James Therien, Hassan Abualola, Charles Angotto , Derek Mayo
MGMT 280-4
Maple Leaf Foods Parts A & B
I.
Players:
Companies:
A. Maple Leaf Foods (MLF)
B. McCain Capital Corporation
C. Ontario Teachers Pension Plan Board
People:
A.
B.
C.
D.
E.
Michal McCain: President and CEO
Bruce Miyashita: Vince President “Six Sigma”- 39, BSc, BSM, Brings Six Sigma to MLF
Louann Holsman: “Master Black Belt” Black Belt trainee at MLF Consumer Foods
Jim Long: Black Belt at Poultry
Brock Furlong: President of Poultry, one of the original three IOC’s for Six Sigma Implementation
Finances:
1999: Cdn$3.5Billion Total Sales, Cdn$147Million Net Earnings
2000: Cdn$4Billion Total Sales, Cdn$90Million Net Earnings
Timeline:
1990: Maple Leaf food is incorporated
1995: Operations/Manufacturing begins under the McCain Capital Corporation, MFI stocks go on sale
1999: Bruce Miyashita joins MLF as vice president,Cdn$3.5Billion total sales, Cdn$147Million Net
earnings
2000: Total Sales were reported at Cdn$4 Billion, up half a billion from the previous year. Cdn$90Million
Net earnings. New Brandon Plant is built, “Green Belt” training for Six Sigma is implemented.
1997: Workers at the Gainers & Ontario plants go on strike.
II.
Conflicts:
-
-
Management:
IOC Presidents could not allocate proper resources to operate Six Sigma. Executing the
projected that involved multiple IOC’s proved to be one of the most challenging tasks, this also
made it difficult to coordinate tasks and projects that were at multiple stages within the
company. Managing the team of “Black Belts” also proved to be an issue, as they needed to be
part of one cohesive group, despite being scattered across Canada.
Ethical
Many employees were opposed to Six Sigma, saying they did not like it and would not do it.
Issues:
-
Problems (ranked and listed)
A. Low Employee support of Six Sigma
B. Low Statistical Literacy of current employees
C. IOC Presidents lacked the proper resources to operate six sigma
D. Change of mindset. MLF went from the “shoot first, ask questions later” type of mindset, to
a research oriented mindset, the basis of Six Sigma.
E. Employee’s trained in Six Sigma had no project’s available to maintain and practice their
knowledge
-
Central Problem:
The central problem that I find with Maple leaf Food would be that when they implemented the
six sigma program, there was a lack of project that employees could complete. MLF helped train
individuals for projects that would be utilizing the six sigma program, and employees went
through the various trainings to learn the new skill set Six Sigma requires. This training proved to
be, at first, unnecessary, due to the lack of projects available for those with a new skill set.
III.
Analysis
In 2001 Maple Leaf Foods was a leading food processing company located in Toronto, Canada that had
11 IOC’s such as Maple Leaf Pork, Maple leaf Poultry, Canada Bread, Maple Leaf Consumer Foods, ShurGrain and Landmark. Michael McCain, CEO of MLF believes that “the personal success of employees was
highly integrated with the continuous success of the business.” McCain wanted continuous success of
his company so he decided that they needed to implement a strategic business plan to achieve and
maintain a “leadership edge” over MLFs competitors. MLF decided to implement the Six Sigma
Philosophy which has the motto of “doing the right things right”. Six Sigma provided MLF with a problem
solving framework that would help their design process from the beginning and improve process that
were already implemented by MLF.
McCain understood that this would be a monumental change and decided to bring in Bruce Miyashita in
a newly created position of Vice President, Six Sigma. After six months of careful planning McCain and
Miyashita decided to implement the Six Sigma plan into two of the companies IOC’s. The Six Sigma plan
was implement by project leaders “black belts” that diagnosed problems and improved the design
process in the various IOC’s that the plan was being implemented in. These Six Sigma “black belts” were
workers already within the company that applied for the position to fully learn the Six Sigma method so
that they could implement it. Most of the positions were filled internally but MLF began getting more
recognition for the new Six Sigma process that they were implanting and many external candidates
began to apply to become “black belts”. Miyashita feared that internally employees would not buy in
but he offered the employees benefits of the Six Sigma plan such as “I’ll be more marketable internally
and externally because of the training that I’ve had” and “I’ll understand other parts of the business
better”. Miyashita offered the MLF’s employees that “ ninety nine percent is roughly 3.8 sigma. A 3.8
sigma or 99 percent capability is like going without electricity for 7 hours per month while, six sigma is
seven seconds a month without electricity.” This showed the employees what could truly be achieved
and had them buy into the plan.
The Six Sigma plan was first introduced to MLF’s poultry plant where they were experiencing problems
with skinning chicken thighs. 6 out of every 10 chicken thighs still had excess skin on them. A design
experiment was implemented with the Six Sigma program, resulting in an increase of 16 percent in
output per employee per year.
A year from first implementing the Six Sigma process into two of Maple Leaf Foods IOC’s, Maple leaf
foods now has 10 of their IOC’s running the six sigma program and have gone from 14 “Black Belts” to
55 and hopes to reach 70 in the near future. The case does not fully give numbers of how well the Six
Sigma plan has worked within the other IOC’s but with the gaining numbers of black belts it is clear that
MLF is growing stronger and stronger and we have to wonder what strategies their competitors might
be planning to keep up with Maple Leaf foods growth.
IV
Huge Number of Employees Wide (Over 12,000)
Had 11 IOC’s (Independent Operating Companies)
Made an improvement of about ½ a billion Canadian Dollars in sales from 1999 to 2000
Net earnings fell to 90 million Canadian Dollars from 147 million in the same time frame. (However this
loss was expected due to increase in hog process and the startup costs of the new Brandon plant.)
MLF embraced Six Sigma as the essential discipline to achieve and maintain what was known internally
as the “Leadership Edge.” (Competitive edge through leadership and the competitive edge of its leaders)
(Philosophy) The MLF Six Sigma Philosophy (doing the right things right)
(Metric) The MLF Six Sigma Metric (Measured variation relative to customer expectations)
(Methodology) Six Sigma provided a common problem-solving framework and language that would help
MLF to design processes from the very beginning, improving existing processes to allow them to achieve
their full performance potential.
(Tools) Six Sigma utilized and integrated a broad range of tools
Bruce Miyashita Brings Six Sigma to Maple Leaf Foods
Via Letter in July 1999 workers were informed that Miyashita had joined MLF as senior management as
“vice-president, Six Sigma” (This is a newly created position)
McCain and Miyashita develop Six Sigma training sessions that occurred January 2000
Six Sigma became the responsibility of the IOC President
Soon discovered that IOC Presidents could not devote enough time to operate Six Sigma
As soon as Six Sigma was implemented at the Bacon Plant it made workers happy and as a result product
defects went from 3,000 defects per million to around 1,400 / Consumer complaints fell 50%
Black Belts (Six Sigma Trained Employees)
Six Sigma is just for manufacturing
Six Sigma Quality costs too much
Most People say that 99% is good enough
V.
As a conclusion to the implementation of Six Sigma to Maple Leaf Foods I would say over all it was a
great success. On the other hand I could say that the cost of Six Sigma is not worth the overall cost.
When a company is currently at 99% as far as non-defected goods goes I feel this is pretty much perfect.
To get that 1% I feel that a company is spending more money than they happen to be losing in defected
goods. As a conclusion and recommendation I feel that Maple Leaf Foods and other companies that may
be in similar situations should focus on goals such as the ones presented below and try to correct
manufacturing flaws at a lower cost and or on a budget. If a company were to follow these guidelines I
believe that they would be quite successful.
A solution to fixing problems could be as simple as talking to workers and keep them up to date on the
status of the business or even holding retraining classes to keep their skills fresh.
Maple Leaf Foods prided itself as being guided by six fundamental values.
 Do what’s right
 Be performance driven
 Have a bias for action
 Continuously Improve
 Be externally focused
 Dare to be transparent
The Strategic Level Seven Principles
 Build High Performance Leadership
 Focus on Markets and Categories where we can lead
 Develop Brand Equity
 Offer the best quality products
 Be the lowest cost producer
 Execute with precision and Continuous improvement
 Think global
VI.
Part A
I think the American manufacturing is improved. There are many reasons that help U.S economy. First of
all, US have High investments and productivity. US manufacture always looking to new technology which
helps them to manage high structural costs and the U.S policy had changed in the last decade. The
government and federal courts has been made in curbing tort costs. Moreover, Health care insurance
premiums have moderated. Also, companies worked to find Ways to limit the costs. Finally, rising costs
abroad is important factor that help U.S .Others countries like Japan, Mexico, china and European are
seeing wage increases, rise in health care costs and pollution control costs. The Tide is Turning is a
report on the structural cost pressures facing the U.S manufactures, the report goes over analysis cost
drivers comparing the US and other countries in all areas of manufacturing; it goes over tax burden,
employee benefits, tort litigation, pollution abatement and energy costs. America is facing many aspects
of trading position; from them are the three important disadvantages which is somewhat holding it
back, a very high rate of tax burden one the highest in the world it is the single most important and
damaging structural cost facing American manufactures which differs across countries. Employee
benefits, tort litigation and energy cost are another disadvantage because of high rates. America is the
world largest manufacturer, with accounts to more than a fifth of global manufacturing output and is
currently growing largest because of export strength of their manufacturing sector which is all identified
as advantages.
McCain's strategy of keeping profits high by reducing operating expenses lent to a period of bitter labor
disputes. In 1997, the workers at Gainers, a 91-year old slaughtering plant in Edmonton, went on strike.
Michael McCain followed through on his promise to shut the doors of the old plant if a strike occurred,
stating his intent to build a massive new production complex in Brandon, Manitoba. About the same
time, two meat-cutting plants in Ontario struck, while 200 butchers in Saskatchewan were locked out
over a wage and benefit dispute.
Part B
In 2000, incomes fell to $36 million compared to $77 million in 1999. McCain attributed the reduction
to the decline in the pork business itself. Maple Leaf faced possibly tough years. However, some
divisions remained. Michael McCain’s early adoption of Six Sigma was a course of action that had very
positive short-term consequences. The program was labeled what it was, Six Sigma, not some other
arbitrary dull-sounding quality initiative name. He was wise enough to realize that for a quality control
initiative to actually be effective at MLF he was going to have to understand and back the system 100%
from the very onset, before demanding cooperation from his employees. In this manner, before the
program was even rolled-out to the employees; the Board adopted it. The process was successful this
was a quality improvement initiative the company was going to follow through on. The lack of
aggressiveness during the rollout of Six Sigma at MLF was later viewed with mixed results. It is still
pondered whether the slow rollout of the program was the better choice. They could have rolled the
program out all at once or nearly all at once across the IOCs.