OSI Group: Open for innovation
But the reality is, Aurora, Ill.-based OSI Group has grown into an innovation-centric, people- and customer-focused powerhouse over the last decade-plus, quietly plying its trade in the background of the macro issues that have bombarded and also emerged within the industry. As the economy struggled through 2009 and 2010 (and in some cases still struggles), OSI was getting back on its horse, riding several initiatives toward long-term growth.
Two of those initiatives came to fruition in the past months — OSI celebrated the grand openings of its Culinary Innovation Center at its Aurora headquarters and its brand new dry-sausage plant in West Jordan, Utah.
Beyond the obvious boost to the asset base and production tonnage for OSI, these two facilities signal much more about OSI’s plans, strategy and direction moving forward. In a big way, these moves tell the industry and a potential customer base that OSI has been and will be not only open for business — but focused heavily on bringing innovative products to market across the globe, using top-of-the-line knowledge and technologically advanced processes to get the job done more creatively and efficiently, and with even better quality.
Branching out with quality, safety
To those who may be in the know, the diversification of OSI’s business in the 1990s is old news. But given OSI’s penchant for not seeking out publicity and desire to remain a privately owned company, it’s worth hearing company chairman and CEO Sheldon Lavin describe how OSI’s business went from being more than 95 percent reliant upon McDonald’s toward a much more expansive customer base today.
“Today, we continue to grow our business with McDonald’s while also serving the growing needs of many of the world’s leading brands,” he explains. Lavin believes OSI’s track record of producing safe and high-quality food has been a big driver of this diversification over the years, and it is one tenet of the business that OSI promotes heavily today.
“One of the reasons we have the customer base that we have is because of our food-safety systems,” Lavin adds. “We’ve been a McDonald’s supplier since Day One and supplied the first hamburger in the first store, and 56 years later, we’re proud to be one of their largest protein suppliers in the world. We have and will continue to evolve with our customers.”
OSI is regularly recognized for its leadership in quality, ranging from development of robust foreign-material prevention programs to industry leadership in raw-material management. Other customers have taken note of OSI’s abilities in these areas, and have helped diversify the company, as Lavin states. Furthermore, Kevin Scott, executive vice president, North America, believes the company’s advancements in food safety and quality give it an advantage globally.
“Quality practices here are giving us a leg up in Asia right now,” he says, “because in their emerging landscape of regulatory and quality standards, we can utilize some of our U.S.-based expertise to provide our customers with excellent supply-chain and manufacturing solutions, distancing ourselves from the competition.”
Best innovation foot forward
Because of OSI’s long-term partnerships with its customers — focused on the restaurant, private-label, industrial and foodservice distributor channels — the company is able to deliver innovative product and processing solutions using its track record on quality, food-safety and operational excellence. OSI then caps it off by putting its best culinary and product-development foot forward.
After years of extensive planning and development by B.K. Girdhar, vice president, R&D, executive chef Chris Hansen, and their teams, OSI converted a wing of its headquarters office building into the OSI Culinary Innovation Center.
Prior to this, OSI had the expertise and track record in product development and culinary innovation, but simply didn’t have a centralized “destination” for its brainstorming, testing and development sessions.
“We lacked the [defined, dedicated] space, so we were improvising [many times],” explains Girdhar. Now, Hansen calls the center — which opened officially in September — the “perfect” space, one that includes a customer-focused kitchen, a taste-panel room, a large conference room and a presentation room.
“At the end of the day, we wanted a functional space that could be used to the customers’ expectations and make them feel welcome,” Hansen explains. Already, in the center’s short active life, it seems to have paid dividends. Ron Bree, senior vice president, Foodservice Sales and Business Development, says one of OSI’s existing customers had used a competitor’s culinary facilities in the past to work on projects. But things appear to be changing already.
“Today we had them specifically in our building working on three new items, and it puts us in the forefront with that customer,” he explains. “The center has played well with other customers as well. We already have had several new customers in here exploring exciting new product concepts.
“It’s a great front-end approach to get them to come into our building, get relaxed and work with our culinary team and Chef Chris, who is a great customer-oriented chef,” Bree says. Girdhar adds that existing and prospective customers are already lined up and using the center frequently. Furthermore, OSI is certainly taking advantage of having the expertise and abilities all in one location.
“Several times a week, we have work sessions or product cuttings,” says Girdhar. “Internally, we use it also for sensory evaluation and product development.”
Building a new business segment
While the Culinary Innovation Center is a great destination point for OSI and its customers to innovate and develop mutually beneficial ideas and products, it should be noted that OSI had been blazing its own trails into new business segments well before the center came online. The company has always worked with its customers to find new growth potential, and then has not been afraid to invest in the long-term opportunities brought about by those relationships.
For an example of this, one needs to look no further than OSI’s brand new West Jordan, Utah, facility expansion into dry-sausage manufacturing. The West Jordan facility was constructed in 1977 and has produced frozen beef patties, cooked meats and specialty hand-cut steak items since then.
When a significant restaurant customer came knocking on OSI’s door about the opportunity to fill a need for dry-sausage production in the west, the company jumped at the chance and agreed to build the plant at West Jordan, doubling the footprint of the overall facility (though the two plants share a wall and the raw-materials receiving dock, they each operate relatively independently of one another).
“As the demand has continued to grow in dry sausage, there has been a limited amount of production in the west,” says Mark Chaplin, vice president, Process Team. “Understanding that, ... we worked with our customer to build the facility and design it specifically to produce world-class pepperoni and Genoa salami.”
Bree says OSI invested in the facility not only for its current customer’s needs, but also to expand OSI’s portfolio of core manufacturing processes.
“We looked for opportunities across the industry where capacity was constrained,” he explains. “Dry sausage was one of those areas and a perfect fit for our customer’s specific needs in this case. If you look, dry-sausage manufacturing is very capital intensive, and it requires unique expertise. OSI is excited to now be a part of this growing business segment.”
Mike Yeager, vice president, Engineering, explains that the West Jordan facility was built to accommodate plenty of growth down the road, beyond the existing capacity.
“When we built the facility, we had two phases of expansion in mind, and we made accommodations for that in the construction plans,” he says. “One, within the physical walls, and two, some of our infrastructure can afford a physical expansion of the building outside of the walls that you see today.”
Innovative technology on display
From a macro standpoint, the West Jordan dry-sausage plant stands as a shining example of OSI’s willingness to invest in a long-term opportunity that it believes has significant potential. However, below the surface, the plant bubbles with innovative technological advancements that take operations, quality and food safety to a whole new level for the industry.
Chaplin says OSI did extensive homework on the dry-sausage process and put together a team with a broad range of experience in the manufacturing of pepperoni and an understanding of the nuances of the process.
“You can talk to people in the industry and [mostly] they’re going to tell you what doesn’t work; what you can’t do, and what that does is puts up a lot of barriers to being a little more creative and stepping out a little further than what the rest of the industry has been doing,” he explains.
OSI stepped back in response and looked carefully at how to be innovative across a variety of processes, whether it was formulating the product, grinding, stuffing, hanging, drying or moving that product around the facility. State-of-the-art processes were developed, all with efficiency and food safety top of mind.
“What we came up with was a process that requires very little human touching of the product,” Chaplin says. “From the time we grind that product, the only person that touches that product is the person that touches the stick and places the loop on the automated hanging system. That is it. ... That product is never touched again until it is placed in the combo.”
Beyond the food-safety ramifications of this aspect of the system, Chaplin adds that it helps minimize worker ergonomics and product damage issues via a lack of human handling of heavy logs of meat.
“In a traditional facility, there’s a lot of weight moved around by forklifts or handtrucks, or in some cases trees that you have to push,” he says. “So putting in an automated system that handles that for you saves ergonomics, saves efficiency and saves yields.”
The overall facility has plenty of room to expand, Chaplin reiterates, and based on the employee base and its loyalty to the company (little turnover, long tenured, explains complex manager Bryan Dedrickson), as long as there is long-term growth potential, people shouldn’t be surprised to see OSI increase its footprint there.
“The big thing about the future of this facility is, we’ve really laid the facility out and built it in such a manner that, if we decided to double the size of this facility, that easily could be accomplished,” Chaplin says. Yeager adds that the way the dry sausage plant is laid out offers OSI a variety of options if the company wants to expand into new segments as well.
“If you look at the front end of the plant, for example, where we grind, stuff and make logs, if you’re open-minded, there’s really not a reason that we couldn’t make logs of a lot of different components,” Yeager says. “We have the real estate here where we could actually use that front end to make different products that could go into a new, different room — today, [dry sausage] may go to the right, but in the future, if we wanted to, [a new product] could go to the left, and we could make a lot of different products and compete in some segments that this facility doesn’t compete in as it sits today.”
No matter the “direction” OSI travels in its pursuit for long-term growth, the company’s new Culinary Innovation Center and dry-sausage facility register as more than a feather in the cap of a true trailblazing processor. These new facilities — combined with the business strategies and employee expertise behind them — show the world in a big way that OSI is open for innovation.