellphone (Shou Ji) (2003) China mobile tried very hard to place its logo everywhere in this movie. But most of the attempts have no advisement effect. In the beginning of the movie, the cast list is showed on a cellphone. The Chinese character of China Mobile is showed at the bottom of the cellphone. Normally, the communication operator showed at the up corner of the cellphone. We could say that this try is not a product placement, but an advertisement. The movie for the product Marketing, including the product placement, is a process of communicating product value to the people. So in the product placement the company need also choose the right movie for its products. The movie has to be a platform for the company’s brand value. The brand behavior or the brand value is needed to be showed in the scene. So the main problem becomes how to choose the partner. Here we have another example to find out how to show the brand value in a movie. In 2001 and 2002, BMW made a series of eight short films with about 10 minutes each. The series is called the Hire. All the eight films are made by popular directors from all over the world, starring Clive Owen as the â€Å"Driver†, and with the performance of various BMW cars. At first, here is the official brand value of BMW: Brand value of BMW The main value of BMW â€Å"joy† and dynamic, challenging, cultured is showed everywhere in these films. We discuss how the films describe BMW with the 8 short films. Here we present 2 of the short films to show the how BMW did the films. Chosen Chosen, Ang Lee 2001 The Driver protects a holy child that was brought to America by boat. The child gives the Driver a gift but says that he is supposed to open it after. After being pursued by many armed men, and being grazed in the ear, he delivers the boy to another holy man. The Boy however signals silently to the Driver that the man is not actually a monk, indicated by his footwear. The Driver defeats the impostor holy man and rescues the boy. When he leaves the Driver opens the gift which is revealed to be a bandage for his bleeding ear. Beat the Devil Beat the devil (2002), Tony Scott The Driver is employed by an old man. He is going to meet the Devil to negotiate the deal as a young man in 1954 to trade his soul for fame and fortune. He proposes a new wager, for the stakes of the Driver’s soul against another fifty years for him, betting on the Driver racing against the Devil at dawn. The race ends with the Driver passes around a train while the Devil’s car crashes and explodes. All the films show great respect to the product value of BMW. The core is â€Å"joy†, which is shown perfectly by all the famous directors. Also we could find the value of dynamic, challenging and cultured from these films. The series is a perfect exhibition for the BMW products. And we may say this is the right movie for the product. Conclusion There are many advantages of product placement in the movies. We have seen both successful and fail examples of product placement from Hollywood and China. When they are done correctly, the placement could greatly benefit both the movie and the brand. It can secure the film production budget, cover promotion budgets and get additional exposure for the movie with the stars, and also make the movies more realistic. A good product placement is the same as a normal advertisement. It required to be placed with the right product, in the right movie and at the accurate moment. The product itself should be one part of the story. Also, in the movie, the brand value should be shown very clearly to make a good placement. The product is good for the movie: The used product should be a main character in the film. It should be â€Å"needed† in the film, not â€Å"planted†. The movie is good for the product: The movie is good for showing the product. The product and the brand value are showed properly in the films. This is the same as typical advertisement. So it should be treated the same as other marketing methods with the similar theories. It is important to carefully integrate products into movie in order to minimize the risk of aggressive advertising which might lead to negative results. Bibliography: [1]. Wikipedia: product placement: http://en.wikipedia.org/wiki/Product_placement [2]. Wikipedia: marketing: http://en.wikipedia.org/wiki/marketing [3]. Product Placement in Film, Viki Antonopoulou, Geogia National Film Center June 2010 [4]. Top Gun (1986), Director: Tony Scott [5]. Cast away (2000), Director: Robert Zemeckis [6]. Transformers (2007), Director: Michael Bay [7]. the Italian Job (2003) Director: F. Gary Gray [8]. the Cellphone (2001) Director: FENG Xiaogang [9]. BMW Brand Behavior Training, Ruud Rabenberg, Laura Wang, BMW China, Automotive Trading, Ltd. 2007 [10]. Chosen (2001), Director Ang Lee [11]. Beat the Devil (2002), Director Tony Scott [12].The Effectiveness of Brand Placements in the Movies: Levels of Placements, Explicit and Implicit Memory, and Brand-Choice Behavior, Moonhee Yang, David R. Roskos-Ewoldsen, Journal of Communication 57 (2007)

Understanding of the Contemporary Media Landscape by the Concepts of Networks Free Essay Example, 1500 words

Castells writes that technology is not the only aspect that defines societies, but other factors like economy, culture, and politics also form the framework of network societies, while religion and social status, help in shaping these societies. A network that collectively forms the societies, is a series of links between basic unitary social elements, known as the nodes. When a single link between two unitary elements is established, the formation of a relationship takes place, and many such relationships form a complex web, known as network societies. Van Dijk in his book had delineated "network society" as entity that is framing its relationships within the media networking to replace the traditional form of face-to-face communication. (van Dijk, 1999, 220-223). Van Dijk's opines that the modern society is in the process of transforming itself into a network society, implying that the Internet is the space where all forms of organizational, interpersonal, and mass communication s converge. This image, as envisioned by van Djik, is something that we are already experiencing in the 21st century, where we find that Internet has already turned into the normal media, used for commutation and gaining information by a large section of the global society, from all domains of life. Contemporary media and network societies: New media is the concept which theorises that the new processes of communication within the virtual world allows small groups to assemble online and sell, share, or exchange goods and information (Castells, and Gustavo, 2005). We will write a custom essay sample on Understanding of the Contemporary Media Landscape by the Concepts of Networks or any topic specifically for you Only $17.96 $11.86/page This includes buying and selling from almost any part of the world and thus dispensing off with the traditional practice where the shopper or seller must necessarily come to a common physical marketplace to trade. Here virtual shopping portals are replacing the real or physical marketplaces.

The Effects Of Climate Change On The Earths Environment

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