May 27, 2004, 10:51 AM — SAP AG has landed one of its meatiest and possibly toughest contracts ever -- literally speaking.
Earlier this month at its international Sapphire customer event in New Orleans, the German business software vendor announced a major deal with Tyson Foods Inc., the world's largest producer of chicken, beef and pork, to move its multiple back-end systems, many of them homegrown, to a unified SAP backbone.
Under the deal, Tyson will deploy mySAP Business Suite as the backbone technology, based on SAP's NetWeaver integration and application platform. In addition, the Springdale, Arkansas, meat producer will collaborate with SAP to introduce a "catch-weight" management application to handle multiple units of measurement, such as cases and pounds of meat.
These agreements are significant. The US$25 billion-sales company is now one of SAP's first big customers to swallow its new service-oriented architecture lock, stock and barrel. It's also the first to demand catch weight, a function that will require sweeping code changes across many SAP products.
The decision to deploy mySAP Business Suite -- SAP's premier product that adds CRM (customer relationship management), PLM (product lifecycle management) and SCM (supply chain management) modules to the core ERP (enterprise resource planning) platform -- follows the successful deployment of the Walldorf, Germany, vendor's human resources software to manage payroll and other functions for Tyson's 110,000-strong payroll.
The move to a common platform has been driven in large part by Tyson's business expansion, particularly its acquisition of meatpacking conglomerate IBP Inc. in 2001, according to Tyson CIO (Chief Information Officer) Jeri Dunn.
"Our acquisitions have forced us to look at a uniform platform," Dunn said. "We've decided to put just about everything on SAP."
Included in that list of core processes are inventory, supply relations management, material management, manufacturing and tax payable. One of the few exceptions, for now, is SCM software, which Manugistics Group Inc. is delivering for the group's chicken business, according to Dunn.
"All of these processes need to be re-engineered within the company," she said. "This will result in a pretty significant change in the way we work."
But introducing catch weight to SAP systems, according to Dunn, is an even bigger challenge. "This is a mammoth undertaking because this function is pervasive in just about everything we do," she said.
It's also a development that will determine how quickly Tyson will be able to implement mySAP Business Suite. "We are dependent on SAP delivering catch-weight-enabled software before we can take advantage of all the other modules," Dunn said.
The delivery date, according to the agreement, is June 2005. But Dunn isn't waiting until then to test the goods.