Ralston Foods, St. Louis, MO, sold its branded cereal business to Minneapolis-based General Mills last summer along with Ralston's Cincinnati, OH, plant. But the changes haven't stopped its model plant and workforce in Sparks, NV, from continuing to post productivity gains.
The Sparks plant has earned plaudits since the company -- formerly Ralston Purina -- converted its pet food plant into a cereal processing facility in July of 1991. At the same time, the plant underwent a social transformation assembled around semi-autonomous work groups. Today, after some growing pains, the Sparks workforce has become a model for the industry.
Since the General Mills transaction, empowered workers have played significant roles in helping the plant meet new financial and production objectives. "Change has made us more cost-sensitive, budget sensitive," says Sparks' plant manager, Dan Kibbe. "Our Business Response Teams -- cross-functional groups -- have tackled challenges ranging from spare parts to inventory and overtime reduction." And they have met them, too. Among its many achievements, the plant has cut overtime 18-20 percent.
Ralston lost less in its sale to General Mills than generally believed. A court ruling allows Ralston to forego the previously ruled 18-month non-compete clause imposed by General Mills with the sale. This will allow Ralston Foods to make a private label Chex cereal to compete with General Mills. Ralston also has a one-year agreement to produce Chex cereals to meet General Mills production requirements.
The Sparks plant is the top manufacturing unit in the Ralston system and was so even before the company sold its Chex, Almond Delight, and Cookie Crisp brands to General Mills. Today, Ralston remains the top private label cereal maker. The plant handles the lion's share of flaked product production. The company's Lancaster plant carries the primary manufacturing load on extruded product.
Kibbe says the Sparks plant is focused on core activities and productivity today. Its team culture has helped it discover "more creative ways to manage costs" along the way as well.
One feature unique to the Sparks work groups is that management requires its workers to hire, fire, discipline and assess co-workers. Group members at Ralston interviewed Cindy Davis, eventual manager of human resources at the Sparks plant 10 times before hiring her. The rigorous process ensures that everyone in the group has ownership of the choice. Management, therefore, schools group members in the legal aspects of their hiring, firing and disciplinary duties. In situations where firing seems imminent, team members should know every item in the employee personnel files, what disciplinary steps have been taken so far, and all the legal implications involved in termination. Ideally, the team brings in legal counsel only after they carefully organize and review the details of each case.
What's in it for me?
From 1992 to the present, daily output has increased steadily, plant expenses have dropped 8.2%/yr on average, and volume has enjoyed a steady increase. The stress on accountability and peer-driven results is behind the impressive improvements. Management communicates to the workers how the plant's success relates to each of their careers and their job security. Ralston has started a gain-sharing plan, financially rewarding employees for meeting or exceeding production goals. The money not only motivates workers, but it motivates workers to motivate workers, since the goals must be met by the team.
Policy dictates that work teams assess each employee, and judge them as having achieved mastery of five basic skill blocks within five months. The first of these skill blocks always includes the basics: safety, team-building, manufacturing, and sanitation. Once each worker masters the core skills block, he or she is free to choose from any combination of the remaining skills and can study them in any order. A combination of operations and cultural training skills must comprise each block. Learning the basic skills in all areas of operations affords each team member with a view of the big company picture, and makes for a versatile team.
Edited by Nick Basta