Tyson Plants Reflect 'Most Admired' Reputation

Tyson's heritage remains in evidence despite super-sized growth.

By Mike Pehanich, Plant Operations Editor

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Digital Editor's Note: This article is one of three segments of Food Processing's December cover story on its "Processor of the Year," Tyson Foods. Click here to read the feature on the mega-processor's business philosophy and operations; click here to access the article on Tyson's R&D facility.



America has a soft spot for entrepreneurs and family operations. But make no mistake: The reputation of Tyson Foods Inc. goes far deeper than a sentimental nod to the passage of three generations of leadership from father to son.

With annual sales now exceeding $26 billion, the strength of this family-owned business (the Tyson family retains 37 percent of the public shares and 90 percent of the voting power) is that it functions as one giant family, 114,000 strong.

Twice in the past three years, Tyson has topped the Fortune magazine list of "America's Most Admired Companies." The Fortune report cites eight criteria for which the company has exceeded all expectations. But the reasons for the widespread business world admiration for Tyson can really be boiled down to one: Boy, do these guys know how to run a business.

Nowhere is Tyson's savvy more evident than in the operations of its 300-plus facilities in 26 states and 20 nations. With the acquisition of IBP Inc. (formerly Iowa Beef Processors) four years ago, Tyson, the world's largest processor of poultry, acquired the world's largest supplier of premium beef (and No. 2 in pork products). An amazing protein powerhouse emerged.

Both companies carried reputations for running efficient and productive plants in disciplined, strategic, uncompromising fashion. And nothing today seems to have been lost in the mix.

John Tyson chatted with some team members during a recent visit to the Pasco, Wash., plant, which processes beef.

"We know how to run plants well. We know our business, and we are willing to invest in next-generation equipment," assesses John Tyson, chairman of the board and CEO. "We continue to manage and operate our plants better. Often you have folks managing the equipment instead of their jobs. We have been able to get the best of the best."

Tyson's greatest asset from the company's inception has been its nimbleness, a corporate quickness and agility. Long has it demonstrated an ability to turn on a dime, to develop and deliver products made to order for foodservice customers and made to the needs of the consuming public on the retail side. But, as a former Kraft CEO once remarked, "At our size, it takes a lot to move the peanut." How quickly can a $26 billion company now turn?

"We have a simple mantra," says John Tyson. "Respond and do whatever the customer wants done. From there we will figure it out."

Without on-time, high-quality execution in the plants, that mantra would be an empty chant. Fortunately, nowhere is that trademark Tyson nimbleness more in need or in evidence than in the processing plants.

Of course, with spectacular growth and the acquisition of IBP have come growing pains. Both product line and geographical expansion have brought about blending and occasional collisions of cultures. Every Tyson employee carries the company's mission statement and goals on a business card printed in seven languages, including Chinese, Vietnamese, Sudanese and Laotian. The workforce at a pork plant in Waterloo, Iowa, includes 650 Bosnians, while there are 600 Sudanese at a Canadian plant. "We even have a large population of Somalians," says John Tyson. "You have to teach, communicate, and explain our Western customs. It makes for a very interesting dynamism. Our values serve as our guardrails."

In response, Tyson has made diversity and leadership training a corporate priority. To discover skills and leadership qualities among a diverse group of 114,000 — many from cultures that may not have had prior access to high-skill or management positions — requires both perceptive leadership and formal disciplines.

"We have built a database to look for skill sets and leadership traits among workers, who come from many different cultural backgrounds across the company," says Richard Bond, chief operating officer, noting that Tyson prefers to develop talent internally. "We try to identify people and see how far they can go. You look at line workers and see abilities. You test them, teach them and help them up the ladder. It creates hope."

The engineering edge

"Lean and mean" translated into weak and nil in the technology brain centers of many a processing firm. When downsizing commenced in earnest during the 1990s, engineering and R&D were quiet casualties.

Not at Tyson.

"We've looked at that trend in the industry as an opportunity," says John Tyson. "For us it is a point of difference with our customers. We emphasize our strong research and development. The same with engineering. By having our own people tinkering, each breakthrough leads us to the next generation of equipment, better production, accelerated payback. This is a selling point with our customers."

Cooked chicken strips with grill marks head for a portioner on a line making fajita kits.

With such stunning expansion of its production capability, replicating best practices where practical and possible becomes of paramount importance.

"From a quality standpoint, we ask what we can do better and differently," explains Bond. "We work hard to get sharing [of best practices] between all of our facilities."

Maintenance practices are a case in point.

"We have a team installing a highly advanced maintenance program," says Bond. "Maintenance people used to work crisis to crisis. Now we emphasize predictive maintenance. We plan their work orders daily. Today they do a better job of preventing crises from an equipment, plant and team standpoint."

With the diversity of plants now under Tyson's wing has also come a broader range of plant solutions.

"We also shuffle people from our pork plans to our poultry plants, from poultry to beef…and cross-fertilize in this manner. We get an interaction of shared knowledge," says John Tyson.

The Tyson heritage, it seems, thrives through growing pains.

Case history: Tyson's Fayetteville complex

For generations, Tyson's strength seemed to reside in specialization. Like Col. Sanders of Kentucky Fried Chicken ads, Tyson knew how to "do chicken right." But the company's production excellence already is proving to be one of its strongest assets as it re-creates the pork and beef businesses in the value-added mold it used to revolutionize the poultry industry.

A huge part of that success involves cost control and improving productivity and efficiencies through automation and better yield. Tyson spent $486 million in capital expenditures in fiscal 2004. Most were directed toward cost savings and income-generating projects. The company anticipates savings exceeding $63 million annually to emerge from the investment.

At Tyson, all investments must prove their worth. That includes investments in people.

"I've been with the company 15 years, and the production team members I've worked with have received pay increases virtually every year," explains Richard Irvin, a complex manager who oversees several Tyson prepared foods plants, including the Fayetteville (Ark.) complex. "We continue to lower our cost of production. We had 2,000 people in 1991 at five facilities in three locations. We're producing 60 percent more volume today with 200 fewer people than we had then. That is mostly due to automation and efficiencies. If you look at our labor rate times the hours put in, our [cost of production] is as good or better on a per-pound basis every year."

FAYETTEVILLE PLANT FACTS
  • Built in 1965; Tyson purchased in 1983
  • 229,000 sq. ft. on 367 acres
  • 750 hourly workers, 75 management
  • Makes 295 products under multiple brand codes
  • 21 active lines
  • Average weekly production: 4.1 million lbs.
  • Freezer capacity: 12 million lbs.
  • 1 million man-hours (14 years) without a lost-time accident
"We have taken jobs that are tough physically and automated them," explains Bond, noting the company has automated poultry and pork operations extensively over the last three years.

The flip side of Tyson capital investment has been plant rationalization. Since 2002, Tyson has closed and consolidated seven plants. Among the major moves has been the consolidation of operations in Fayetteville. In October 2004, Tyson closed a plant that had come with its purchase of Mexican Original Inc. in 1983 and streamlined the management structure at three other facilities, creating the current Fayetteville complex.

The purchase of Mexican Original, then a small corn and flour tortilla processor, had been the first Tyson further-processed venture outside of protein products. Tyson has worked its value-added magic from that base of Mexican staples, creating products that couple tortillas and taco shells with poultry and other meat protein items along with beans, starches and vegetables.

Tyson today provides both components and complete Mexican meals for both the foodservice and retail channels. Products include (heat pressed) tortillas, tacos, chips and flatbread. Poultry and beef also are processed here. They go into products in the growing "kit" segment of the business – meal packages, such as chicken and beef fajita kits, containing multiple prepared components designed to prepare and mix easily for a good-as-fresh meal.

"Tyson's kit business is growing faster than the industry average," says Darrell Froud, plant manager.

Inside the plant

The Fayetteville complex is comprised of a three-line area for the manufacture of tortilla and corn chips; a post-pasteurization packaging room with an adjacent USDA freezer; a USDA-governed meat area consisting of a raw meat cooler, raw meat processing area and a cooked meat processing area; an 11-line flour tortilla processing room; and a 5,800-sq.-ft. freezer and freezer tunnel. Two ammonia refrigeration engine rooms power the plant's extensive refrigeration needs.

One highlight of the plant is its post-pasteurization line. The line processes ingredient meats for individual sale and for inclusion in the successful line of Tyson kit meals. "It's almost like a retort process," explains Irvin. "The product is recooked in the bag. You can safely keep the product refrigerated for 90 days."

Corn chips are staples at the Fayetteville complex, and the facility meets demand with baked and pre-fried corn chip lines.

Tyson uses several different food-grade corn varieties for the line and produces chips in three colors. High quality raw ingredient, free from cracks, breakage and aflatoxins, is a must. Optimum moisture retention is 12 percent.

Two 800-lb. kettles cook the raw product at 150°F. Cooked corn is kept in a warm-water solution in holding tanks for eight hours. Dough for the chips is spread thin on the chip line sheeter. A roller die presses out round chip forms from the sheet. Remaining dough rolls back and re-enters the corn sheet.

On the baked line, a climbing conveyor carries pressed chip forms into the Heat & Control oven chamber. After baking, chips are cooled for two minutes to bring product to appropriate packaging temperature – below 70ºF.

Pre-fried chips are baked first, passing through an equillibrator to allow chips to cool prior to entering the fry phase. A climb-and-drop conveyor has a two-fold function of compressing line length and enhancing the cooling process.

Chips are fried and collected in a bin to allow excess oil to run off before passing onto a vibrating conveyor that keeps product separated during transport. Chips pass through a rotating seasoning tunnel. They are elevated via an A.C. Horn Verta-veyor to the Matrix Snack Pro filling system.

At Tyson's Fayetteville, Ark., plant, employees remove tortillas from ovens and package them in bags.

Asked what area of plant operations poses the biggest challenges, management's reply is unanimous.

"Metal detectors." Why? "The iron content in flour used in tortilla and taco processing occasionally gives false positive readings because of the extremely low detection standards," says plant manager Froud. The plant is considering conversion to X-ray detection systems.

Eleven flour tortilla lines supply Mexican Original's flagship product.

Flour is mixed with bulk water in the Peerless blender. Dough balls are puched out from a rounder and dropped into a proofing conveyor belt. They are then heat-pressed and par-baked for 30 seconds. Finished tortillas are then conveyed through a cooling chamber for approximately five minutes.

Automation at end-of-the-line functions has introduced automatic stacking and delivery to several lines with ongoing upgrades under way.

Predictive maintenance is sign and substance of a metamorphosis in maintenance thinking.

"We used to have our maintenance guys waiting for a fire," says Irvin. "Now they keep that fire from breaking out."

Maintenance mechanics are assigned preventive and predictive maintenance tasks each day to sustain quality line operations. To remain at the head of their game, all are required to participate in a minimum of three hours of maintenance training each week, studying hydraulics, pneumatics and a variety of mechanical disciplines, along with computer literacy, mechanical aptitude and electrical aptitude.

All training courses are run out of the master computer, while hands-on training is performed on training boards and supervised by training manager Ron Stagg. Currently, 71 Fayetteville team members participate in the training. Instruction can be read or delivered in narrative/written format.

The plant also has a sterling safety record.

"Our complex won the best of the best recognition for its safety record in terms of lost-time accidents, DART rate, recordable injuries and workers compensation last year," says Irvin.

TYSON PLANTS SAVE THEIR ENERGY

Processing, warehousing and distributing the value-added food products of a $26 billion food company takes a lot of energy, in every sense of the word. But it's the cost of energy fuels that has processors everywhere counting their BTUs.

Tyson's first corporate energy target is price.

"We buy fuel on the commodities market and lock in a good position," explains Richard Irvin, complex manager for several Tyson prepared foods plants. The largest energy purchase is natural gas.

Next comes looking at usage numbers, comparing those numbers both to prior energy consumption at a given facility and to plant-to-plant usage.

"We meet weekly at our plants," says Irvin. "I meet with plant managers, plant controllers, maintenance managers, QA managers and others. We cover all key areas from quality to safety to production efficiency. The plants put out a scorecard. This Operating Performance System meeting is the best meeting we have all week."



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