As the workers left, the company replaced them with temps until the new warehouse opened, but the temps were not able to handle the job and service deteriorated significantly. FoxMeyer was forced to open the new warehouse before the problems were corrected. The result was the crippling of the warehouse inventory management system and ultimately customer service. The Delta Information System failed because FoxMeyer’s management neglected to understand the complexity of the project. They also did not recognize the risks, timelines, resources and testing in the implementation process. Furthermore, the technological factors related to the lack of understanding and knowledge of the intricacy of the system. The result was a system that was nonfunctional and inadequate. FoxMeyer’s stock suffered heavily from the automation problems. Their stock, which reached a high of $26 per share in 1994 when the Delta Information System project was announced, dropped to about $3 per share by December of the following year. (Bulkeley, 1996) The company eventually filed for court protection under Chapter 11 of the Federal Bankruptcy law. A spokesperson for FoxMeyer, claimed that "fundamentally, the computer-integration problems we had were a significant factor leading to the bankruptcy filing." (Madden, 1998) Later, the McKesson Corporation purchased the FoxMeyer Drug Company. They bought the company at the bargain price of a mere $80 million in cash. Interestingly, it is obvious that the Delta Information System’s technology was capable of functioning as designed, since McKesson Corp made the technology work, including the automation of the warehouse.In the competitive world of business, changes must be made to stay on top. Often, information technology is the change a company needs to ascend them ahead of the rest. In the case of FoxMeyer’s Delta Information System, the technology was ready and capable; however, the ...
