Tasty Baking Company

A move to new premises will make business sweeter than ever for snack cake maker Tasty Baking Company, Gary Toushek learnsAmericans love their snack cakes, and every day they consume a lot of Tastykakes in several varieties, including snack-sized, pre-packaged treats such as Krimpets (shaped sponge cakes with icing or filling), Kandy Kakes (chocolate-enrobed cakes with filling), Juniors (small two-layer cakes with filling or icing), Kreamies (long two-layer cakes with cream filling in between), Doublicious (variations of the standard products with extra icing or filling), Cookie Bars, cupcakes, pies, doughnuts, and even some Better For You items (lower-fat or sugar-free lower-calorie items).These varieties and more are manufactured in their hundreds of thousands every day by Tasty Baking Company, founded in 1914 by Philip J. Baur and Herbert C. Morris. BaurÔÇÖs German-American family was selling its large Pittsburgh bakery; Morris was a Boston egg salesman from a well-established Cleveland family. The pair decided to develop small cakes, pre-wrapped individually at a bakery plant and delivered to local grocers. Their main competition at the retail level was loaf cakes that were cut into portions by grocers under questionable sanitary conditions that seemed to be the norm at the time, so a major marketing point was TastykakeÔÇÖs packaging. Since a condition of the sale of the Baur bakery didnÔÇÖt allow any family member to own or operate a bakery within 100 miles of Pittsburgh, the two decided to make Philadelphia their base of operations. They insisted on using the finest ingredients delivered fresh daily to the bakeryÔÇöflour, eggs, creamery butter and whole milk from local farmers, and cocoa, spices and natural flavorings from suppliers. Sugar and flour were sifted by hand. The early cakes were produced in white, yellow, chocolate, raisin, molasses and sponge cake varieties. After bakingÔÇöinitially in a single ovenÔÇöthe cakes were iced, cut into rectangles, wrapped, packed into boxes and distributed to retailers, who sold them for a few cents each. In its first year the company had gross revenues of $300,000. By 1918, sales had reached $1 million.Fast-forward to the 1990s, when the company owned two bakeries, the flagship six-story facility in Philadelphia and a smaller plant in nearby Oxford. Major financial problems in 2000/01 forced the board of directors of the company to bring in a new CEO, Charles Pizzi, who brought a new team with him, including Autumn Bayles as CIO. As part of the company turnaround, she spent three years building a new IT team, changing the technology infrastructure and software platforms to SAP, and rebuilding the applications and data center from the ground up. She was then asked to take over the operations head position, as senior vice president of strategic operations, responsible for supply chain analytics, research and development, quality assurance, manufacturing, distribution, transportation, and strategy. One of the final projects on the turnaround list was to determine the future of the aging flagship Philadelphia plant. A strategy project determined that there was significant upside to constructing a new bakery, and the construction project was born.┬á While production continued in the flagship plant as well as at the secondary plant in Oxford, both a new headquarters facility and bakery facility were planned. The headquarters would hold the corporate offices, while the bakery would house upgraded production processes and a warehouse and distribution center. Both buildings were constructed in a part of Philadelphia called the old Navy Yard due to its history of being the property of the US Navy, and parked ships and naval activity still continue on the base. The foundation was poured a year ago, the corporate offices were moved there recently, and the new manufacturing processes in the construction site at the bakery are the current focus of attention. ÔÇ£WeÔÇÖve been installing new production equipment for a few months, starting in earnest,ÔÇØ says Bayles. ÔÇ£Now weÔÇÖre into the heavy part of it, and everything should be mostly on site and in place by the end of summer, with the exception of a few things that are still being fabricated and arenÔÇÖt scheduled to be completed yet. So weÔÇÖre doing the bulk of the installation work now, and then weÔÇÖll start testing and conditioning. WeÔÇÖre encouraged that weÔÇÖre on or ahead of schedule, and weÔÇÖll be transitioning production by the end of this year, as we phase in the new lines and phase out the old onesÔÇöwhich is what we fully planned forÔÇöand then weÔÇÖll complete the process in 2010. So weÔÇÖre right where we want to be in terms of our schedule.ÔÇØ Referring to the old plant as a female entity, Bayles says, ÔÇ£SheÔÇÖs still doing well; she obviously doesnÔÇÖt have any of the efficiencies that the new facility design has in it, but sheÔÇÖs served us well for 87 years and produced millions of cakes, so weÔÇÖre quite happy.ÔÇØ As well as focusing on the new project, Bayles still spends a major portion of her time concentrating on current operations, seeing how they can be made as efficient as possible so the best processes can be transitioned into the new plant. ÔÇ£ThatÔÇÖs still an important part of our focus, as is how we transition our SAP software technology to the new facility. We just have to be careful and confident in our testing and in the way we move materials into the new SAP setup, things of that nature.ÔÇØ The new production lines will be semi-automated; workers will still operate equipment on the assembly line, at quality checkpoints, for example. The new equipment is more technologically advanced: the ovens have a touch-screen control, to program them for a particular type of cake, for example. Everything is designed to be as easy as possible to use, with less manual setup and robotic packaging in place. ÔÇ£WeÔÇÖre always looking at new products and extending our distribution geographically. The new plant will offer us some flexibility, both financially and with product innovation, to leverage those efforts more fully.ÔÇØ Asked whether the current economic downturn is affecting sales of Tastykake products, Bayles says theyÔÇÖve actually had ÔÇ£an uptick in sales. I think weÔÇÖre seeing some benefit from the economic uncertainty, because people need their comfort food, and our products are affordable. So I think people are eating at home more and packing Tastykakes into their lunches more, which we certainly appreciate!ÔÇØ ÔÇô Editorial research by Bobby Meehan┬á