Tech magazine touts Tyson, Wal-Mart

Two Northwest Arkansas companies have made Computerworld magazine’s list of America’s top 100 companies for effective use of information technology. Tyson Foods Inc. made the list for its use of Internet-based electronic commerce and Wal-Mart Stores Inc. for implementation of mobile and wireless computing to improve inventory management.

The Nov. 16 issue of Computerworld notes that “the technology standard is not as important as how that technology is applied” in the era of affordable computer systems.

To a degree, technology has been the “great equalizer” for many companies, but it’s still the most effective means to differentiate products, according to Computerworld, which based its rating on a survey of 1,000 IT managers. Suppliers now compete along only a few avenues: price, product features, service and sales and marketing.

“Their only choice is to use information technologies to drive down the costs of production and distribution, to design better products and improve service,” says Computerworld.

Companies are using technology to make, sell and deliver their products more efficiently and to help differentiate themselves from the competition.

Advanced technologies allow Tyson Foods of Springdale to take advantage of electronic commerce, says Gary Cooper, chief information officer and vice president of management information systems for the company.

“I can reduce your cost as well as reduce my cost,” he says.

Cooper says Tyson Foods recently implemented a “broker workbench” that allows the company to sell, distribute and track shipments electronically. Orders can be placed and payment can be made electronically, without invoices or checks being sent back and forth through the mail. Each Tyson delivery truck is equipped with a satellite tracking device that allows Tyson Foods to plot its location from the home office in Springdale through a global positioning system. The system allows Tyson Foods to be able to accurately estimate time of arrival for goods shipped.

Cooper says Tyson Foods began making changes in 1989 that have kept the company ahead of others in the realm of technology. The changes included moving away from a mainframe computer system to use of a network instead, says Cooper.

“Since we acquire companies regularly, we thought it would be a good thing for our computers to talk to the other computers,” he says. “This was in 1989, so we were lucky and good. We were in a position to take advantage of the new technologies because we had made those changes in 1989.”

In 1994, Tyson Foods installed an “intranet” computer system, meaning the company’s different plants and offices could communicate with each other through Tyson Foods’ in-house computer system. At the same time, the company switched from a proprietary, digital protocol (the language read and understood by computers) to TCPIP protocol (the protocol of the Internet). The move also meant Tyson then had access to several hundred “servers,” or providers of Internet service.

“We’re centrally managed but remotely executed,” says Cooper. “A lot of the things we can do today larger companies wish they can do but they can’t.”

As Computerworld stated, Tyson Foods’ advantages have come through the efficient use of available technology, not because the company has necessarily spent more money on technology than other companies.

Small changes made by Tyson Foods have made the shipping process more efficient, says Cooper. Trucks are loaded so the first items to be unloaded are by the door for easy removal. A “cross-docking” system is used to distribute products to supermarket delivery trucks already at a dock.

“I want to make it easy for people to do business with us,” Cooper says.

Cooper, a native of Farmington, came to Tyson Foods in 1985 from University Computing Co., a time-share computing business in Dallas.

In 1985, Tyson Foods — then a $1 billion per year company in sales — had only about 20 employees in MIS, and Cooper saw opportunity for enormous growth in that department. Now, of Tyson Foods’ 70,000 employees, 250 are in MIS and 7,500 are users of computer technologies at work. The company currently has 4,500 personal computers and is acquiring more.

“We’re not a technology company,” says Cooper. “We’re not Dell or IBM, so we have a relatively small number of computer users.”

A typical Wal-Mart store now has 15 to 30 Telxon Corp. handheld mobile systems equipped with retail-specific applications, says Computerworld. The contraptions are integrated with back-end store systems, giving merchants data to make forecasts and restock efficiently.

Don Spindel, an analyst for A.G. Edwards who follows Wal-Mart, says the company has been in the “forefront” of information technology applications but notes that things weren’t that way a few years ago.

“A lot of people will spend money on technology, but you have to be able to harvest what you spend in an effective manner,” Spindel says. “Wal-Mart really admitted in the late 1980s and early ’90s that they had captured all this data, they just didn’t know how to use it.”

Since then, Spindel says Wal-Mart has become proficient at using the data, so much so that the hiring of some of the company’s IT executives by Amazon.com prompted Wal-Mart to file a lawsuit against the Internet book and music retailer.

Spindel says Wal-Mart’s efficient use of information technology translates to a more efficient organization and allows the company to provide goods at lower prices to consumers. This starts a chain reaction of efficiency, lower prices and increased sales.

“Obviously, in doing so, that helps the bottom line,” says Spindel.