Nestlé's ERP Odyssey

Von Ben Worthen

Dunn's arrival in spring 1997 came a few months after Nestlé USAChairman and CEO Joe Weller coined the term One Nestlé to re-flect hisgoal of transforming the separate brands into one highly integratedcompany. In June, Dunn joined with executives in charge of finance,supply chain, distribution and purchasing to form a key stakeholdersteam and study what was right and wrong with the company. When thetime came, the key stakeholders were initially allotted a little overtwo hours to present their findings to Weller and other top Nestléofficials.

The team balked at the time limit. "I told them that they would eitherthrow me out in the first 15 minutes or they would cancel the rest ofthe day, and we would really have a great discussion," says DickRamage, Nestlé USA's vice president of supply chain and a member ofthe team. "It took them an hour, but they canceled the rest of theday."

"I don't think they knew how ugly it was," says Dunn, referring to thecompany's condition. "We had nine different general ledgers and 28points of customer entry. We had multiple purchasing systems. We hadno clue how much volume we were doing with a particular vendor becauseevery factory set up their own vendor masters and purchased on theirown."

Soon the stakeholders team presented Weller with a blueprint for majorchanges they thought could be made in three to five years. While thecornerstone of the recommendation was an SAP package, Dunn says, "Wemade it very clear that this would be a business processreorganization and that you couldn't do it without changing the wayyou did business. There was going to be pain involved, it was going tobe a slow process, and this was not a software project."

Despite that warning, it would later become apparent that neitherWeller nor the key stakeholders really understood the degree to whichthe Best project would change the business processes at Nestlé or theamount of pain it would cause. "They still thought that it was justabout software," Dunn says.

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