Enterprise resource planning (ERP) is a business management system and software that aid an organization to use an integrated application system to manage the day to day business activities and automatically run back office functions related to technology, human resource, and services. The software significantly brings together all phases of product operation, that is, product planning, development, production, sales and marketing in a single common database, application and user interface. (Yen, D. C. et al. 2002) The system brings order across all managerial staff since the data is created, stored and used through the same common processes in the organization.
Through the use of the system, improved efficiency, enhanced collaboration, reduced operational cost, and reduced risk is achieved. ERP implementation involves installing the software, moving data to the new system, putting in order of the users and processes and training the user on the software. The selected companies for analysis are Cadbury, Hershey candies, Nestle and PG&E
Cadbury, founded by John Cadbury, is an international company owned by Mondelez International. (Dellheim, C. 1987). The company is the second largest, after Wrigley's company, chocolate product company worldwide due to its maintained undisputed leadership over the years. In recent years Kraft installed System Analysis and Program development (SAP) which is the largest ERP enabling Cadbury company a massive production of chocolate bars. ( Dellheim, C. 1987). The SAP main objective was bringing together the production, purchase, sales, distribution, supply chain, and marketing of the company globally to reduce operational costs. The inefficiencies initially faced by the company were eliminated by the SAP system leading to the fast-paced growth.
The installation of the system led to new ways of the storage system management and an effective system to manage its various offices and branches building its strengths thereby maintaining its competitiveness. Cadbury company also developed a powerful feedback management system to regularly monitor implementation and changes of the initially stated plans hence increased efficiency.
The second company, Hershey is the extensive chocolate producer situated in North America. It was started in 1894 by Milton S. Hershey. The company sales are 80% chocolate and 20% non-chocolate. The management approved ERP software installation project in late 1996 which was scheduled for four years, but the company demanded two and a half year. Hershey ditched phase approach for the big bang approach. This decision brought chaos as it crippled the company's operational processes. Every process and operation of the company was simultaneously crashed due to malfunctioning of the newly installed computer systems rendering it unable to do business. This caused delivery delays, lost credibility in the market, and high operational cost; hence the company was in a huge loss. For successful ERP installation, the manager should have chosen phase approach for the implementation time schedule.
Nestle company is an extensive global candy manufacturer with its headquarters in Switzerland. It was founded by Henry Nestle in 1866. The company sales a wide range of products including snacks, dairy products and beverages like tea and coffee. It has three operating companies that are in Switzerland, the UK, and the USA. The sole goal was to integrate the three companies into one. The implementation of ERP systems forced the employees who were not familiar with the system to adapt, which was a disaster initially. The company focused on its business requirements rather than installation timeline which was longer than expected in the long run it was proven a success after the company realized a huge profit rise which came from the improved supply chain. Through ERP implementation, the companies enjoyed efficient communication, more confident workforce and up to date accounting structure.
The Pacific Gas and Electric (PG&E) company, is owned by an American investor which is located in San Francisco which provide natural gas and electricity in most of California. The ERP system installation in the company brought chaos since sensitive company data was used in system testing instead of production data by the manager. The data mishandling led the public to lose confidence and trust in the company's brand; hence it suffered costly recovery programs. Good managerial skills are key roles in the success of a business. The manager should have protected the company's sensitive information and use appropriate data for the system testing to be successful.
From the above case studies, Cadbury company's ERP implementation led to its huge success right from ERP acquisition to the implementation. The company identified its weakness in the supply chain. It selected Kraft company which come up with SAP software as the solution. The company's data was migrated successfully into the system within the scheduled timeframe. The system infrastructure was accurately selected and the staff members trained to adapt the system and embrace the changes. After that, the system was properly managed and maintained to achieve the objectives of the company.
In conclusion, the ERP implementation in a company may bring success if properly installed or failure if poorly done because of complexity associated. A correct method should be chosen wisely successful installation of the system.
Dellheim, C. (1987). The creation of company culture: Cadburys, 1861-1931. The American historical review, 92(1), 13-44.
Kim, Y., Lee, Z., & Gosain, S. (2005). Impediments to successful ERP implementation process. Business process management journal, 11(2), 158-170.
Yen, D. C., Chou, D. C., & Chang, J. (2002). A synergic analysis for Web-based enterprise resources planning systems. Computer Standards & Interfaces, 24(4), 337-346.
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