1. If you were in the position of Anthony Scire, how would you respond to Louann
Hulsman’s request to implement Six Sigma @ the Edge at the Rivermede plant?
2. If you proceed, how would Six Sigma @ the Edge affect the managers, supervisors and plant workforce?
3. What is your list of questions for Louann?
4. What criteria would you use to evaluate the readiness of the Rivermede plant to proceed with implementation of Six Sigma @ the Edge?
5. Why has Six Sigma been successful under Anthony’s tenure at Rivermede? Why had it been unsuccessful previously?
6. What is the role of Six Sigma in the Maple Leaf Foods organization? Is it a set of tools or a manufacturing philosophy? Is it strategic or tactical?
7. What resources would you need to implement Six Sigma @ the Edge?
8. Which group will feel the greatest impact if Six Sigma @ the Edge is implemented: managers, supervisors or plant workforce?
Six Sigma Implementation at Maple Leaf Foods Questions: 1. If you were in the position of Anthony Scire, how would you respond to Louann Hulsman’s request to implement Six Sigma @ the Edge at the Rivermede plant? 2. If you proceed, how would Six Sigma @ the Edge affect the managers, supervisors and plant workforce? 3. What is your list of questions for Louann? 4. What criteria would you use to evaluate the readiness of the Rivermede plant to proceed with implementation of Six Sigma @ the Edge? 5. Why has Six Sigma been successful under Anthony’s tenure at Rivermede? Why had it been unsuccessful previously? 6. What is the role of Six Sigma in the Maple Leaf Foods organization? Is it a set of tools or a manufacturing philosophy? Is it strategic or tactical? 7. What resources would you need to implement Six Sigma @ the Edge? 8. Which group will feel the greatest impact if Six Sigma @ the Edge is implemented: managers, supervisors or plant workforce? SIX SIGMA IMPLEMENTATION AT MAPLE LEAF FOODS Professor P. Fraser Johnson prepared this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail
[email protected]. Anthony Scire, plant manager at Maple Leaf Food’s Rivermede plant in Toronto, was preparing for his meeting with Louann Hulsman, senior manager. Louann had asked to meet with Anthony the following Monday regarding a new initiative that she was heading, Six Sigma @ the Edge. Based on the recent success of Six Sigma at the Rivermede plant, Louann had approached Anthony about the Rivermede plant becoming one of the pilot sites for Six Sigma @ the Edge, and she wanted to discuss what would be involved. It was now Thursday, July 14, 2005, and Anthony wanted to dedicate some time so he would be adequately prepared for his meeting with Louann. MAPLE LEAF FOODS Maple Leaf Foods (MLF) was a leading global food processing company headquartered in Toronto, Canada, and total employment numbered approximately 23,000 people. MLF shipped product to more than 80 countries around the world from its 120 plants across Canada and the United States. For 2004, MLF reported sales of $6.4 billion and net earnings of $107 million. The Maple Leaf brand first appeared more than 100 years ago, and over the years, the company evolved and grew through a number of mergers and acquisitions. In 1990, Maple Leaf Mills Limited and Canada Packers Inc. merged to form Maple Leaf Foods. In 1995, McCain Capital Corporation and the Ontario Teachers’ Pension Plan Board acquired controlling interest in the company. MLF’s president [4] and chief executive officer (CEO), Michael McCain, was appointed to the position in January 1999. He had joined MLF as president and chief operating officer in April 1995, as part of the new management team. In 2005, the company sold its products through three flagship consumer brands — Maple Leaf, Schneiders and Dempsters — and a family of strong regional brands. Company operations were organized into two major groups. The Protein Value Chain Group included meat products and agribusiness, and comprised fresh and processed meats, animal nutrition, hog production and rendering operations. The Bakery Products Group comprised MLF’s 88 per cent ownership of Canada Bread, a producer of fresh bakery products, frozen bread products and fresh pastas and sauces. Within both the Protein Value Chain Group and the Bakery Products Group were independent operating companies (IOCs) aligned by product lines (e.g., Maple Leaf Pork, Maple Leaf Poultry and Maple Leaf Consumer Foods). MLF was driven by its seven core strategic principles: invest in market leadership; build our brands; drive costs out; innovate; add value to our products; add value for our customers; and diversify globally. A key element of the company’s strategy was Leadership Edge, an initiative that focused on achieving competitive advantage by developing people at all levels in the organization. Development programs were in place to assist supervisors, managers and executives in living the Leadership Edge Values (see Exhibit 1). SIX SIGMA The term “Six Sigma” refers to 3.4 defects per 1 million opportunities. The concept behind Six Sigma is that if you can measure the number of defects produced from a process, you can systematically work to eliminate them. Although the use of statistical tools to manage quality and performance dates back to the 1920s, Motorola was the first company to formally introduce the concept of Six Sigma in the mid-1980s to address quality concerns in the organization. More recently, Six Sigma has evolved into a management tool used by a number of Fortune 500 companies, such as Allied Signal, DuPont and 3M, to reduce waste within an organization. For example, General Electric (GE) has embraced Six Sigma as a customer-focused, data-driven philosophy. It is used as a common methodology throughout the company to systematically eliminate errors, with the objective of providing customers with near perfect products and services consistently, through the flawless execution of key processes. All GE employees are trained in the strategy, statistical tools and techniques of Six Sigma at various levels.1 Six Sigma uses martial arts terminology to describe the level of training and experience of practitioners: green belt, black belt and master black belt. Black belts typically lead customer focused project teams using a systematic problem-solving methodology, change and project management skills and analytical techniques to drive fact-based decision-making. As described in Exhibit 2, the Six Sigma problem-solving framework is commonly referred to as DMAIC: • Define what needs to improve. •Measure the current state against the desired state. • Analyse the root causes of the gap in performance. Improvement solutions are brainstormed, selected and implemented. • Controls for long-term sustainability are implemented. SIX SIGMA AT MLF MLF began its journey to becoming a Six Sigma organization in 1999, and the company’s first Six Sigma projects were completed in 2000. Michael McCain’s objective was to build a corporate culture of continuous improvement, recognizing that this would be a journey, not a one-off program. Michael McCain explained: There are a number of things that distinguish Maple Leaf Six Sigma from off-the-shelf versions. First of all is the very profound connection that we’ve created between Six Sigma and our leadership culture. Leadership Edge defined the type of people and culture at MLF, while Six Sigma defines the way we work. The very essence of Six Sigma is Leadership Edge. Bruce Miyashita, vice president of Six Sigma, elaborated further about the linkage between Leadership Edge and Six Sigma: Six Sigma represented a significant culture change because it challenged accepted management beliefs and practices. Six Sigma is more successful in situations where management has built, or is actively building, a fact-based, scientific, transparent, open and customer-focused environment. Six Sigma, in our experience, tends to fail where the management culture is not consistent with MLF values: passive resistance, unchallenged opinions, defensiveness and silos. Six Sigma also requires a readiness and ability to work pro-actively, the discipline required from high performance, and the ability to conduct organized projects across functions, locations and businesses. We believe that as an organization increasingly practices each of our six Leadership Edge values on a daily basis, the quality of and the results from Six Sigma efforts will also improve. It is in this way that we see our values linked to Six Sigma. By the end of 2004, MLF had more than 100 full-time black belts in the organization and had realized $70 million in savings from projects completed in the two-year period between 2003 and 2004. Hundreds of Six Sigma projects had been completed since 2000, in all major areas of the business, including market research, R&D, sales force strategy, operations, risk management, acquisition strategy and energy management. Exhibit 3 describes the key elements of Six Sigma at MLF. SIX SIGMA @ THE EDGE Six Sigma @ the Edge was designed to engage front line employees in Six Sigma methodology and tools. Bruce Miyashita explained how Six Sigma @ the Edge fit within MLF Six Sigma journey: Six Sigma typically begins with projects that reduce costs. However, the benefits from Six Sigma are not limited to cost savings. Over time, more and more projects focus on building revenue and growing the business. We are indeed experiencing this progression at Maple Leaf. The potential size of this benefit is enormous and is many times larger than cost reduction savings. But cost reduction and revenue building are not the only benefits from Six Sigma. Ultimately we see Six Sigma is helping each employee to enhance and to realize his or her full potential and to help Maple Leaf benefit from those ideas and energy. Getting the most out of human capital is what makes the other two benefits possible. For example, we are now launching the Six Sigma @ the Edge initiative that is aimed at making the basic tools and methods of Six Sigma available to every one of our employees. Michael McCain described his commitment to Six Sigma and the new Six Sigma @ the Edge initiative: We will continue to build on what got us to where we are so far — our total commitment to attracting, developing and retaining outstanding people, and deployment of Six Sigma throughout the company. In the future, we will be taking action to carry the principles of the Leadership Edge and Six Sigma right to the front line of the organization — we call it Leadership @ the Edge and Six Sigma @ the Edge. Engaging our front line team members is one of our most important strategic objectives. Plans were to have Six Sigma @ the Edge piloted at one or two manufacturing sites and possibly one non-manufacturing site before roll-out. IOCs could nominate potential pilot sites using the following criteria: 1. The site has a plant manager and executive that wants to participate in Six Sigma