Malcolm Baldrige National Quality Award
2002 Award Recipient, Small Business
Located in Fort Worth, Texas, Branch-Smith Printing Division—one of two divisions of Branch-Smith, Inc.—is a fourth-generation, family-owned business founded in 1910 by Aaron Smith. Born with no arms, Smith taught himself to write and type with his toes. Today employing 68 full-time employees, Branch-Smith Printing specializes in providing a wide range of turnkey services to its customers—including designing, printing, binding, and mailing—related to sheet-fed printing of multipage bound materials. Products include publications, magazines, catalogs, directories, and books. In 2001, Branch-Smith Printing had more than $10 million in sales.
Aaron Smith's strong faith is reflected in the company's values: "To honor God in all that we do. To pursue excellence with integrity and commitment. To help people develop as individuals and as a team. To grow profitably by committing ourselves to our customers' success."
- Branch-Smith Printing Division experienced 72 percent growth in sales over four years and held that gain in 2002, when the industry declined 6.6 percent.
- Branch-Smith Printing has grown its customer base from 91 in 1998 to 167 in 2002.
- Value added sales per employee have increased 33 percent over the past five years.
- From 1988 to 2001, Branch-Smith Printing slashed its level of volatile organic compound (VOC) emissions from 13 tons to 6 tons, well below the 10-ton threshold for state reporting requirements.
Serving a Niche Market
The printing industry is highly competitive, with over 45,000 companies nationwide and more than 1,000 in the Dallas/Fort Worth area vying for market share. To ensure its competitive position, Branch-Smith Printing used research, including the McKinsey landmark study on the printing industry, to determine its primary customer base, a select niche market whose printing needs may be too small for a larger competitor but fit perfectly with the core competencies of Branch-Smith Printing. For this niche market, Branch-Smith Printing provides expert solutions leveraging cost advantages normally associated with web press operations, while capitalizing on its specialized sheet-fed printing capabilities.
Today, Branch-Smith Printing has more than 160 customers—up from 91 in 1998—85 percent of which are located in the Dallas/Fort Worth area. The company stands out among its competitors because of its approach to customer care through mechanisms such as a systematic customer complaint process, use of customer satisfaction surveys, regular meetings with key customers, individual customer plans, and an on-line GoldMine database to identify and meet customers' specific needs. To reduce costs and leverage resources, the company has established processes related to its supplier partnerships that are advantageous to suppliers, customers, and Branch-Smith Printing. Also, to keep abreast of industry trends and remain a leader in the market, Branch-Smith Printing is active in industry associations.
The success of this approach is demonstrated by overall customer satisfaction rates and Branch-Smith Printing's strong financial performance. From 1996 to 2002, ratings for customers' satisfaction with product quality, a key differentiator for Branch-Smith Printing, exceeded those for competitors. The company's ratings ranged from 8.3 to 8.7, while competitors rated 7.9 to 8.1. Since 1998, its sales growth rate has outperformed the industry rate each and every year. Branch-Smith Printing experienced a 72 percent growth over four years and held that gain in 2002, when the industry declined more than 6 percent. Even though Branch-Smith Printing is a small business, its market share in the Dallas/Fort Worth area almost tripled during this time.
Commitment to Performance
Branch-Smith Printing's focus on the importance of quality and on meeting customer needs is highlighted in its strategic objectives: to continuously improve business results, become the partner of choice for its customers, and become the employer of choice. To achieve these objectives, the company uses a comprehensive strategic planning process and incorporates continuous improvement processes throughout the organization.
Branch-Smith Printing's active Management Review Team (MRT) establishes and monitors organization direction, reviews key measures, takes corrective action, and reviews progress of Action Plans and Quality Improvement Process teams. The MRT also reviews all suggestions for improvement, customer complaints, and supplier and internal non-conformance submissions to determine the best improvement approaches. This process ensures timely review of results and encourages communication, involvement, and accountability from the worker level to top leadership.
Branch-Smith Printing's extensive use of databases and software to improve processes is unusual for small businesses but is a key component of its strategy to provide excellent customer service at the lowest cost. Branch-Smith Printing has invested in developing databases and purchasing software to gather critical data about various processes that impact customer service, production, continuous improvement, and decisionmaking. For example, Branch-Smith Printing developed the Quality Information Database, a relational database that integrates multiple types of key data concerning opportunities for improvement, customer complaints, and supplier and internal non-conformance into a central location. The MRT regularly uses data from this tool to document and track progress.
Another critical software tool links shop floor data, inventory, job costing, and accounting to help manage processes and analyze productivity. The software is used to estimate time and materials for jobs and to plan jobs electronically to manage workflow. As employees do their work, they enter information to indicate the process being performed, the quantity produced, the materials used, and whether the activity may be charged to the customer. This job information flows directly into invoicing, inventory management, and financial systems for cost tracking by job, customer, and cost center.
Branch-Smith Printing's investment in technology has paid off in numerous ways, including improved employee productivity measured as value added sales per employee—which has increased by 33 percent over the past five years.
Employer of Choice
Branch-Smith Printing demonstrates its commitment to furthering the well-being, satisfaction, and motivation of its employees in a variety of ways. Involving employees in all aspects of process improvement and providing training in new technologies are fundamental to its success. To gauge employee satisfaction and determine areas of employee concern and focus, Branch-Smith Printing conducts an annual employee satisfaction survey. Results from the survey indicate that efforts to improve the work environment are paying off. Overall employee satisfaction has increased from 67 percent in 1996 to 86 percent in 2001, near the 87 percent level of its benchmark, a Baldrige Award recipient in the small business category.
The survey results also show that recent satisfaction levels in many areas, including job enjoyment, teamwork, and safety, exceed those of its benchmark, another Baldrige Award small business recipient. In 2001, levels for five of the measures exceeded 90 percent, and satisfaction in many other areas has grown significantly over the past five years. Results for recordable accidents show an overall positive trend for the past seven years, from 16 per 100 employees in 1996 to an annualized rate of 2.71 in 2002. Levels in 2001 (the most recent year comparative data were available) were below those for both the industry average and a benchmark company, a Baldrige Award recipient in the small business category.
Reflecting its focus on employee satisfaction, Branch-Smith Printing has reduced the voluntary turnover rate of employees over the past seven years from a high of almost 43.7 percent in 1996 to an annualized percentage of 7.75 in 2002.
Complementing its attentiveness to customers and employees, Branch-Smith Printing also is committed to supporting and strengthening the community. Contributions to the United Way for the past five years have increased both from the company and from employees. The company's employee participation rate of 63 percent in 2001 significantly exceeded the United Way average of 40 percent. Other community activities include a workplace mentoring program with a local junior high school and donations of printing services to support a variety of organizations, including the American Red Cross and the Quality Texas Foundation.