Recent events such as the COVID-19 pandemic and the war in Ukraine led Hormel Foods to change its mentality when it comes to relationships with vendors and suppliers.
Jen Ehresmann, Hormel Foods vice president of supply chain, said during the Partners in Ag Innovation Conference on July 25 that it has switched from a “vendor management” mentality to one of “vendor partnership.”
“Pre-pandemic, we thought of our suppliers as maybe more transactional,” she said.
But as bottlenecks with vendors and suppliers became more common during the height of the pandemic, it became clear just how important communication between the parties was.
“We have very quickly learned that for best continuity, we have to go incredibly deep into our suppliers’ supply chain,” Ehresmann said.
Joint business planning
Ehresmann said good communication is really about best practice sharing and joint business planning.
“We have now begun the process where we have incredibly clear expectations about key materials that are critical to running our operation, understanding where do we need to make adjustments, where do we need to reform … to prevent supply disruption,” she said.
Geopolitical events
Geopolitical events often cause logistical problems for one company, and those problems often affect others with whom the companies do business.
One example Ehresmann gave was the war in Ukraine, and how it has affected grain shipments and trade.
“All of this disruption very much touches and touches very quickly our business,” Ehresmann said. “So (Hormel is) doing a tremendous amount of contingency planning with our vendors on their geopolitical risks.”
Cybersecurity
Along with increased usage of technology often comes increased cybersecurity risks, and Hormel recently found itself in a situation where one of its largest cold storage distribution partners was hit by a cyberattack.
“What that meant for us as Hormel, including our Jennie-O products, was that we were pretty crippled as it related to distributing on the West Coast of the U.S.,” she said.
But Hormel quickly obtained needed information from that company, and was “able to very quickly move to manual processes.”
The internet technologies teams from both entities further communicated to make sure no other infiltration or cyberattacks came through.
She said the way that situation was handled is a strong example of why “that partnership has to be there and it can no longer be a vendor transactional relationship.”
The conference was held at the MinnWest Technology Campus in Willmar, Minnesota, and also virtually.
