Tyson Increases Relationship With SAP Apps

Like many consumer packaged-goods makers, Tyson Foods Inc. has found tracking the promotions it shares with the many retailers who sell its products to be a challenge. Thanks to a new commitment to deploy SAP applications, the maker of chicken, beef, and pork products hopes to get a more integrated view of all its promotional programs. The key component may be a piece of software that's a cousin to customer-relationship management apps, known as trade-promotion-management software.

The companies disclosed an expanded relationship Monday, with Tyson planning to implement much of the mySAP Business Suite, including an application for managing promotions, as well as financials, procurement, and customer data. The deployment will build on Tyson's use of SAP's human-resources application to manage payroll and other employee-related processes. Terms of the deal weren't divulged, but SAP says it's one of the most significant contracts it's signed in the last year.

Tyson CIO Jeri Dunn says turning to trade-promotion-management software to obtain a more complete view of promotional activities represents a big change for the company, which has seen promotions managed from multiple systems because retail customers are buying different product lines from different sales reps. Consumer packaged-goods companies also typically go in on promotions with their retail partners, so it's hard for them to know who benefited more from a given promotion. They sometimes may be unaware that a promotion failed because the retailer fell behind in restocking shelves. Trade-promotion-management software is designed to take the mystery out of the arrangement by tracking promotions across the company and analyzing related sales information to spot any problems and determine the precise value of promotions. "I want to make sure I get the lift, or the increased revenue, from the money that I've spent," Dunn says. "I want to make sure they sell that product, and that I get the increased revenue. I need to know, was the promotion profitable, and was it money well spent?"

Dunn says the decision to deploy a suite of core applications from SAP was based on the logic of being able to easily integrate what are increasingly becoming interrelated business functions. By linking promotions with supply-chain processes such as demand forecasting, for instance, Dunn says it's possible to ensure that production schedules take into account promotional activities.

Additionally, Tyson has been planning to establish a common information backbone since it acquired beef- and pork-maker IBP Inc. in 2001, creating Tyson Fresh Meats Inc. It already had standardized its payroll across the expanded company on SAP. "We got common about how we treat our employees with SAP," says Dunn. "Now we need to get common about how we treat our customers and suppliers."