Tyson Beefs Up

As the consumer goods landscape changes due to the mergers and acquisitions driven by the industry's leading players, the question of how the combined companies manage and integrate separate I.S. entities into a new whole becomes paramount for long-term success and efficiencies across the enterprise and supply chain.

Tyson Foods SVP and CIO Jeri R. Dunn, who has been previously referred to in the press as the quintessential global IT executive, is currently addressing this exact question. Dunn is leading one of the most dramatic and extensive I.S. integrations in the history of consumer goods manufacturing, bringing together the I.S. groups of the "old" Tyson Foods and its October 2001 acquisition, IBP Fresh Meats.

"When I came onboard, many areas of the company had already gained significant synergies, but the I.S. integration had not begun. I.S. was still operating from both the major IBP I.S. shop and the major Tyson shop," says Dunn. "The only difference being IBP had previously acquired around seventeen other companies and had already integrated those smaller companies onto the Tyson backbone, but nothing had been done to combine the 'two giants.'" That situation is changing rapidly, as Dunn reveals in this exclusive CGT interview about the new Tyson.

The New Tyson

When Springfield, Arkansas-based Tyson Foods acquired Dakota Dunes, South Dakota-based IBP Fresh Meats in 2001, the move propelled Tyson from its chicken roots to becoming the world's largest provider of protein product on the planet -- the world leader in producing and marketing beef, pork and chicken, or, as the company refers to them, "the proteins at the center of the plate."

According to Dunn, from a systems standpoint, both companies, IBP and the old Tyson, did a very good job of supporting their businesses with the systems they had in place, which represented a wide range of homegrown and mainstream technologies. "But when the two companies came together," says Dunn, "neither set of systems was going to suit the business the new Tyson was representing. The older systems were not scaleable nor robust enough for the new organization."

That new organization is defined as "a consumer products branded company and a protein powerhouse." Company chairman and CEO John Tyson recently announced a $100 million fully integrated marketing campaign to bring that message to consumers and Tyson's partners in all channels.

When Dunn, who is a member of the Consumer Goods Technology editorial advisory board, arrived at $24 billion (sales) Tyson in late July of 2002 from her previous post as CIO at Nestlé USA, her number one assignment was to integrate the Tyson and IBP I.S. shops, but not from the old chicken nor the old beef perspectives.

"When I came to Tyson, John Tyson, who is extremely visionary, said to me, 'we need to put the systems in place so they can support the new Tyson, not the old poultry business, not the old fresh meat business, but the new Tyson,'" Dunn recalls. So with the chairman's support and that of other senior management, Dunn says, "We put together a project team called 'Project Won,' w-o-n, but it has the play on words with o-n-e."

Management's I.S. Vision

At the outset of the assignment, Dunn took a group of senior executives offsite to draw a picture of what the new company and its processes could look like and came back with the forty-thousand-foot view. "We wanted the project team to be looking at what we need to do to compete against other CPG companies," Dunn explains. She then conveyed management's perspective to the team, saying, "this is where we think the industry is going to be and this is where we think Tyson needs to be." With strong senior management direction, the project team is now bringing the vision from forty thousand feet to ground zero. In the end, Project Won will determine what Tyson needs to compete with other consumer packaged goods companies going forward.

Using Tyson's highly successful food service division as her example, Dunn says, "We don't want to break anything that's going real well there, but we do want a challenge and we're using a methodology that says honor the past, challenge the present and create the future." She emphasizes, "It's not like either of the companies (Tyson and IBP) were doing anything wrong in the past, it's just that the requirements have changed for where we're going in the future."

Creating Project Won

The core Project Won team Dunn created has approximately seventy people on it, both internal and consultant, determining what the new Tyson's business processes should look like. According to Dunn, the project team has almost equal representation from the different Tyson companies -- all the companies, not just the two "giants." What they are looking at is: in its entirety, what should the new company look like? What should its processes look like? And if the processes change, what should the new I.S. organization look like that will support those processes?

As part of its ongoing work, the core team runs a series of design workshops where it does a lot of straw-man building. Specific subject matter experts from different areas of the new Tyson are invited to attend and participate in a process design workshop. Then the core team takes their input, documents it and continues the design work. In addition, Tyson uses what Dunn describes as "trans-functional challenge sessions," where cross-functional teams "kick the tires" on the team's process work and intermediate conclusions. Dunn says by using the cross-functional approach, "We get the knowledge and intellectual capital from the folks who have it onto the core team, so we're getting representation from everywhere."

The project kicked off in early February and Tyson is looking at the end of May to be down to the fifteen-thousand-foot view. From there, the project will move into its "blueprint" phase where the team will actually do configurations, functional specs and technical specs.

Vendor Challenge

CGT asked Dunn in what ways she thought the Tyson approach to technology was unique in relation to other consumer goods firms. Several things came to her mind, all of which pointed to the same conclusion: Tyson is looking to lead, not follow. To that end, Dunn has issued an appropriate challenge to Tyson's technology partners.

"I don't want my technology partners to just come in and tell me what the best practice is for me to catch up with. I'm asking them to provide leadership so that we leapfrog and become the company that others want to copy," says Dunn. She further explains, "What we're looking to do is take away the preconceived notions of what we did in the past, and what other companies are doing today, and really start thinking about what we think the technology landscape and architecture is going to be in three years' time."

Dunn wants her partners looking ahead now to see what technologies will be commonplace in three years, so Tyson can get them in place near-term. "We are taking that approach, and we're trusting our vendors, our strategic partners, to play a key role in making that a success."

Tyson is also looking to completely leverage the range of skills its technology partners have gained from clients in other industries. It views that breadth of vendor experience as the path to becoming a product leader. "For instance," says Dunn, "FedEx can track an envelope all over the world -- we want that same rigor in tracking a case of beef."

Adjusting the I.S. Organization

Another "giant" in this story is the tale of the successful integration of the old Tyson and IBP I.S. organizations. "We had to look at our organization and say, we're not going to be two anymore, we're going to be one organization," says Dunn. As a result of being one, the company had to combine some functions and deal with redundancies in jobs. "And something that's a hard thing to go through is to decide who's going to end up with a job and who's not at the end of the day," admits Dunn. "Everything was done, we think, as fair and just as we could possibly do."

What Tyson actually did, was have every single person in the composite I.S. department reapply for their position. Says Dunn, "From our perspective, that allowed us to choose the best and the brightest from both organizations to be part of the one organization that was left. But, obviously, whenever you are impacting your team members' lives, that is a difficult period to go through."

Becoming One

For today's 120,000 team members -- that's what Tyson calls its employees -- one technology integration accomplishment is particularly impressive to Dunn. As of January of this year, all Tyson team members are now paid through a single SAP HR system. From the Tyson perspective, which is now based around creating one organization from its many parts, getting a hundred and twenty thousand team members onto one HR system is a huge accomplishment.

According to Dunn, "The biggest thing you need to be one is to have one paycheck coming out with the same name on the logo of the check."

Tyson is also taking a holistic approach in Project Won to the integration of manufacturing information from the shop floor. "As we're designing this project, we're really trying to take the information from the shop floor and put our MES layer on it, integrated into our ERP." One key change Tyson has made in this area is having the process logic control team members, who used to report to engineering, now report to I.S. "We're really looking at manufacturing from a holistic perspective as opposed to equipment that's on the shop floor." Now the company can take information such as oven temperatures, refrigeration, cooling, etc. into the enterprise system so it has true linkages to what its total costs are.

It should come as no surprise that Dunn sums up the situation this way: "This is an extremely exciting project to be working on."