Case study: Nestlé Struggles with Enterprise Systems
Nestlé SA (www.nestle.com) is a giant food and pharmaceuticals company that operates virtually all over the world. Headquartered in Vevey, Switzerland, the company had 2004 revenues of $76 billion and more than 253,000 employees at 500 facilities in 80 countries. Best known for its chocolate, coffee (it invented instant coffee), and milk products, Nestlé sells thousands of other items, most of which are adapted to fit local markets and cultures.
Traditionally this huge firm has allowed each local organization to conduct business as it saw fit, taking into account the local conditions and business cultures. To support this decentralized strategy, it has had …show more content…
The team members expected the changeover to take three to five years. Dunn knew it was more than a software change, and she later said "We made it very clear that this would be a business process reorganization and that you couldn't do it without changing the way you did business." The long time period was the result of Dunn's expectation that "There was going to be pain involved, it was going to be a slow process, and this was not a software project." By October, Nestlé had established a project team of 50 top business executives and 10 senior information systems professionals. They developed a set of best practices to become common work procedures for manufacturing, purchasing, accounting and sales. A smaller technical team was set up that took 18 months to examine all data for every item in all divisions and set up a common data structure for the whole company.
At first the project decided not to use SAP's supply chain software because that module was brand new and appeared to be risky. It turned instead to Manugistics for its supply chain module. The team did decide to use SAP's purchasing, financials, sales, and distribution modules. All of these modules would be installed throughout every Nestlé USA division. The plan was completed by March 1998 and development work began in July 1998. The project was called Best for "business excellence through systems technology."
In June 2000, Nestlé SA followed the lead of Nestlé USA and contracted with