The Hershey Company
Assembly Line
Unwrapping Hershey’s $250M manufacturing upgrade
The investment aims to digitize and automate Hershey’s processes, optimize procurement and manufacturing, and accelerate R&D and planning to boost visibility and streamline operations. Through the initiative, Hershey will be able to better integrate demand planning and bring more automation to the supply chain.
The lack of visibility prompted Hershey to unify its new business units under a single umbrella through an ERP integration using software provider SAP’s S/4 platform. “S/4 was an important foundation,” Buck said at CAGNY. “It enables us the end-to-end connectivity to better identify where there’s redundancy and take that and complexity out of our system.”
Technology is a pillar of Hershey’s current strategy, and the company appointed its first-ever chief technology officer in 2023. Deepak Bhatia came to Hershey after 12 years at Amazon, where his most recent role was VP of supply chain optimization technologies.
Visibility and real-time data also allow plant managers to proactively maintain lines, advancing the initiative’s goal to optimize manufacturing. Data analytics could reveal the best times to clean equipment so it doesn’t interfere with a production run, or when to replace a part before it breaks and causes longer-term issues.
The AAA initiative is slated for completion in 2026. From there, Hershey expects to save $300 million annually, with 30% of the savings from supply chain productivity. This year alone, Hershey expects to save $100 million, with $10 million coming from supply chain savings and the remainder from SG&A.