$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Theo » Sun, 31 Oct 1999 04:00:00



--> Snipped From http://www.veryComputer.com/

FOCUS-Computer glitch haunts Hershey's Halloween sales
(Updates; edits; adds comment from Kroger in 15th graf)

By David Morgan

PHILADELPHIA, Oct 29 (Reuters) - Halloween could turn out to be a real horror
story for Hershey Foods Corp. (NYSE:HSY - news), the leading U.S. candy maker,
whose distribution channels continue to be haunted by problems with a new
computer system, analysts say.

The maker of Hershey's chocolate bars and Kisses, Reese's Peanut Butter Cups,
Kit Kats and Twizzlers has not been able to get all of its Halloween inventory
onto store shelves soon enough to fill the plastic orange jack-o'-lanterns of
trick-or-treaters, who are expected to stalk American neighborhoods on Sunday
evening.

Analysts on Wall Street had expected the gremlin in Hershey's $112 million
order-and-distribution system to be exorcised by mid-October. But now they fear
lingering problems could jinx candy sales through Christmas and maybe even into
Easter.

``This is serious stuff. The fourth quarter represents about 40 percent of
profits, and Hershey could lose $100 million in sales between back to school,
Halloween, Thanksgiving and Christmas,'' said Merrill * analyst Leonard
Teitelbaum.

The Hershey, Pa.-based company had $4.44 billion in revenues last year.

Most serious is the potential for a 0.5 percent loss in U.S. market share to
privately held Mars Inc. and Nestle SA , as consumers who find store shelves
bare of Hershey products switch to rival brands.

Hershey, which has had no production problems, also must face the potential
costs posed by pallets of undelivered ``Cat 'O' Lantern'' milk chocolate
snacks, Reese's Peanut Butter ``Pumpkins'' and other seasonal goods marketed in
highly decorated holiday wrappers only at this time of year.

The company's computer system, which uses software from SAP AG and Siebel
Systems Inc. (NasdaqNM:SEBL - news), began operating in July. But it quickly
presented the 1,200-strong sales force with a steep learning curve. Managers
are now expected to have the upper hand by the first quarter of 2000.

Industry executives believe Hershey has not been able to fill orders at 100
percent and has resorted to flying some shipments out to keep relations sweet
with key customers such as Kmart Corp. (NYSE:KM - news) and Wal-Mart Stores
Inc. (NYSE:WMT - news).
...

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by flw » Sun, 31 Oct 1999 04:00:00



Quote:> --> Snipped From http://biz.yahoo.com/rf/991029/2s.html

> FOCUS-Computer glitch haunts Hershey's Halloween sales
> (Updates; edits; adds comment from Kroger in 15th graf)

> By David Morgan

> The company's computer system, which uses software from SAP AG and Siebel
> Systems Inc. (NasdaqNM:SEBL - news), began operating in July. But it
quickly
> presented the 1,200-strong sales force with a steep learning curve.
Managers
> are now expected to have the upper hand by the first quarter of 2000.

Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
remediation (Y2K upgrade system replacement) as part of Hershey's "computer
problem."
flw

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Ralph Daughert » Sun, 31 Oct 1999 04:00:00





> > --> Snipped From http://biz.yahoo.com/rf/991029/2s.html

> > FOCUS-Computer glitch haunts Hershey's Halloween sales
> > (Updates; edits; adds comment from Kroger in 15th graf)

> > By David Morgan

> > The company's computer system, which uses software from SAP AG and Siebel
> > Systems Inc. (NasdaqNM:SEBL - news), began operating in July. But it
> quickly
> > presented the 1,200-strong sales force with a steep learning curve.
> Managers
> > are now expected to have the upper hand by the first quarter of 2000.

> Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
> remediation (Y2K upgrade system replacement) as part of Hershey's "computer
> problem."

   Isn't the SAP-Siebel system the Y2K upgrade system replacement?  It's their
entire enterprise wide system at this point.

 Ralph

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Dave Koste » Sun, 31 Oct 1999 04:00:00





> > --> Snipped From http://biz.yahoo.com/rf/991029/2s.html

> > FOCUS-Computer glitch haunts Hershey's Halloween sales
> > (Updates; edits; adds comment from Kroger in 15th graf)

> > By David Morgan

> > The company's computer system, which uses software from SAP AG and
Siebel
> > Systems Inc. (NasdaqNM:SEBL - news), began operating in July. But it
> quickly
> > presented the 1,200-strong sales force with a steep learning curve.
> Managers
> > are now expected to have the upper hand by the first quarter of 2000.

> Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
> remediation (Y2K upgrade system replacement) as part of Hershey's
"computer
> problem."
> flw

Only to satisfy the Y2K Act.

Ha, Ha, you can't sue us.

dk

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by flw » Sun, 31 Oct 1999 04:00:00



Quote:

> > Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
> > remediation (Y2K upgrade system replacement) as part of Hershey's
> "computer
> > problem."
> > flw

> Only to satisfy the Y2K Act.

> Ha, Ha, you can't sue us.

> dk

I don't think so.
It appears that Hershey will be the Sueor rather then the Sueee.
I don't have the article in front of me but I recall reading that IBM
was their prime contractor regarding the "upgrade".
flw
 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Dave Koste » Sun, 31 Oct 1999 04:00:00





> > > Yesterdays Wall Street  ournal in its Hershey article also mentioned
Y2K
> > > remediation (Y2K upgrade system replacement) as part of Hershey's
> > "computer
> > > problem."
> > > flw

> > Only to satisfy the Y2K Act.

> > Ha, Ha, you can't sue us.

> > dk

> I don't think so.
> It appears that Hershey will be the Sueor rather then the Sueee.
> I don't have the article in front of me but I recall reading that IBM
> was their prime contractor regarding the "upgrade".
> flw

Are you familiar with the Y2K Act?
IBM and the other vendors will have 90 days to fix it (aka. finger point).
Problem is, it's a little late.
Will Hershey allow them to sugar coat the effect of the problem?

dk

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Ralph Daughert » Sun, 31 Oct 1999 04:00:00





> > > Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
> > > remediation (Y2K upgrade system replacement) as part of Hershey's
> > "computer
> > > problem."
> > > flw

> > Only to satisfy the Y2K Act.

> > Ha, Ha, you can't sue us.

> > dk

> I don't think so.
> It appears that Hershey will be the Sueor rather then the Sueee.
> I don't have the article in front of me but I recall reading that IBM
> was their prime contractor regarding the "upgrade".

 Hi flw,

   I was surprised to see IBM as the prime contractor.  But here is the URL.
IBM has redone their site so this URL is now redirected.  I didn't go find the
web page from there, but they actually have showcased this Hershey SAP-Siebel
install.  You would think they would want to see if it works first before
filing it in the success domain.

IBM Global Services - Showcase
...Hershey set up a team of managers and professionals to install SAP...
...Canada, Hershey was ready for a company-wide launch of SAP in...
www.ibm.com/services/showcase/success/fullhershey.html

 Ralph

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Ralph Daughert » Sun, 31 Oct 1999 04:00:00




> > I don't think so.
> > It appears that Hershey will be the Sueor rather then the Sueee.
> > I don't have the article in front of me but I recall reading that IBM
> > was their prime contractor regarding the "upgrade".

>  Hi flw,

>    I was surprised to see IBM as the prime contractor.  But here is the URL.
> IBM has redone their site so this URL is now redirected.  I didn't go find the
> web page from there, but they actually have showcased this Hershey SAP-Siebel
> install.  You would think they would want to see if it works first before
> filing it in the success domain.

> IBM Global Services - Showcase
> ...Hershey set up a team of managers and professionals to install SAP...
> ...Canada, Hershey was ready for a company-wide launch of SAP in...
> http://www.ibm.com/services/showcase/success/fullhershey.html

   I inserted the http:// to highlight it.
 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Montgomery Bur » Sun, 31 Oct 1999 04:00:00



>> http://www.ibm.com/services/showcase/success/fullhershey.html

>   I inserted the http:// to highlight it.

it redirects to:

http://www.ibm.com/services/showcase/feature/showcase2.html

but nothing comes up.

whatzup? was it pulled, in light of recent sugar coated news?

MB

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Neas » Mon, 01 Nov 1999 03:00:00


On Sat, 30 Oct 1999 12:15:26 GMT, "Dave Koster"

---snip

Quote:>> Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
>> remediation (Y2K upgrade system replacement) as part of Hershey's
>"computer
>> problem."
>> flw

>Only to satisfy the Y2K Act.

>Ha, Ha, you can't sue us.

>dk

I didn't think larger companies were covered under that Act.

Steve

 
 
 

$100 MILLION In Lost Sales From $112 MILLION Hershey SAP-Based System?

Post by Ralph Daughert » Mon, 01 Nov 1999 03:00:00



> On Sat, 30 Oct 1999 12:15:26 GMT, "Dave Koster"

> ---snip
> >> Yesterdays Wall Street  ournal in its Hershey article also mentioned Y2K
> >> remediation (Y2K upgrade system replacement) as part of Hershey's
> >"computer
> >> problem."
> >> flw

> >Only to satisfy the Y2K Act.

> >Ha, Ha, you can't sue us.

> >dk

> I didn't think larger companies were covered under that Act.

   Wasn't it intended for all companies, but primarily large ones, to
encourage them to be forthcoming about their status without fear of lawsuits,
such as shareholder, customers, etc.?  But as someone pointed out already, if
anybody sues, it will be Hershey.

 Ralph