With a name grounded in Hawaiian spirit, Kahiki Foods Inc. emphasizes authenticity in its Asian themed offerings including frozen egg rolls, spring rolls, potstickers, entrees and bagged meal kits. The Gahanna, Ohio-based company, which began as a supper club, has parlayed its tropical heritage into a successful company supplying retail, club stores, private label, military and foodservice channels. But just a few years ago, the now 48-year-old company found itself far from paradise.
President and Chief Operating Officer Alan Hoover recalls the tumultuous period in 2005 following the company’s move into a new 119,000-sqaure-foot processing facility.
“We had a ‘burning platform,’” Hoover says. “We experienced all sorts of problems. Equipment was unreliable. Suppliers were complaining loudly. We were losing money and nearly out of cash. We were in ‘crisis mode’ virtually every day.’”
To make matters worse, company founder and Chief Executive Officer Michael Tsao unexpectedly passed away around the same time. Hoover and other Kahiki executives - including Tsao’s sons Tim and Jeff - knew something had to change. For Kahiki, the solution came in the form of Lean, Six Sigma and Milliken Performance System practices.
“Our ‘Kahiki Performance System’ (KPS) is our key strength and is the engine that drives continuous improvement. We have been learning it from [textile company] Milliken since June 2007,” Hoover says. “Many people have asked me, ‘What can a frozen food company learn from a textile company?’ I tell them, ‘plenty.’”
Similar to Kahiki, Milliken, Spartanburg, S.C., established a performance system after facing seemingly insurmountable industry challenges. Milliken managers traveled to Japan to learn the processing system, and today the textile company has become what Hoover calls “one of the most respected companies in the world, a leader in quality, safety and productivity.”
He immediately identified the company as a learning resource, “So far, I have made seven trips to visit Milliken in South Carolina, taking over 50 [Kahiki] associates with me - from top management to production line workers.”
The Kahiki Performance System, borne out of these trips, involves measuring and charting everything that happens in the plant. The company displays about 50 charts in its “KPS Room,” which detail historical data, trend lines and goals for each team.
“We even chart each maintenance technician’s performance and post it, along with his photo, outside the maintenance department,” Hoover says.
He adds that an important part of the system is learning from errors.
“We believe that ‘failure breeds success.’ It is through mistakes and failures that we have learned the most,” he continues. “We make it safe for associate to talk about mistakes and errors. Our top management team recently gathered for two separate two-hour ‘hansei’ or reflection sessions to review big mistakes we made last year. It was amazing how many great new ideas for improvement came out of those sessions.”
Further driving associate feedback is Kahiki’s “Bright Idea” program, which encourages plant workers to submit suggestions for improvement. As an incentive, Hoover says the company awarded $1,000 to an associate who came up with the “Best Idea of the Year” for 2008.
Kahiki’s efforts and improvements have not gone unnoticed. Last year the company achieved its highest sales, best year-over-year growth and its highest output per direct labor hour. Other notable accomplishments include three consecutive AIB Superior ratings, and the company’s lowest turnover rate.
In addition, Kahiki's productivity has been improved through the addition of updated equipment. Plant improvements, in the last four years, include: a large spiral freezer, a bagger, a sauce inserter, a ribbon blender, a high speed packaging line, a new cartoner, a bulk oil storage system and an egg roll packaging machine.
Hoover adds, “Our fourth quarter was the best quarter we ever had, both from a sales and productivity standpoint. We were both efficient and effective.”
This is not to say Kahiki has reached a plateau. Hoover says the company will increase capital expenditures this year to improve automation and occupational safety. Food safety also is a priority.
“We take a very serious approach to food safety. We have third-party audits throughout the year, both announced and unannounced,” says Hoover. “We also conduct our own daily and monthly audits that follow the same methodologies as the top third party audit firms.”
Goals for the next year include earning four AIB Superior ratings, increasing machinery reliability, reducing downtime and restoring at least six key machines to “like new” conditions.
“We believe our best performances are still ahead of us. We know we can still get a lot better relative to 5S, quality, machine uptime, scheduling and associate educational programs,” Hoover continues. “Kahiki has made amazing progress over the past three years, but we still have a ways to go to reach our goal of a ‘world class’ within the next five years.”
Just the FactsCompany:Kahiki Foods Inc.
Food plant(s) honored:Gahanna, Ohio
Selection criteria:Employee Programs, Productivity
Facility size:119,000 square feet
Products:Egg rolls, spring rolls, potstickers, sauce, single-serve entrees, family entrees, bagged meal kits