Tasty Baking Company

Finding the sweet spotTransitioning from an old facility to a new one is not exactly a piece of cake, SVP Autumn Bayles explains to Gary Toushek. In 1914 baker Philip Baur and egg salesman Herbert Morris went into business together in Philadelphia to produce small baked goods using ingredients delivered fresh daily to their bakery. MorrisÔÇÖs wife proclaimed the products ÔÇ£tasty,ÔÇØ so the Tasty Baking Company was born, and the products bore the brand name Tastykake. Growth led to expanding regional sales and a longer product line, including cakes, pies, doughnuts, brownies and other sweet snacks, all packaged individually. Today the company has two bakeries, a flagship six-story facility in Philadelphia and a smaller plant in nearby Oxford. The Philadelphia bakery is the original large-scale facility opened in 1922 and expanded several times in the decades to follow, but it had become less efficient and more difficult to operate as time passed. Major financial problems in 2000ÔÇô01 forced the board of directors of the Tasty Baking Company to bring in a new CEO, Charles Pizzi, who in turn hired a new executive team including Autumn Bayles as CIO in 2003. Previously a management consultant, Bayles looked forward to the challenges ahead. ÔÇ£The company was in need of serious help, and the technology was a mess,ÔÇØ she says. Her priority was to rebuild the technology platform used in all aspects of the operation. ÔÇ£We made a plan with 20-plus projects for rebuilding the architecture and applications of the company, and at the same time we were trying to improve the economic side by reducing costs and improving service. We also built a new IT team including some outstanding company veterans and some new folks. We changed the infrastructure and the software we used, and we rebuilt the applications and the data center from the ground up.ÔÇØ At the time, the executive in charge of operations and supply chain was considering changes necessary to make the plants move forward. ÔÇ£Part of the issue was that we have an old, inefficient, 94-year-old flagship bakery: what should we do with it?ÔÇØ she says. ÔÇ£He and I worked closely together through SAP and other technology changes. Since the technology is so integrated with operations and my background is in manufacturing engineering, I really became closely involved with that side of the business. When he left the company for personal reasons, Charlie and the team discussed what to do. Initially some additional responsibilities of his were given to me, and later, the rest.ÔÇØ She became senior vice president of strategic operations, in charge of operations including manufacturing, distribution, transportation, supply chain analytics, R&D and quality assurance.Her new priority was to create a strategy to take the company operations and turn them into a competitive, thriving entity. She led the effort with a strategic assessment that examined all possible options for both existing plants and leveraging the assets. ÔÇ£We looked at renovating both facilities and expanding Oxford. We looked at what we could accomplish by renovating the original structure of the flagship plant, whether it was economically feasible, and what the alternatives were. How would we combine manufacturing and distribution? The options included separate distribution, attached to a new facility, or some functions shared at Oxford. If we built a new plant, where? We looked at every possible scenario and mathematically calculated which was the best.ÔÇØ Next came a strategic analysis of the options, and when it was complete, the solution was obvious: the company needed to build a new, modern facility. Then they looked at the flagship plant to see what was required to keep it operating long enough to produce customer orders while the new plant was constructed. ÔÇ£We considered safety a top priority, because we never want to put our workers at any risk.ÔÇØ In May 2007 the company announced that the new 345,500-square-foot facility with plant offices, a production facility, a warehouse and a distribution center would be constructed at the cityÔÇÖs old Navy Yard, on a 25-acre site. A new corporate office space will be rented nearby. And the Oxford plant will be upgraded to both maximize its efficiency and to prepare it to take on some additional manufacturing. Today the foundation is being poured at the new site, and BaylesÔÇÖ team is performing design and engineering work on building new production lines and procuring new equipment. ÔÇ£Since we donÔÇÖt know what snacks and treats customers will want in ten years, weÔÇÖre building flexibility into manufacturing equipment and packaging, to be able to adapt to variations. We also want to control quality and consistency. The new equipment includes automation and robotics, and the ovens include touch-screen controls that can be programmed precisely according to the product. Most important, itÔÇÖll enable us to gain vast efficiencies. Our existing six-story plant requires hauling supplies up and down floors, which entails a lot of coordination and time. In the new facility the ingredients will be placed in a bulk handling system across the front of the lines where theyÔÇÖre needed for mixing and processing; then down the line, product is packaged, palletized and taken to the adjacent distribution center. ItÔÇÖs a much cleaner, simpler, logistical flow, all on the same level.ÔÇØ The transition from the old plant and distribution center to the new facility will be tricky. As far as producing enough to continue filling customer orders, building up inventory isnÔÇÖt possible, Bayles says, since bakery products are made fresh daily. ÔÇ£We plan to put our current lines down for a day or two, but no longer than that. So weÔÇÖll transition one line at a time, and weÔÇÖll keep the existing facility running until the new one is fully operational.ÔÇØ In terms of distribution and transportation, ÔÇ£Right now weÔÇÖre used to getting our products from our two plants, along with some third-party products, but there will be a period of several months when weÔÇÖll have three facilities supplying product. And weÔÇÖre doing the break-even analysis of the right time to move the distribution center. So when more product is coming out of the new facility, weÔÇÖll then move distribution to that site as well.ÔÇØCurrently distribution is mainly through a route system to retail outlets in Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia and Ohio, as well as third-party distributors or direct relationships in Florida, Massachusetts, New York and Connecticut. With the challenges of a tighter economyÔÇöwhich means rapidly rising commodity prices for flour, dairy, and oils as well as fuelÔÇöshe notes that ÔÇ£itÔÇÖs nice to have the opening of a new, modern plant as a bright light at the end of the road. WeÔÇÖre excited; itÔÇÖs a lot of work, but itÔÇÖs what this company needs in order to be around for another hundred years. This transformation is fun: challenging, but rewarding at the same time.ÔÇØ ┬á