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ERP at Nestle

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Njood j

on 23 October 2013

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Transcript of ERP at Nestle

ERP at Nestle
Effect of market and industry

According to customer based classification of project management, this is B2B project.

Time constraint project

According to SAP, Business customers of SAP would have to make "dramatic changes in corporate behavior" and SAP made this transition easy. This was an indication of the change which Nestle was about to face.

Centralizing the business
-increased Nestle’s buying power.
-encouraged suppliers and customers to strip cost

Company Structure

- USA Region

- Decentralized - Many divisions and departments

- Team Oriented

25 manufacturing facilities, 35 distribution centers, and 15 sales offices

Combination of functional organization and dedicated project teams.

Resource availability as a constraint. - human
Company Culture

Specific principles help to guide Nestle:

1. For Consumers: Nutrition health and wellness, Quality assurance and consumer communication

2. For Human rights and labor practices: put human rights into their business activities

3. Our people: Leadership and personal responsibility, safely and health at work

4. Suppliers and Customers: Supplier and customer relationships, agriculture and rural development

5. Environment - Environmental sustainability and water

- Focused on the end result and enjoyed playing it safe

- difficulties encountered when implementing SAP show that employees’ decentralized view of the organization made it difficult for them to see a process that would integrate all offices.

- culture of Nestle had to change to being more open minded and to a more centralized view

•Change communication channels before implementing new software

•New operating systems software changes the way people do work. It is more than just a computer software.

•The culture of an organization determines the success of change


. Communication & Change Management
. Integration
. Project manager

Thank You
Overview of the project
Scope, Time, Cost
Effect of market and industry
Company's structure and culture

xcellence ..through


* Project Objectives:
Transforming the separate brands into one highly integrated company.
Internally aligned and united, establishing a common business process architecture
Standardizing master data

Initial SAP would include 5 modules:
Sales & Distribution
Accounts Payable
Accounts Receivable

Also planned to implement supply chain module with Manugistics – at the time an SAP partner. Each would be deployed across every Nestlé division
•Project timeline: October 1997 - 1st Quarter of 2000

•Development work began in 1998.

•The deadline for four of the modules was 2000

Initial Project Cost : $200 Million

Consultation charges : $80 Million

Total scheduled budget : $280

Finished at a cost of $210 million

Project Team - BEST

Project of this magnitude required cross functional consultation and communication

Project BEST team consisted of:
*50 top business executives
*10 senior IT professionals

All Stakeholder were not taken on board (employees who had to actually use the ERP system and incorporate it in their daily use)

Project Priorities

Time constrained project

Priority Matrix (start of the project)

Project Timeline - Actual

Spring 1997 – Need for SAP Identified
Oct 1997 – Implementation Plan complete
1998 - Development work begins
1999 - First roll out : met by employee resistance and management resistance
Jan 2000 - Chaos
June 2000 - Project halted and Co-Leader was fired

Management of the Project

The new business processes confused employees - divisional executives, who were just as confused as their employees and even angrier.
Resistance grew into rebellion in 2000.
BEST project team had overlooked the integration points between the modules
The project was restructured June 2000

ERP at Nestle
Full transcript