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Due to volatile commodity markets earlier in 2008, followed by the packaged meat recall and its
impact on our business, some strategic projects were delayed and will resume in 2009. There
is much more we can and will do. We have significant opportunity to take costs out and create
value through further integrating our plants and legacy information systems with the adoption
of standardized best practices. While we have plants that meet the needs of today, we will have
plants that are best in class from every perspective: cost, efficiency, scale, capacity, and food
safety. We have 37 bakery facilities and 34 fresh and packaged meat plants, with opportunities
to increase their efficiency and add capacity through consolidation, expansion or adoption of new
technologies and practices. We will invest in improving our distribution network in eastern Canada
to achieve the same capabilities and efficiency as we have in the West. The benefit will be a much
stronger competitive position, best in class operations and significantly lower operating costs.
Upgrading our information systems
Moving to a common systems platform and a shared services model is another key component
for increasing efficiency. Starting in early 2009, we began implementing a world-class enterprise
resource program (ERP) platform company-wide that will house all our information, support more
efficient standardized processes and provide consistent access to information in real time, so we
can make the best decisions possible.
We selected SAP based on a comprehensive review of software solutions and the benefits they
would deliver our company. We expect the SAP implementation to take three years and it will
transform our systems and information management into a core competitive advantage.
Establishing functional excellence
Our organizational structure is based on strong centralized corporate services that support
operating companies, which are accountable for driving the business and delivering results.
The goal is to balance the structure and discipline of a large public company while supporting
an entrepreneurial culture that ensures responsiveness to changing business conditions at the
operating level.
Across our operating divisions there are common functions, like manufacturing, food safety
and human resources, to name a few, that can benefit from adopting best practices and
standardizing these practices across the company. This will enhance our functional excellence
and reduce the cost and complexity of multiple ways of doing the same thing. We are migrating
towards this organizational model - the recent establishment of a chief food safety officer is
an excellent example of how recruiting global talent will elevate how we approach food safety
across our company. We are taking the same approach to many other functions - either through
strengthening existing reporting relationships or bringing new talent to the organization.
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