After 20 years of continuous improvement, The Bama Companies Inc., Tulsa, Okla., achieved a goal awarded to no other bakery: the Malcolm Baldrige National Quality Award. This recognition thrust the family-owned bakery into the national spotlight and gave 40 members of the Bama family a trip to Washington, D.C., and a date with Vice President Dick Cheney.

“The recognition is so meaningful to Bama because we know how intense, objective and rigorous a company is viewed by the examiners and judges,” Paula Marshall, Bama’s chief executive officer, says. “The process is planned to ensure that only the most outstanding organizations are recognized.”

The Baldrige Award is named after Malcolm Baldrige, a former Secretary of Commerce who believed quality management was the key to the country’s prosperity and long-term strength. The president of the United States of America gives out the award to recognize U.S. organizations for their achievements in quality and performance, and to raise awareness about the importance of quality as a competitive edge. Baldrige Awards may be given out annually in these categories: manufacturing, service, small business, education and healthcare.

Besides Bama, other 2005 recipients of the Baldrige Award include Texas Nameplate Co. Inc., Dallas; Kenneth W. Monfort College of Business, Greeley, Colo.; and Robert Wood Johnson University Hospital Hamilton, Hamilton, N.J. Since 1988, internationally renown companies such as Motorola Inc., Federal Express Corp., Merrill Lynch Credit Corp. and Boeing Aerospace Support. Bama’s membership in this elite group marks the first time a bakery has been honored with this distinction.

From left to right: Vice President Dick Cheney and Paula Marshall, Bama's CEO.

Bama’s journey toward the Baldrige Award started 13 years ago. The company’s first application did not garner a Baldrige Award, and neither did many subsequent applications. However, the application process proved invaluable as a continuous improvement tool.

“We’re very proud of receiving the award, and it’s been a big journey for us,” Kelli Bruer, Bama’s marketing manager, says. “But it hasn’t been a journey just for the award’s sake. We’ve used the whole application process as a tool to get better and better.”

Mike Frihart, a Six Sigma Black Belt for Bama, spearheaded this journey, clearing his schedule every February through May to work on the Baldrige Award application. This application includes more than 50 pages of minute details about every aspect of the company’s operations. Specifically, the Baldrige Award outlines seven criteria for operational excellence: leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resource focus; process management; and business results. To gain the Baldrige Award, Bama had to detail how it satisfied each of these criteria. Summaries of these criteria and Bama’s strategies are listed in this story. Throughout 2006, Baking Management will dig deeper into these criteria to discover what makes Bama a Baldrige Award winner.

Leadership

Paula Marshall accepts the Baldridge Award in Washington, D.C.

Cornillia Alabama “Bama” Marshall founded The Bama Companies in 1927, and her granddaughter, Paula Marshall, leads the company today. Marshall assumed the chief executive officer role in 1984, and has guided the company through an impressive growth period, which saw annual sales skyrocket to more than $200 million.

Marshall and her senior management team govern the company through Deming philosophies. W. Edwards Deming was a business icon who helped rebuild Japan’s industry sector after World War II. Deming also authored many books on Total Quality Management.

Bama’s senior management team uses Deming philosophies to guide its business strategies. For example, one of Deming’s philosophies urges companies to break down barriers between departments. Bama follows this principle by operating in an open environment, where every employee knows the company’s strategic goals and initiatives. This openness allows the company to respond quickly to issues and provide guidance to employees in an efficient manner.

Bama also lives by the Deming philosophy to eliminate management by numbers. “Bama does not have quotas. Operationally [at other companies], your team members may meet quotas, but what have they achieved?” Bruer says. “At the end of the day, the team members are not interested in improving the overall business, they’re just interested in the quota. Quotas actually demotivate people from being creative.”

Strategic planning

The Bama Companies manufactures handheld pies for McDonald's in the United States and 17 other countries.

Bama’s Future Picture serves as the end goal of its strategic plans. The company’s vision is to “Create and deliver loyalty, prosperity and fun for all, while becoming a billion dollar company.”

This Future Picture is a key aspect of the company’s Prometheus Strategy. The Prometheus Process was created by John Warden, who is credited as being the architect of the Desert Storm air campaign. Boiled down to its simplest form, the Prometheus Process applies military strategies to the business world.

“You map out your internal system, the marketplace system and your competitors’ systems, and you enact parallel plans of attack,” Bruer says. “When you change the market in any way, you have to break the elastic limit. Competitors cannot have time to react.”

Bama implemented the Prometheus Process in 1999 and launched a growth strategy that broadened its customer base and laid out a complex strategic plan. This strategic plan is graphically laid out in the company’s War Room. Here, strategic maps, processes and goals litter the room’s four walls.

The Bama Companies operates four plants in Tulsa, Okla., and one in Bejing.

Central to the company’s War Room is the strategy map, which includes five strategic outcomes that will help the company attain its Future Picture. These outcomes include people, learning and innovation, business improvement, customers and financial.

“Everything we do links to the strategy map,” Bruer says. “These are the five things that we need to impact in our business.”

Customer, market focus

Bama’s customer list reads as a who’s who of the business world, and includes the largest hamburger chain, pizza chain, Mexican food chain and retailer in the United States. These core customers, especially McDonald’s, represent a significant portion of the company’s sales.

Bama produced the first handheld pie for McDonald’s in 1968, and has expanded this business throughout the world. The company is the sole supplier of McDonald’s handheld pies in the United States, and distributes these products to more than 17 countries. The company even operates a plant in Beijing.

Measurement, analysis management

As part of the Baldrige Award application process, a feedback report is given to all applicants. This report serves as a continuous improvement tool and helps Bama address all of its problems instead of sweeping them under the rug. “We’re our own best critics. We have no problem pointing out a problem and saying it needs to be fixed,” Frihart says. “We don’t sit around and say somebody else needs to do something about that.”

The Bama Companies employs Six Sigma to solve manufacturing problems.

The company uses a Balanced Scorecard System (BSS) to measure performance at four levels: company, facility, department or team, and process. The BSS allows every employee to review the company’s performance, which promotes accountability, the company says.

Bama also employs a Data Warehouse System (DWS) to integrate information from BSS and other performance databases. This integrated system allows the company to track operations and overall organizational performance on a daily basis. DWS also enables the company to understand the relationship between its actions and their results.

Human resources focus

Bama implements many tools, processes and strategies throughout its business operations. These measures would be useless, however, if the company’s employees did not buy into the theories and philosophies behind the tools. The company’s People Assurance System ensures that employees are trained, informed and know their job performance expectations.

The company also believes in a team-based environment. Most employees are members of at least one team, and many of these teams consist of multiple departments. This promotes initiative, cooperation and flexibility, the company says.

Bama also encourages its employees to obtain a college education by providing tuition reimbursement. In the last four years, more than 140 employees participated in the tuition reimbursement program.

Process management

Bama operates five plants, and uses a comprehensive Six Sigma program to maintain efficiencies and solve potential manufacturing problems. Six Sigma is a problem solving tool that analyzes business problems and solves them. Since 2000, the company has used Six Sigma to solve many operational and business problems. “We attribute $12 million in savings due to Six Sigma from 2001 to 2004,” Frihart says. “It’s a very systematic problem solving process. It consists of a lot of standard problem solving tools along with some heavy-duty statistical tools.”

The Six Sigma program is divided into various color-coded levels. To obtain the highest level, black belt, employees are pulled away from their jobs and put through a comprehensive four-month training program. This program makes employees identify an existing problem and go through a rigorous analytical process to solve the problem. Bama has 12 black belts on staff, 50 green belts (the second level) and countless yellow belts (the introductory level).

Business results

Bama’s Future Picture sets a lofty goal: a billion dollar company by 2010. To achieve this goal, the company is broadening its customer base. For example, 15 years ago McDonald’s accounted for 95% of Bama’s sales. Today, Bama has diversified its sales and the fast food chain no longer accounts for such a large percentage of Bama’s total sales. By diversifying its customer base, Bama is poised to meet its Future Picture.

Throughout 2006, Baking Management will look at four areas that Bama excels in. These areas are the Prometheus Process, Six Sigma, customer and supplier partnerships, and research and development. For more information on this series of stories and Bama, go to www.bakery-net.com/bama. •