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Nestlé's ERP
3125301 INFORMATION SYSTEMS
THANK YOU!
Our team
Intro
Alperen Akca
Alperen Akca
Edvina Bihorac
Edvina Bihorac
Saye Deniz Türk
Deniz Türk
History of the Company
- Founded in 1866, HQ in Switzerland
- World's Largerst Food Company, #50 in Fortune Magazine's Fortune Global 500 list
- Nestle USA was incorporated in 1990
- 33 manufacturing facilities, 6 distribution centers and 17 sales offices around the country, 17,300 employees worldwide
- "...America's most admired Food Company for the fourth consecutive year"- Fortune Magazine, February 2011
About Nestle
Business Challenges
Business Challenges
- After the brands were unified and reorganised into Nestle USA in 1991, division were still geographically dispersed.
"
- Nestle USA's brands were paying 29 different prices for vanilla - to the same vendor!
- There were 9 different ledgers and 28 points of customer entry.
- Nestle was the world's NO. 1 food and beverage company- but one of the least efficient.
"
Project Scope - "BEST"
- Five SAP Modules - Purchasing, Finance, Sales & Distributions, Accounts Payable & Accounts Receivable and Manugistics' Supply Chain Module
- From October 1997 to 1st Quarter of 2000
- $210 million budget
Problems
PROBLEMS
05.
230,000 employees and 500 facilities in 80 countries
01.
Turnover among the employees who were to use Manugistics software to forecast product demands reached 77% and the ones who remained found it easier to use their familiar spreadsheets
02.
The lack of standard business processes prevented it from obtaining lower prices for raw materials
06.
The workers didn't understand how to use the system or the changes
03.
The project was going to change the corporate structure
YK2 put too much pressure on the people executing the changes
07.
04.
The staff that was directly direclty affected by the change were not included in the key stakeholder team
Infogram
A last minute switcheroo ->
- Replacing all but a couple of parts of the Manugistics system with APO, accounting for 5 % of Best’s $210 million cost.
The offsite group members ->
- Starting with the business requirements then reaching an end date, rather than a predetermined end date
Making sure that they have support from key divisional heads .
All employees know what changes are taking place, when, why & how.
Enterprise Systems
Integrate firm's key business processes into a single software.
Production
Logistics
Inventory
SC
ERP
Sales
Marketing
CRM
Finance & Accounting
ERP
HR
Service
Project
Info flow throughout the organization
- Coordination
- Efficiency
- Decision making.
Uniform organization
- Similar processes & information
- Measures work in terms of organization-wide performance standards.
- Inter-business coordination rapidly to customer demands response.
Producing & stocking only that inventory necessary to fulfill existing orders
- Product shipments
- Firm’s performance
- Quality of information for
all levels of management.
- Sales & production forecasts
RoI:
- Profitability
- Costs
PROBLEMS
01.
Implementation: Change business operations & adapt customers
02.
Technology: Expensive, time consuming & master skills required
Centralizition is not always better
03.
Supply chain management systems are more externally oriented than enterprise systems.
- SAP SCM Module: Ad-vanced Planner & Optimizer (APO): brand-new & risky
- Manugistics’ SCM module followed all the SAP standards & could easily be integrated.
Results
- Facts
- Before & After
- Installation vs Implementation
RESULTS
Facts
Facts (Time & Money)
Kmart write-off $130 million for an ERP project that was never complete!
Jennifer Chew (Cambridge Analyst) ERP Duration
Before & After
Each mind claims different .
Co-decision of I/O for all parts
Sales guy
Demand planner
Common databases & business processes
Trustworthy demand forecasts various products
Factory
Demand Planner
Change # again
Factory
B & A
Forecast down to the distribution center level.
Too much of a product is sent to one place & not enough to another
Inventory & redistribution expenses
325M saved
Install vs Implement
Installation vs Implementation
Big difference: Installing software vs implementing a solution.
- Change business processes
- Achieving universal buy-in
- Change management
Without consideration of how the business ran, just installing ERP Software firmide:
- No adaptation of empleyee
- Unemployment line after install without implement.