Ray Kroc, founder and chairman of McDonald's® Corp. from 1955 to 1984, was famous for many of his mottos, but perhaps none more so than his philosophy of the three-legged stool as illustrated by his quote, “none of us is as good as all of us.” The three-legged stool refers to the relationship between corporation, franchisees and suppliers. Mid South Baking Co., a key supplier of buns, rolls and English muffins to McDonald's, exemplifies the importance of this relationship, not only in the way that it services its customer, but also in the way that it works with other McDonald's bakery suppliers.
Mid South Baking Co. has worked with other bakeries to develop a common language toward continuous improvement. In doing so, Mid South relied on its own internal quality systems, third-party evaluations, other bakery evaluations and state-of-the-art automation to achieve its goals.
As a company that places great emphasis on having an assured supply of product to meet its customers' demands, Mid South places equally as much importance on the quality of its delivery and distribution system as it does on the production side of the business. As such, the bakery is committed to not only producing product according to specification, but also delivering product accurately and on time.
A council of bakers
Years ago, McDonald's started a group of councils where its suppliers with common interests banded together to work toward best practices. Mid South Baking Co. joined other bakers to form McDonald's Bakery Council. “Everybody laid their buns on the table,” says Fred Bower, president, C.E.O. and managing partner of Mid South. As one baker compared its product to another's, a lot of differences were noted from one part of the country to the other. It wasn't a matter of product being out of spec, but the range of product attributes strayed widely from the target line. As a result, Mid South and its fellow bakery suppliers worked jointly with McDonald's USA and its franchisees to improve the consistency of key attributes so they are more centrally focused on target.
“What we've done is align our strategies in areas of people, product, progress and practices to where we're all going in a common direction,” Bower says. “We've identified those common areas where we can make the greatest difference to improve product, give them the best possible value and find ways of improving our service to the restaurants.”
Among the areas that McDonald's bakers have analyzed are manufacturing practices, including those associated with direct labor and the purchase of ingredients. As such, Bower and his managers have the opportunity to see how their practices compare with other bakeries on the council.
Sensory perception is one of the many quality aspects Mid South focuses on. Once a year, a realignment process takes place to make sure the bakery's buns, rolls and English muffins meet McDonald's sensory expectations. All of this is done under the guidance of McDonald's sensory and quality personnel who select product that meets its specifications of appearance, flavor and texture. A tasting and scoring session is then conducted with Mid South's management, line supervisors, quality staff, field service people and McDonald's sensory personnel to ensure the bakery's product is aligned according to its customer's expectations. “We use a scoring system that is a degree of difference system to tell us what the target is and how far off the product is from that target. It works very well,” says Bill Snell, quality assurance manager for Mid South.
The bakery also relies on a lot of third party involvement to ensure both its quality and safety standards are on target. Mid South bakeries have bi-annual food safety audits and safety scoring by AIB International, and maintains a Superior rating. On occasion, Mid South sends its product to other McDonald's bakers for quality scoring. It also receives food safety and quality systems audits from Homewood, Ill.-based Silliker Inc. Mid South's HACCP program is fully approved by an outside third party, as are all of the other bakeries' on McDonald's Bakery Council.
To assess its level of preparation, the bakery runs a mock recall. “We have to be able to perform within four hours,” Bower says. “We have to know where the product went, how we're going to get it back and who has to be notified.” Another part of the certification process is the timing of the mock recall.
“The recall has to be performed after hours,” adds Homer Daniels, general manager for Mid South. “That's one of the criteria of HACCP.”
On the cutting edge
Mid South's path toward continuous improvement has been supported by a move from at-line inspection to a 100 percent in-line inspection/rejection system. The installation of Dipix's CS24 inspection system has improved consistency and productivity. Dipix's intelligent system has helped the company lower rejection rates, while giving operators real-time production process monitoring capabilities. This system took a lot of the subjectivity out of process control; it's a more analytical process, Daniels notes.
“Operators can watch CT screens and let their supervisors know whether the product is running a little dark or a little tall,” Daniels explains. “As the graph moves, the intent is for the operator to get their supervisors to make the proper adjustments on a real-time basis. The Dipix system hasn't affected speed or throughput, it's just made us better bakers. We can actually take a look at the effects of a flour crop change on the finished product.”
Among the reports available through Dipix's CS24 inspection system are the trend report and a production summary. The trend report is a graphical representation of a particular product parameter that shows the distribution of data around a target. For example, one particular chart measuring bun height indicates a target of 47 mm, with a lower limit set at 41 mm and an upper limit set at 52 mm. Out of 759,601 buns graded during a particular period of time, the average height was 47.4 mm, only 0.4 mm away from the target. None of the buns were below the lower limit and only 0.3 percent were above the upper specification limit. Aside from height, Mid South measures mean diameter, seed area percent coverage and crown color of buns. An alarm will sound if a majority of product is not meeting spec within a 30 second time period on either color, number of seeds, height or diameter, alerting the operator that the Dipix rejection is removing out-of-spec product from the line and correction is required immediately.
Mid South can set up any number of parameters on the inspection system along with its customer's specifications. The system analyzes about 22 million buns and muffins per week. This allows the company to improve product processes and quality, while minimizing waste. “The Dipix unit helped standardize and develop a common language throughout the McDonald's community,” Bower says.
In 1981, Mid South started servicing 50 McDonald's restaurants in the Oklahoma City area, out of a small bakery in Wichita Falls, Texas. Six years later, McDonald's approached the bakery with the opportunity to build its current facility in Bryan, Texas. At that time, Mid South was servicing about 1,200 McDonald's restaurants. The bakery has since built two additional facilities in Pelahatchie, Miss., and currently services more than 2,500 McDonald's restaurants across the country.
Working on a fresh delivery system requires that Mid South deliver product three times per week. Its trucks travel about 148,000 miles per week on 118 different routes while making about 7,500 deliveries.
The bakery buys its own fuel, and most of its trucks are set up with three or four tanks to ensure they make the full trip. “If we don't provide the service, which includes transportation and delivery service, we cannot achieve customer satisfaction,” Bower says. “Half of everything we do is on the delivery side of the business. Our transportation part of the business does an outstanding job; very much equal to the manufacturing part of our business.”
Perhaps no company could be more cognizant of the preparations needed to maintain an assured supply for its customers than Mid South, which finds itself in the heart of hurricane country. After learning its lesson the hard way during Hurricane Katrina, the company set up a generator that both of its Mississippi bakeries can feed into. The generator can be delivered on the back of a transport and can supply enough electricity to run both plants. It also has an outdoor diesel fuel tank that feeds the generator.
Mid South also has a back-up propane system in case the gas supply is ever shutdown. Coincidentally, the natural gas company shut down the Texas plant for seven days just two weeks after it installed the propane system.
Another issue the company worries about is its flour mill, which sits in the harbor area of Houston. At a daily usage of about 260,000 lb. of flour per day, Mid South can't function without its key ingredient. During the most recent hurricane threat, the mayor of Houston evacuated the city. Although Mid South's flour had been milled, the mill's drivers had been evacuated with the rest of the town. “By that night, we had become a licensed flour carrier, with a tractor and tank trailer that could haul flour to our tanks,” Bower says. “For the next two days, we delivered our own flour, which took our driver 12 hours on a trip that normally takes one and a quarter hours. ”
Aside from the transportation and delivery side of the business, Mid South must ensure that its plants can accommodate many of the new products that McDonald's test markets. “You have to position yourself for the future, so when new circumstances occur, you know that you have the route and the equipment to support it,” Daniels says. Most of the Bakery Council's plants are well equipped to be highly effective with a limited amount of versatility. Mid South recently installed a more versatile sandwich carrier line, so that it can more effectively give McDonald's other options, Bower notes.
When Ray Kroc stated: “I don't know what [McDonald's] will be selling in the year 2000, but we'll be selling more of it than anybody else,” he must have had an idea of the staggering number of buns that Mid South, one of McDonald's valued suppliers, would ship in 2007. At nearly 100 million dozen buns shipped last year, McDonald's can not only be confident that Mid South will deliver an assured supply to meet its astounding demand, but also absolutely conform to all of its quality standards.
Mid South Baking Co. at a glance
Headquarters: Bryan, Texas
Ownership: Partnership—Fred Bower (managing partner), John Paterakis and Peter Grimm
Management: Fred Bower, president; Steve Warden, V.P. of bakery operations; Tray Elliott, V.P. of finance; Dave Bartholomew, director of customer and quality service; Mike Little, director of distribution; Homer Daniels, general manager—Texas bakery; Tom Shuler, general manager—Mississippi bakeries; and Sherry Flanagan, corporate compliance officer
Texas bakery personnel: Willie Dairy, transportation manager; Donnie McLendon, chief engineer; Bill Snell, quality assurance manager; Ryan Johnson, sanitation manager; Diane Reese, shift supervisor and Debbie Weatherford, shift superviso
Product line: McDonald's buns and rolls including hamburger, Quarter Pounder, Big Mac, premium chicken and McRib; McDonald's English muffin; and Sara Lee Whole Grain and Wheat with Honey English muffins
Packaging: McDonald's buns and rolls are packed in 30-count pillow packs; McDonald's English muffins are dozen packed; and Sara Lee premium muffins are packed three on three
Marketing territory: Southwest to Southeast, stretching from New Mexico to the Carolinas
Plant size: Texas bakery, 90,000 sq. ft.; Mississippi bakery, 45,000 sq. ft.; and central Mississippi bakery, 35,000 sq. ft.
Production lines: High-speed bun and roll line; English muffin line with AMF Versapack customized for packaging Sara Lee muffins
Plant throughput: 1.5 million buns per week
Sales: $100 million
Primary customers: More than 2,500 McDonald's restaurants and Sara Lee
Distribution: Fresh delivery system making 7,500 deliveries per week via 118 routes. Leases 85 power units from Penske Truck Leasing
Number of employees: 443