|In 1999, The Bama Cos. started the Paul Marshall Excellence Awards to recognize its suppliers on innovation, continuous improvement, quality of products, service, fair pricing, cost containment, technical support, customer service support, common philosophies and shared values, and the ability to bring new business to The Bama Cos. The bakery says its suppliers play a large role in its success.|
The old adage, “treat others how you want to be treated,” holds true for The Bama Cos. and the relationships it builds with its suppliers.
“We’re a partnership company, not a transactional company,” says Shirley Bailey, The Bama Cos.’ director, supply chain and corporate contracts. “And I think that’s the difference between us and a lot of manufacturing companies.”
This difference was a key factor in the Tulsa, Okla.-based bakery’s recognition as a Malcolm Baldrige National Quality Award winner. This recognition put the company in the spotlight, and marked the first time a bakery has received this distinguished honor.
Although many factors contributed to the company’s recognition as a Baldrige winner, one cannot underestimate the role the company’s suppliers play in The Bama Cos.’ success.
For example, during last year’s devastating hurricane season, many bakeries were left in a lurch when sugar availability dwindled. “During that period of time, the market was in a total sense of chaos,” says Chris Hutton, The Bama Cos.’ senior director, supply chain, and Six Sigma Black Belt.
Fortunately, the company has a strong 30-year relationship with its sugar supplier. This relationship benefits both companies and is not solely focused on prices. This relationship proved advantageous as the company’s sugar supply remained steady despite the chaos last year.
“If you beat suppliers up on price alone, than we would have not been in the same situation,” Hutton says. “We may have been without sugar.”
Instead, the company maintained a consistent sugar supply during that time. Even more important, the supplier honored the contract price.
This represents one example of how The Bama Cos. benefits from strong supplier partnerships built on honesty and trust.
“Our philosophy is that we try to deal with as few suppliers as we possibly can, and we build long-term relationships through the years by partnering with these suppliers,” says Bob Gordon, The Bama Cos.’ senior vice president, corporate service and supply chain.
The company deals with 50 to 60 key suppliers, many of whom have been partnering with the company for more than 15 years. In most cases, the company prefers to deal with a single supplier for an ingredient as opposed to multiple sources. Gordon says the reason is simple: “We try to give as much business to one supplier as we can.”
This philosophy builds the partnership bond, Gordon says, by giving suppliers a greater investment and role in assuring The Bama Cos.’ success.
The company’s founder, Paul Marshall, laid the groundwork for the company’s supplier philosophy. In the beginning, the bakery built its business on handshake deals. Today, suppliers go through a more formal process, but the company still maintains the handshake mentality to strengthen relationships.
Ingredient suppliers undergo frequent audits from The Bama Cos.’ supply chain group to ensure ingredient integrity and manufacturing practices. More importantly, these visits help maintain and strengthen relationships.
One of the most important aspects of these relationships is honesty and open communications between The Bama Cos. and its suppliers. “The most serious supplier issue is dishonesty,” Gordon says. “We know our suppliers are going to make mistakes, and if it happens, we will work through those issues. But if we find out that they were dishonest, there will be serious issues.”
The Bama Cos. expects a lot from its supplier partnerships, and in turn, the bakery considers it beneficial to reward its suppliers for exceptional performance. In 1999, the company started the Paul Marshall Excellence Awards program, which provides formal recognition to suppliers who excel in business management, performance and business results. The company says the awards provide suppliers with a mechanism for self-assessment and external assessment in order to identify key areas of strength and opportunities for further improvement.
“We’re probably one of the rare companies that have a formal way to say we appreciate our suppliers and showcase them and all of the quality things they do for us,” Bailey says.
The company determines award winners on 10 factors: innovation, continuous improvement, quality of products, service, fair pricing, cost containment, technical support, customer service support, common philosophies and shared values, and the ability to bring new business to The Bama Cos.
The company recognizes suppliers at an annual awards dinner in the following categories:
• Supplier of the Year
• New Business Opportunities of the Year
• Supplier Excellence, Rookie of the Year
• Supplier Excellence, Service
• Supplier Excellence, Value and Innovation
• Supplier Excellence, Quality
For The Bama Cos., the awards ceremony and program serves as a continuous improvement project and a tool for the company’s suppliers to “hone in on their expertise and bring to Bama the best of what they have to offer,” Bailey says.
Spreading Six Sigma
The Bama Cos.’ quest for continuous improvement throughout its business includes constantly seeking ways to improve supplier partnerships. Last year, the company took a significant step in its continuous improvement goal by transferring its Six Sigma program into the supply chain.
Last year, the company brought its Six Sigma provider to its annual supplier meeting to introduce and outline the benefits and potential efficiencies gained through joint Six Sigma programs. Since that meeting, The Bama Cos. and its key suppliers have completed or are involved in nine joint Six Sigma projects.
“These projects have to be win-win for us and for our suppliers,” Hutton says. “It cannot benefit only us, and the supplier is there only to support us.”
One such project with the company’s flour supplier addressed suboptimal truck weights. Through the DMAIC process (define, measure, analyze, improve and control), the Bama Cos. and its flour supplier put together a team that increased the average weight per truckload by about 2,000 lbs. and decreased variation by 50%.
“Throughout this process, we were able to improve the overall system to deliver a better freight opportunity for Bama, and improve the suppliers’ businesses by helping them in their deliveries to other customers,” Hutton says.
Trust is the key word when detailing any aspect of The Bama Cos. supplier partnerships. “We’ve built a lot of relationships on the trust between us and our suppliers,” Gordon says. These relationships helped The Bama Cos. obtain the Malcolm Baldrige National Quality Award, and they continue to pave the way for the company’s success.