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:
2003/04 FINALS RESULTS & PHOTOS!
- October: Obtain the problems from
this web site. We may make additional details available, so check back
- 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
- 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.
Challenge #1: Recommend 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.
- 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
- 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
- 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
- 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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Challenge #2: How can Human Resources (HR)
effectively transform to add more value to the business and enhance internal
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
Assess current situation, externally and
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,
B) Assess HR long-term strategy,
C) Corporate business goals.
Assess potential desired state HR
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
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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:
- 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
- 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.
- 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
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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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?
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.
types of things could a carrier or shipper like Hershey do (either independently
or together) to help attract and retain drivers.
Trucking Association, Individual Transportation Companies
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?
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
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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