CASE STUDY

BAMA PIE
Submitted To:
Prof. Sekhar V

Submitted By:
Urpreet Kaur Soni

08PG209

Marketing B
Introduction:

The Bama Companies began as the Bama Pie Company in the kitchen of its founder,
Cornillia Alabama “Bama” Marshall, in 1927. Today, this family-owned business
manufactures frozen ready-to-use food products for the quick service and casual dining
restaurant business and family dining chains. Its three main products are hand-held pies,
biscuits, and pizza crust.

Its Revenue is over $200 million with a Workforce of 1,043 employees having its Location:
The corporate office and four production facilities are located in Tulsa, Okla. In 1993, Bama
opened a production facility in Beijing, China.

HIGHLIGHTS of the Case:

• While the overall frozen baked goods industry has remained relatively flat since 1999,
Bama’s sales have increased 47 percent. Total revenue has grown from $120
million in 1999 to over $200 million in 2004.

• Bama rewards its hourly employees when certain financial measures are met. Since
2001, this payment has averaged around $5,000 per year for each employee.

• Bama has not raised prices for hand-held pies and biscuits since 1996.

• Bama uses its Centers of Gravity (short-term action plans) and a Balanced Scorecard
to assess progress toward meeting its three strategic outcomes: Employee
Satisfaction, Growth Opportunities, and Corporate Citizenship. The plans and
scorecard support the company’s decision making process at all levels and are
posted throughout the facility allowing all employees to see at a glance how their
unit is performing against goals. The Senior Management Team reviews the
information at weekly and monthly review meetings.

• Bama has a full-time Vice President of Community Development who is part of the
senior management team and is responsible for directing all of Bama’s charitable
and volunteer efforts. Bama also employs a Volunteer Coordinator who facilitates
the matching of community needs with Bama resources.

Quality and Improvement Results:

• Benefiting from new product innovations, Bama is gaining market share and sales
rates are growing faster than the rate of the restaurant industry. Sales from new and
innovative products as a percent of sales have grown from less than 0.5 percent in
2000 to almost 25 percent so far in 2004. Sales from branded retail products have
increased from 9 million in 2002 to 25 million in 2004. Bama has become the nation’s
largest producer of hand-held fruit pies as well as the largest producer of ready-to-
bake biscuits, exceeding the production of much larger corporate competitors.

• Using its Business Opportunity Management Process (BOMP), which helps to

coordinate the activities required to get a product from the idea stage to market,
 Bama’s sales per employee rose 9 percent between 2002 and 2003. Since 2000,
sales per employee grew from $175,000 to $205,000. This exceeds the 2003
Industry Week benchmark by $40,000.

• New product ideas at Bama are implemented at a rate nearly 10 times the industry
average.

• In 2001, Bama entered the retail sales market selling Bama-branded frozen biscuits
and pies to a major U.S. retailer. Retail sales have grown from $9 million in its first
year to $20 million in 2004.

• Bama’s focus on productivity improvements through the use of the six sigma
methodology has saved the company $17.3 million since 2002. For example,
efficiency on the frozen dough line has increased from 70 percent to 84 percent,
start-up efficiency has increased from 35 percent to 50 percent, changeover time has
decreased from 3 hours to 1 hour, and scrap has been reduced from 3 percent to 1
percent. Prior to these improvements, each shift produced 342,000 pies; after
implementing improvements, each shift produced 625,000 pies.

• Bama encourages employees to seek a college education by providing tuition

reimbursement. The number of employees taking advantage of this program has
increased from 20 in 2001 to 50 in 2003, representing an investment of well over
$400,000 in tuition reimbursement during that time. The number of training hours per
employee per month has grown from two hours per month in January 2002 to five
hours per month by January 2004.

• Employee satisfaction is measured every six months and annually. Overall employee
satisfaction rose from 7 (on a 10-point scale) in 1999 to 8 in 2004, which is near the
benchmark level of 9.

• Since 2001, employee turnover at Bama has been about 14 percent annually, well
below the average turnover in the Tulsa area of 20 percent.

• Since 2000, Bama has had no safety, health, or environmental violations. Further,
during this same time period, Bama has had 100 percent compliance with the
Hazard Analysis and Critical Control Point (HACCP), which is a food safety system
that focuses on preventing hazards.

• As a result of several customer service initiatives, overall customer satisfaction for the
company’s national accounts has increased from 75 percent in 2001 to nearly 100
percent in 2004. This is considerably higher than the food manufacturing benchmark
of 85 percent.

• Customer satisfaction with Bama biscuits increased from 60 percent in 2002 to 85

percent in 2004, which is equal to the satisfaction rate of its closest competitor.

• Bama’s satisfaction rate among its casual dining customers consistently scores higher
than its competitors. Between June 2003 and June 2004, satisfaction rose from 4 (on
 a 5-point scale) to 5, better than its competitors’ scores which ranged between 2 and
4.2 during the same time period.

• Since 2001, Bama has achieved 98 percent on-time delivery of product to customers,
with 99 percent of orders completely filled on the initial shipment.

Processes

• Bama combines its Listening and Learning Process (to find out what customers want)
with its Business Opportunity Management Process to ensure the effective transition
of products from idea to ready-to-use menu items. For example, using the LLP and
BOMP, Bama has targeted a healthier line of products called “Better For You.” The
company expects 50 percent of its revenue will be from these more nutritious
products by 2007.

• Bama’s Senior Management Team (SMT) incorporates a People Assurance System

(PAS) to reinforce its mission “People helping people be successful” and its core
belief that “the quality of Bama people is in essence the formula for quality in our
products.” The PAS emphasizesteam-based approaches to work design, problem
solving, and process improvements. Bama links its performance management
system to the PAS to ensure employees are provided with the assistance and
resources to be successful. This includes involving managers in reinforcing new
skills and mentoring.

Leadership/Social Responsibility

• Bama’s Senior Management Team sets directions and expectations, communicates

values, and creates a clear customer focus through its Principal Centered Bama
Culture (PCBC). Based on the teachings of Stephen Covey, the noted author of The
Seven Habits of Highly Effective People, the PCBC underlies everything Bama does
by serving as its guiding principles.

• Bama has received many honors and awards for its corporate citizenship including The
Best Company to Work For (2004, Tulsa People), Best Corporate Citizen (2004,
Tulsa People), United Way Gold Award, and the Most Family Friendly Corporation in
Tulsa Award from Family and Children Services (2000). Bama is the third largest
contributor to the Tulsa Area United Way (manufacturing division), raising over
$800,000 in 2004 alone. In addition to its United Way gifts, Bama has contributed an
average of 6 percent of its pre-tax income (over $2.6 million) every year since 2000
to organizations such as the Tulsa Community Food Bank, Environmental Expo, Up
With Trees, the NAACP, Tulsa Indian Health Center, Adopt-A-School, and the
University of Tulsa.

• Employees are given paid time off to volunteer to work on corporate sponsored
projects (Rebuild Tulsa, Meals on Wheels, and United Way) during work hours.