Hershey in brown text with small orange ghosts and a small Hershey chocolate

The Hershey’s Halloween Disaster: How ERP Glitches Spoiled the Treats

Introduction: When the Candy Didn’t Come

In the candy business, Halloween isn’t just a holiday, it’s a critical revenue window. For Hershey’s, the iconic maker of Reese’s, Kit Kats, and Hershey’s Bars, October sales can define an entire fiscal quarter.

But in 1999, Hershey missed the moment.

Shipments failed. Retailers were left with empty shelves. And America’s favorite candy maker lost an estimated $100 million in revenue all due to a flawed ERP implementation.

This wasn't a simple IT hiccup. It was a case study in how poor ERP timing, rushed execution, and misaligned business planning can cause widespread operational failure.

What Went Wrong with Hershey’s ERP Rollout?

In an effort to modernize its enterprise systems, Hershey launched an ambitious digital transformation project. The plan was to upgrade:

  • SAP ERP for core enterprise functions
  • Siebel for customer relationship management
  • Manugistics for supply chain planning

Originally intended as a phased, multi-year rollout, the project timeline was dramatically condensed. Against the recommendations of key advisors and internal teams, Hershey pushed to go live all at once with just weeks before Halloween, the company’s busiest sales season.

The consequences were immediate:

  • Late and missing deliveries
  • Order backlogs across distribution centers
  • Retailers left un-stocked during peak demand
  • Supply chain disruptions, despite having the inventory on hand

“Digital systems don’t fail in isolation - when ERP goes wrong, the whole operation feels it.”

Key Failures in Hershey’s ERP Strategy

1. Big Bang Implementation

Hershey attempted a simultaneous rollout of ERP, CRM, and supply chain systems. The scope was enormous. Integrating all three at once significantly increased risk, especially without prior experience managing this scale of change.

2. Poor Timing

Launching new enterprise systems in Q3 left no margin for error before Halloween. A period that typically generates a significant portion of annual revenue.

3. Inadequate Load Testing

The system was not sufficiently tested under real-world seasonal volume. As orders surged, critical components like order routing, warehouse scheduling, and shipping coordination failed to scale.

4. Lack of Supply Chain Visibility

Glitches in the logic used to release and schedule shipments caused confusion in fulfillment centers. Candy sat in warehouses, while retailers waited for stock that never arrived.

The Business Impact: A Financial and Strategic Setback

  • National retailers missed critical shipments during Halloween
  • Inventory was stranded in the supply chain despite strong demand
  • Hershey’s Q4 performance was severely impacted
  • Stock price dropped over 8% following the public announcement of the issue

This was more than a project misfire, it was a multi-million-dollar lesson in the risks of poorly managed digital transformation.

What ERP Professionals Can Learn from Hershey

Never Launch Before Peak Season

Go-lives should be scheduled well before or after seasonal demand cycles. ERP systems need breathing room to stabilize and your operations do, too.

Phase Your Implementation

Launching ERP, CRM, and supply chain systems simultaneously creates interdependencies that are difficult to untangle under pressure. A staged approach reduces risk.

Test Under Real-World Conditions

Simulated stress testing must replicate actual seasonal loads. What works in QA can easily fail under production volume.

Align Tech Timelines with Business Cycles

System deployment must follow, not dictate and the business calendar. IT success is measured by operational outcomes, not project deadlines.

Why This Case Still Matters

Hershey’s ERP failure is one of the most cited cautionary tales in enterprise tech history and for good reason. It underscores a critical truth: Digital transformation is as much about operational alignment and business judgment as it is about choosing the right software.

The systems themselves SAP, Siebel, and Manugistics were proven solutions. The failure came not from the tools, but from the timing, execution strategy, and organizational readiness.

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Final Thought

ERP is never just about technology. It’s about execution, timing, and cross-functional discipline.

Hershey’s Halloween disaster offers a sobering reminder: even with strong products and the right platforms, a misaligned rollout can create systemic failure.

If you’re planning your own ERP journey, don’t just focus on the software, focus on the strategy.

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