The project will provide Tyson team members with a common view, platform and standard process for managing customer relationships, improving visibility and accuracy in procurement and inventory management and managing all financial information across the company.
In addition, IT provider SAP and Tyson Foods will work together to further enhance a catch weight management application for tracking variations and assessing value between product orders and shipments.
"To achieve our goals for the integrated Tyson organisation and take the relationship between business strategy, benefits and the supporting technology to the next level, we have selected SAP as the technology foundation that will standardise our operating units on best practice business processes across the organisation," said Tyson Foods chief information officer Jeri Dunn. "By choosing to implement a single, integrated technology platform from SAP, we can more rapidly achieve the benefits of the combined organisation and provide Tyson with a strategic and competitive advantage going forward."
The SAP software will provide Tyson Foods will a closed-loop, integrated approach to improve the management of promotional spending, more effectively plan promotions with retailers and analyse promotions on key performance indicators such as total trade expenditures, profit impact and incremental return on investment. mySAP customer relationship management (mySAP CRM) ties together an end-to-end trade promotion management process that extends its value across the entire enterprise and to business partners.
Tyson, which employs 120,000 staff in 22 countries, will also have the ability to process and interpret financial and business data, handle financial transactions and manage profitability, business performance and growth. The technology platform will give company-wide control and integration of financial and business information essential to strategic and operational decision-making and will enable Tyson Foods to track financial accounting data within an international framework of multiple companies, languages, currencies and books of accounts.
Tyson will also have an in-house strategic sourcing function to capture quick, significant and sustainable cost savings without recurring expenses for managed services or systems integration. Using a common platform for sourcing and procurement will help ensure higher contract compliance and better spend visibility across all operating units within Tyson.
As part of the agreement, Tyson Foods will work with SAP in further enhancing catch weight management applications for the consumer products industry in capturing the value in measurements of incoming orders, which are placed by the case, and outgoing shipments, which are measured in pounds and ounces.
"This significant expansion of SAP's relationship with Tyson Foods shows SAP's unique ability to establish early success working with our customers and to deliver increased value over time," said SAP America president Bill McDermott. "SAP is teaming with our customers -many of whom are global industry leaders - to maximise efficiency for consumer products companies and to develop innovative new applications that address key areas of revenue growth, customer satisfaction and operational excellence."
Stringent legislation, consumer concerns about food safety and growing pressure from retailers have forced food manufacturers to look at every possible means of ensuring traceability and efficiency throughout the supply chain. Global processors such as Tyson have a huge task of coordinating every aspect of their international business, and have increasingly turned to IT solutions. The importance of technology platforms such mySAP is that they facilitate greater interconnectness in every aspect of the food supply chain.
Legislation has been a significant driver. The recent US Bioterrorism Act and forthcoming EU legislation on traceability have added to the pressure on manufacturers to get their house in order and be able to trace products right through the chain. The problem traditionally has been a lack of investment in the food production sector; technical upgrades have tended to be carried out on a one-off basis and there has often not been a strategic approach to implementing supply chain traceability.
This is now beginning to happen on the manufacturing side, through tracking and tracing and through closer collaboration with retailers. Industry experts believe that over the next few years, manufacturers will have achieved significantly tighter control over their processing and packaging operations.
Ultimately, it is in the manufacturer's long-term interest to invest in a system that can trace and organise operations from start to finish. The cost of compensation or a product recall means that the cost of installing a technology platform is less of a factor than it ever was.