Sysco Food Service: A case study on the dynamic orientation of Sysco’s utilization of human resources efficiency.

Sysco Food Service: A case study on the dynamic orientation of Sysco’s utilization of human resources efficiency.

Sysco food services is one of the most dynamic companies in the food distribution industry when it comes to business strategy and the use of human resources efficiency as a tool to position the company as a competitive player within it’s industry. Sysco prey’s upon the advantages that are derived from one of the companies differential advantages that set Sysco apart from the rest of it’s competitors, being strategies that are based upon the fundamentals of marketing such as price, product, promotion, and place (the four p’s).  However, Sysco is known for not being afraid of change, for being as much of an organism-like organization as possible, utilizing strategic human resources as a means of efficiency in cost reallocation and reduction. The need for organizations to change their internal structure to remain competitive in the marketplace is a strategic approach to HRE. Sysco is a company that prides itself on the highest quality of product offered by any distribution company in the industry, at a very competitive price. In doing so for a long time, the competition was able to progressively attain the ability to offer the same products for the same prices. Therefore, it is the value added services that Sysco has decided that will differentiate themselves from the competition.

Human Resource Efficiency

In an extremely competitive marketplace that is congested with both big fish distributors fighting for the majority of business in each major account, and small fish distributors that take little bites out of each categorical business in the major accounts, Sysco knew that in order to maintain double digit growth figures and to carve the path toward consecutive years of returning high profit margins to the stockholder, that the need for restructuring the internal resources of the company for reasons of competitive advantage was necessary. The variation in cost allocation of human resources versus the option to continue the battle using the same old tactics was a difficult assessment to conduct, however, the decision to change the strategy of human resource use in this case was considered to be the best option. The entire company has undergone a transitional change that was implemented in phases, and departmentally distinct to the strategic change map that was laid out for that particular unit, fitting into the master strategic plan. As Sysco is a multi-billion dollar organization, the funding of such a change has been relatively available, as the budgets were set and detailed as to the allotment of funds that were to be used for the changes implementation. The tactical purpose of this resource restructure was to capture the benefits of economies of scale toward the end of the distribution channel by reducing the cost per unit of product sold through the increase of sales and profit margin. The major emphasis is on the ability to grow relationships between the newly assigned marketing force and the end user, along with the sales force, creating a powerful bond of strategic allegiance between the consumer and Sysco.

Powers of Influence

The direction of the company was clear, as the strategic plan was broken down into tactical courses of action and maps that told the story as to the way the implementation of the process should be conducted. Although this is theoretically platted, the ease of practically instituting such a plan in every operating company is a lot to hope for, as the results and situations of the workforce and the condition of the internal environments may not be as conducive to the plan as others may be. The plain and simple fact that HR executives within an organization play a vital role in executing the action plans in an effective and efficient manner, along with the other executives, but offering assistance and guidance into the most practical and effective methods.

Using HR as a means of Efficiency

The utilization of HR as a strategic force in an external and internal environment of an organization has not been a common practice, but is now becoming much more frequently used by industries. Sysco in particular, is one organization that has used HR as a strategic partner and benefited from doing so. As an organization must be conducive to change, the practicality of a HR strategic partner that is advanced and capable of controlling and measuring human factors that go along with the change initiatives is logically a sound investment for an organization to fund. As the HR function is to be greatly oriented around the needs of the organization, the needs of each individual employee, and the interests of groups, the ability and influence that the HR department and personnel hold within an organization can be used to a much greater capacity. Overall, “the increasing prevalence of strategies and initiatives that build on knowledge and employee competencies has opened the door for HR to become more of a strategic partner” (Lawler, 2003).
Lawler III, E.E., & Mohrman, S.A. (2003). Creating a strategic human resources organization: An assessment of trends and new directions. Los Angeles: Stanford University Press.