ERP Assignment Group 2

S.P.
JAIN INSTITUTE OF MANAGEMENT & RESEARCH

MUMBAI
Study of the BPR and ERP implementation activities in Cadbury
Jul – 2010
Group
Jai Singh
Kanica Rangnekar
Rajat Chandra
Study of the BPR and ERP implementation activities in Cadbury PGDM 09-11
Saurav Kumar
Venkta Raghavan
Contents
Contents................................................................................................................ 2
PROJECT SCOPE: .................................................................................................. 3
PROJECT DELIVERABLES:.......................................................................................3
COMPANY INTRODUCTION.....................................................................................3
CADBURY’S CRITICAL BUSINESS PROCESSES........................................................5
Sourcing............................................................................................................. 6
Production planning............................................................................................7
Inventory control................................................................................................ 8
Distribution & Logistics.......................................................................................9
Finance & HR...................................................................................................... 9
Cadbury India High Level Business Process Map.................................................11
The Level 1 business processes........................................................................12
Level 2 Business Processes..............................................................................12
Type of BPR implementation................................................................................15
ERP IMPLEMENTATION METHODOLOGY CHALLENGES.........................................18
BUSINESS BENEFITS OF BPR AND ERP IMPLEMENTATION....................................24
Benefits specific to Cadbury................................................................................26
Learning and recommendations from Cadbury implementation..........................28
S.P. Jain Institute of Management & Research

Enter Solutions, Jul’2010 2
PROJECT SCOPE:
Study the implementation of Business Process reengineering in one of the company Cadbury
which holds one of the finest supply chain and a company which has been on the fast track on
the growth with its foot on the accelerator pedal in full throttle.
Study the implementation of Enterprise Resource Planning within the organization which has
operations in over 56 countries and how the operations have been integrated and analyse the
challenges faced and derive learning out of the same
PROJECT DELIVERABLES:
1. Identify five critical business processes
2. Plot the process map of the organization
3. Analyse the type of BPR implementation in the company
4. Analyse the ERP implementation in the company and the challenges
5. Business benefits and learnings
COMPANY INTRODUCTION
The company that we have chosen for the visit is Cadburys. The company has seen a great
growth phase. Cadbury India is a fully owned subsidy of Kraft Foods Inc. The combination
of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick
meals. With annual revenues of approximately $50 billion, the combined company is the
world's second largest food company, making delicious products for billions of consumers in
more than 160 countries. We employ approximately 140,000 people and have operations in
more than 70 countries. In India, Cadbury began its operations in 1948 by importing
chocolates. After 60 years of existence, it today has five company-owned manufacturing
facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal
Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The corporate
office is in Mumbai.
Currently, Cadbury India operates in four categories viz. Chocolate Confectionery, Milk
Food Drinks, Candy and Gum category. In the Chocolate Confectionery business, Cadbury

has maintained its undisputed leadership over the years. Some of the key brands in India are
Cadbury Dairy Milk, 5 Star, Perk, Éclairs and Celebrations. Cadbury enjoys a value market
share of over 70% - the highest Cadbury brand share in the world. In the Milk Food drinks
segment it’s the leading Malted Food Drink (MFD) in the country. Similarly in the medicated
candy category it is the undisputed leader.
Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For
over two decades, it has worked with the Kerala Agriculture University to undertake cocoa
research and released clones, hybrids that improve the cocoa yield. The team visits farmers
and advise them on the cultivation aspects from planting to harvesting. It also conducts
farmers meetings & seminars to educate them on Cocoa cultivation aspects. Our efforts have
increased cocoa productivity and touched the lives of thousands of farmers.

CADBURY’S CRITICAL BUSINESS PROCESSES
Cadbury Ltd is a manufacturing and distribution company, its products include:
These products fall under the category of Fast Moving Consumer Goods (FMCG).
The characteristics and required performance indicators of perishable FMCG products:

The above parameters define the critical business process of Cadbury. These factors
are in forward or customer facing supply chain of Cadbury PLC. However, in order to fulfill
above requirements the upward supply chain should also be looked into and perfected. Our
group has identified the following critical business processes for Cadbury PLC’s success:
Sourcing
As the economy increases in complexity, it has become more difficult for organizations to
adapt to marketplace changes. Organizations can no longer efficiently possess all expertise
in-house. The result is a greater dependence on interrelationships with outside organizations
that can provide the expertise these organizations may be lacking. In particular,
manufacturing companies may find it advantageous for suppliers to provide products and
services rather than performing them in-house. Outsourcing is a supplier agreement that may
come to mind for most readers. However, there are several types of supplier agreements a
company may rely upon.

Cadbury produces chocolates and products derived from it, cocoa being an internationally
traded commodity and not produced in India plays an important role in the chocolate supply
chain. In addition various other products such as nuts, milk, sugar etc. are required by
Cadbury, all these commodities are perishable with very short shelf life. The procurement
and sourcing of these commodities play a major role in the business.
Fig: shows the typical supply chain for cocoa and holds for other commodity products required by Cadbury PLC
An instance of the importance of sourcing can be found in the recent fairtrade practices
followed by coffee and chocolate makers and the production of fairtrade chocolate now in
progress in European countries by Cadbury PLC.
Sourcing strategy at Cadbury outlines the long term and short term sourcing contracts with
the suppliers. It also aims to discover partnerships with intermediaries and logistics providers
to assure availability of raw materials in a smooth fashion and at fair prices.
Production planning
Many of Cadbury PLC’s products have a seasonal demand, some of them also a
smooth demand over the year. Production planning aims to utilize machinery and manpower
at Cadbury PLC’s facilities in order to have a smooth production schedule while maintain
optimum capacity utilization.

Following processes are involved in production planning:
1. Define machine families, Shift hours and manufacturing capacity

2. Define manufacturing processes, process set up times and production
throughput rates.
3. Detail resources and processes involved for each job, materials required and
work instructions.
4. Forecast and schedule resource requirements and track vs capacity.
5. Re-schedule work and re-allocate resources to meet customer requirements.
6. Prioritize workload and process jobs.

7. Carry any jobs not run as scheduled to next shift and ensure all incomplete
jobs are on the schedule.
8. Automate clerical tasks and enable timely and relevant production scheduling.
An efficient production planning system at Cadbury will enable it to achieve:
1. Supply chain optimization. The system can connect to an MRP.

2. Material Requirements Plan to ensure the necessary materials for order are on
hand or ordered on time. We can also provide an MRP system if needed.
3. Reduced scheduling effort by arranging an optimal schedule per the constraints.
4. Labour load levelling. Reduce labour spikes and declines by projecting schedule
into the future.
5. Real time information. View the jobs that are currently running, allow customer
services to see the capacity available.
6. Identify and reduce bottlenecks.
Inventory control
The majority products of Cadbury PLC have a low shelf life and one of the key
performance indicators accepted by Cadbury is the Freshness Index of the products delivered
by them to the consumer. At the same time, Range Availability at Distributors are to be kept
at a min of 95% and is being currently maintained.

Inventory control allows Cadbury PLC to achieve low inventory levels thereby reducing costs
and achieve greater freshness index. Inventory control however, does not aim to specifically
reduce inventory, a sufficient inventory levels must be maintained to have a service level at
the Depot of 95% RAD. It also helps to reduce distribution runs thereby saving transportation
and logistics costs.
The u/s inventory of raw materials helps to smoothen availability and reduce risks of raw
material unavailability for production at the same time guard against price fluctuations in
commodity markets. The associated costs saved include but limited to, machine and
manpower utilization vs. inventory costs and costs of sourcing.
Distribution & Logistics
The logistics management area covers the activities related to the physical flow of materials,
semi-elaborated products, raw materials, and the acquisition by the initial providers from the
sale to the consumers. This includes the storage, production and distribution of the products.
The conception of the logistic environment in an integrated way is reached through the
integration of all, and each of the activities that constitute it.
Distribution and logistics form a major chunk of costs under selling expenses; in India it
forms 6.5% of India’s GDP and 14% of USA GDP. Distribution and logistics also determine
location of warehouses and depots for optimal availability at the customer level.
For Cadbury distribution is not one way but rather a two way process, where-in there are
costs associated with returns and stales. It also plays a part in ensuring the Freshness Index of
products.
Finance & HR
The intense competitiveness in the global markets demand an improvement in the results. In
this context, it is critical of the management of human resources. The concept of Human
Resources as a cost generator has to change into a profits generator.Human Resources is a
fundamental part of the scheme of every successful enterprise, as the information received by
this area needs to have a continuous follow-up and correct evaluation for the professional
development and the social welfare of the workers. However, due to the large quantity of
information that is handled in this area, the job is becoming more difficult everyday. ERP is
represented like a useful tool to help and orient the users to focus their work in the direct
relationship with the staff, and to link the personal skills and aspirations of the personnel
related to the objectives and goals of the company.
Cash management is a fundamental application that allows you to manage your accounts. It
includes banks, savings institutions and charge cards. All the appropriate functions are
conveniently centralized in one location. The application provides facilities for accounting
staff to receive payments, make deposits, print checks, record manual checks, record funds
transfer and card charges, pay off charges and reconcile your cash accounts.

Cadbury India High Level Business Process Map
Cadbury India PLC is essentially a manufacturing and

distribution company and as such shares many of its
processes with the manufacturing industry. Figure 1 gives a
layout of its facilities in India.
The business processes of the company are aligned to its

objectives as stated in the company’s mission, “Financial
scorecard, judiciously reinforced by our quality,
commitment and culture”. The stated objectives in the
confectionery business translate into a fresh product
available at arm’s length to the consumer at a profit. To
achieve the implied objective Cadbury’s processes need to be
efficient, lean and responsive to the consumer’s demand. Figure 1 : Cadbury India
Facilities Location (Source
Cadbury India website)
The processes and intermediaries involved in the cash to
cash cycle for Cadbury India is as shown below:
Figure 2: Cadbury India Supply Chain

The Level 1 business processes
Sales and Operations Planning
2. Master Resource
3. Master Scheduling 4. Sales Planning
Planning
5. Forecasting
7a. 7b. 9. Sell
6a. Buy 8. Make
Inv Inv
10. Production & Inv

6b. Purchasing control 11. Sales Control
Control
12. HR, Reporting & Financial measurement
Level 2 Business Processes
1. Sales and Operations planning

a. Product conceptualization
b. Product design
c. Engineering development
d. Strategic & forecasted sales targets
e. Define and communicate product intent
f. Manage engineering changes
2. Master Resource Planning

a. Develop family wise production plans
b. Asses capacity
3. Master scheduling
a. Schedule production runs based on demand forecasts and orders
b. Develop capacity requirements
4. Sales planning
a. Logistics
b. Warehouse capacity
c. Location planning
d. Scheduling
e. Dispatching
f. Sales targets

5. Buy
a. Manage supplier relationships
b. Plan and order production material
c. Non production material
d. Track inbound material
e. Receive and manage production material
f. Receive and manage non-production material
g. Receive and manage service parts
6. Inventory control
a. Track receipts
b. Maintain and record inventory levels
c. Track outbound inventory
7. Make
a. Produce product
b. Control production levels
8. Inventory
a. Track receipts
b. Maintain and record inventory levels
c. Track outbound inventory
9. Sell
a. Order processing
b. Product scheduling and demand smoothening
c. Invoice product
d. Ship product
e. Track product information for stales and recalls
f. Perform product returns
g. Perform quality assurance
10. Manage Production Processes
a. Manage Production Network

b. Manage Production Performance
c. Manage Production Orders and In-Process Products (WIP) Information
d. Control Production Equipment
e. Execute Maintenance Plans
11. Provide Human Resources (HR) Support
a. Develop Human Resources

b. Ensure Site Safety
c. Manage Team Relations
d. Plan and Administer Compensation and Benefits
12. Provide Financial Support

a. Perform Accounts Receivable

b. Perform Accounts Payable
c. Provide Financial Accounting and Controlling Support
d. Perform Budgeting and Planning
e. Plan Capital Assets
f. Perform Cash Management
g. Manage External Relations
h. Close the Books

Type of BPR implementation
Business process reengineering (BPR) began as a private sector technique to help

organizations fundamentally rethink how they do their work in order to dramatically improve
customer service, cut operational costs, and become world-class competitors. A key stimulus
for reengineering has been the continuing development and deployment of sophisticated
information systems and networks. Leading organizations are becoming bolder in using this
technology to support innovative business processes, rather than refining current ways of
doing work.
Fig.: Reengineering guidance and relationship of Mission and Work Processes to Information
Technology
Business process reengineering is one approach for redesigning the way work is done to
better support the organization's mission and reduce costs. Reengineering starts with a high-
level assessment of the organization's mission, strategic goals, and customer needs. Basic
questions are asked, such as "Does our mission need to be redefined? Are our strategic goals
aligned with our mission? Who are our customers?" An organization may find that it is
operating on questionable assumptions, particularly in terms of the wants and needs of its

customers. Only after the organization rethinks what it should be doing, does it go on to
decide how best to do it.
Within the framework of this basic assessment of mission and goals, reengineering focuses
on the organization's business processes—the steps and procedures that govern how resources
are used to create products and services that meet the needs of particular customers or
markets. As a structured ordering of work steps across time and place, a business process can
be decomposed into specific activities, measured, modeled, and improved. It can also be
completely redesigned or eliminated altogether. Reengineering identifies, analyzes, and
redesigns an organization's core business processes with the aim of achieving dramatic
improvements in critical performance measures, such as cost, quality, service, and speed.
BPR is primarily categorized as:
• Clean Slate
• Technology Enabled
Clean Slate Advantages Technology Enabled Advantages

Not constrained by tool Focus on ERP, best practices
Not limited by best practice database Tools help structure reengineering
Retain competitive advantages Tools focus reengineering
Not subject to vendor changes Process bounded, thus easier
may be only way to implement advanced know design is feasible

technology
may have unique features where best Great likelihood that cost, time objectives met
practices inappropriate
The management knew about the existing systems company had. Cadbury had
operations in 16 different locations. It had marketing in several different locations (26 depots)
and they were all highly decentralized. The management was looking at ways to ease things
out. So they knew about SAP systems and also knew that one day or the other they would

have to go for this. Company was on a fast paced growth and that point of time it was very
important to implement the system. The top management was very supportive in that.
BPR at Cadbury was Technology enabled and focussed on implementing ERP system to
bring in changes. The exercise was made a KPI for all major functions and implementation
was controlled by a core team. BPR was done from scratch to suit the needs of ERP system
and India office was first to implement this. The exercise did not get much resistance from
the employees primarily because of following reasons:
• Since, it was technology enabled BPR, processes were not changed much and hence
people did not have any issues. It was easier to implement this.
• Young employee base of Cadbury which is always ready to change for the benefit of
the organization.
Post BPR exercise the three things that company controls are:
• Range availability at the distributor
• Range availability at the depot
• Freshness index.

ERP IMPLEMENTATION METHODOLOGY CHALLENGES

Cadbury’s India was the very first organisational unit all over the world to implement
ERP in its processes. The Indian subunit was very excited and looking forward to these
practises. Also, Cadbury’s India themselves took the initiative to implement ERP as they
were confident of their manpower being able to handle the implementation process efficiently
& effectively. The implementation process in India was started from scratch as they were the
first to implement that in all over global application of the Cadbury. They tried to inculpate
the best practises of the company and tried to build on the strengths the past systems in new
ERP systems.
Cadbury’s knew that for implementation will they will be standardizing the processes
in 16 different locations. People will have to gear up in order to streamline the processes. The
progress has to be rapid for the implementation which was not very easy. The growth wave
blowing over the developing countries encouraged the top management to look forward to the
ERP implementation which would set the base for huge information sharing.
The ERP initiative was to bring about a complete integration of the major processes
in the business. The major processes being procurement system, finance system, the Human
Resources and other departments. These were functioning in a completely decentralised
manner. Also, Cadbury’s have four branch operations and 13 manufacturing operations and
each had their own systems running in isolation. The finance department was the only one
common to all. ERP served as an integrating system and a solution for their then existing
decentralised model. When they were implementing the system, they integrated using the
finance module first. It was a staggered implementation with finance first followed by the
other modules.
In order to implement these ERP processes, Cadbury’s had to impart training a few
of their young professionals. Since these were quite tech savvy and open to new ideas, overall
training period was reduced. The implementation methodology adopted by Cadbury’s
happened in 1995 and they went ahead using a big bang approach. They did the
implementation company wise.

Cadbury’s had one major expectation from ERP ie. IT to help the management work
better than before with the existing systems in place. It would help increase tracking back, for
e.g. we can find out who has keyed a data and what they have keyed and when. In order to
carry out the ERP implementation, Cadbury’s had to align with a n external vendor. For ERP
partnership with Siemens and for infrastructure management ( Help end user desk Functions)
partnership with IBM. The decision for this Siemens was taken centrally at the UK function
we continued on the same so have same systems all over globe functions.
In terms of the visibility achieved through ERP up-to lower Tier levels Cadbury is able to
achieve: Raw materials completely and sales up-to the SKU Level. For the suppliers there is
one portal is run known as Vendor Connect, through this they have access to check the
inventory they provide to Cadbury at our plant premises
Initially Cadbury’s went with Finance and then subsequently to production and supply chain.
They went for a function based big bang approach in India and then implemented the whole
module all across company in span of 1 year so it can be said as big bang as whole.
It was completely top management driven. Cadbury’s have a proper MIS now. Data is
entered only once. The entire system gets updated. One can see the consolidated data from
anywhere and make decisions. From manual entries it has become a totally system driven
data entry now.
The ERP system made a lot of functional changes in the system. Bill material, automation
and integration happened from completely manual process. Booking of the finance entries,
bill material receipts and inventory getting updated, The real time data was made available to
the company wide function for e.g. for production function the end of shift data is available,
for finished goods inventory the inventory levels at all our depots reflects on portal.

The ERP methodology implemented by Cadbury’s can be explained on the basis of the
general methodology approach taken by companies. Following is the phased approach
followed by some leading companies. The various phases in this approach are as follows.
Here, Cadbury’s has tried to combine all these phases into a single phase and implemented
BIG BANG method to implement its ERP Practises.
Phase1:
Project Preparation
Hire key project members, Install Development system, Train internal IT transfers, Select
systems integrator, Project Orientation, Install pre-configured client, Prepare for blueprint
phase
• Configure WHV prototype system
• Detailed work plan
• Revised cost estimate
Phase 2:
Detailed design & requirements
• Process
• Reporting
• Forms
Business improvement Measures, Identify business implications, Project risks &

opportunities, Global application map, Global template system, Finalize global scope,
Revised capabilities roadmap, Draft change management.
Phase3:

Master data conversion, Global template configuration, Exceptions agreement (statutory/local

must do’s), Exceptions configuration, Cycle unit testing, Cycle integration testing, Issues
resolution, Documentation, Begin global training material preparation
Phase 4:
Finalize training program, End-user training, Readiness assessment, Production system prep,
Finalize cutover plan, Communicate cutover plan, Inform external partners as necessary,
Day-in-the-Life (DIL) Tests
Phase5:
Production master data conversion, Execute cutover plan, Monitor process & system usage,
On-site support, Issue resolution, Communicate on-going support process- ESC update at
end of phase
Cadbury laid out a grand plan for their ERP implementation. The installation of ERP systems
of all modules happens across the entire organization at once. The big bang approach
promised to reduce the integration cost in the condition of thorough and careful execution.
This method dominated early ERP implementations; it partially contributed the higher rate of
failure in ERP implementation.
Today, not many companies dare to attempt it anymore. The premise of this implementation
method is treating ERP implementation as the implementation of a large-scale information
system, which typically follows SDLC (Systems Development Life Cycle).
But an ERP system is much more than a traditional information system in the fact that the
implementation of ERP continuously calls for the realignment of business processes. Many
parties involved in ERP software systems are not IT professionals. ERP more than automates
existing business processes. ERP transforms the business processes.
The appeal of the big bang implementation strategy is that it focuses the organization for an
intense and relatively shorter period of time than if the project were phased. This often helps
address long-term resource shortages. It also condenses the pain and difficulty of an ERP
project into a shorter period of time, although the pain is typically more pronounced using
this approach.
The downside of the big bang implementation approach is that the project is often rushed,
details are overlooked, and changes to business processes may not be the best ones for the
organization. And, as mentioned above, the pain is often more severe due to the hectic nature
of this approach. More often than not, my experience has been that projects that implement
an overly aggressive big bang approach are more risky and result in less satisfaction with the
system's abilities to meet important business requirements.
The other end of the spectrum is to follow a slower, phased approach. This can either by
functional business area or geography. The appeal here is that is allows project teams to take
their time in the planning, customization, and testing of the system while continuing with
day-to-day jobs.
The downsides are that these types of phased projects often lack the urgency and focus of a
big-bang project. It can also lead to "change fatigue," which can cause employees to become
burned out on constant change. Instead of getting the project over with in a shorter period of
time, these projects involve constant change over longer periods, which can be draining to
employees.
The Cadbury’s Supply chain network is as shown. ERP has brought about modifications for
the better in these processes.


BUSINESS BENEFITS OF BPR AND ERP IMPLEMENTATION

Meeting the marketplace demands
We are currently in an environment which has drastically changed from a pull system
to a push system, thanks to the increasing interest in entrepreneurs bringing in the same
products and trying to meet the same needs during the era when demand was more than
supply. Before we realized it supply became more than demand because of increasing number
of competition. Cadburys also faces the same situation. Working in the same way as before is
certainly not a solution and will lead to the erosion of the company. Hence it is a proven fact
that change has become mandatory because of the macroeconomic factors governing the
markets. The customers today want more for less. If you do not provide it he is ready to go
for another supplier who can and who will in order to ensure your downfall.
The competition is intense and it’s a red ocean. The customers are also demanding variety
and flexibility at the same time which demands more from the manufacturing side and the
companies have to be on their toes to service customers where loyalty is a lost word.
Retention of customers has become a great strategy in itself now. Organizations have become
complex in order to suit all these needs. In such a buyers’ market, the implementation of BPR
and ERP has its benefits which have become visibly evident.
Improving the functional efficiency of the organization at large
Every company is moving from its conventional system to an integrated flexible

system capable of meeting future needs and the future almost always is very near and is
market driven and one has no control on the same. The companies that haven’t changed have
been faced with high overheads compared to those that have become well coordinated. The
overheads are due to the presence of several non value adding activities that consume
resources. Now companies are becoming leaner (reducing utilities cost) and meaner (reducing
manpower cost). The initial setup in the company had several informal systems operating
which increased the lead time and also the time to market. This led to several disappointed
customers and the remedy to this in the short run has been to increase the inventory and hold
higher stocks so as to reach higher customer satisfaction level and service level. This has
increased the inventory holding cost and locks up money in the system. Hence this causes
cash flow problems. There is lack of accountability within the organization as problems
cannot be traced back and this traceability issue leads to finger pointing and IR issues within
the organization. There are times where the plans get inflated because of inefficiencies built
in the supply chain which expect that the company will not be able to meet the full demand.
This disbelief leads to the bull whip effect and increased cost and for a company like Cadbury
dealing with perishable items it becomes an imperative to attack this issue. There are
schedule mismatches and the company has 26 depots each functioning as a silo and this will
only go on to amplify the impact. This leads to constant fire-fighting which leads to employee
frustration and confusion.

Benefits specific to Cadbury

• Cadbury had operations in 16 locations and 26 depots and all of these were highly
decentralised. The management was looking at ways to sort internal problems and this
is where SAP had come to the rescue
• Cadbury was on a fast paced growth and could not continue with the existing systems
and the pace was too slow due to added inefficiencies down the chain. BPR
implementation handled all the issues and added efficiency and guided the fast paced
growth
• Cadbury standardized the processes within the 16 locations thereby benchmarking the
best practices in the locations and having a marked increase in the efficiency by
bringing all the locations to the same page and the best page.
• The implementation of ERP brought in a new way of warehouse management system

and brought in structure to branch offices and the depots
• The manufacturing in itself had 13 operations and each was operating in a silo. This
had increased the work in progress and the integration of the processes has done well
for the company
• While implementing the ERP systems, the company has built it up on the past
strengths of the company thereby not losing out on its competitive advantage and at
the same time saddling itself up for a fast paced growth
• The initial implementation took time and then the successive implementations took
lesser time and cost and there is a huge advantage in saving cost while in the
implementation phase itself
• The reaction from competition does not matter in this because this is not a change that
was advertised to the market. This is an internal process restructuring and was a
welcome change within the company which badly needed the change
• The company also has built in a robust regular feedback system to monitor the
changes and check if they go according to the initial plan. The entire implementation

is cross functional and hence it is important that there is a high increase in the
efficiency.
• The ERP vendor was also selected from among the best in class vendors which helped
the process occur in a streamlined fashion and avoided any possible chances of
hiccups during the initial implementation phase.
• The system has also been deployed up to the vendors. They have a portal called
vendor connect where they can see their inventory movement and make plans
accordingly. Hence the restructuring happens not only internally but also across to the
supplier which will add on to the benefits that are accrued
• It was considered a low cost and high result implementation which by itself highlights
the success and the benefits.
• There is increase transparency in the organization though there is authorization

involved. This helps to keep the people in the same page and ensures proper
integration
• The company achieved 70% automation in processes and has not eliminated any
process specifically
• The company has a proper MIS (Material Information System) because of this
implementation and the entire process is top driven
• The jobs were classified into complexity base and the high complex jobs were
targeted and automated. No manpower elimination took place. Instead the company
hired manpower
• Bill material, automation and integration happened from completely manual process.
Booking of the finance entries, bill material receipts and inventory getting updated,
The real time data was made available to the company wide function for e.g. for
production function the end of shift data is available, for finished goods inventory the
inventory levels at all our depots reflects on portal.
• A new stock accounting system has been put in place which takes care of freshness of
the product

Learning and recommendations from Cadbury

implementation
• The transition challenges the comfort zone of individuals, teams, business units and
the organization, built over a period of time.
• It is extremely important to generate energy within the team members and creating
ownership in the organization.
• It is important to have a top-driven implementation especially for a company that is

focusing on a growth of 20-30%
• When the top management feels the importance and the need for the implementation
of the system, the implementation is much easier as apropos to the situation where the
CFO has to generate the idea and get the approval for completion of the project within
the specified timeline and the budget
• The support of employees is very essential in the implementation though it is top

driven. There has to be a clear communication of the need and the benefits of the
implementation and the employees have to feel the need of the same
• There has to be clear setting up of accountability and ownership in the

implementation stage and a special team has to be set up for regular monitoring and
control
• The implementation can be tailor made to fit the growth plan. Having only the
necessary modules will also reduce cost and pace up the implementation process
• Starting the integration with the finance module has been a time tested and proven
implementation strategy that works almost every time
• ERP serves as a one stop solution when an organization shifts from a decentralized
model to a centralized lean model where the entire organization is aligned to the
vision and mission of the company

• When integration takes place it is wise to retain the best practices across the
departments and build the implementation on the strengths of the best practices so as
to retain the competitive structure, integrate functions and also become best in class
• Proper training has to be given to the employees during the implementation stage and
monitoring has to take place in order to ensure that the implementation has given the
desired results and that the user acceptance is ensured because of the ease of access
and simplicity of the process
• Several companies do a big bang in one area and follow it up a geographical

deployment of the same after testing the success. Trial runs are very important
• Seldom such activities are tagged as internal process reengineering and are known
only within the organization and hence do not attract reactions from the competitors
immediately giving a head start for the pioneers. Cadbury was a pioneer in this case
• There has to be a proper reporting and documentation system in any organization.

This can be achieved by the implementation of ERP because it automates the
reporting and documentation is available in electronic media
• Gradually it makes sense to integrate vendors also so that the entire structure in and
around the organization gets leaner. In the demanding environment luxury will soon
become a necessity and it is important to keep improving
• It is essential to look at total cost of ownership and identify if the implementation will
yield results. The study can be done using NPV or payback period analysis
• ERP most of all gives a transparency in a system that facilitates overall growth and
empowers the people and motivates them as they know what’s happening in the
organization. Transparency brings in integrity.
• It is essential to alter the key performance indicators of the employees and add the
implementation success to the indices to ensure even participation and to answer the
“What’s in it for me?” question that arises in the minds of those people who have to
spend additional time out of their work for the implementation
SAP Project has to be analyzed from the total cost of ownership perspective:

• Hardware costs
• Licensing costs
• Training and knowledge transfer costs
• Personnel costs


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S.P.

JAIN INSTITUTE OF MANAGEMENT & RESEARCH

Study of the BPR and ERP implementation activities in Cadbury

PROJECT SCOPE: .................................................................................................. 3

CADBURY’S CRITICAL BUSINESS PROCESSES........................................................5

Distribution & Logistics.......................................................................................9

Finance & HR...................................................................................................... 9

Cadbury India High Level Business Process Map.................................................11

The Level 1 business processes........................................................................12

Level 2 Business Processes..............................................................................12

Type of BPR implementation................................................................................15

ERP IMPLEMENTATION METHODOLOGY CHALLENGES.........................................18

BUSINESS BENEFITS OF BPR AND ERP IMPLEMENTATION....................................24

Benefits specific to Cadbury................................................................................26

Learning and recommendations from Cadbury implementation..........................28

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S.P. Jain Institute of Management & Research

S.P. Jain Institute of Management & Research

CADBURY’S CRITICAL BUSINESS PROCESSES

Cadbury Ltd is a manufacturing and distribution company, its products include:

The characteristics and required performance indicators of perishable FMCG products:

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S.P. Jain Institute of Management & Research

S.P. Jain Institute of Management & Research

Following processes are involved in production planning:

1. Define machine families, Shift hours and manufacturing capacity

6. Prioritize workload and process jobs.

An efficient production planning system at Cadbury will enable it to achieve:

1. Supply chain optimization. The system can connect to an MRP.

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Distribution & Logistics

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Cadbury India High Level Business Process Map

Cadbury India PLC is essentially a manufacturing and

The business processes of the company are aligned to its

Figure 2: Cadbury India Supply Chain

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The Level 1 business processes

Sales and Operations Planning

10. Production & Inv

12. HR, Reporting & Financial measurement

Level 2 Business Processes

1. Sales and Operations planning

2. Master Resource Planning

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10. Manage Production Processes

a. Manage Production Network

11. Provide Human Resources (HR) Support

a. Develop Human Resources

12. Provide Financial Support

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a. Perform Accounts Receivable

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Type of BPR implementation

Business process reengineering (BPR) began as a private sector technique to help

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BPR is primarily categorized as:

Clean Slate Advantages Technology Enabled Advantages

Retain competitive advantages Tools focus reengineering

Not subject to vendor changes Process bounded, thus easier

may be only way to implement advanced know design is feasible

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• Range availability at the distributor

• Range availability at the depot