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Nestle USA - ERP Implementation

Nestle implemented an ERP system across its various divisions to integrate operations, improve efficiency, and reduce costs. The project took 5 years to fully implement different SAP modules for supply chain, distribution, sales, purchasing, and financial functions. Initial rollout faced employee resistance and technical integration issues. However, by 2002 Nestle realized $325 million in savings primarily from supply chain improvements. The ERP system allowed Nestle to operate as one coordinated organization with centralized functions and trustworthy demand forecasts.

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3K views11 pages

Nestle USA - ERP Implementation

Nestle implemented an ERP system across its various divisions to integrate operations, improve efficiency, and reduce costs. The project took 5 years to fully implement different SAP modules for supply chain, distribution, sales, purchasing, and financial functions. Initial rollout faced employee resistance and technical integration issues. However, by 2002 Nestle realized $325 million in savings primarily from supply chain improvements. The ERP system allowed Nestle to operate as one coordinated organization with centralized functions and trustworthy demand forecasts.

Uploaded by

pujithamuramalla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Benefits of ERP in F&B: Discusses the advantages of using ERP systems in the Food & Beverage industry for efficiency and accuracy improvements.
  • About Nestle: Provides background information about Nestle, its global presence, subsidiaries, and major brands.
  • Need for Implementation: Explains the reasons for implementing ERP, focusing on challenges faced by Nestlé USA and the need for standardization.
  • ERP Project Planning: Outlines the project planning phase, including goals, team assembly, and completion timeline for the ERP implementation.
  • General Implementation of ERP: Illustrates the main modules of the ERP system and their integration into operations.
  • Implementation in Nestle: Details the timeline and stages of ERP implementation at Nestle, highlighting challenges and adaptations required.
  • Results: Summarizes the outcomes of ERP implementation, including cost savings and process improvements at Nestle.
  • Conclusion: Concludes with lessons learned and the importance of change management in successful ERP projects.

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 Improve quality control
O Compliance management
O Traceability of product
O Improve order fulfilment and accuracy

O Making smarter buying decisions with reduced costs


O Streamline product receiving
O Improve account accuracy and 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

1990s
O Employees: 16,000 and Revenues: $ 8 billion
O Major brands: Alpo, Coffee-Mate, Nescafe, Swee Tarts and Tasters

Choice
O Year 1997: Leveraging IT to build competitiveness and reduce cost

inefficiencies

Need for ERP implementation


O In 1991, Nestl 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 - Nestl 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

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
(Manugistic
s)

Distribution
Module SAP

Sales
Module SAP

Nestl
e 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
By 2002,
2002, Nestle
Nestle USA
USA realized
realized a
a savings
savings of
of $325
$325
million
Mostly
in
the
area
of
supply
chain
million Mostly in the area of supply chain
improvements
improvements
With
With SAP,
SAP, databases
databases and
and business
business processes
processes
lead
to
trustworthy
demand
forecasts
lead to trustworthy demand forecasts for
for the
the
various
various Nestle
Nestle products
products
Nestle
Nestle USA
USA has
has come
come together
together as
as one
one
organization.
Simplify
operating
procedures
organization. Simplify operating procedures and
and
allow
allow for
for the
the centralization
centralization of
of functions
functions
Employees
Employees responsibility
responsibility is
is to
to stay
stay focused
focused on
on
continuous
improvement
rather
than
simply
continuous improvement rather than simply
trying
trying to
to maintain
maintain existing
existing systems
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 organizations

ability to rally and work together during difficult times to reach an


end goal.

Queries??

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 Implementa
Benefits of ERP in F&B O Keeping Inventory lean O Operate more efficiently O Improve inventory turnover O Improve quality co
About Nestle O Multinational food and beverage company from 1905 O Presence in 194 countries and headquartered in Switzerla
Need for ERP implementation O In 1991, Nestlé USA reorganized itself and different brands were brought under the parent Amer
ERP Project Planning O BEST: "business excellence through systems technology." O Three- to five-year plan with estimated cost
Nestl e USA -ERP Supply Chain Module (Manugistic s) Purchasing Module -SAP Financial Module - SAP Sales Module -
Implementation in Nestle July 1998 Development of the modules began 1999 - Employees’ acceptance Employees did not understan
Results By 2002, Nestle USA realized a savings of $325 million Mostly in the area of supply chain improvements By 2002, Nes
  Conclusion • Breakdowns occur in spite of prior planning • Software Implementation is more about Change management • Impo

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