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One of the classic, well-documented ERP system failures dates back to the late 1990s and involved the American company Hershey’s, the well-known chocolate and confectionery manufacturer. At the time, the company invested hundreds of millions of dollars into modernizing its enterprise systems (ERP, CRM, and other modules) to streamline supply, production, and sales processes.
The result was catastrophic: financial losses at around $100 million
Unfortunately, the implementation didn’t go according to plan and ran into a series of unforeseen issues:
The company lost profits and reputation
The result was catastrophic: during the most important sales period of the year, unfulfilled orders began to pile up. Warehouses were overloaded, but the system failed to properly plan and execute deliveries to customers. The outage led to enormous financial losses—estimated at around $100 million—and, more critically, damaged reputation with clients who didn’t receive products on time during the busiest season.
With more sophisticated monitoring tools, tragic consequences could have been avoided
While this wasn’t a complete production line shutdown like the one described in the computer factory case, the principle was the same: a key system failed (or malfunctioned), preventing order fulfillment and costing the company both revenue and reputation. Had Hershey’s had more robust monitoring and predictive tools in place, it could have identified communication issues between production planning, warehousing, and shipping in time to prevent the impact.
Does this story sound familiar, or are you facing similar issues—even if not on the same catastrophic scale? Avoid potential failures and outages by identifying threats from IT system communication changes early on. Get in touch with us.
