BUSI 760 Week 7 Strategic Quality Management Implementation Plan Example

Rebuilding Continuous Improvement at Hearthside Bakeries: A Strategic Quality Management Implementation Plan

Executive Summary

Hearthside Bakeries' first continuous improvement program produced early gains and then stalled within a year, because leaders withdrew their attention and employees saw that their ideas went nowhere. This plan rebuilds the effort as a strategic quality management system tied to the company's growth in private-label contracts. It sets four objectives for the next two years: cut scrap from 6.8 to 4.0 percent, reduce customer complaints by half, eliminate major audit findings and raise on-time-in-full delivery to 98 percent. It sequences lean flow improvements before targeted Six Sigma projects, places a steering committee of senior leaders in charge, funds a three-person improvement office and requires every plant manager to lead weekly reviews. The plan costs about $1.1 million over two years and the scrap savings alone should repay it about twice over within the following two years, while giving employees a lasting role in improving their own work.

Organizational Profile

Hearthside operates three plants in the Midwest that produce buns, rolls and sandwich bread for food service distributors, quick-service restaurant chains and, increasingly, private-label grocery brands. The company employs about 780 people, most of them line operators, sanitation workers and maintenance technicians on three shifts. Private-label contracts with national grocers now account for 38 percent of revenue and are growing fastest, but they bring stricter specifications, unannounced audits and financial penalties for short or late deliveries. Quality has therefore become a strategic issue rather than a plant-level concern. The company's strategy depends on winning and keeping these contracts, and that depends on consistent product delivered on time.

Current-State Assessment

The current state can be summarized through four measures and one history. Scrap, product discarded for weight, shape, bake color or packaging faults, averaged 6.8 percent of production last year, against an industry benchmark of about 3 to 4 percent cited by the company's ingredient suppliers. Customer complaints averaged 46 per million units shipped, with foreign material and underweight packages the most common categories. The most recent customer audits produced two major findings, both for gaps in documentation of corrective actions. On-time-in-full delivery averaged 93.5 percent, and late or short loads cost the company about $410,000 in penalties.

The history matters as much as the numbers. Two years ago the company launched a program with kaizen boards, a two-day root cause course for 40 supervisors and leads, and a goal of closing problems within 30 days. Early results were good: a bun line cut scrap by 9 percent after a team found a worn divider. Within a year, however, posted problems fell by three-quarters and actions stalled. Interviews with supervisors identified the causes: plant managers stopped attending board meetings, requests for parts and maintenance time joined the normal budget queue, and bonuses continued to reward daily output alone. According to Powell (1995), the parts of a quality program anyone can buy, courses and improvement methods among them, seldom set a firm apart on their own, while executive commitment, employee empowerment and open culture did. Hearthside's first program had the visible features and lacked the tacit ones.

A closer look at scrap shows where the first effort should concentrate. A Pareto analysis of last year's scrap records finds four categories behind roughly four-fifths of the losses: product discarded during changeovers between products, underweight or overweight packages, misshapen buns from proofer temperature swings and packaging film jams. The first and last are flow and maintenance problems that operators and technicians can see; the middle two involve variation whose causes are not yet understood. That split shapes the approach set out below.

Strategic Quality Objectives

The plan sets four objectives, each tied to the private-label strategy and each with a measurable target for month 24. The first is to reduce scrap from 6.8 to 4.0 percent, which at current volumes would save about $1.3 million a year in ingredients, packaging and labor. The second is to cut customer complaints from 46 to 23 per million units, concentrating on foreign material and weight. The third is to pass every customer audit with no major findings, by building corrective action documentation into the improvement process. The fourth is to raise on-time-in-full delivery from 93.5 to 98 percent, eliminating most penalties. These objectives are deliberately few. Starbird and Cavanagh (2011) argue that teams perform when they understand how their processes connect to business results, and a short list of objectives that every operator can name is more useful than a long list that no one remembers.

Approach: Sequencing Lean and Six Sigma

Plenert (2012) warns against adopting improvement tools as a package and argues that each tool should be chosen for the problem and the organization's stage of development. Hearthside's problems fall into two kinds. Much of the delivery shortfall and part of the scrap come from flow problems: long changeovers between products, unplanned downtime and waiting for sanitation releases. These are lean problems, and the first year will concentrate on them through value stream mapping of each plant's highest-volume line, setup reduction on changeovers, standard work for sanitation and autonomous maintenance by operators. Because the census evidence in Shah and Ward (2003) shows lean practices paying off as connected bundles, so the plan introduces flow, maintenance and people practices together rather than one at a time.

Other problems are variation problems. Package weights vary more on some lines than others, and the causes are not visible on a process map. In the second year, the plan will train six green belts, two per plant, to lead Six Sigma projects on the largest sources of variation, beginning with fill weights and foreign material. Schroeder et al. (2008) argue that Six Sigma's distinctive contribution is not its statistical tools but its structure of trained specialists working on selected projects with defined metrics, and that structure fits problems whose causes must be found in data. Sequencing the methods this way also builds readiness: by the time belts begin projects, the plants will have stable processes and a habit of daily improvement.

Governance and Roles

The first program failed because leadership attention faded, so governance is designed to keep it visible. The chief operating officer will chair a quality steering committee whose other members are the three plant managers, the director of quality and the vice president of sales, will meet monthly to review progress against the four objectives, approve projects and remove obstacles. A three-person improvement office, a manager and two coaches, will train teams, facilitate value stream mapping and support belt projects. Each plant manager will lead a weekly review of the plant's improvement board, with authority to approve up to $5,000 per action on the spot. Line leads will run daily ten-minute huddles at shift start. Maintenance will reserve 15 percent of its hours for improvement actions. Finally, the incentive plan will change: supervisors' bonuses will weight scrap, complaints and closed improvement actions alongside output.

Engaging People

Bortolotti et al. (2015) traced the gap between plants where lean took hold and plants where it did not mostly to people practices and culture rather than to technical tools. Starbird and Cavanagh (2011) make the same argument from practice: process improvement and team engagement must be managed together. The plan therefore commits to several people practices. Every operator will receive four hours of training in problem solving during paid time, delivered on the floor using the operator's own line. Each improvement team will include line operators, not only supervisors and engineers. Ideas posted on the boards will receive a response within one week, either an action, a test or an explanation of why not. Results will be shared at monthly plant meetings, with credit given to the teams that produced them. The surest sign that a program is alive is that operators see their ideas acted on within days rather than months. The plan also includes a commitment that improvement gains will not be used to reduce headcount through layoffs; staffing reductions will come only through attrition, so that operators can improve their work without fear of eliminating their own jobs.

Training Plan

Training is sequenced so that each group learns what it needs just before using it. In the first phase, the steering committee and plant managers will complete two days on leading improvement, including how to run a board review, how to respond to ideas and how to coach rather than direct. Supervisors and line leads will then complete three days on problem solving, standard work and setup reduction, delivered partly on their own lines. Operators will receive four hours on the floor in the second phase, timed to the start of improvement work on their line. Green belt candidates, selected for analytical ability and credibility with operators, will begin a four-month course in the third phase, each completing a project as part of certification. The improvement office will track completion and, more important, whether trained people are using what they learned three months later.

Implementation Roadmap

The roadmap runs in three phases over 24 months. No phase starts until the steering committee has checked the previous one against its gate criteria.

Measurement System

The steering committee will review a short dashboard monthly, combining results measures with process measures that show whether the system is working.

Resources and Budget

The plan requires about $1.1 million over two years. The largest items are the improvement office, outside training and the cost of operators' training time.

Scrap reduction alone, at the year-two target, would save about $1.3 million a year, and lower delivery penalties would add several hundred thousand more, so the plan is expected to pay for itself during the second year.

Risks and Responses

Communication with Stakeholders

The first program was launched with a single announcement and then went quiet, so communication in this plan is continuous and two-way. The chief operating officer will relaunch the effort in person, meeting each shift of each plant, explaining honestly why the first program faded and what will be different. Monthly plant meetings will report the dashboard measures and celebrate completed actions. Sales leaders will share customer feedback and audit results with the plants, so operators see how their work affects the contracts the company depends on. Private-label customers will receive a summary of the plan during their next business reviews, since evidence of a credible improvement system strengthens the company's position when contracts are renewed. Finally, a short quarterly survey will ask operators whether their ideas are being heard, giving the steering committee an early warning if the program begins to drift again.

Integration with Keller

Keller and Alsdorf (2012) devote chapters 6 through 8 to the ways work goes wrong: it becomes pointless, selfish and a revealer of idols. Their argument about idols is especially relevant to quality management. An idol, in their account, is a good thing made into an ultimate thing, and efficiency is a good thing that organizations easily make ultimate. A quality program run as an idol of efficiency treats operators as instruments for removing cost, and the predictable result is fear, hidden problems and the kind of quiet withdrawal Hearthside saw in its first program. The plan responds in concrete ways: the no-layoff commitment, paid training time, operators on improvement teams and a rule that every idea receives an answer. These choices reflect a conviction that the people making the bread are not a cost to be minimized but coworkers whose judgment and care the company needs, and whose work has worth beyond its output.

Sustaining the System

Netland (2016) found broad agreement among practitioners on what makes lean succeed, yet many companies still struggle, because sustaining improvement is a matter of management behavior over years. The plan builds sustaining mechanisms into its structure: improvement results become part of the monthly business review, supervisors' incentives include improvement measures, and new supervisors receive problem-solving training in their first month. At the end of year two, the steering committee will commission an independent review by an outside lean practitioner of whether the practices are still being used as designed, not only whether the targets were met. The review will interview operators as well as managers, observe board meetings unannounced and compare the share of ideas answered within a week across plants. Its findings will go to the board of directors with the financial results, which keeps the system visible at the level where the first program's support quietly disappeared.

Conclusion

Hearthside's first improvement program taught the company that tools without sustained leadership produce a burst of activity and then silence. This plan treats quality management as a strategic system tied to the private-label growth on which the company depends. It sets four objectives, sequences lean and Six Sigma according to the problems each addresses, gives senior leaders visible roles, invests in operators' skills and protects their jobs, and measures both results and the health of the system. If it succeeds, Hearthside will lower its costs, keep its most demanding customers and become a place where operators on the line have a real say in how the line runs.

References

Bortolotti, T., Boscari, S., & Danese, P. (2015). Successful lean implementation: Organizational culture and soft lean practices. International Journal of Production Economics, 160, 182-201. https://doi.org/10.1016/j.ijpe.2014.10.013

Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God's work. Dutton.

Netland, T. H. (2016). Critical success factors for implementing lean production: The effect of contingencies. International Journal of Production Research, 54(8), 2433-2448. https://doi.org/10.1080/00207543.2015.1096976

Plenert, G. (2012). Strategic continuous process improvement: Which quality tools to use, and when to use them. McGraw-Hill.

Powell, T. C. (1995). Total quality management as competitive advantage: A review and empirical study. Strategic Management Journal, 16(1), 15-37. https://doi.org/10.1002/smj.4250160105

Schroeder, R. G., Linderman, K., Liedtke, C., & Choo, A. S. (2008). Six Sigma: Definition and underlying theory. Journal of Operations Management, 26(4), 536-554. https://doi.org/10.1016/j.jom.2007.06.007

Shah, R., & Ward, P. T. (2003). Lean manufacturing: Context, practice bundles, and performance. Journal of Operations Management, 21(2), 129-149. https://doi.org/10.1016/S0272-6963(02)00108-0

Starbird, D., & Cavanagh, R. (2011). Building engaged team performance: Align your processes and people to achieve game-changing business results. McGraw-Hill.