ERP Implementation at Nestle Agenda O Benefits of ERP in F&B Industry O About Nestle O Need for Implementation O ERP Project Planning O General Implementation of ERP O Implementation in Nestle O Results O Conclusion Benefits of ERP in F&B O Keeping Inventory lean O Operate more efficiently O Improve inventory turnover O Streamline product receiving O Improve quality control O Improve account accuracy and O Compliance management O Traceability of product O Improve order fulfilment and accuracy O Making smarter buying decisions with reduced costs management About Nestle O Multinational food and beverage company from 1905 O Presence in 194 countries and headquartered in Switzerland O Largest In revenues , $ 92.6 billion O Nestle USA, a subsidiary of the Swiss conglomerate formed in early 1990’s O Employees: 16,000 and Revenues: $ 8 billion O Major brands: Alpo, Coffee-Mate, Nescafe, Swee Tart’s and Taster’s Choice O Year 1997: Leveraging IT to build competitiveness and reduce cost inefficiencies Need for ERP implementation O In 1991, Nestlé USA reorganized itself and different brands were brought under the parent American control O Each division was still free to make its own decisions O Joe Weller, CEO - Nestlé USA, wanted to integrate the company O Common systems would facilitate data sharing among subsidiaries & enable group buying O Problems in the current system were identified – 29 different pries to procure vanilla ERP Project Planning O BEST: "business excellence through systems technology." O Three- to five-year plan with estimated cost of $200 million. O More than a software change - business process reorganization O Project team of 50 top business executives and 10 senior information systems professionals developed “Best Practices” O Smaller technical team - to set up a common data structure O Plan completed by March 1998 Supply Chain Module (Manugistics) Distribution Module - SAP Sales Module - SAP Nestle USA ERP Purchasing Module -SAP Financial Module - SAP Implementation in Nestle July 1998 Development of the modules began 1999 - Employees’ acceptance Employees did not understand how to use the new system and did not understand the new work processes they were being forced to adopt June 2000 - Technical difficulties In the rush to beat the Y2K deadline the project team had overlooked the integration points between the modules. 2001 – New Blueprint Designing a new blue print that would overcome the technical difficulties 2002 - Savings were identified 2003 – Last roll out happened in first quarter of 2003 Results By 2002, Nestle USA realized a savings of $325 million Mostly in the area of supply chain improvements With SAP, databases and business processes lead to trustworthy demand forecasts for the various Nestle products Nestle USA has come together as one organization. Simplify operating procedures and allow for the centralization of functions Employees responsibility is to stay focused on continuous improvement rather than simply trying to maintain existing systems Conclusion • Breakdowns occur in spite of prior planning • Software Implementation is more about Change management • Important learning from Nestle USA ERP implementation • Involve right individual from the beginning of the process. • Plans must be flexible enough to change mid-stream to overcome obstacles that appear during the project • ERP implementations combine disparate data sources, re-engineer processes, and involve large numbers of users and locations. • The difference between success and failure is an organization’s ability to rally and work together during difficult times to reach an end goal. Queries??