Case Study: Addressing Opportunities and Risks – Smithfield Foods
At Smithfield Foods, an integral part of the business strategy is to operate as a vertically integrated company. As a pork processor, that means managing the raw material supply by raising the hogs for processing. This provides opportunities in terms of the quality and quantity of hogs for processing but also provides risks in terms of proper care for the several million animals in hundreds of farm locations.
Smithfield built its sustainability program around the environment, employee health and wellness, food safety and quality, and community outreach. It also became apparent that animal care was important from both a resource and reputational perspective. Programs for animal health, diet, and bio-security that would help ensure supply were well documented and managed. However, even though animal care and handling practices were generally in place, a fully documented program with specific procedures, requirements, accountability and training was not yet at a sufficient level to address all reputational risks.
The company developed programs based on a ‘plan, do, check, adjust’ process. Additionally, sustainability leaders created a policy with specific procedures and processes implemented to address the policy. Management and employees were trained where they had responsibilities and/or potential impact. Internal and external audits were integrated into the process. Stakeholders and subject matter experts participated to be sure that concerns and latest concepts were included. In addition, the effort included a response plan.
When a mistreatment, based on undercover video, was alleged, Smithfield was able to implement the response plan that was already in place and address the matter quickly and efficiently. Communication with customers and stakeholders took place in a timely and transparent fashion. Afterwards, the program was reviewed for potential improvement and recommendations implemented.
A situation that could have resulted in a significant negative impact on the company’s reputation resulted in a positive impact. The transparency, timeliness and completeness of the response and use of a sustainability program model in addressing opportunities and risks showed employees, customers and stakeholders that the company took sustainability seriously.
Image source: Smithfield Foods