Hostess is filing for bankruptcy and going out of business. There will be no more Twinkies. I know this news is over a week old now. I am behind.
My first thought when hearing the news was, “No Twinkies! No Cupcakes! No Ding Dongs! Ahhhhhhhhhh!” I absolutely love all of those. My daughter was distraught because the mini-donuts are a staple for our family as we travel on vacation.
I will miss those snacks. I’m sure someone will buy the rights to the recipes and the brand names. All will be good probably sometime next year.
My second thought was, “That company must have been horribly mismanaged!”
The Hostess brand of snacks were consistently much more expensive in the grocery store than comparable snacks. Yet, people bought them up…me included. Every time I went to the cash register to pay for some Twinkies I thought, “Wow! They have got to be making a ton of money.” Then to find out they aren’t. What a shame!
With the brand recognition and the price they charged, how could you not make money. I was going to dig into it a little bit but before I could I read Anatomy of a Twinkie by Bill Waddell over on Evolving Excellence. It was a great post and answered a lot of questions.
From the post:
- 57% of their costs: Administrative, Overhead, Selling, Distribution, Depreciation, Other
- 28% of their costs: Ingredients, Packaging
- 15% of their costs: Factory Labor
I think that answers all the questions about mismanagement. It is a shame. Cut out the waste and leave what only adds value for the consumer and I bet they would have made a ton of money. I bet whoever buys the recipes will be more efficient and make a great profit from Hostess’ demise.
Awhile back I talked about whether 5S is really foundational and does it need to be done as the first thing on a lean journey.
Once an organization decides to journey down the 5S path, it shoud involve the people in the area. The area should be understand that 5S is there to highlight abnormalities so issues can be addressed immediately.
A question that I am asked frequently is, “How far is too far?” What they want to know is, what is the minimum they can do to have workplace organization? Is there a point of diminishing returns?
I believe there is no such thing as too far. Get it as clean and organized as possible. Spic and span. Henry Ford was known for not allowing a spec of saw dust on the floors of his saw mills. This is the mentality and goal an organization should have when implementing 5S.
I have a couple of reasons for thinking this way. First of all, a by-product of doing 5S well is discipline. If everyone is putting things back in their place and maintaining an organized environment, they are following the standard work. This is a good thing and we should keep pushing it.
Secondly, if someone is asking what is the minimum to do they are not seeking perfection. Perfection may not be reached but we should always be striving to get better. Good enough conveys that once a level is reached we don’t need to improve. Looking for what is good enough is not a mentality that lean organization should want.
5S done well does not mean the organization is lean. Understanding why they do 5S and the benefits they have gotten from it can give clues about how they view lean though.
Don’t short cut the benefits and effort in implementing 5S. You will end up back sliding in the long run. Stay disciplined and seek perfection.
I received a comment about that post from Gray Rinehart. North Carolina State University is sponsoring a “Manufacturing Makes It Real Tour” the week before Manufacturing Week in America. It is the week of Sept. 27 – Oct. 1, 2010. The tour will be stopping at Thomas Built Buses, PolyChem Alloy, Elastic Therapy, as well as 7 or 8 other stops.
This sounds like a great two weeks for Manufacturing in the U.S. Are there any other events like this going on this year? If so, leave information about it in the comments.
I hope there is great participation as I believe manufacturing is foundational to our country and its strength.
Have a great weekend!
Kevin Meyer over at Evolving Excellence had a post earlier this week about about how some companies getting involved in vertical integration of their supply chains. This gets back to the basics that Henry Ford started in the earlier 20th Century. Henry Ford was very interested in creating a vertically integrated supply chain that he controlled. He owned the forestry area to the lumber mills to the assembly that used the wood. He controlled the entire supply chain. Because of this he was able to use the waste in the lumber mills to create new and different products which generated more revenue. Henry Ford saw that he could get a better product to his customer faster when he controlled the supply chain.
While this may not mean companies are bringing manufacturing back to the U.S., it does have the same principles as bring the “on-shoring” movement. It is about getting the supply chain closer to the customer and having better control over it so the company can reduce lead time, waste, and cost. The more integrated the supply chain is, the more important it becomes to have it location regionally where transportation isn’t a large factor in lead time.
Imagine if the fresh produce (tomatoes, lettuce) you bought at your grocery store was grown in Asia and shipped by boat over to the U.S. I know that is on the extreme end. So where do you buy your fresh produce? My wife and I don’t buy much, if any, from Walmart anymore. Why? Because, it doesn’t really seem that fresh. Walmart has contracts with farmers all around the country and it takes a lot of time to get through their supply chain. We buy our produce from the local/regional chain, because they have contracts with local/regional farmers so it gets through the supply chain and to the store shelf quicker. An even better way is to buy directly from the farmer at the farmer’s market. That is just about as fresh as it gets, because the farmer picks it and that week brings the produce to the market to sell. Typically, it isn’t any older than a week.
I, for one, am glad to see some companies start to get more vertically integrated.
Last week Bill Waddell posted a blog about over at Evolving Excellence about a “grass roots” movement to help raise awareness about manufacturing and it’s importance to America. There will be a American Manufacturing Week. It is the week of October 2-9. I encourage everyone to take a look at Bill’s blog about it.
This is a subject that I have great passion around and will be blogging more about in the future. I believe that manufacturing is the foundation that our country was built on and it is the foundation needed to keep this country strong. We can’t lose sight of that.
I will pass along more information about American Manufacturing Week as I learn more.