Milling & Baking News - March 24, 2009 - 29

Baker of the Year

said. Rather than becoming more profitable as the company grew sales, the
plants were situated in a way that the
company actually would become less
profitable as demand grew, he said.
"Our logistics system was set up
more to be a baking business than the
mixed business we are - both baking
and salty snacks," Mr. Singer said.
While he saw the company's D.S.D.
system as an asset he also saw a serious need for upgrades.
"Our vans were almost all 10 to 20
years old, and our handheld computer
system was 10 years old and falling

apart," he said. "We had rampant turnover among our route salesmen."
Consistent with the overall business
structure, the company's information
technology infrastructure was made
up of a number of separate I.T. systems
that could not talk to one another, Mr.
Singer said.
In manufacturing, Lance has been
helped in achieving its targeted changes through two opportunistic acquisitions, one of which was consummated
shortly after Mr. Singer's arrival and
one just a few months ago.
The late 2005 acquisition of Tom's
Foods Inc. out of bankruptcy gave
Lance snack foods production capacity in Florida and Texas and baking
capacity in Columbus, Ga. The Archway deal, also purchasing a company
out of bankruptcy, gives the company
a plant in Ashland, Ohio.
When trailers were replaced, the
company moved away from the 48foot trailers that had been the standard, to new 53-foot trailers reflecting
the increased growth of Cape Cod potato chips at the company.
30 / March 24, 2009

Milling & Baking News

strategic initiatives, added, "This has
provided basic education in management, and we've really moved the
needle quite a bit in that area. The
proof in the pudding is when we see
a new initiative come up, and we see
the PowerPoint presentation, and
there are slides that include a slide
that reads 'The change management
thought around this are x, y and z.'"
The approach seeks to avoid blindsiding associates with decisions and
their effects.
"Much of what this entails is common sense," Mr. Singer said. "We explain why a change is made, how it
will affect people and what we expect
from them.
"The point is to be up front with
people. The objective is that people understand the change, even if it doesn't
necessarily make them happy."
Asked to elaborate
further on this tem'We need to be larger and more
plate for change, Mr.
Carter replied,
important to our customers, which will
"One way of lookalso serve to spread our fixed costs across
ing at it is that we
a larger volume base and make us a
want everyone to
avoid disseminating
healthier business.'
memos that begin
- David Singer, president and c.e.o.
with the phrase, 'Effective Monday,'" he
said. "In advance, we
rolling this out across the tell everyone where we're going, why
facilities, a project that Mr. were going there, what it's going to be
Singer estimated is well past 50% like during the change and what the
completed. Other steps aimed at en- destination is."
hancing efficiency and focusing on
Larger goals pursued by the company
core sales included eliminating its begin with making Lance a great stock
D.S.D. vending business (the com- to own for the long term, a great partner
pany still participates in the vending for customers, suppliers and communibusiness through distributors) and ties and a great place to work.
exiting the West coast distribution of
Mr. Singer said the company has
Cape Cod potato chips.
made great progress toward each ob"There just wasn't a pathway to jective, beginning with the company's
profitability for that," Mr. Singer said.
stock price. From the middle of 2005
When he joined Lance, Mr. Singer until the end of 2008, a $100 investknew that considerable and fairly ment in Lance stock would be worth
rapid change would be needed. Deter- just over $150, versus $107 as the avermined both to succeed and avoid up- age performance of a peer group Lance
ending Lance management along the tracks and $80 for the S&P 500.
way, Mr. Singer created a framework
Mr. Singer describes the foundationfor effecting change, engaging La- al work at Lance as "largely built." This
Marsh and Associates, Inc., Chicago, assessment reflects both the changes
to help with the process.
that have been made and metrics that
"Change is a big deal, and we have confirm the efforts are bearing fruit.
raised awareness of how change af- Calling efforts to upgrade the D.S.D.
fects people," Mr. Singer said. "We've system a "huge component," Mr. Singintroduced a simple process that is er said sales per route have climbed
scalable and repeatable, training se- 40% since 2004 contributing signifinior leadership as well as the organi- cantly to a nearly 70% drop in sales
zation through to the director level."
person turnover.
Mark Carter, vice-president of
"Sales per route are one of the key
"The old trailers were great for
baking, but with salty snacks like
Cape Cod we would cube out before
we would weight out, and with fuel
costs on the rise, we had to maximize
poundage.," Mr. Singer said. "When
replacing old trailers, we purchased
new 53-foot trailers, which have had
a positive impact on our costs. Our
D.S.D. system was also recapitalized
with an investment of millions of dollars. Our truck fleet currently averages well under five years old, and
our handheld computers have been
upgraded to modern technology. As
a result of these investments
and better practices, turnover
among our route sales people
has been cut by two thirds."
Additionally, the company purchased an Oracle ERP
solution and is presently

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Milling & Baking News - March 24, 2009

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