J&J Snack Foods’ ERP Implementation Woes

Ask anyone how easy the job is for someone involved in a major IT systems project, particularly one involving enterprise resource planning or ERP, and he will flick a look of hate and might even stop talking to you for the day. ERP implementation is one of the most hated roles in IT adoption for companies over the last decade, and it has led to thousands of burned-out project managers every year. The latest debacle at J&J Snack Foods Corporation is no exception.

J&J Snack Foods decided to move forward with a new ERP system in early February of 2022. Since then, the new system with promises of greater efficiency and more insight for management decisions has instead turned into the primary source of delays in operations and a massive year-over-year drop in earnings. J&J Snack Foods’ net income was down almost half to $3.3 million from $6.06 million, even with net sales up 10 percent to $281.5 million from $256.18 million. The root cause sits squarely in the problematic ERP system being run through its paces, which many critics are positing was a jump too far or too early. However, Daniel Fachner, the company’s CEO, continues to stick to his guns that it is a necessary change to boost J&J Snack Foods’ supply chain properly.

The expectation, a common one repeating the mantra of ERP sales slogans, is that the new system will give J&J Snack Foods a far more integrated approach from supply to order fulfillment, including dozens of operational-related benefits as well, such as greater inventory capacity and growth. Unfortunately, these buzzwords need metrics behind them, which are not materializing due to the new system not working yet. That said, Fachner believes the worst is behind them with April, and the new system will produce expected savings over the summer. J&J Snack Foods will need something quick; thanks to inflation, the company is having to increase its product pricing to offset inflation impacts on supply expenses and food stock materials.