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Flexibility from Structure, Innovation from Procedure

By Janet Poeschl, CPIM, CIRM, CSCP | July/August 2013 | 23 | 4

The unexpected path to more progressive operations

Editor’s note: The editors of APICS magazine are pleased to introduce Janet Poeschl, CPIM, CIRM, CSCP, as the new author of “Executive View." Poeschl is the vice president of supply chain at Pacific Foods, where she and her team are responsible for demand planning, scheduling, purchasing, and warehousing activities for the family-owned natural foods manufacturer.

Pacific Foods was founded in 1987 as a soy milk manufacturer based in Tualatin, Oregon, just outside of Portland. We were one of the first food and beverage manufacturers in the United States to use the aseptic packaging format—a process by which the food product and its package are sterilized separately, then combined. Over the past 25 years, through an intense focus on product and process innovation, the company expanded its offerings into soups, broths, and additional non-dairy beverages. Most recently, we began producing hearty soups and beans in Tetra Recart packaging, a sealed carton that serves as an alternative to canning.

Pacific uses only all natural and organic ingredients that are traceable back to the original farm source through our “Certified to the Source” program. Many ingredients come from the company’s own farms, dairies, and ranches. Our vertical integration extends back to poultry, dairy, animal feed, and meat processing, with a strong emphasis on sustainable farming and humane treatment of animals. Pacific’s ingredient sourcing strategy uses local, regional, and then domestic horizons, and we make very limited international purchases. We strive to develop relationships with local farms to ensure seasonal supplies of the freshest fruits and vegetables. Pacific creates its own recipes and produces almost exclusively on-site. We employ approximately 500 people and sell about 200 products distributed broadly across the United States.

Pushing the limits
Pacific’s focus on packaging innovation is a key factor behind the business’s complex and rapidly changing environment. As a relatively small company operating with the active involvement of our original entrepreneur owner, Pacific places a high priority on flexibility and innovation. Thus, it is vital to have a responsive supply chain—and this requires high levels of process discipline. We expect manufacturing employees to perform specific tasks the same way every time. It’s a constant battle, but our best chance at fulfilling extraordinary requests is for routine things to happen routinely. 

There often seems to be conflict between entrepreneurship or innovation and organization size. They don't have to be mutually exclusive. As Pacific grows, I expect we will continue to be progressive and nimble while becoming more structured and, dare I say, bureaucratic. The creativity that occurs in our organization stems from the research and development and marketing areas. We do not need our supply chain and operations management professionals to be free thinkers; we do need them to follow rules and be consistent. Yes, we welcome new ideas on process improvements, but the processes first must be in control. We’ve probably been slow to recognize this at Pacific, so we continue to fight for structure and potential bureaucracy. 

In mid-2012, we launched an effort to put more of the right types of control in place through the development of a company-wide operations strategy. We started at the executive level and identified what it would look like to deliver on our mission: to make Pacific Foods the most respected brand in natural products by providing a safe, positive environment in which we produce the highest-quality, most innovative products that benefit our employees, customers, and the environment. We ended up with six key goals, which were to
  • have end-to-end integrity
  • be an innovation leader
  • be a leading corporate citizen
  • have financial strength
  • be an employer of choice
  • offer the preferred brand.

We then established short- and mid-term goals for these measures to evaluate performance. Our metrics cascade down to lower and lower subprocesses until it’s possible to link an individual’s performance all the way back up to the six key goals and ultimately the company’s mission. For example, an individual material handler may have a measurement related to staging timeliness. We can show through the linkages that jobs must be staged on time for production to achieve its weekly schedules and, in turn, deliver the product to the distribution center to ship on time to customers.

Next, we asked company leaders to identify specific business practices that would affect the measures. They came up with 12 core processes, each having its own subprocesses and process measures. For instance, the “supplying” core process includes subprocesses for contracting supplies, placing purchase orders, and managing supply quality. The corresponding metrics include supplier quality and on-time delivery. 

In all, there are 10 subprocesses on which we focus, the company-wide scorecard has nearly 100 measures reviewed quarterly, and the supply chain scorecard has 97 measures reviewed at least quarterly. All individuals on the supply chain team have at least one measure on the scorecard that is part of their individual performance evaluation. Meanwhile, other departments at Pacific are developing similar scorecards so that, in time, every employee will be able to see the connection between individual performance and overall company results. 

Our hope is that, by focusing individuals on the routine, we will have faster reaction times to the non-routine. Likewise, if our supply chain and operations teams achieve flawless daily execution, we can better support our company’s more entrepreneurial and innovative activities. In short, day-to-day and hour-to-hour tasks must be measured—and individuals held accountable.  

Janet Poeschl, CPIM, CIRM, CSCP, is vice president of supply 
chain at Pacific Foods. Prior to that, she worked in various supply chain and operations management roles at AlliedSignal,  Honeywell, and Precision Castparts. She may be contacted at jpoeschl@pacificfoods.com.

1 Comment

  1. 1 Doug 22 Mar
    My initial reaction, as a supply chain professional, is a negative response to Ms. Poeschl's comment that "We do not need our supply chain
    and operations management professionals to be free thinkers". I am a huge proponent of processes and procedures that benefit the company and drive
    improvement. However, to baldly state that you do not need free thinkers - in any capacity - is self-limiting. That approach suggests that the company does not want
    want employees to extend themselves. Rather, the employees are to neatly fit themselves into established slots. They are expected to perform their functions
    as directed, and report as directed.

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