I have seen several references to Hershey and the missed seasonal markets. Somebody, fill in the blanks for me. What calamity befell them? How is it computer related? I just read a post here that mentioned that their product was not on the shelves for Halloween. What's that about?

-- homestead2 (homestead@monroecty.net), December 05, 1999

Answers

They upgraded their computer systems to get compliant and they crashed big time...right at the worst time for them...prior to Halloween. Still not ready for Christmas and probably wont be for Valentines

-- Kings Kid (beprepared@y2k.net), December 05, 1999.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001gSw

-- Linkmeister (link@librarian.edu), December 05, 1999.

Hershey seems to be the most visible botched new implementation case we have to date. As a result, Hershey was not able to fill all of their orders in a timely manner during their key season. They suffered a quarterly loss as a result, and will probably suffer another before they get things back to normal.

By current accounts, they have made big strides in getting their problems fixed. And there's certainly no shortage of Hershey products on the shelves where I am. And notice that the only "domino" was increased sales for Hershey's competitors, who didn't seem to mind a bit.

-- Flint (flintc@mindspring.com), December 05, 1999.

On an historical note, after the Three Mile
Island disaster many of the local dairy
farmers were about to go belly up because
their milk was radioactive. These farmers
contracted all of their milk to Hershey.
Hershey bought all this radioactive milk
and said that they would decontaminate it
and use it later. :-' For years I would not
eat Hershey's Milk Chocolate.

-- spider (spider0@usa.net), December 05, 1999.

Hehe, they've got the Hershey Squirts. It's called, "Install new enterprise system, encounter problems that Polly says take 2 hours to fix, and six months later you still can't find invoices or find inventory or ship product." Now, if you are a Hershey's exec, or own Hershey's stock, you have the squirts, see? Other than that it's a sweet stock to own.

Of course, as a Hershey Squirting Exec, the fact that you have to solve a whole NEW set of digital problems on January 1 makes you very optimistic about how sales will do in 2000. Obviously, we are all bullish on Hershey. Obviously, we are bullish on all good people who were smart enough to all upgrade their enterprise wide systems in LATE, LATE, 1999.

-- paul leblanc (bronyaur@gis.net), December 05, 1999.

More info on Hersheys at http://www.michaelhyatt.com/discuss/ubb/Forum8/HTML/000376.html also in same forum, topic on the European Software company SAP that sold this terrific software to not only Hersheys, but other major companies also have problems, i.e. Whirlpool, Royal Doulton, and many more.

-- rumdoodles (rumdoodles@yahoo.com), December 05, 1999.

[url]http://www.michaelhyatt.com/discuss/ubb/Forum8/HTML/000376.html [/url]

-- rumdoodles (rumdoodles@yahoo.com), December 05, 1999.

href="http://www.michaelhyatt.com/discuss/ubb/Forum8/HTML/000376.html" >Link to Michael Hyatt BB

(Speaking of cross-platform incompatabilities...)

-- I'm Here, I'm There (I'm Everywhere@so.beware), December 05, 1999.

Link_to_Michael_Hyatt

-- I'm Here, I'm There (I'm Everywhere@so.beware), December 05, 1999.

FYI:

http://biz.yahoo.com/rf/ 991130/3z.html

Tuesday November 30, 4:54 pm Eastern Time

Trade data shows Hershey sales up despite problems

CHICAGO, Nov 30 (Reuters) - Hershey Foods Corp. (NYSE:HSY - news) posted strong sales in the four weeks ended Nov. 7, despite widely publicized distribution problems that had threatened to curb Halloween candy sales, analysts said on Tuesday, citing trade figures.

According to the latest data from Chicago-based Information Resources Inc., Nabisco Holdings Corp.'s (NYSE:NA - news) sales also rose during the period, while Campbell Soup Co.'s (NYSE:CPB - news) fell, the analysts said.

The data also shows General Mills Inc. (NYSE:GIS - news) outpaced Kellogg Co. (NYSE:K - news) in the race for first place in the U.S. cereal market.

Information Resources tracks retail sales of food and other items at grocery stores and other locations.

Hershey's chocolate sales for the four-week period climbed 9 percent in dollar terms and 6 percent by volume. Year-on-year sales growth was flat for non-chocolate candy, analysts said, citing the data.

Hershey had warned earlier this year that problems with a new computer system would disrupt distribution, hurting 1999 sales and profits.

``Despite distribution problems, consumer offtake does not seem to have been affected,'' Eric Katzman, a food industry analyst with Merrill Lynch, said in a research note.

For Nabisco, the maker of Oreo cookies and Ritz crackers, cookie sales for the four-week period grew 9 percent in terms of dollars, and sales volume rose 10 percent. In crackers, dollar sales were up 8 percent, while sales volume climbed 6 percent, analysts said.

Katzman said increased advertising and a ``revitalized'' sales force helped Nabisco post strong gains in cookies.

Campbell's soup sales fell 1 percent in dollar terms and 4 percent by volume, the latest data shows.

``Campbell continues to post weaker-than-category declines in soup volumes,'' David Nelson, a food industry analyst with Credit Suisse First Boston, said in a research note.

Nelson said Campbell raised average selling prices by 5.8 percent in the four-week period, outstripping the industry average of 2.3 percent.

For General Mills, the maker of Cheerios and Wheaties, cold cereal sales rose 5 percent when measured in dollars and 3 percent in volume. Kellogg, which makes Frosted Flakes and Rice Krispies, saw its sales drop 9 percent in terms of both dollars and sales volume.

``We are impressed with the continued success in execution by General Mills, given the increased competitiveness and pressure facing rival players,'' Nelson said. ``We maintain our 'hold' rating, but valuation is getting more attractive here.''

At an analysts' meeting on Tuesday, Kellogg acknowledged that sales were off for the fourth quarter, but it backed Wall Street's fourth quarter earnings estimates and said it was taking steps to improve profits down the road.

-- Hoffmeister (hoff_meister@my-deja.com), December 05, 1999.

http://biz.yahoo.com/rf/991130/3z.html

Tuesday November 30, 4:54 pm Eastern Time

Trade data shows Hershey sales up despite problems

CHICAGO, Nov 30 (Reuters) - Hershey Foods Corp. (NYSE:HSY - news) posted strong sales in the four weeks ended Nov. 7, despite widely publicized distribution problems that had threatened to curb Halloween candy sales, analysts said on Tuesday, citing trade figures.

-- CD (not@here.com), December 05, 1999.

(Apparently we posted at the same time Hoff)

-- CD (not@here.com), December 05, 1999.

What the hell is the BIG DEAL??? Toilet paper by the ton,at sale prices yet.Canned goods 4/$1.00,Store shelves packed to overflowing. Even tho oil prices have more then doubled,gasoline has only icreased fractionally in regards to oil. Methinks it has reached the stage of grasping for straws.

-- No shortages (sowhat@home.com), December 05, 1999.

paul leblanc:

You wrote:

"Install new enterprise system, encounter problems that Polly says take 2 hours to fix"

This is, to put it bluntly, a lie. Nobody has EVER claimed that problems with new implementations would be fixed in 2 or 3 hours. Some people have claimed that DATE BUGS could be controlled within 2 or 3 DAYS.

Why are you lying? Such tactics do your cause no service, you know.

-- Flint (flintc@mindspring.com), December 05, 1999.

Flint:

I talked to someone yesterday about her job in a credit collections company. I'm not sure if this company is owned directly by a bank or is rented out to a banking group.

They have dialers, A and B. B is known to be non-compliant as of yesterday. A was upgraded over Thanksgiving. Dialer A is still being tested, a few bugs found here and there, but the IT guy I talked to there is fairly sure A will be up and running after the rollover.

The plan is to use A and merge all of B's functions into A right before the rollover. The IT guy has to make the different type of data on B flow correctly to A. He's hoping he can do that correctly.

They have a little over three weeks to get it done. They started late. The IT guy will be putting in his two week notice two weeks before the rollover.

I guess the good news here is that the IT guy thinks he can do it. The bad news is that the woman who started the conversation is out of a job for some period of time if the IT guy can't do it.

The bank won't get its money if the IT guy is wrong. The woman's babysitter won't be needed if the IT guy is wrong. ect ect ect.

I thought it is awfully late for companies to be taking chances like this, but in the collections biz according to these people, this is about where all of them are as of yesterday.

-- helen (sstaten@fullnet.net), December 05, 1999.

Actually Hershey's error is more management than IT. Effectively the same thing happened to a company I can't name (I'd lose my job and so would the client who told me) and the integrator company brought in TONS of people to MANUALLY do what the systems had been doing, AND to fix the SAP instalation. Company was down for about 3 months but STILL shipped, billed, and processed payments while the integrator company figured out the problems. NONE of you saw it, and it never made the press.

Chuck

-- Chuck, a night driver (rienzoo@en.com), December 05, 1999.

Flint -

My recollection of the implication of Mr. de Jager's comments was that he had never seen a computer problem that couldn't be fixed in two or three days. Not just a date-related problem - ANY computer problem. I remember thinking at the time that this said more about Mr. de Jager's lack of experience in Ops than it did about the likely severity of Y2K problems.

Unfortunately, I cannot locate the article, so my memory may be playing me false on this. If you have a link that shows that his comment was related only to date-related failures, that would certainly clarfy the discussion.

Using terms like "lying" seems a bit strong, when in some cases many of us are working from memory, not source documents.

-- Mac (sneak@lurk.hid), December 05, 1999.

Mac:

I understand the vagaries of memory. But even Hoffmeister says a new SAP implementation takes at least six months if everything goes perfectly, and forever worst case. I think paul leblanc knows this. Certainly if he really can't remember the difference between new implementations and individual date bugs in existing code, his credibility *ought* to drop to zero, except among the Committed.

As for *any* computer problem being fixable in 2 or 3 days, this is nonsense. Even if you don't count the time spent *finding* the problem as part of fixing it, it's still nonsense. Sure, you can break large problems down into small pieces, no one of which will take more than 3 days, but I don't think that's what's meant here.

Most date problems are really quite trivial to fix, though. You know what kind of problem you're looking for, and you know what it does. Tracking it down is almost always simple, and so is making the correction. But of course the problem shouldn't be defined too broadly, just as it shouldn't be defined too narrowly. Each discrete date bug left in the code is one problem. If you define the problem as being "all date bugs we didn't get to in the whole world", then NO, it's not a 3-day fix. Decades, I'd estimate.

And I personally consider the notion that we can "control" the problem within 3 days to be fatuous. I expect many processes to be out of control for months. Just my opinion.

-- Flint (flintc@mindspring.com), December 05, 1999.

Flint, from someone who has been an observer here since the inception of this forum, and followed and appreciated your many posts, I feel that as of late, your posts contain a more pessimistic nuance about them. Has your overall feel of Y2K changed for you in the past few weeks?, or am I simply incorrect in my observation?

-- JJ (123@4.com), December 05, 1999.

None of the information here reflects much knowledge of SAP or it's products and how they have been used in y2k remediation. Whirlpool has only spent 27 million dollars on y2k remediation. The rest of the cost has been capitalized on a SAP implementation. This company provides Enterprise Resource Planning (ERP) software which does inventory management, supply chain management and optimal purchasing stragtegies (just in time inventory). This system uses its own programming language coupled with an Oracle database and expensive UNIX based computers from IBM or Sun Microsystems to implement a specific customer solution. The minimum cost seems to be $50 million. I have a friend at Dell that told me about their experiment with it 3 years ago. They got $30 million into it before they realized the througput and performance of the system was not good.

One of the biggest problems with the system is the dependence upon the customer to have competent programmers in the SAP language or to hire expensive consultants that understand it. This means that bad implementations result in less than projected capability. If the business cannot meet the current capacity with the new system when it switches over formthe old, business loss ocurrs as a result.

Hershey is papering over the truth, they operate on an accrual basis which means they account for income when they book the order not when they recieve the cash for delivery of the product. I can accept orders for any amount of product but if I cannot deliver it, I have a cashflow problem.

This means that I have to borrow against my recievables, that is where Hersheys is right now. Did you see lot's of Hersheys kisses this Halloween?......No you didn't because there weren't any. They could not fulfill the orders because they switched over to the new system in July when the orders come in and the system couldn't manage the volume. The SAP and Anderson consulting company just had a $500 million judgement awarded to one of thier customers because the SAP implementation put that company out of business.

http://ccwf.cc.utexas.edu/~cutty/foxmeyer/implemtn.html

The SAP solution is just like any other software, it takes time to work out the bugs. If management is unrealistic or bought an optimistic sales pitch from the vendor, we usually just pay more for the product. Next year, it won't be there.

-- William R. Sullivan (wrs@wham.com), December 05, 1999.

JJ:

So long as you understand that I have no crystal ball either...

The evidence that there are lots of bugs is convincing to me. I'm sure there are many millions of them. I don't think I'm under any illusions that we'll get them all. But I tend to disagree with many here about the potential impact of those bugs. I think our overall systems are more resiliant, redundant, and robust than most here give them credit for. I see a very large gap between failures at the code level and failures at the business level. Hershey is an illustration -- they're having terrible failures at the code level, yet they're filling orders for most products and in no danger of business failure.

I think any apparent change in my viewpoint is an artifact of my willingness to call a hill a hill. This forum tends to dichotomize, saying the hill is either a mountain or it's a flat plain. You *must* pick one or the other, and if you don't pick "mountain" you just don't get it.

So when someone says it's flat and I say No, it really is a hill, then many here say Aha! Flint agrees it's a mountain after all! He's becoming more pessimistic. And when I say No, it's not a mountain, just a hill, then these same people say Aha! Flint's now saying it's flat again. He can't make up his mind!

I continue to believe that y2k problems are very real and mostly manageable, with exceptions. Hershey has manageable problems. Very real problems, but manageable. I expect few private sector organizations to have problems as serious as Hershey's. I think public sector problems look much worse, and will cause the most trouble. Given the quality of our information, I must admit that these can't be a whole lot more than guesses.

-- Flint (flintc@mindspring.com), December 05, 1999.

William R. Sullivan,

"Hershey is papering over the truth, they operate on an accrual basis which means they account for income when they book the order not when they recieve the cash for delivery of the product. I can accept orders for any amount of product but if I cannot deliver it, I have a cashflow problem."

Indeed. Well said.

"This means that I have to borrow against my recievables, that is where Hersheys is right now. Did you see lot's of Hersheys kisses this Halloween?......No you didn't because there weren't any. They could not fulfill the orders because they switched over to the new system in July when the orders come in and the system couldn't manage the volume. The SAP and Anderson consulting company just had a $500 million judgement awarded to one of thier customers because the SAP implementation put that company out of business."

No Hershey's Kisses for Halloween were to be found anywhere around where I live.

-- GoldReal (GoldReal@aol.com), December 05, 1999.