The Bama Companies, Inc.

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The Bama Companies, Inc.

2727 East 11th Street
Tulsa, Oklahoma 74104
U.S.A.
Telephone: (918) 592-0778
Toll Free: (800) 756-2262
Fax: (918) 732-2950
Web site: http://www.bama.com

Private Company
Incorporated:
1927
Sales: $220 million
Employees: 1,043
NAIC: 311410 Frozen Food Manufacturing; 311810 Commercial Bakeries; 311813 Frozen Cakes, Pies, and Other Pastries Manufacturing; 311821 Cookie and Cracker Manufacturing; 311822 Flour Mixes and Dough Manufacturing from Purchased Flour; 311911 Perishable Prepared Food Manufacturing; 424420 Packaged Frozen Food Merchant Wholesalers

The Bama Companies, Inc., manufacture oven-ready products for customers in the quick-service and casual restaurant industry and private label products for retail in more than 17 countries. The company's three main products are hand-held pies, biscuits, and pizza crust. Its four facilities include Bama Pie, Bama Foods, Bama Frozen Dough, and Beijing Bama. Bama's quality processes include the company's own proprietary "business opportunity management process," Six Sigma.

192784: HOME-MADE PIES FOR RESTAURANT CHAINS

In 1927, Cornillia Alabama Marshall founded the Bama Pie Company in her Texas kitchen. According to company lore, "Bama" Marshall's homemade pies were so delicious that people lined up outside the soda fountain that sold them, waiting to purchase a slice. In 1937, Bama's son, Paul Marshall, and his wife, Lilah, moved to Tulsa, Oklahoma, where they started a full-fledged pie-making business, using Bama's recipes for mouth-watering pie.

Bama evolved under Paul Marshall's leadership. The small company that specialized in home-baked pies began to cater to the needs of the biggest and best-known restaurant chains in the 1960s. In 1967, McDonald's added Bama's Fried Apple Pie to its national menu. By the time Marshall handed over the reins of the family business to his daughter, Paula Marshall-Chapman, in 1984, Bama Pies had grown into a $33 million-a-year operation.

As the youngest child in the Marshall family and a woman, Marshall-Chapman had not been in line to take over the business. Paul Marshall had, in fact, considered hiring a non-family executive, as well as selling the company when it became clear that none of his three sons wanted to be the next head of business. Then, during what Marshall called a "divine intervention," he realized that his daughter, who had worked for the company for 17 years and had earned a bachelor of science in business from Oklahoma City University (OCU) in 1982, knew how to run the business. Marshall-Chapman went on to earn a doctorate in commercial science from OCU in 1993.

However, the 31-year old Marshall-Chapman was viewed with some suspicion by customers and suppliers of the major food-manufacturing concern. "I was a rookie pregnant CEO," Marshall-Chapman recalled in a 1998 Snack Food and Wholesale Bakery article, adding, "Dad retired in September and I was due in May." The company's new chief executive inherited a company selling 75 to 85 percent of its output to McDonald's in the form of apple and cherry pies. However, the hamburger giant was threatening to pull its contract because "McDonald's was getting more complaints from its stores about our pies than any other product," Marshall-Chapman recalled.

McDonald's executives flew to Tulsa, and the two companies came up with a solution to their problem: double the number of inspections at the end of Bama's product lines. Two months later, the company had accumulated $100,000 worth of unacceptable pies. "We were just inspecting errors," according to Marshall-Chapman in the Snack Food and Wholesale Bakery article, "And losing money."

198494: FOCUS ON QUALITY IMPROVEMENT LEADS TO NATIONAL AND INTERNATIONAL GROWTH

Marshall-Chapman turned to Phil Crosby, whose Quality is Free had impressed her, for quality assurance help. Crosby was a proponent of incorporating quality improvement processes into a company's day-to-day operations. Crosby's quality audit of Bama revealed that the company was losing nearly $4 million annually because of waste that ranged from 5 to 25 percent of its business and generated half a truckload, or between 25,000 to 35,000 pounds, of unacceptable products a week.

Determined to make the quality improvement process work, Marshall implemented quality improvement teams in 1986, and within nine months, these teams had driven inventory write-offs down from $300,000 to nothing. The company also began to train employees in quality improvement, shutting down lines to do so. McDonald's QA director helped convince other executives at the hamburger giant's corporate headquarters to support Bama's quality improvement program. By 1989, Bama's quality program was a way of corporate life, and there were control charts in the dip room where pies received their sugar glaze.

Marshall did not stop there. After attending a W. Edwards Deming seminar in 1989, she began introducing Deming's concepts into the organization and implementing the Bama's Blue Flame, or Quality Process. The heart of the flame represented the company's mission, vision, and values, while the flame's internal surface represented its daily work, partnerships, planning, teamwork, and process management. By the early 1990s, Marshall had made reading Deming's philosophies a requirement for Bama management, with all managers also attending a series of Deming classes that Marshall led.

The 1990s saw continuing evolution in the company's quality culture and an 18 percent average annual growth rate between 1990 and 1998. Influenced by Stephen Covey's Seven Habits of Highly Effective People and The Baldridge performance excellence model, Bama's quality efforts were paralleled by an aggressive capital expenditures program, which, in turn, responded to new business demands. After being asked to develop a biscuit with a "made-from-scratch" taste for McDonald's in 1990, Bama built a new $38 million, 135,000-square foot facility, the Bama Foods facility, dedicated to biscuit production.

In 1994, the company invested in a second plant, this one to handle frozen pizza dough production. The $20 million investment entailed remodeling an old, 78,000-square foot furniture warehouse. All in all, Bama spent nearly $100 million on new plants and production lines between 1990 and 1994, by which time the company had reduced inventory losses by 90 percent, accident rates by 50 percent, and placement of products on hold by 75 percent. Overall production costs on apple pies dropped about 10 percent.

By 1998, the company's overall scrap rate was between 1.5 and 3 percent, and Bama devoted 10,000 hours each year to training.

COMPANY PERSPECTIVES

Bama's success comes from our ambition is to be our customers' first choice and your supplier of choice. We achieve this through extraordinary vision, leadership, integrity, strategic focus and processesshared by Bama's over 1,000 team memberswith a single mission of "People Helping People Be Successful."

At the same time, Bama was expanding globally and in new directions. In 1992, it opened a processing plant in Beijing, a 75,000 square foot facility that cost $15 million to supply apple, pineapple, and bean-curd pies to McDonald's restaurants in China and Korea. In 1993, it entered into a joint partnership with McDonald's to explore marketing in China. In 1998, Bama doubled the capacity of Bama Beijing.

19952005: BAMA'S SALES RATE OUTPACES THAT OF THE RESTAURANT INDUSTRY

Bama also took steps to refocus on its core products in the late 1990s. In 1997, it stopped selling retail products in grocery stores, and, in 1998, it sold its 27-year old Bama Transportation Co. to ROCOR International of Oklahoma City, which continued to provide ground transportation for the company. Also in 1998, it launched its Culinary Group with one chef on staff to launch new dining products. By 2006, the group had expanded to three full-time chefs and a chef's consortium, consisting of certified master chefs and bakers, to create brandable products for marketing.

Continuing on its path for total quality management, the company began to draw attention for its emphasis on quality throughout the mid- to late-1990s. In 1994, Bama won the Oklahoma Quality Award. In 1996, it won McDonald's top honor for business excellence among its 4,000 global suppliers, the Sweeney award. In 1997, it was named one of Ernst & Young's Entrepreneur of the Year companies. In 1999, Bama initiated the Prometheus strategic planning and execution process, with teams at the corporate, facility, and department level responsible for developing and executing action plans that aligned with organizational priorities and opportunities. The following year, Bama integrated a company-wide Business Opportunity Management Process (BOMP) system to coordinate, manage, and measure new business opportunities and to improve current products and processes.

Two additional undertakings took place in the year 2000, reflecting a shift in The Bama Companies to more specialty items. The company returned to its roots with the introduction of a gourmet pie collection sold exclusively through the company's new online Bama Pie division. The Bama Pie Heritage Collection featured pies that were an inch larger in diameter than the typical nine-inch pie, hand-baked, flash frozen, and boxed. Bama Pie's 500-page web site contained baking tips, interviews with local and national guest chefs, bakeware for sale, and a children's area.

That same year, in a move to meet increased demand for specialty breads nationwide, the company also purchased the family-owned Bavarian bakery in Lawton, which produced 40 to 50 different breads each week. In addition, with an increasing number of restaurants turning to frozen dough that they customized in their own kitchens, Bama invested somewhere between $12 and $13 million in a third dough line at its flagship Frozen Dough facility. The addition allowed it to produce twice as much dough, or another 340,000 pounds, each day.

KEY DATES

1927:
The Bama Pie Company is founded in Texas by Cornillia Alabama "Bama" Marshall.
1937:
Bama's son Paul Marshall opens a pie-making business in Tulsa, Oklahoma, with his wife Lilah.
1967:
Bama's Fried Apple Pie becomes part of the McDonald's fastfood menu nationwide.
1984:
Paula Marshall-Chapman takes over the $33 million per year family business from her father.
1986:
Marshall-Chapman implements quality improvement teams to reduce errors that threaten the company's business with McDonald's.
1990:
After a successful test of a "made-from-scratch" biscuit for McDonald's, Bama builds a facility dedicated to biscuit production for the fast-food chain.
1992:
A processing plant is opened in Beijing, China, to supply apple, pineapple, and bean-curd pies to McDonald's restaurants in China and Korea.
1994:
Bama wins an award for business excellence from McDonald's.
2000:
The company introduces the Bama Pie Heritage Collection of gourmet pies.
2001:
Bama opens the Marshall Tech Center for research and development of new and improved products.
2003:
Bama expands its flagship facility in Tulsa.
2005:
Bama is awarded the McDonald's USA National Quality Supplier Award, the fast-food company's top honor for quality.

In 2001 Bama created its Marshall Tech Center to support new product research and development. The 28,000-square foot facility included a product development lab, a chef's kitchen, and a sensory area. Bama launched its Six Sigma initiative in 2001, requiring that all leaders in the organization complete its training. Six Sigma is a data-driven approach to analyzing the causes of and identifying solutions for business problems. Initially, Bama selected eight managers throughout its business areasoperations, customer service, product development, maintenance, engineering, human resources, training, and financeto become Six Sigma Black Belts. As part of the Six Sigma initiative, the Bama Training Institutes went to online to facilitate employee access to training The company also moved information about health benefits online and made a policy of encouraging employees to complete college through a tuition reimbursement program.

In 2001, Bama was producing 2 million biscuits and 1.5 million pies daily. It reentered the retail sales market, selling Bama-branded frozen biscuits and pies to a major domestic retailer. An ever-growing customer base and increased demand for new dessert products called for a boost in production capability, and in 2003, the company invested in a $20 million expansion of its flagship facility, which created 100 full-time jobs for Tulsa's flagging economy. The expansion added 42,000 square feet of space and more than 7,000 square feet of renovations. That year, Bama had revenues of $210 million and employed a total of 1,000 employees at its headquarters and four factories. The following year, Bama purchased a 1920s-era building to renovate and consolidate its corporate offices.

By 2004, Bama was steadily gaining in market share with a sales rate that was growing faster than rate of growth of the restaurant industry. In the overall frozen baked goods market, which had remained relatively stable since 1999, Bama's sales had increased 70 percent, from $120 million to $200 million. In the retail market, the company had a sales increase from $9 million in 2001 to $20 million in 2004. New products, which, in 2000, represented fewer than 0.5 percent of sales, accounted for more than 25 percent in 2004.

In acknowledgement of Bama's overall competitiveness and quality management, Congress awarded Bama the Malcolm Baldridge National Quality Award in the manufacturing category in 2004. The Baldridge award was created by Congress in 1988 to enhance competitiveness among United States companies and was awarded annually by the U.S. Department of Commerce. In 2005, the company won McDonald's USA's top honor for quality, the McDonald's USA National Quality Supplier Award.

In fact, Bama's number of products had tripled between 2000 and 2005, and between 1999 and 2006, it enjoyed a 47 percent sales increase. This position allowed Bama to elect to do business only with customers that shared its philosophy of developing long-term relationships and to refuse to take part in annual bidding for contracts. As the nation's largest producer of hand-held fruit pies, Bama looked forward to ongoing growth in years to come.

PRINCIPAL SUBSIDIARIES

Base Inc.

PRINCIPAL COMPETITORS

Flower Foods; George Weston; SYSCO; ARAMARK; Bimbo; Horizon Food; Interstate Bakeries; Jana's Classics; Maple Leaf Foods; Merkel McDonald.

FURTHER READING

Blossom, Debbie, "Tulsa, Oklahoma-Based Bakery Company Slices into Online Market with Gourmet Pies," Tulsa World, October 11, 2000.

, "Tulsa, Oklahoma, Frozen Bakery Firm Invests $13 Million in Expansion, Test Lab," Tulsa World, December 15, 2000.

Daniels, Susan E., "A Recipe for Excellence," Quality Progress, June 2005, p. 54.

Droege, Tom, "Tulsa, Oklahoma-based Baker Plans New Headquarters," Tulsa World, August 25, 2004.

Oacyniak, Bernard, "Lightin' a Fire," Snack Food & Wholesale Bakery, February 1998, p. 20.

Theurmer, Karen E., "Bama Foods Bakes in Beijing: Quality Control and Bean-curd Pies," World Trade, March 1998, p. 46.

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The Bama Companies, Inc.

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