Trade Spend Transformation at Tyson FoodsMelissa Montero

05/19/2016

Overview

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Founded: 1935

Original Founder: John W Tyson

Headquarters: Springdale Arkansas

President & CEO: Donnie Smith

CIO: Gary Cooper

2015 Forbes 500 Ranking: #83

Market Cap: ~22.06 B

Number of Employees: 113,000

Key Acquisitions:

• IBP (2001)

• Hillshire Brands (2014)

Why We Exist:

Making Great Food.

Making a Difference.

Our Aspiration:

To be the Global,

Innovative Leader of

Food Experiences.

Overview

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The current pricing and trade architecture is dynamic and complex

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GPO/Non-comm/Reg chains Commercial Schools

Commercial Business

Redistributor

Distributor

SchoolsOperator and GPOGrocery Store

Vistex Trade Management

7

Pros

• Is part of SAP ECC. No interfaces to deal with.

• The ability manage environment seamlessly (ABAP, performance, tuning, SD integration,

transports,……)

• Scalability to handle transactional volume growth – industrial strength

• Good Vistex Product Support (upgrades, support packs, fixes)

• Shorter learning curve for those who know SAP SD

Opportunities

• Not standard SAP transaction codes (like AP, AR,…) so must work with audit to create

initial security setup (Security Matrix) and Separation of Duties is extra work

• Not much information available on the web and you depend on consulting/vendor

• SAPBI Reporting can add additional challenges

Vistex Trade Management

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Vistex Trade Management is an Integrated Approach to Managing Trade Promotions

within SAP.

SAP / ECC

SD AR FIAP

SEM

DMA

PRS

BID

TBM

CPR

IDS FSMA

ABS

BW

Vistex Trade Management

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Vistex Trade Management is an Integrated Approach to Managing Trade Promotions

within SAP.

SAP / ECC

SD AR FIAP

TBM Vistex

BW

Project Design

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Split in to “Tracks” of work

• Track 1: Food Service Distributor Programs

• Track 2: Broker Commissions

• Track 3: Operator Programs

• Track 4: Bids

• Track 5: Retail Programs, Retail Promotions and Food Service Promotions

Phased Implementation vs Big Bang

• Can build off of learning

• Build core functionality then add extras

• Org change: move at the pace of the business

• Reduced testing cycles

Trade Management – Program Timeline

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Multi-year program with multiple go-lives impacting all Poultry and Prepared Divisions

StartJune 2012

Track 1 - Distributor Volume & Growth Programs

Track 2 - Broker Commissions

Track 3 - Operator Volume & Growth Programs

Track 4 - Bid Management -Phase I

Track 5 - DMA, TBM & SEM Other

FY2012 FY2013

Project Management, Org Change & Enterprise Architect Support

CORE LiveNov2015

AS-IS PR3 Environment – Phase I

Distribtor ProgramsCORE Integration

Broker CommissionsCORE Integration

Operator Vol & Growth ProgramsCORE Integration

TO-BE PR3 Environment (CORE) –

Phase II

BidsPhase II/CORE Integration

FY2014 FY2015 FY2016

Fully Integrated Closed Loop System

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Vistex Processes

Agreement approvals in system

Broker access for local Agreement entry

System captures all spending Fixed spends Distributor

spends Operator spends

Off Invoice pricing

Direct accruals driven from invoice

All accruals post to SAP GL

Funds tracked by customer and sku

Ability to fund up or close out unused funds

Fund adjustments post to SAP GL

Ability to settle by issuing check or deduction from funds

Systematic approvals

Claim Validations

SAP BI reporting Fund details Agreement

details

Customer/skuprofitability

Standard Extractors to BW

SAP ECC Reporting

Accruals & pricing

Fund Management

Settlements ReportingAgreement

Management

Value Realization

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Key Analysis Data Points

Operator/Distributor

Start/End Date of Volume

Volume Amount / UOM

Material / SKU

Customer Claimed Amount

Operator and Distributor Must Be on Agreement Material Must be on Agreement and Vistex

evaluates Invoice history for Material Purchase Agreement Must be Valid for Entire Period of

Claim Vistex Calculates Amount Due based of

Agreement and compares against claimed amount

Lines Color Coded for Ease of Processor

Vistex Analysis

Benefits

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• Consolidation of internal business process & structures

• Improved agreement compliance and maintenance

• Centralization of all trade functions in SAP leading to centralized visibility

and reporting

• Integration with pricing/dispute management/credit/AP/AR and broader

adoption of SAP

• Developed IS talent and in-house capabilities

• Program level planned and measured ROI to date is on schedule

Lessons Learned

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• Business Ownership

• What is the role of IS?

• Keep things standard and avoid customization as much as possible

• Increased testing and negative scenarios tests

• SAP performance management for peak in transactions

• Org Change Management & Training for faster business adoption

• Manage scope creep

• Conduct business simulation testing if too many items are changing

Q&A

Thank You