Tyson's Digital Outsourcing May Strengthen Its Global Supply Chain
Tyson Foods, Inc. (NYSE: TSN) isn't a name that brings high technology to mind – pork and poultry farms seem far removed from the clean, abstract world of IT networks and satellites. But behind all the oinking and clucking, Tyson has detected a need for some powerful digital upgrades if it's going to keep its facilities full of porkers, chickens, and beeves competitive as it pushes aggressively into the cutthroat international meat market of the 21st century. To do that, it's looking to a third party digital service company and downsizing its in-house IT department, all in the name of rounding up bigger profit growth in the near future.
Tyson's need for high quality, ultramodern IT infrastructure to manage its business comes from its evolving business model. According to research cited by Tyson, 98% of growth in demand for protein (that is, meat) during the next five years will happen outside the USA. While the meat industry will continue to sell within America's borders, demand is at or near its peak, and it may even decline as plant-based meat substitutes continue gaining popularity.
Tyson has to coordinate large-scale operations across the globe in real time to remain competitive. The need for high-speed information technology to support this is key to making the entire plan succeed. Managing a supply chain that stretches across multiple continents, meeting both global and local standards, responding rapidly to shifts in demand, and predicting consumer trends in remote, widely varied markets all require a reliable and lightning-fast digital "central nervous system" to achieve.
Source Fool.com
