Is The Global Supply Chain Project Still Sweet For Hershey?

Back in February 2007, Hershey announced a three year Global Supply Chain Transformation (GSCT) project that would cost the company between $475 and $525 million. Today Hershey announced its fourth quarter and full year figures for 2008, which showed that less than two years into the Supply Chain project, the cumulative charges have reached $530 million. Hershey have now estimated the cost of the GSCT project to be between $575 and $600 million.

The GSCT project has aimed to transform the way Hershey does business by creating Center of Excellence driven manufacturing, geographically dispersed sourcing and improved asset utilization. This has led to a reduction in a number of production lines in the US, including the shutdown of the facility in Oakdale, California, and the construction of a cost-effective production facility in Monterey, Mexico. Hershey published that the GSCT has resulted in cumulative savings of approximately $81 million and the estimate for total ongoing annual savings by 2010 is $175 million to $195 million.