Dive Brief:
- Hormel Foods is discontinuing bacon production at its Tucker, Georgia, plant to optimize its manufacturing footprint, the company said in an email to Supply Chain Dive.
- The company shut down the line at the plant because of “the age of the equipment and the substantial investment required to align with our long-term strategic objectives,” per the email. Hormel has since moved production to other facilities.
- The shift was one of roughly 90 projects Hormel executed in Q3 as part of its multiyear transformation and modernization initiative to reshape its supply chain, executives said in an Aug. 28 earnings call.
Dive Insight:
The global branded food company launched its T&M initiative at the end of fiscal 2023 to deliver at least $250 million in annualized operating income growth across three years. The project focuses on "transforming the supply chain, minimizing portfolio complexity, investing in data and technology, and enhancing people and processes," the company said last year.
By the end of fiscal year 2025, which ends in late October, Hormel expects to realize $100 million to $150 million in incremental benefits from the T&M initiative, EVP and CFO Jacinth Smiley said in the earnings call.
A T&M project in the current fiscal year included opening a distribution facility in the Memphis, Tennessee, metro area to improve inventory flows and increase distribution capacity, per the email.
Projects last year included launching the Hormel Production System to standardize work across manufacturing facilities and "new procurement and productivity programs, with further savings expected across many categories, such as logistics and warehousing, direct supplies and indirect supplies," the company said in an earnings statement.
Also, the company formed a data and analytics office focused on creating easy access to technology, data and analytics to support the initiative.
During 2024, Hormel promoted Steve Lykken to group VP of supply chain to further optimize and manage operations. In this role, Lykken oversees procurement, manufacturing, engineering, logistics, research and development, quality management and plant operations.
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