ERP Implementation at

Nestle
Agenda
O
Benefts of ERP in F&B Industry
O
About Nestle
O
Need for Implementation
O
ERP Project Planning
O
eneral Implementation of ERP
O
Implementation in Nestle
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Results
O
!onclusion
Benefts of ERP in F&B
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"eeping In#entory lean
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Operate more e$ciently
O
Impro#e in#entory turno#er
O
Impro#e %uality control
O
!ompliance management
O
&raceability of product
O
Impro#e order fulflment and accuracy
O
'a(ing smarter buying decisions )it* reduced costs
O
+treamline product recei#ing
O
Impro#e account accuracy and management
About Nestle
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'ultinational food and be#erage company from ,-./
O
Presence in ,-0 countries and *ead%uartered in +)it1erland
O
2argest In re#enues 3 4 -567 billion
O
Nestle 8+A3 a subsidiary of t*e +)iss conglomerate formed in early
,--.9s
O
Employees: ,73... and Re#enues: 4 ; billion
O
'ajor brands: Alpo3 !o<ee='ate3 Nescafe3 +)ee &art9s and &aster9s
!*oice
O
>ear ,--?: 2e#eraging I& to build competiti#eness and reduce cost
ine$ciencies
Need for ERP implementation

O
In ,--,3 Nestl@ 8+A reorganized itself and di<erent
brands )ere broug*t under t*e parent American control
O
Eac* di#ision )as still free to ma(e its own decisions
O
Aoe Beller3 !EO = Nestl@ 8+A3 )anted to integrate t*e
company
O
Common systems )ould facilitate data s*aring among
subsidiaries & enable group buying
O
Problems in t*e current system )ere identifed C 5di<erent pries to procure #anilla
ERP Project Planning
O
BE+&: Dbusiness eEcellence t*roug* systems tec*nology6D
O
&*ree= to f#e=year plan )it* estimated cost of 45.. million6
O
'ore t*an a soft)are c*ange = business process
reorgani1ation
O
Project team of /. top business eEecuti#es and ,. senior
information systems professionals de#eloped FBest PracticesG
O
+maller tec*nical team = to set up a common data structure
O
Plan completed by 'arc* ,--;
Nestl
e 8+A
=ERP
+upply
!*ain
'odule
H'anugistic
sI
Purc*asing
'odule
=+AP
Financial
'odule =
+AP
+ales
'odule =
+AP
Jistribution
'odule =
+AP
Implementation in Nestle
July 1998
Je#elopment of t*e modules began
1999 - Employees acceptance
Employees did not understand *o) to use t*e ne) system and did not
understand t*e ne) )or( processes t*ey )ere being forced to adopt
June 2000 - Technical diculties
In t*e rus* to beat t*e >5" deadline t*e project team *ad o#erloo(ed t*e
integration points bet)een t*e modules6
2001 ! "ew #lueprint
Jesigning a ne) blue print t*at )ould o#ercome t*e tec*nical di$culties

2002 - $a%ings were identi&ed

200 ! (ast roll out happened in &rst )uarter o* 200
Results
By 5..53 Nestle 8+A reali1ed a sa#ings of 4L5/
million ostly in t*e area of supply c*ain
impro#ements
By 5..53 Nestle 8+A reali1ed a sa#ings of 4L5/
million ostly in t*e area of supply c*ain
impro#ements
Bit* +AP3 databases and business processes
lead to trust)ort*y demand forecasts for t*e
#arious Nestle products
Bit* +AP3 databases and business processes
lead to trust)ort*y demand forecasts for t*e
#arious Nestle products
Nestle 8+A *as come toget*er as one
organi1ation6 +implify operating procedures and
allo) for t*e centrali1ation of functions
Nestle 8+A *as come toget*er as one
organi1ation6 +implify operating procedures and
allo) for t*e centrali1ation of functions
Employees responsibility is to stay focused on
continuous impro#ement rat*er t*an simply
trying to maintain eEisting systems
Employees responsibility is to stay focused on
continuous impro#ement rat*er t*an simply
trying to maintain eEisting systems

!onclusion

Brea(do)ns occur in spite of prior planning

+oft)are Implementation is more about !*ange management

Important learning from Nestle 8+A ERP implementation

In#ol#e rig*t indi#idual from t*e beginning of t*e process6

Plans must be MeEible enoug* to c*ange mid=stream to o#ercome

obstacles t*at appear during t*e project

ERP implementations combine disparate data sources3 re=engineer

processes3 and in#ol#e large numbers of users and locations6

&*e di<erence bet)een success and failure is an organi1ation9s

ability to rally and )or( toget*er during di$cult times to reac* an
end goal6
NueriesOO