Choc-o-holics Rejoice

Hershey increases logistics capabilities

Waukesha, WI  May 8, 2001  Supply chain management company McHugh Software International has announced that Hershey Foods Corp. is following up the rollout of McHugh's DLx Warehouse and DLx Labor components of DigitaLogistix at Hershey's Eastern Distribution Center (EDC III) with a new implementation at their Southern California distribution facility. Hershey is currently considering DigitaLogistix for other of its distribution facilities as well.

Hershey is the leading candy maker in the United States, controlling almost 30 percent of the U.S. candy market. In the autumn of 1999, Hershey lost millions in candy sales when the implementation of an enterprise resource planning (ERP) system slowed product shipments to retailers. However, Hershey's logistics problems have gone the way of penny candy thanks to a redesigned distribution network, including a new 1.2 million square foot Eastern Distribution Center located in Palmyra, PA, which opened in June 2000. The new EDC III replaced several "surge" storage facilities to provide more streamlined distribution and better service to retailers. "This state-of-the-art facility has enabled us to reduce distribution costs while improving our service to customers," said David Menicheschi, Hershey director of distribution. "Customers have regained faith in our ability to deliver the goods."

As part of the rollout of EDC III, Hershey implemented McHugh's DLx Warehouse solution. It directs much of the routine logistics work done at the DC, such as receiving the goods from production, putting them away, picking selected goods to fulfill retailers' orders, staging the orders for shipment, and directing the loading of orders onto outbound trucks. Hershey also implemented McHugh's DLx Labor solution to provide better management control and labor productivity for their 650 DC workers, including about 300 employees who work in the 150,000 square foot Co-Pack operations within the facility.

"McHugh is definitely a continuing part of the solution," said Menicheschi. "We hadn't worked with McHugh previously, but their team showed a good understanding of our needs and worked closely with us to make the launch of EDC III successful. Based on this success we selected McHugh for our Southern California distribution center as well, and we are currently considering rolling out McHugh for other sites."

Ken Miesemer, Hershey project manager, wrote a detailed case history of the development of EDC III for the Warehouse Education and Research Council (WERC). Copies are available from WERC and McHugh Software.