Lance, Inc.: Instilling Vision
March 01, 2009
by Steve Berne
Many of the enterprise shortfalls David Singer, president and c.e.o., Lance, Inc. identified when he came on board in 2005, directly impacted plant operations. And despite tremendous teamwork and open communication to implement solutions, change was required throughout the organization, including the front lines of operations. Management and employees relished these ideas. They were ready for change.
While the company had two No. 1 brands (Lance sandwich crackers and Cape Cod potato chips), great manufacturing capabilities, experienced employees, a direct-store-delivery (DSD) system and good corporate and family values, Mr. Singer identified four areas that needed immediate attention — organization, supply chain, DSD and information technology (IT).
He noted that the company had evolved over its 95-year history into multiple small companies with minimal interaction — like silos linked only at the periphery. He cited tight capacities regarding supply chain. Plant upgrades were required to handle the needs of a wider variety of products and distribution, so they could be more profitable. Logistics were set up as individual bakery businesses vs. a mixed-product, multiplant business.
His strategy of attack culminated into what Mr. Singer coined 1Lance. The program took a decentralized, multicompany mindset and brought everything together in a centralized, functionalized approach. The program was based on common goals, and he made sure everyone understood the destination.
“Prior to 1Lance, each business and plant was its own entity,” said Terry Helms, senior director baking services and former plant manager at the Charlotte, NC, plant for 15 years. “There was no sharing of information or resources and very little communication. In some cases, an effort was made not to tell others what was happening at your plant, although there was no formal corporate competition or award for best performance. It had just evolved that way.”
Now there is total sharing of information, according to Mr. Helms. “We not only make it available but also meet to discuss ideas and expand our knowledge base. We share best practices. And there was no resistance to implementing these practices: Just the opposite. It was embraced.”
Goals at the plant level were to standardize processes, mindsets and consistency between the plants and to promote continuous improvement. A lot of this resulted from the company’s vision stream program, a continuous set of cross-functional task forces that Mr. Helms (bakery side) and Joe Irwin, his counterpart on the salty snack side of the business, spearhead.
Projects, many initiated by employees, run the gamut from energy savings to product quality and process efficiency. Teams are assembled, ideas discussed and proposals made to management in attendance. “It is our directive to provide feedback and support,” Mr. Helms said. “We take the ideas seriously, and money is set aside every year for vision stream projects. At many of the plants, capital spending goals include rebuilding pride in what we do and where we come to work everyday, but there are still productivity projects, automation as well as vision stream projects.”
“Once Mr. Singer painted his vision, the end goal was clear, the plan was concise, and all agreed change was needed,” said Greg Wolljung, vice-president service and distribution. Most recently, the senior management team began implementing 1Lance concepts at the newly acquired Archway plant in Ashland, OH.
The plant, which was shuttered in October 2008, restarted production in December under Lance leadership. “It’s still very early in the process, but there is a very clear path with timelines and milestones in place,” Mr. Wolljung said. “We had a kick-off meeting in Ashland led by more than 15 Lance managers and executives and attended by more than 280 Archway employees. We spelled out our plan, hopes and dreams regarding the employees, plant and brand. Then we got down to business.”
The company initially brought back 60 employees to restart the plant. The plan includes increasing employment in stages. It quickly implemented 5S organizational programs, Kaizen events and vision stream teams and began integrating the 1Lance culture.
5S includes the principles of sorting, systematic organization, shine (cleaning), standardize and sustain. Kaizen (Japanese for improvement) is a philosophy that focuses on continuous improvement. In the bakery, Kaizen activities can apply to all functions and personnel. By improving standardized activities and processes, Kaizen teams aim to eliminate waste.
“A good example of a Kaizen event was when we gathered groups from different Lance plants and worked to identify best practices and standardize processes and metrics such as quality, yield, product profile and packaging,” Mr. Irwin said. “Everything was reviewed, from receiving to distribution.” Teams included production managers, quality control, maintenance and representatives from all departments.
“Prior to 1Lance, every plant was isolated, and each thought its practices were best practices,” noted Tommy Lynn, vice-president, procurement. “Results have been dramatic in weekly product reviews and improved yields.”
The company standardized on ingredients as well. Mr. Lynn helped implement a vendor scorecard system, which adds vendor accountability. The company also holds a quarterly flour summit, where all flour suppliers are brought in to discuss quality and newcrop integration schedules across plants producing the same products, a process vital to quality cracker production. “This mitigates product differences between plant and production runs,” Mr. Lynn added.
“What is happening now throughout Lance is ‘off the charts,’” Mr. Helms said. “There is a lot going on with the company. It’s an exciting time. It’s fun to see the changes, which are gaining a lot of benefits in all areas of the business.”
The Charlotte plant is not new. In fact, it was built in 1960, with many additions over the past 49 years. However, it is extremely well run and well designed. It is laid out as two plants — cookie/cracker and salty snacks — with a connecting bridge between. Charlotte is the company’s only location with mixed production, even though it is two distinct buildings.
In the past three to four years, the company invested $140 million in capital improvements for infrastruc- ture, efficiency, consistency and standardization. Management noted the next few years will entail making sure those improvements perform at peak efficiency and gain sufficient return on those investments.
The 700,000-sq-ft complex sits on 150 acres and devotes 600,000 sq ft to bakery operations and 100,000 sq ft to salty snacks. Major snack items produced in Charlotte include popcorn, Bugles (Tom’s brand), Cape Cod products, pork rinds (Tom’s), Hot Fries (Tom’s), Nacho Rings (Tom’s), Onion Rings (Tom’s), Cheese Puffs (Lance) and Cheese Twists (Lance). The snack plant also packages salted and honey-roasted peanuts, cashews, sunflower seeds (in-shell and shelled) and a peanut candy bar. It produces its own peanut butter for its sandwich cracker fillings.
The bakery produces a wide variety of sandwich crackers such as Toasty, Toastchee, Cheese on Wheat and Captains Wafers as well as Nekot and varieties of Lunch sandwich cookies including Choc-O-Lunch, Lem-O-Lunch and Van-O-Lunch. Captain’s salad crackers and Lance’s new varieties of whole-wheat and whole-grain sandwich crackers are also produced at the facility.
Many of the sandwich cracker varieties use different fillings but share the same base cracker, allowing a multitude of line extensions and fast changeovers.
For sandwich cracker production, a series of 16 Peerless horizontal systems prepare dough. A Reimelt ingredient handling system pulls flour from 10 silos, each with 100,000 lb of flour capacity. “A total of 2 million lb of flour is used per week,” said Theo Watkins, facilities manager.
Troughs are dumped into any of seven chunkers that portion dough and convey it down through the floor to sheeting lines below. Six to seven production lines run simultaneously and operations are active 24 hours a day five to six days per week.
“Because the number of base crackers/cookies is limited, changeovers in mixing and sheeting are minimal, averaging only two per 24-hour period,” Mr. Watkins said. “Some lines run the same dough all week.”
Although most of the sheeting and laminating lines are between 20 and 40 years old, operators and maintenance personnel have kept them in meticulous condition. Dough goes through initial reduction and lapping before proceeding to the next series of reduction rollers. All products are roller cut to shape. Crackers bake approximately three minutes at 600°F. All ovens are direct-gas-fired 5-zone systems from a number of suppliers including APV, Baker Perkins, T.L. Green and Werner Lahara.
After baking, crackers pass through optional APV oilers, salters and seeders before ambient cooling for 10 minutes. After passing through Fortress Phantom metal detectors, line operators spot-check crackers for color, salt and moisture.
Entering the packaging room, each production line splits and diverts crackers to up to seven wrappers. A total of 28 wrappers are dedicated to sandwich crackers, and the rest — salad, saltines and Captain Wafers — are wrapped separately.
Crackers are laned and tipped on end. Each pair of lanes feeds one wrapper where a Peters sandwiching machine deposits filling, then places a second cracker on top just prior to stacking and overwrapping. Sandwiches are stacked in a 2-by-3 configuration and overwrapped at speeds of up to 1,200 sandwiches (200 packs) per minute for each wrapper.
Over the past six years, the plant’s packing lines have been automated using robotic tray feeders to increase speed, efficiency and quality and reduce labor.
On four of the seven lines, SIG robotic systems form chipboard trays and pick-and-place wrapped crackers, before a final overwrap and casing. The robotic systems made a tremendous impact on efficiency, according to Mr. Watkins. “Return on investment was only three years.”
The plant employs 1,000 factory people between the two operations. Although the plant is landlocked, there is enough open space where expansion is possible, and warehousing could be moved to a remote location for additional production space.
For this 95-year-old company, management and employee attitudes toward operations, quality and efficiency are like a bunch of kids in a candy shop — excited to be there, having fun, enjoying the results of their actions and looking forward to tomorrow. It’s a good way to start each day.