|The Bama Foods Cos. uses Six Sigma concepts to increase capacity by improving line efficiency. From 2001 to 2004, the company estimates that $12 million is savings is attributed to Six Sigma.|
When was the last time you analyzed your production lines? When was the last time you traced dough from the mixer to the packaging line, carefully monitoring every motion and every inch of conveyor? You do not perform these steps often, right?
Two years ago, The Bama Cos., Tulsa, Okla., did just this at its Bama Foods facility, which manufactures biscuits. The comprehensive analysis was part of a Six Sigma project that aimed to answer an important question: Is it possible to increase capacity without capital expenditures?
The plant’s capacity was exhausted, and an immediate answer was needed. “We were about 30 days away from going to the banks and getting a huge loan to expand the facility,” says Vern Rathbun, The Bama Cos.’ vice president, general manager of Bama Foods and corporate quality.
Instead of going to the banks, the company applied Six Sigma tools and methodology to analyze for a way to increase capacity by improving line efficiency. “We analyzed production and found a way that we could increase our throughput to the tune of a 17% increase in capacity,” Rathbun says, “which allowed us to defer the capital expenditure.”
To accomplish this impressive capacity increase, the company conducted what Rathbun calls “back-end problem solving.” This process starts at the initial problem: the company was running out of capacity. From there, Rathbun and his team identified areas that restrained production capacity, then “figured out what we could do to break through those barriers,” Rathbun says.
Next, the company ran tests to validate that its problem solving tools worked. “This project took 60 days to really understand and execute a plan to allow us to be comfortable with a 17% upside in capacity,” Rathbun says.
This Six Sigma project was accomplished through the work of a 12-person team consisting of one Six Sigma Black Belt and several floor operators, whose familiarity with the facility’s production systems proved invaluable.
After completing the project, the company continued identifying areas of efficiencies, further increasing capacity by an additional 12%. “Using Six Sigma, we’ve not only been able to defer a huge amount of capital,” Rathbun says, “but we also are looking at a 25% to 40% capacity increase without any capital at all, which is obviously breakthrough thinking.”
The Six Sigma approach
The breakthrough in problem solving techniques used at The Bama Cos. is attributed to Six Sigma, a systematic problem-solving tool. The history of Six Sigma is traced back to the 1800s, but Motorola spurred the methodology’s current approach in the 1980s. Becoming versed in Six Sigma problem-solving tools and methodology requires a significant amount of training. Color-coded belts designate the various levels of training and understanding of Six Sigma, with Black Belts as the pinnacle of Six Sigma training, and Green Belts and Yellow Belts as lower levels of training.
The Bama Cos. became serious about Six Sigma in 2001, when Paula Marshall, The Bama Cos.’ chief executive officer, sent many of the company’s top managers to Six Sigma training. For about a year, these top managers spent long stretches of time away from their jobs. When they returned, they spread the Six Sigma methodology and problem solving tools throughout the organization. Today, about 20% of the company’s employees have some level of Six Sigma training.
The Bama Food Cos. employs 10 Black Belts in its organization, and each of the company’s five plants has a dedicated Black Belt employee. The company uses Smarter Solutions, Dallas, to train its Black Belts.
“They are a significant voice in making people understand that Six Sigma is a set of tools,” says Shelly Holden, The Bama Cos.’ senior director of Six Sigma. “These tools are very comprehensive and the methodology is designed to give you the key factors for designing processes and products, or finding root causes for process improvement and systematic improvements.”
Holden has worked at The Bama Cos. for 14 years, and spent the majority of her time in the customer group before becoming involved in Six Sigma. She has certification in Six Sigma improvement methodologies and design.
In addition to its Black Belts, The Bama Cos. has 74 trained Green Belts and 14 Green Belt Champions. Green Belts undergo 46 hours of training at the company’s training institute in Tulsa. The company also employs about 200 Yellow Belts, who undergo eight hours of training, and who must prove that they grasp the basic elements of Six Sigma.
Why Six Sigma?
In the world of business, there are thousands of books and companies that specialize in corporate strategic thinking aimed at improving how organizations run. So, what separates Six Sigma from a sea of seemingly like-minded strategies? “Anybody can be good at figuring out a problem and solving it, but Six Sigma really helps you figure out how to maintain and sustain the solution,” Rathbun says. “With Six Sigma, you can’t leave a process until you have a control plan in place, and then you go back and validate the plan to make sure it’s sustained. That has saved us on numerous occasions from drifting away from Six Sigma methodology.”
In its simplest form, Six Sigma is used to solve problems throughout an entire organization. In manufacturing applications, typical Six Sigma projects are launched to reduce scrap rates and packaging bottlenecks. On the operations side of a business, typical Six Sigma projects are designed to reduce inventory and improve ordering systems.
For The Bama Foods Cos., Six Sigma has proved an invaluable tool. From 2001 to 2004, the company estimates that $12 million in savings can be attributed to Six Sigma. In addition, the company’s productivity numbers have skyrocketed since implementing Six Sigma, with sales per employee increasing from $175,000 to $205,000.
Six Sigma evolution
However, these cost-savings and productivity improvements are not enough to satisfy The Bama Cos. About six months ago, the company decided to increase the use and reach of Six Sigma by integrating it into all levels of its operations as a major strategic tool. The decision to evolve Six Sigma into a strategy-driving tool occurred after the company hit a plateau with its Six Sigma advancement.
Throughout the last five years, Rathbun says, the company has done an excellent job training its employees at the various Six Sigma levels. However, the company’s integration of Six Sigma into its organization has leveled out.
“Over the last several months, we’ve had a real change in philosophy, not about the tools and use of Six Sigma, but about how we can take Six Sigma out of the bottom level of our organization,” Rathbun says. “How do we work the finite projects into more of a strategic component of how you view your business planning, and the actual execution of high-level strategies.”
By expanding Six Sigma methodology into a broad-based company-driving strategic tool, The Bama Cos. has once again raised the bar on operational excellence. The company expects its most recent evolution of Six Sigma to drive the company toward its Future Picture: a $1 billion company by 2010.
In 2004, The Bama Cos. was named a recipient of the prestigious Malcolm Baldrige National Quality Award, marking the first time a bakery has been bestowed with this honor. In a five-part series of articles, Baking Management details various aspects of the bakery’s operations, including strategic plans, research and development, and Six Sigma.
This is the third installment of the series. For more information on The Bama Companies and to read parts I and II, go to www.bakery-net.com/bama.