Oktane20 Keynote Q&A with Tyson
Scott Spradley: At Tyson Foods we've got an IT team that's building the technology of the future and we're working to change at 85 year old company to be the most modern food company in the world. We are developing technologies that are used in our offices, they're used in our plants, they're used in farms, they're used everywhere. And we are focused on building technologies that are changing the way this company works. Everything from machine learning, to artificial intelligence to using drones that will help drive our business forward. At Tyson Foods we're driving world class technologies to change a world class company.
Frederic Kerrest: Well Scott, great to have you today. Thanks a lot for joining us we really appreciate it.
Scott Spradley: Great. Freddy good to be here, thanks for having me.
Frederic Kerrest: Of course. So Tyson has been around for almost 100 years, Fortune 80 company, 140,000 employees, over $40 billion in revenue last year. Not that big of a deal really. What prompts a company like yours to move to the cloud?
Scott Spradley: It's an interesting story. I think it kind of goes back to when I was being recruited here. I think the first recruit call from the CEO he mentioned we had a new world class "cutting edge" data center and I kind of said, "Sorry to hear that," and that sparked an interesting conversation. Where I was saying I just don't think you need to carry that kind of cost statically throughout your IT cost structures and explaining that to him. I was like hey, first thing's first when you look at supporting the company you're going to have spikes throughout the year. Anytime you're doing quarter end close or a year end close you're going to have a big spike that's going to use a lot of CPU, it's going to use a lot of storage but you have to carry that cost the whole time.
Scott Spradley: And I kind of came up with a metaphor I said, "It's like building a church for Easter Sunday." A church gets the big time at Christmas Eve and on Easter and they're always full and so they build that whole church for that period of time, but they don't use it most of that time. And so for us that was kind of the precursor to it, but then there's a lot of other tangible reasons. I mean the agility you get through the cloud, the speed you get through the cloud, the philosophy, the ability to try new things. Spin up a server real quick, run it, trial something, see how you like it. As you start looking at transforming your whole company more using edge computing as well, getting data from the edge and bringing that in. The cloud just allows you to do that much faster at a better set of economies. So it's been a good ride for us and we're on kind of closing out the second year of that approach, of moving entirely to the cloud.
Frederic Kerrest: Yeah, that's great. Well, talk about agility. Certainly a lot of agility required the last few weeks especially in response to the COVID-19 pandemic. I know that your CEO Noel White recently share that Tyson's pivoting from supplying the food service industry, so restaurants and hotels to better supply the entire retail industry. I think he was talking about grocery stores in specific quote that I saw. You, Tyson produces one in five pounds of all what? Chicken, beef, pork in the U.S so you're obviously the number one meat producer in the United States. Your CEO is calling this the most significant shift Tyson has ever initiated. Obviously technology strategy, a huge part of that implementation. There's no way they wouldn't have done it without the agility that you put in place.
Scott Spradley: Yep. Well first things first, thanks for recognizing that we're not just a chicken company. It's everywhere I go and everywhere I speak people always think about Tyson chicken because they'd probably had some chicken nuggets somewhere. But yeah, we do lead the nation in producing pork, beef and poultry. And for us the pivots been natural, right? So the president of the United States and his COVID-19 task force have classified us as critical infrastructure. So the world's got to have food, the United States has got to have food and frankly restaurants are not operating. There are some that are operating for drive food business and so the grocery stores are taking the brunt of it.
Scott Spradley: And if you go to any grocery store, you're going to see that a lot of those shelves are kind of empty, the supply chain is being disrupted. So for us and from a technology perspective what we've been focusing on is trying to predict where food is needed, that's one of the things. So as you look at what kind of food is needed, when it's needed, where it's needed? When you think about these things in the past a lot of people that the generations, some of the Gen Z's and the millennials they're used to eating out. Now they can't really eat out as much, they're actually being forced into the grocery store to get food. So we're predicting what kind of food is going to be needed and when and we're looking at that as we drive it all the way back through the supply chain.
Scott Spradley: But then there's other things that we're doing on that case as well. So we're also doing some prediction to help us figure out risk for our plants right? So we have 140,000 people and as a critical infrastructure company, we've got to keep those plants running. In fact, we're producing more product now than we normally have to supply the nation's grocery stores. So we're trying to look at where outbreaks are occurring, we're pulling that data in and we're trying to parse that out with also some of the restrictions that governments have put in place. To do some prediction on how food's going to be consumed and consumed by whom so it's a big model shift for us. We're doing more with a direct grocery as opposed to that food service to the aggregators.
Scott Spradley: In fact, even the aggregators, the Sysco Foods, the U.S Foods they're dealing with that as well. And I think then there's also some sharing that's going on with the CIOs and CTOs of those companies to really try to get a more concise around predicting where that food needs to go. And then also it extends even into the logistics piece, so those truck drivers are running into all kinds of problems. So we're doing some advanced analytics there to also try to help them identify where they can stop and get food. Because if you think about somebody driving from coast to coast, a lot of those truck stops aren't serving food anymore. So there's a whole lot of reasons Freddy that we get into some deep, deep analytics on supporting this in COVID-19 days.
Frederic Kerrest: Yeah, that is amazing. A lot of the technology shifts that people like to talk about it's like we're bringing in modernization, we're bringing in brand new ways of doing things. For a company like you 140,000 people, a big part of that is obviously the people. I mean you have this existing population that's been working there, many of them for a long, long time and you want to bring them along in that journey. You talk about all the analytics, you talk about all the modernization, I know that you're obviously a huge change agent for that there, but you have to bring along your whole group. And I know something you'd really focus on and we've talked a lot about in the past is what you call Upward Academy, right? The initiative of how you can use technology to better empower your employees. How are you using technology to better enable Tyson's workforce today?
Scott Spradley: Yeah, thanks for that. And it's a great chance to share a little bit about why Tyson's differentiated among employers, people that do that kind of work. So Upward Academy is a mobile platform that we've developed that deploys across an iPad set of environments. And it focuses on delivering in multi language support I think it's up to 30 languages that we have, to all of our plant workers all kinds of different things. From learning how to get a driver's license, to understanding more about how financially they can manage their families, to obviously safety in the plant those kinds of things, getting their GEDs. And so we've developed this platform and actually Okta is a big part of that.
Scott Spradley: Because before we did this, we had about 95,000 employees that didn't have any digital identity, very manual. They come in and they literally punch a clock. They go through the whole suit up and then they go in and they work, they come out, they put... Now we've digitized that and Okta... Again, thank you for your technology that's been a huge part of that. But this has really kind of given these employees another reason to consider Tyson Foods. We not only pay well, but we're also providing these employees a better experience for their life management as well. So a Upward Academy is huge, it's been highly adopted. We get a lot of positive feedback from our folks on delivering that platform.
Frederic Kerrest: Yup. So I know that one thing obviously is enabling your employees, making sure you're bringing them along, improving communication, improving work satisfaction. Another thing obviously, a unique challenge that you have is around all your customers. You just talked about that food chain and that food supply chain end to end a lot of that is not necessarily online. So what are some of the unique identity challenges that you face as you bring that entire food distribution supply network online?
Scott Spradley: Yeah. I think you're getting into a different area that we're a company that's as you mentioned nearly 100 years old, we're 85 years old. A lot of the processes that exist inside of most food companies are kind of what I would call born analog and remained analog, some guy on a clipboard drew out some process. So the ability to move through a digital transformation gives us the ability to challenge those processes for faster streamlining of product delivery from farm to fork and getting it there faster. That's one of the things. We use analytics to actually do a lot more prediction on what's going to be consumed and when it's going to be consumed and then how to shift it and move it faster.
Scott Spradley: I mean when you're producing in the pound range that we produced just identifying all that product, tracking all that product, figuring out what's at what co-manufacturer or what's at what outside cold storage is very difficult to track and trace. We've put in technologies that are allowing us to use machine learning and AI to actually assist that so that we can move product faster, which delivers a fresher product faster. And it allows us to kind of reduce some of the cost stack on that so that we can keep our prices lower for pretty much everybody in the country. So a lot of our customers, they come to us because of the quality but they come to us because of the speed and they come to us because we were very price centric for them. And reducing all that back in infrastructural costs is what's allowing us to stay on the forefront of that pricing strategy.
Frederic Kerrest: Yeah. So you say born analog still lives analog, obviously you're using the cloud to be a lot more competitive, doing a lot of those analytics. I'm sure that's a sustainable competitive advantage that frankly all of your supply chain really appreciates. But we are seeing, you and I were talking about non animal based proteins popping up all over. You're facing competition from now digital services, I think ButcherBox is one of them that I heard about. How do you remain competitive not just with today's traditional stalwarts, but how do you stay ahead of the new competition and make sure that you're really continuing to drive your industry?
Scott Spradley: Yeah, I think that's an interesting one for us. When you start to look at non animal based proteins, I mean our strategy is not to do it through an e-commerce delivery system. Our strategy really is to kind of go through the aggregators so the U.S Foods, the Syscos, the Walmarts, the Amazons, those kinds of guys and distribute through that. The coronavirus has kind of put us in a unique position because a lot of our rollouts were planned for right now, not wise to roll those out right now with coronavirus. So it allows us a little bit more time to use more data and streamlining of process for where that should go, when that should go, how that should go.
Scott Spradley: And then actually starting to really attack what are the generational ready metrics? So for example, the baby boomer may not be as ready for the non animal based proteins, but certainly the Gen Z and the millennial which by the way the 70 year buying trend is. But right now because of the procreation of a lot of that food and a lot of the facts that people are picking up to go food, not many installations are ready for that. So we're probably going to have to see that come out just a little bit later. But again, not through e-commerce, strictly through the aggregators.
Frederic Kerrest: Yeah, that's great. Well look Scott, I know I've been harassing you for a number of years to join us on the keynote stage at Oktane, I really appreciate you joining us for Oktane live. Thanks again for all your time and your support and partnership over the years. And you know I'm looking forward to working with you on all the exciting initiatives you have up ahead.
Scott Spradley: Thank you Freddy and thanks for Okta. I mean you guys have been and huge impact for our business model and what we're trying to do from a digital transformation perspective. Really appreciate it, thank you.
Frederic Kerrest: Thanks Scott, I really appreciate that.
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