Hershey Entertainment & Resorts bills itself as “The Sweetest Place on Earth,” but its procurement and accounts payable processes were pretty sour.
The sprawling Pennsylvania site, founded in 1927 when Milton S. Hershey separated his chocolate manufacturing operations from his other businesses, includes The Hotel Hershey, Hersheypark, The Hershey Lodge, numerous restaurants and affiliated shops to name a few. Hersheypark is a 110-acre theme park with more than 70 rides. The hotel has 276 guest rooms, the Lodge 665 rooms, as well as four restaurants, and there’s a 55-acre camping resort with 300 sites and a 10,500 square foot museum.
Now, imagine manually matching POs, receiving documents and invoices for payment. Not only that, but many of these processes varied by property and division, making tracking and accountability of spend difficult. Hershey needed a Procure-to-Pay solution that would meet three needs:
- Streamline procurement and account payable capabilities
- Improve spend management and visibility
- Improve the management of vendors and contracts
In addition, Hershey’s vision was looking down the road to a system that could manage inventory as well. Although not an immediate requirement, the ability of a solution to handle this would be a plus.
The Solution
Hershey approached the always challenging search with a well-thought out plan. First, the company established an e-procurement project team comprised of key internal stakeholders. Next, it conducted a Needs Assessment by surveying all employees and departments that would be impacted by a new system. Finally, they conducted a thorough supplier research and selection process.
Through a series of interviews, references and demonstrations, Hershey identified a provider that would meet its needs, within its budget and have the ability to grow along with their procurement organization. Hershey’s choice for its Procure-to-Pay solution: Puridiom 4.3 Enterprise Cloud Solution.
The Implementation
Hershey’s procurement transformation began in mid-July, 2011, and its first electronic purchase order was submitted in December of that year. This was achieved by establishing a dedicated implementation team with an e-Procurement coordinator. They developed a specific implementation plan and with careful coordination with the Puridiom Project Manager they set manageable goals. Communication to all involved was mandatory and critical to success.
Importantly, suppliers were involved early on in the process so that they would also be able to reap the benefits of the new procurement system. As an entertainment organization, reliable suppliers are of utmost importance. Creating the connection between the new procurement solution and suppliers was essential. To accommodate this, Hershey developed a Supplier Enablement Plan that helped to transition suppliers into the new system through consistent and effective communications.
Hershey also implemented electronic invoicing. They chose to do this one year after they went live to ensure once again that all the groundwork had been covered, users and suppliers were adequately trained and informed, and that expectations would be met. They initially worked with one supplier to test the process and make sure that all steps were being followed correctly. Carefully monitoring the process, gently reminding users of the procedures, and continual training resulted in the current status of:
• 597 users in the system
• 1037 suppliers registered
• 44 hosted catalogs
• 10 punch-out catalogs (two more are in the works)
Training
As with any new process, there are those that will resist change. This was true for the Puridiom users and Hershey suppliers. Training was and is required for all users of the Puridiom system and users were not allowed to access the system until training was completed. Hershey found the optimal class size and utilized the training guides and videos provided by Puridiom. The e-Procurement coordinator gathered helpful tips and published these weekly, which greatly improved the user adoption rates.
Hershey employed a systematic, step-by-step approach that kept communication and training at the forefront. The result was continued success with increased user adoption. The results, in a very short time frame, are impressive:
• 2011—16 purchase orders, $8,027 spend under management
• 2012—9,242 purchase orders, $12.1 million spend under management
• 2013—17,670 purchase orders, $20.1 million spend under management, and 2,619 electronic invoices processed
Keys to Success
The path to procurement transformation for Hershey did not happen overnight. The implementation demanded careful planning and alignment of stakeholder goals during the entire process. Open communication and visibility with procurement and finance was key, as well as active and constant collaboration with all departments in the organization.
Specifically, Hershey found that senior management support is a must, total company engagement is required, expectations must be tempered—do not expect to be fully automated overnight, and the benefits of having a Procure-to-Pay solution are a direct correlation of the time and effort invested in it.
The Future
Hershey has a timeline defined for its procurement success. The next steps include the implementation of administrative check requisitions and the Puridiom Budget module.
About Puridiom
Puridiom, a recognized leader in the Supply Chain, offers innovative technology solutions, industry-specific strategies, and best practice expertise to achieve best-in-class results. For over 30 years, Puridiom has successfully transformed procurement and accounts payable operations and delivered real savings, control, compliance, and accountability to spend activity. Puridiom serves many global organizations within diverse industries, including energy, insurance, financial, entertainment, government, healthcare, and non-profit. Solutions and services include stand-alone modules, a comprehensive procure-to-pay suite, cloud / SaaS and on-premise deployment platforms, and business process outsourcing options. Discover real savings and learn more at www.puridiom.com.
About Hershey Entertainment & Resorts
Hershey Entertainment & Resorts is a world-class entertainment and hospitality company dedicated to preserving the legacy of Milton S. Hershey. It is a privately held Pennsylvania corporation, founded in 1927. There are currently 1,650 full-time employees and 7,400 part-time and seasonal employees.
