Operations Executive of the Year: Frequent Flyer
Dec. 1, 2011
by Lucy Sutton
Albert (Al) Koch is a globetrotter. Of German descent and born and raised in Namibia, he speaks five languages and is more than used to traveling all over the world. So when Kraft Foods, Northfield, IL, combined its international and US divisions and created a companywide global supply chain group after he had held engineering positions in the grain-based food business for almost 40 years, Mr. Koch was a shoe-in for the director of biscuit engineering, global supply chain position. He has held the position since 2004 in the company’s East Hanover, NJ, facility.
With a bachelor of science in mechanical engineering and a master’s in business administration, Mr. Koch leads a team of six engineers who provide strategic planning and functional engineering support to operations teams in five regions: North America, Europe, Asia Pacific, Latin America, and the combined Central Europe, Middle East and Africa (CEMA). While his team provides some assistance to the North American and European regions, these areas have their own directors of engineering so require less attention. The team’s expertise focuses on the other three developing markets, which made up 28% of Kraft Foods’ overall business.
Especially in these developing regions, Mr. Koch makes sure his team never loses sight of the five P’s: people, products, property, the planet and profit — in that order. It is his passion for protecting these assets that earned him 2011’s Operations Executive of the Year award from Baking & Snack
Although his grandfather owned a bakery in Namibia, Mr. Koch stumbled into the baking industry by happenstance. Because there were no universities in Namibia at the time, he was faced with the choice of going to college in South Africa or overseas. “I chose the United States because I was always enamored with the United States,” he said. First, Mr. Koch tried his hand at acting, graduating from the American Academy of Dramatic Arts in New York, NY.
“When I went for auditions, I met so many very, very talented actors that had been in a play at one point but were working at Macy’s trying to make ends meet, and I decided I wanted to have a better lifestyle,” Mr. Koch said of his early career. “And I also realized that I didn’t have as much talent as many of those people.”
Whether that’s true or not, he worked his way through night school for eight years before he earned his bachelor of science degree in mechanical engineering. “I did it the hard way,” he said.
Mr. Koch started as a draftsman for Shell Oil, then worked as assistant plant engineer for Rheingold Breweries, and in 1967, he became plant engineer for Buitoni Foods Corp. It was here that his exposure to grain-based foods started — although one could argue it really began at the brewery — and Mr. Koch got his first real taste of developing a brand-new process for an unheard-of product: an instant pizza.
“It was quite a challenging job, especially at that time in my career,” he said. He and his coworkers used an oversized ravioli machine to make the product, which he described as looking like an English muffin but with filling inside. A dual-tower I.J. White spiral conveyor, Pfening proof box and custom-designed oven from Selas Corp. of America also aided in the product’s development, along with a dual-tower atmospheric cooler, a freezing tunnel and an automated packaging system.
After such a resounding success in his new-found career, Mr. Koch moved to Best Foods, a division of CPC International, as process design engineer. When CPC International acquired S.B. Thomas, a family-owned English muffin company, he asked for a transfer because the Thomas plant was close to where he lived. He served there as manager of engineering for five years and then transitioned to Arnold Bakers, where he worked as director of engineering for two years.
In 1977, Mr. Koch transitioned into engineering R&D as manager of process research for Nabisco. “That was a good step because it allowed me time to really get down to basics, really into the fundamentals, analyzing the baking process in great detail,” he said. “At that time, we had just come out of the energy crisis in the 1970s, so we did an awful lot of work with alternative energy sources.”
As the company went through ownership transitions, Mr. Koch noted, he was presented with some remarkable opportunities. “When Philip Morris acquired the Nabisco biscuit business [in 2000 and merged it with Kraft Foods], I fortunately was given an opportunity to work for Fred Sherriff, a senior executive at Kraft headquarters, to lead what we called the ‘stretching capital initiative,’” he said.
Through this project, Mr. Koch got to know many of the Kraft Foods executives and establish his credibility. “I’m grateful for that opportunity because that allowed me then to get back to lead the biscuit category,” he said.
That leadership position opened up in 2004 when Kraft Foods created a new structure that emphasized the company’s global scope in five consumer sectors: beverages, snacks, cheese and dairy, convenient meals, and grocery. “That is also when it was decided to form these global category engineering groups,” Mr. Koch said. “Fortunately, I had been through the stretching capital initiative, people knew me, and I was selected to lead [the snacks category].”
When Kraft Foods acquired Cadbury in 2010, the company restructured again. Now the global engineering support functions are organized into six consumer sectors: confectionery, biscuits, beverages, cheese, convenient meals and grocery. Mr. Koch leads engineering for the biscuit category, which is the company’s second largest behind confectionery.
A CAPABLE CREW.
To ensure the prominent group’s success, company leadership asked Mr. Koch to pick what he called the “cream of the crop” for his category.
“When the global supply chain organization was formed, the objective was to create a group of highly experienced and skilled individuals with not only the technical background but also the interpersonal skills to deal with different cultures all over the world,” Mr. Koch said. “Everybody on my team has extensive biscuit engineering experience at Kraft. When you send someone halfway around the world, they have to be able to add value.”
That value comes in a different form from each team member. The most senior members of the team, all of whom have over 30 years of biscuit engineering experience, specialize in certain areas of the biscuit production process. Joe Stiener specializes in biscuit handling and packaging systems. Claude Pillori focuses on bulk ingredient handling, pneumatic conveying and biscuit sandwiching equipment. Levent Akpinar knows dough forming equipment, ovens and cooling tunnels inside out.
Supplementing this team of specialists, three additional highly experienced biscuit engineers focus on supporting the company’s biggest growth areas. Antonio Toaliari supports Latin America and is located in Brazil, and James Hue and François Maréchal are located in Singapore to support the Asia Pacific region.
“What I hold these guys responsible for is to keep up their skills and always search for better solutions,” Mr. Koch said. “Part of our job is leading the ‘enabling technologies,’ as we call it in Kraft, for the biscuit category. That is to develop solutions that are better than what’s commercially available on the market.” He explained further that these enabling technologies are a focus companywide. They are equipment and processes that allow the company to produce high-quality products at a lower cost.
It’s an area in which Mr. Koch said he would like to be able to focus more time. “That’s where you’re working on truly innovative new solutions,” he said. “Also, it’s important not just to focus on your own industry because you can borrow a lot of ideas from other industries.” But because the biscuit business is growing globally, the team spends the majority of its time on capacity expansion, building new bakeries and adding production lines to existing facilities.
With so many specialists backing him up, Mr. Koch said, he has become more of a generalist. His specialty has always been oven technologies and the overall baking process, and he said sometimes that level of expertise precludes him from being able to let go of some details.
“I, at times, get too deeply involved in the details of the projects that [the team is] working on. It’s something that I have to be aware of, and they let me know,” he said with a laugh.
This instinct to go over the minutiae of each project comes from an almost paternal place, wanting to protect his subordinates from repeating his missteps. “I’ve made so many mistakes over the years that I don’t want to repeat them,” Mr. Koch said. “They say you’re supposed to let your kids fall, feel the bumps, but I try to catch them before they hit the ground.”
One area where Mr. Koch’s team members endeavor not to make mistakes involves their interaction with coworkers and customers from other cultures. Mr. Koch’s career has included projects in Brazil, Saudi Arabia, China, Indonesia and Russia. Working with such diverse cultures poses some challenges to guarantee communication is clear and company standards are met. The key, Mr. Koch said, is to listen to people and understand them.
“Have a dialogue. Together, develop a solution that meets their needs as well as our needs,” he said. “It takes a lot of patience to understand the people. Like in China, ‘Yes,’ doesn’t mean, ‘Yes.’ ‘Yes,’ means, ‘I heard you.’ It doesn’t mean, ‘I agree with you.’” This is one way in which Mr. Koch’s attention to detail comes in handy. He emphasizes these cultural nuances with all of his team members.
Enabling the international teams to take ownership over the projects they’re working on can optimize success. “Sometimes the best solution is not the best solution,” he said. “We bring thought starters; we don’t bring the solution. You learn very quickly that one solution does not fit all. You have to tailor it to the needs of the local people.”
To illustrate the idea of “thought starters” — the coining of which he credited to Mr. Stiener — Mr. Koch gave the example of building a new bakery in Russia, which would be staffed by a local crew. His global supply chain team studied the existing operations and drew up plans and ideas based on what they anticipated the new facility would need.
“We went with a semi-automated approach where you have to use good ergonomic design standards,” he said. “We sat down with a room full of people and said, ‘OK, here are some ideas, and this is what worked for us before.’”
They then went back and forth with the local team members to get their input and come up with a solution that met their needs. “You can’t walk in with nothing; you have to have something to start the discussion,” he said. “I like to do it with drawings rather than just words, especially when you’re in Russia where English is a second language.”
Just as he must fight the urge to micromanage, Mr. Koch said, his team needs to allow the local crews to develop their own projects. “Having had all the experience, I have to be careful. You can’t go there and tell people what to do,” he said. “The tendency is to try to give them the best solution and say, ‘This is the way to do it,’ but you can’t.”
COMING IN TO LAND.
One thing Mr. Koch won’t compromise on is his passion to protect people, products, property, the planet and profit — in that order.
“If you want quality, you have to treat your people with quality — that is, with dignity and respect,” he said. “If you treat the people with respect, they will feel important and care about their jobs. This, in turn, will mean that they will care about the products they produce and ensure that the highest standards are maintained.
“If you provide a safe and friendly environment for the people to work in, they will value it and help to maintain a safe environment, which, in turn, also helps to protect the product quality,” he continued.
“People who care about their environment will, in turn, care about the protection of the planet and be conscious about not wasting energy, water and other natural resources. They will treat nature with respect because they have self-respect.
“This is a continuum that leads to a successful business model,” he concluded. “It is, therefore, important that we follow these principles in this order. Do not place profit ahead of people, products, property or the planet.”
Mr. Koch has shared this sentiment at meetings for several industry groups, including BEMA, the Food Processing Suppliers Association and the Biscuit & Cracker Manufacturers’ Association. His presentation includes illustrated examples of ergonomic problems common in equipment design and their relatively easy fixes, often with cost benefits. He emphasizes this point when his audience includes equipment manufacturers.
At Kraft Foods’ Biscuit Technical University (BTU), 90 participants from Kraft Foods locations around the world heard a version of the presentation. Mr. Koch drew particular attention to the idea that it is not just the responsibility of the safety and environmental staff to be vigilant and passionate about the five P’s, but everybody should follow them because their livelihood depends on it.
“I made everybody stand up, put their hands on their hearts and pledge,” he said. “I went through it: ‘Repeat after me.’ We all laughed afterwards, but they got the message.” It’s a message the people who have worked with Mr. Koch won’t soon forget, even after his impending retirement.
When Baking & Snack
notified him of his nomination for the Operations Executive of the Year award, Mr. Koch called it an “exclamation point” on a career that is coming to a close after decades of challenges and rewards. “Hard work isn’t hard work if you really enjoy what you’re doing,” he said.
THE MISSING PIECE.
In all of his global travels, Mr. Koch has yet to visit one country that has been in the news a lot lately: Greece.
When the company acquired the Danone business, it had the partnership with E.J. Papadopoulos SA in Greece, which had three bakeries, but the company decided at that time not to sell its shares. “I was so disappointed because I’ve never been to Greece,” Mr. Koch said. “But I’ve been to Egypt, to Australia, South Africa; we have bakeries all over.”
When asked to name his favorite place to visit, Mr. Koch immediately answered, “Europe,” but then rethought his position — perhaps because of the nationality of his interviewer. “One of my favorite places, truly, is Australia,” he said. “I love the people; they are so much more laid back, not so tense, very friendly.”
He said he had the chance to become director of engineering for the Australian business in Melbourne, but Kraft Foods decided to move the Asia Pacific headquarters to Singapore and close the Melbourne bakery. Mr. Koch is one of the few Kraft veterans who has not been stationed in a country other than the US for more than a few weeks.
He said he and his wife, Margareta, plan to cash in his frequent flyer miles when he retires. Maybe he’ll finally make it to Greece.