Archway Lance: Back from the Brink
July 1, 2010
by Steve Berne
After a series of challenges, the once-iconic Archway Cookie Co. was forced to cease operations at its last wholly owned facility at Ashland, OH, in October 2008. Seizing the opportunity to expand its capabilities in branded as well as private-label cookies, Lance, Inc., Charlotte, NC, purchased the plant and all its assets. That act began a whirlwind of activity at the plant and within Lance to not only reopen the bakery but also give it a true makeover, implementing its well-tested Lance concepts for corporate culture, employee empowerment, product quality and operational efficiency.
“It was a really tough time when the plant closed not only for the 278 folks employed at the Archway plant but also all the contactors, sales people — nearly 700 people lost their jobs — and our suppliers,” said Lisa Mahon, human resources manager. “It was really a shock for everyone.”
“What was even more astounding was the speed with which Lance brought the operations back on line after it signed the acquisition papers on Dec. 9,” noted Dan Streit, bakery services manager and a 37-year Archway employee. “Within one week after the acquisition, more than 30 Lance employees from corporate headquarters came in and met with all ex-Archway plant employees; gave each one a check for $1,500 dollars as a goodwill gesture; interviewed 265 people interested in returning to the plant, with the ability to only rehire 60 at the time; hired, trained and restarted operations. It was incredible. We are now back to about 200 employees, 137 of which are former Archway staff.”
Part of the employee empowerment included involving current employees in the interview process for new employees. “This was a volunteer opportunity, and it not only was an eye-opener for the employees but also really elevated them to a level of job ownership we had never seen before,” Ms. Mahon said. “To the prospective employee, it showed the seriousness of the job they were applying for. Once hired, we set up new employees with mentors to acclimate them into our culture. It has really worked out well.”
Jeremy Bowen, plant manager, came on board at the plant in February 2009, site unseen. “I had heard so many good things about Lance, and after discussions with Blake Thompson, senior vice-president supply chain, I realized this was an opportunity I couldn’t pass up. It really came down to the culture, and we see that every day. It seems sometimes that the plant can run itself, and managers are not needed. And that’s a great feeling for everyone.”
At this point, the company still values the plant’s history and heritage, but it eagerly looks to its future. “We’re full speed forward, with a list of projects and ideas, many originating from the hourly employees, that can keep us busy for a long time,” Mr. Streit noted. “We run autonomously as far as Archway products within the Lance organization and bring much needed capacity to the company’s Vista Bakery private-label operations at Burlington, IA.”
Joe Phinney, logistics manager, a 22-year veteran of Archway and several previous positions at Mothers, Beatrice and Parmalat, was responsible for relocating the distribution center to Ashland in 2005 and for liquidat- ing the $2.5 million of assets right after the bankruptcy. “Dan (Streit) and I were the ones walking prospective buyers through the plant during that time, and we had some parties simply interested in selling off the assets for a profit. But Lance was one of the few that saw potential to keep the plant running and had great plans to move it forward at an accelerated rate,” Mr. Phinney said.
The 85,000-sq-ft distribution center adjacent to the plant handles the company’s private label and directstore deliveries as well as shipments to distributors. Of the two brands made at the plant, Archway cookies are baked-to-order because of shelf life while Stella D’oro products are baked-to-inventory.
Tenure from Archway is evident with most senior management. Bob Remington, compliance manager, spent 27 years with the company prior to its bankruptcy. After a short stint at another food company in Ashland following the cookie plant’s closure, he returned with no loss in benefits or years of service. “That’s the kind of culture Lance brings with it,” he said. “It is as close to a family-owned company as there is, and we are all members of the family.”
The first week Mr. Remington came back, the plant was preparing for several food safety and quality audits. “It was great in that Jeremy; Dave Whitman, director of quality and quality systems; and many others were right there on the production floor helping out wherever was necessary. I was thoroughly impressed,” he added. “The buy-in, cooperation and get-it-done attitude from corporate to every employee here are fantastic. We never had this with the old company.”
While each manager noted the culture of teamwork that Lance brought, it was not a new concept, but one that Lance has perfected and one that the old company didn’t have. The environment has gone from a rule-based atmosphere to more a creative, entrepreneurial culture, according to management.
WIGS AND BLACK HATS.
Creativity is evident in some of the acronyms and programs management implemented at the plant. “We put together our ‘wildly important goals,’ or WIGs, which are targets that we see as must-attain items but that will push our standard operating structure and make us think outside the box,” Mr. Bowen noted. “The ideas are also generated from our hourly employees.”
The “Black Hats,” a concept developed by Mike Johnson, operations manager, is now being implemented across all Lance plants as a best practice. “Black Hats are select employees from the production floor who were chosen as key project leaders,” Mr. Johnson said. “They were not mandated for this role, rather we asked for volunteers who would be willing to step up and take charge and be involved from beginning to end of a project.” The team interviewed 30 candidates and picked seven.
The first time Lance implemented the Black Hats program was after the Stella D’oro acquisition. On Oct. 13, 2009, Lance bought Stella D’oro and started moving equipment from Bronx, NY, to Ashland. Within three days, the Ashland maintenance team had the equipment dismantled, shipped, installed and the first order of Stella D’oro Breakfast Treats produced. During the next few weeks, more than 30 additional Stella D’oro products were added.
“Once we knew we were going to have that production here, we also knew that for it to be successful we needed to get the people running the line involved as early as possible,” Mr. Johnson explained. “They helped with line layout, scheduling, creating line flexibility and determining process parameters — all of which surpassed our quality expectations. They then took that knowledge and taught the rest of the production employees and worked the other shifts to train them as well. The training and implementation was all from their perspective, not management simply telling them what to do. That was very powerful.”
Results are tangible. What Stella Doro was running on five production lines at its plant in the Bronx, the Ashland plant now runs on one and a half lines. Moving from dedicated lines to flexible lines making multiple products was the most challenging aspect for the team. “The wide range of products within the Stella Doro brand is completely different than anything we ran before,” Mr. Streit noted. “Biscotti toast, delicate doughs for breakfast treats and shortbread cookies with fudge dollops in a center depression — all this was unique for us, even though they are still cookies.”
According to Mr. Bowen, “With any product, you sell quality. We saw it, and our employees saw it. Through everyone’s efforts, the products made by this plant are the best since the 1980s when Archway was family owned.”
With the plant restart, Lance evaluated the Archway product line and reduced SKUs from 84 to 21 core items. Yet in the past year, it also added Iced Lemonade as an everyday item and seven Holiday SKUs. “We are also completely redesigning our packaging for the Archway brand,” Mr. Bowen noted. “It will require new packaging equipment and new configuration of lines and will be a second major project for the Black Hats.”
Although more than 90%•of all US households purchase cookies, the category has only seen slight growth in the past few years, according to Kristen Oleson, director of corporate communications at Lance.• “Still, the cookie category is highly competitive with larger national brands and smaller niche brands, as well as an abundance of private-label and branded offerings. As consumers seek value and variety, competition increases for share of mind and wallet, making for a highly aggressive environment.”
Within this category, Archway seeks a unique position through its products and communications to help consumers see the value. “In many instances, the cookies alone are enough to differentiate one from the competition , as in the case of Archway and Stella D’oro,” Ms. Oleson added.
BUDGET BUILD UP. Current production at Ashland is split evenly between Archway, Stella D’oro and private label, according to Robert Quintero, finance manager. Under Mr. Quintero’s and key production employees’ leadership, the plant transitioned from using three separate Enterprise Resource Planning (ERP) software systems to an Oracle system, which ties into corporate Lance. “The accuracy, access to data and fact-based decisions have grown exponentially,” Mr. Quintero said. “This plant had no idea of product cost, waste, inventory or other data to make good decisions. If the data was there, it was either inaccurate or spread out between systems, which made it impossible to function profitably.”
According to Mr. Bowen, the plant had no capital budget in 2009. It fixed only what was “bleeding” but evaluated and started making plans to streamline operations. “We repaired some walkways for employee safety, put in bulk tanks for oil to replace totes and buckets and streamlined some lines to improve effi ciency — the low-hanging fruit,” he said. “This year, we are investing in new packaging, wrappers and some depositing systems” Capital plans for 2011 through 2013 will be finalized later this year. The plant continues to reduce inventory and streamline operations for double the production capacity.
Within the current facility, processing and packaging operations take up 73,000 sq ft. More than 50,000 sq ft is used to warehouse raw materials, and ancillary operations take up 41,000 sq ft. “The most sophisticated system is certainly the Schubert robotic pick-and-place system that came with the Stella Doro acquisition,” Mr. Bowen said. “It is remarkable, and we are still learning its capabilities. We sent two technicians to the supplier’s headquarters in Germany, and they came back with great ideas and enhanced knowledge that allows us to pack at an efficiency never accomplished at the Bronx location.”
The Archway plant currently has five production and seven packaging lines, producing 57 cookie varieties and 114 SKUs, all for retail markets. Production is straightforward, although not yet straight flowing. “By midsummer, we will have all the lines running in a straight-flow pattern from production to packaging,” Mr. Bowen said. “That will free up critical space for our holiday cookie production, which is a lot more labor intensive on the packaging end.”
Six Peerless 1,200- to 1,800-lb capacity double sigma arm mixers automatically receive bulk ingredients such as molasses, liquid sweeteners, palm and soy oils, pastry and cake flours and granulated sugar. The remaining ingredients are hand-weighed and staged pre-shift. Liquid eggs are a new ingredient for the plant, coming in with the Stella D’oro production. “We brought in a walkin cooler for storage, and this added a whole new dimension to our standard operating procedures (SOPs) while also adding a critical control point in our Hazard Analysis Critical Control Point Plan,” Mr. Johnson noted.
Each mixer uses an Allen-Bradley PanelView control system, although these are not yet tied to the Oracle ERP system, and is managed manually by the mixer operators. After mixing, dough is unloaded into triangular troughs, rested for up to 15 minutes depending on product and hoisted above the respective depositor. Dough is regulated into the hopper by a crank-controlled opening in the bottom of each trough.
Depositing is either by extrusion, wire-cut or rotary methods, and each oven has two types of depositors positioned over the band. All six ovens are Werner Lehara (APV Baker) indirect gas-fired systems. Lines No. 1 through 3 are 1 m wide. “Lines No. 1 and 2 are dedicated to Stella D’oro production and are certified parve kosher,” Mr. Johnson said. “Operating according to kosher rules was another new facet that came with the acquisition.”
Line No. 3 runs a number of products. During this editor’s visit, it was producing Iced Lemonade cookies, a newly reintroduced item for the Archway brand. Lines No. 4 and 5 produce the bulk of Archway homestyle (big and soft) cookies. These ovens are 48 in. wide. Bake times range from seven to 20 minutes, with the average for Archway products being eight minutes. Icings are produced using a Tonelli mixer, and fudge for the Stella D’oro Swiss Fudge cookies is made in small batches in Hobart bowl mixers to maintain quality.
Each production line requires only one operator. This person is responsible for everything from finished mixes through depositing and baking and has to know the parameters and nuances of each cookie variety. “We produce a range of items from 100-Calorie packs of 23-g Stella D’oro Breakfast Treats cookies to soft and chewy 9.5-oz molasses cookies and toasted biscotti loaves that are baked, sliced and subjected to a secondary toasting operation,” Mr. Bowen added. “The operators are largely empowered and take full ownership of their lines.”
After baking, products enter the cooling room, consisting of four I.J. White spiral cooling conveyors. The isolated room is temperature controlled to 70°F. “We are looking at ways of further isolating each line so cooling time and temperatures can be adjusted based on product,” Mr. Streit said. “Moisture content is critical to quality and shelf life, and our products have a wide range of finished moisture requirements from 2.5 to 8%.” Biscotti are produced on Line No. 1, baked first as wide continuous bars. The baked bars are sliced vertically and then conveyed as individual pieces into a Baker Perkins 100-ft direct gas-fired oven where they toast for about 10 minutes, adding color and reducing moisture.
SpanTech modular conveyors carry all products from cooling to packaging, where flexibility allows horizontal tray wrapping and bagging of products from any of the Lines No. 2 through 5. Line No. 1 flows directly to the Schubert robotic pick-and-place system. Line No. 2 also can be directed to the Schubert packaging system when running Stella items. “We plan to totally revamp our packaging systems within the next two years,” Mr. Bowen noted. “The 14-head Ishida weighscale and Sandiacre bagger and two Ilapak and four Fuji wrappers are good but old and ineffi cient.”
The Archway facility is the fourth largest of Lance’s eight manufacturing plants. As such, the plant is investigating ways to reduce energy and waste within its operations and warehouse. “We have changed out lighting to more efficient bulbs and ballasts , as many plants have done, but we also installed motion detectors,” Mr. Streit said. “To date, we have reduced our lighting costs by 50%.”
The plant is also investigating a solar-powered project that could save up to $25,000 a year. “ROI is a bit long, but it is the right thing to do and may be worth the investment.” Mr. Bowen noted.
With all that is going on at the Lance’s Ashland facility and with the right people at the helm, this plant could well be the new shining star of the Lance, Inc. organization.