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2003/04 Challenges

Hershey Foods Corporation is the leading North American manufacturer of quality chocolate and non-chocolate confectionery and chocolate-related grocery products, and has a variety of international operations. Hershey is offering five challenges from four different areas of the company:



  • October: Obtain the problems from this web site.  We may make additional details available, so check back often. 
  • March 15, 2004: Postmark date for completed written solutions.
  • April 8, 2004: Team Coordinators will be notified.
  • May 11, 2004: Final oral presentations will occur at Hershey Foods Corporate Headquarters.


  • Be sure to view the rules, registration and forms for submitting your solution.
  • Teams are encouraged to submit all documentation for Hershey Foods challenges in electronic format to the following email address: LGR@epix.net
  • Acceptable formats are: Word (.doc), Excel (.xls), PowerPoint (.ppt), and simple text file (.txt). If separate graphics or scanned images are included, they should be in gif, jpg, or jpeg format.

Hershey Direct

Challenge #1Recommend how Hershey Direct can personalize chocolate moulded cards to meet the strategic growth plan, while ensuring quality, accuracy, and on time delivery to customers.

Background: Hershey Direct personalized approximately 200,000 cards in 2002 of which 84% were personalized over a six week period. The six-week seasonal demand will remain a constant ongoing. Projected growth in 2003 will require the personalization of approximately 220,000 cards. Hershey Directs’ Strategic Plan will require personalization of 260,000 cards in 2004, 325,000 cards in 2005, 400,000 cards in 2006, and 500,000 cards in 2007. Currently all personalization is done by hand, using common pastry decorating bags, requiring large volumes of seasonal part time labor.

Expectations: The student team is expected to recommend how Hershey Direct can meet business growth demands in the Personalization facet of order fulfillment. Current facility space and layout constraints, local labor pool, and cost to personalize should be taken into consideration. The recommendation should also take into account order information to personalize cards only becomes available as orders are placed during the seasonal six week curve.

Suggested Approaches/Considerations:

  • Review the current moulded card offering in the 2003 Hershey Direct Fall catalog and at www.HersheyGifts.com.
  • Consider Hershey Direct current personalized order fulfillment processes.
  • Review like processes via the Internet to benchmark other companies with like processes.
  • Investigate third party personalized order fulfillment opportunities.
  • Investigate automation with the flexibility to personalize unique messages per card.
  • Consider in-house training during non-peak times to develop personalization skills.
  • Partnerships with Culinary and Arts schools.
  • What metrics can be used to measure the success of a recommendation.
  • Investigate cities that abound with Culinary type schools and business to leverage location specific labor pools.
  • Recommend off peak business opportunities that are good fits to level the seasonality of personalization allowing for full time staff opportunities.

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Human Resources

Challenge #2:  How can Human Resources (HR) effectively transform to add more value to the business and enhance internal perceptions?

Background: In many organizations, true transformation of HR is only beginning to take hold. The traditional HR function of employee service and "policy manufacturer" will substantially disappear. Through process re-engineering & standardization, sophisticated technology implementation, and increased employee responsibility of interactions, HR will successfully migrate to a new, more value-added role within the company structure. This evolution, however, is difficult, as company culture, internal perceptions, etc. can often impede progress.

Details: HR work can be evaluated in terms of process cost/benefit, key process metrics in place, Hershey Foods employee survey (conducted every 12-18 months), and correlation of key metrics to corporate performance.

Suggested Approaches/Considerations:

Assess current situation, externally and internally.
A) HR work assessment (what work is truly adding value to the business? What criteria best assesses this? What less value work can be eliminated, streamlined, etc.?
B) Assess HR long-term strategy,
C) Corporate business goals.

Assess potential desired state HR operations/functions.
A) Evaluate best-in-class HR operations (external),
B) Review current periodicals/literature, etc.

Evaluate gap between current and desired state. Determine potential obstacles for successful migration of HR Organization.

Based on assessment, prepare action-oriented recommendations over a three year period that will evolve HR to a more value-added business partner.

Suggested Resources: Current Literature: HR Magazine, Society of Human Resources website (www.shrm.org), HR Online (www.hronline.com), Corporate Leadership Council – HR Initiatives, select Harvard Business Reviews, et.al. business periodicals; Current books, etc. Networking with various Human Resource Professionals.

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Recycling Center

Challenge #3:  Hershey Foods generates over 10,000 tons of cocoa shell mulch every year. Hershey Foods Recycling Center is responsible for locating safe and economically profitable markets. The challenge is primarily marketing in nature. Ideas should reflect ways to find new cocoa shell markets, increase sales, eliminate pet safety concerns, and create year round demand. 

Background: Cocoa shell mulch sales have been flat for the last couple years.  Currently, the cocoa shell mulch is packaged and sold 3 ways. These 3 ways are:

  1. The most profitable market is bag sales. Each bag weighs 28 lbs. and contains 2 cubic feet cocoa shell mulch. Customers include Landscape Designers, Home and Garden Centers, Nurseries, and Grocery Stores.
  2. The second most profitable market is trailer bulk sales. A trailer containing cocoa shell mulch is about 20 tons. Most cocoa shell sold by the trailer goes to the mushroom industry. Cocoa mulch makes an excellent soil for growing mushrooms.
  3. The third most profitable market is bulk tote bins. Each tote bins weighs about 1,000 pounds. Most cocoa shell sold by the bulk bin is for Landscape Designers.

Details: Be sure to include budgeting considerations. Your marketing budget is $10,000 and must not be exceeded!

Suggested Approaches/Considerations:

Hershey's Cocoa Mulch Website: www.hersheyscocoamulch.com 

Upon request a factory tour can be scheduled in advance to support formulation of your idea.

Hershey's Recycling Team is working on compiling video footage of the recycling operations.  We hope to make it available here very soon.  Please check back!

For additional information, or to request an advance tour, please contact Bill (717) 534-5417, or Michelle (717) 534-4392.

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Transportation Department:

Challenge #4:  There is a nationwide shortage of truck drivers in the US and it looks like the gap between supply and demand of refrigerated truck drivers is growing. What can the industry do to attract more drivers and lessen turnover?

Background: The current pool of truck drivers is comprised mostly of men over the age of 40 and there aren't many younger people entering the profession. Also the turnover ratio for many companies is around 100%. Something needs to be done to attract more drivers before the current workforce reaches retirement age and to keep existing drivers in the industry.

Details: What types of things could a carrier or shipper like Hershey do (either independently or together) to help attract and retain drivers.

Resources: American Trucking Association, Individual Transportation Companies

Suggested Approaches: Be creative! In a tightening economy, it is unrealistic to solve this problem by solely offering more money. What would draw a younger workforce, what would keep a driver happy with his/her job and lessen turnover …..

Judging: We are looking for something realistic and innovative that could be implemented without detrimental effects to Hershey, the carriers or other supply chain partners.

Challenge #5:  Hershey's products have an extreme seasonality curve that makes it difficult to maintain temperature controlled transportation capacity. How could we continue to support customer demand while ensuring temperature controlled transportation capacity?

Background: Hershey Foods, like many manufacturing customers, has different seasons. The largest of those seasons is BTSH (Back to School, Halloween). Hershey ships roughly 25% -40% of our annual volume during the months of July, August and September. This shipping season also coincides with other manufacturers' main shipping seasons. For these three months, there is a shortage of equipment as demand exceeds supply.

Details: What can be done to ensure that Hershey has enough temperature controlled transportation capacity to meet its needs?

Resources: American Trucking Association, Individual Temperature Controlled Transportation Companies, Individual Food Shippers, Various Government Economic Industries

Suggested Approaches: Be very creative! Throwing money is not necessarily the answer. Think more along the lines of relationships building and partnership. How would you build these relationships that would be profitable to everyone?

Judging: Although potential solutions to this problem are highly subjective, we seek a realistic approach to a complex problem. The answer must be a win-win for all parties involved.

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