Navigating the complexities of a global supply chain is like being an air traffic controller. You’re constantly balancing hundreds of moving parts — from regulatory constraints to regional partnerships — all while ensuring the seamless flow of products across borders.
Matt Strampe, who oversees supply chain operations for Hormel Foods International
The challenge extends far beyond simple logistics. This dynamic system must operate seamlessly while adapting to an array of external pressures — from unpredictable weather patterns and regional conflicts to an ever-shifting international trade landscape. The complexity is amplified by the company’s international presence, encompassing a sophisticated web of joint ventures, co-manufacturers, licensees and wholly-owned operations across multiple continents. Each entity requires careful navigation through distinct regulatory environments, cultural considerations and market demands.
“Navigating the complexities of a global supply chain is like being an air traffic controller,” explains Matt Strampe, who oversees supply chain operations for Hormel Foods International. “You’re constantly balancing hundreds of moving parts — from regulatory constraints to regional partnerships — all while ensuring the seamless flow of products across borders.”
Steven Lykken, group vice president, supply chain for Hormel Foods, sees untapped potential throughout every facet of the supply chain — from strategic procurement and manufacturing processes to warehousing operations and distribution networks. “Right now, supply chain innovation represents the most dynamic area of transformation within our company,” he said. “The vast majority of our modernization efforts are concentrated in the supply chain, providing us with a clear pathway to enhanced operating margins.”
Digital Innovation Revolutionizes Planning
A cornerstone of this modernization effort involves the integration of previously disconnected data systems throughout the company, coupled with the implementation of advanced data processing capabilities, including artificial intelligence for enhanced planning and operational efficiency. At the center of this digital transformation is the deployment of “O9,” a sophisticated planning software platform also utilized by technology giant Apple Inc.
This comprehensive system represents the first true end-to-end software implementation at Hormel Foods, processing everything from syndicated market data to real-time shipment information to weather-pattern analysis. The platform employs predictive AI and machine learning algorithms to replace what previously required hundreds of manual spreadsheets and countless hours of human calculation.
“The real value lies in minimizing forecasting error,” Lykken said. “We’re fundamentally shifting from reactive to proactive operations. With enhanced data access and advanced analytics capabilities, we gain a much clearer understanding of future needs, enabling our plants to operate consistently and efficiently.”
The new approach introduces sophisticated tools like cost modeling and professional negotiation training for buyers. The impact has been both immediate and substantial across various purchasing categories, from metal cans to virtually every substrate and component the company procures.
We want to empower team members at every level to question existing processes, explore new technologies and seek out best practices from other industries and companies.
Steve Lykken, group vice president of supply chain
“We’re actively challenging the ‘we’ve always done it this way’ mentality,” Lykken said. “We want to empower team members at every level to question existing processes, explore new technologies and seek out best practices from other industries and companies.” This cultural transformation includes opportunities for team members to stay current with industry trends, engage with potential partners and participate in training programs that enhance their professional skills and knowledge base.
This encouragement of innovation radiates outside the walls of Hormel Foods to co-packers and suppliers as well, according to Strampe. “Our suppliers can be a source of new ideas and processes,” he said. “We’ll often work together to develop new formulas, sometimes sending our people from the U.S. to the supplier’s facilities for line trials and testing. Breakthroughs often come when we work together to refine ideas — whether through shared trials or adopting localized solutions for specific markets.”
Future Proofing
There is no doubt that the food industry is experiencing a period of rapid change that shows no signs of slowing down. Customer expectations will continue to evolve as will technological tools and dynamics in international markets.
“Traditionally, supply chains have been viewed primarily as cost centers within organizations,” Lykken reflects. “But an adaptable, agile, data-driven supply chain that continuously improves and evolves becomes a genuine strategic advantage. We’re fostering a mindset of perpetual learning, exploration and adaptation. These investments fundamentally reshape the opportunity landscape for our company.”
As Hormel Foods continues this ambitious Transform & Modernize journey, the company is combing technological innovation, management standardization and cultural evolution that will not only modernize its supply chain, but establish it as a decisive competitive advantage in an increasingly complex global food market.
