warburtons company report

Chloe Welsby

University of Central LancashireMN1014 – Management and Organisational Functions

Company Report

Warburton’s 2016

Introduction.............................................................................................................................................3Company Background and Accomplishments.................................................................................3

Finance....................................................................................................................................................4Latest Published Accounts information...........................................................................................4

Marketing.................................................................................................................................................5Marketing Mix......................................................................................................................................5

Product..............................................................................................................................................5Price..................................................................................................................................................6Place.................................................................................................................................................7Promotion..........................................................................................................................................7

Human Resources..................................................................................................................................8Mintzberg’s Organisational Configurations......................................................................................8Bakery Structures...............................................................................................................................9Recruitment Process..........................................................................................................................9

How Warburton’s advertise position and attract applicants..............................................................9Interviewing Candidates..................................................................................................................10Cost Implications to Recruitment....................................................................................................10

Staff Retention and Benefits............................................................................................................10Engagement.......................................................................................................................................11

Warburton’s Company Values........................................................................................................11VIP System – Values in People......................................................................................................12Gallup’s Hierarch of Engagement...................................................................................................12Training and Development..............................................................................................................13Bitesize...........................................................................................................................................13

Operations.............................................................................................................................................15Warburton - Mass Production Definition and Benefits..................................................................15Chain of Production..........................................................................................................................15Focus on Quality...............................................................................................................................16New Technology................................................................................................................................16Six Sigma...........................................................................................................................................17Warburton’s Operational Long Term Plan......................................................................................17

Contents

2

Apendix..................................................................................................................................................18Apendix A – Balance SheetApendix B – Profit & LossApendix C – Product Relaunch ExamplesApendix D – Warburton’s Marketing TimelineApendix E – Departmental Map – Operations, Marketing & Human ResourcesApendix F – Recruitment Policy Apendix G – Success FactorsApendix H – Long Service Award PolicyApendix I – VIP GuideApendix J – VIP Judge’s GuideApendix K – How to Recognise SucessApendix L – Training & Development PolicyApendix M – Continious Improvement PackApendix N – Bitesize WorkbookApendix O – Continuious Improvement Project Example

Company’s Vision“Become one of the world’s best food businesses, which will be achieved by continued investment and employee

commitment in ensuring we retain out reputation for producing the best quality freshest bread, and unrivalled customer

service”.

Jonathan, Bret and Ross Warburton

Contents

3

IntroductionCompany Background and Accomplishments Since the Warburton’s family started baking in 1876 they have managed to grow and expand across the UK and have

succeeded to keep one-hundred per cent ownership of their company. Five generations of the family, have run the

company so far, the latest being three cousins Jonathan, Brett and Ross (Warburtons, 2015). Starting with a simple

white loaf in a little bakery biased in Bolton, Warburton’s has managed to expand its portfolio of products to include

wraps, thins and even garlic bread. As a result, they have become the largest wrapped bread brand in the country, with a

market share of 31.4 percent which has put them 8 percent ahead of their main competitor Kings mill (LLP, 2014). They

currently own twelve bakeries and fourteen depots across the UK and are responsible for 4,500 employees (Warburtons,

2015). Furthermore, they have become the second largest grocery brand in the UK behind Coca Cola according to The

Nielsen Company (2010).

According to Marketing Week (Tesseras, 2015) in the UK sixty percent of companies are family owned. 54 percent of

these companies consider their family status as an important part of their marketing strategy. This is no different for

Warburton’s and in 2016 they launched a range of new packaging on all their products to include a 140 years of quality

baking stamp (Stein, 2016).

Finance

Latest Published Accounts information According to Companies House (2014) Warburton’s

generated a turnover off £547.9 million and profit off

£78.3 million before tax in their latest published accounts

IntroductionFinance

4

from September 2013 -2014. Comparing this to their pervious financial report the turnover has decreased by 2.5 percent.

In spite of this, the profit has increased by £42million, cash held increased by £14.7 million and fixed assets increased by

£4.2 million. While a lot of these results are positive for the company, one downfall is the decrease in staffing numbers

from 4,532 to 4,502 a decrease of 30 employees. To view the latest balance, profit and loss sheet see appendix A and B.

Marketing

5

Marketing MixIn the Introduction to Integrated Communication Journal (McGraw-Hill/Irwin, 2009) states the marketing mix as the

development of connections by understanding the needs and wants of the customers, satisfying those needs through

product development, offering at a price, making it available and developing an advertisement or promotion to generate

interest. These are known as the four P’s – Product, Price, Place and Promotions all of these are a part of what is know

as the marketing mix.

ProductIn 2010-2011 Warburton’s re-launched all the packaging for every product to include a new logo and personal message

from Jonathan Warburton relating to the product (Brand New, 2011). Although the financial implication for the rebrand

have not been announced to the public, when researching a similar company called Lyndale Foods also rebranded their

image in 2010 which resulted in a cost of £1million (Manchester Evening News, 2010). Completing such a large scale

image re-launch for a company of Warburton’s size doesn’t only have financial implication but operational as well. These

include having to change all delivery vans to match the new style, ensure all packaging from the old logo is used and the

new packaging is communicated to their customers. To see examples of the new packaging compared with the old see

appendix C.

Marketing

6

PriceWarburton’s use a mix of cost plus and premium pricing

strategy, to calculate the amount they should charge their

customers for each product. They adapt the cost plus strategy

by adding together the material cost, labour cost and overhead

cost to make the product. After this they add the mark-up

percentage (which is the profit) to give them the total price

(Accounting Tools, 2014). Warburton’s also use aspects of the

premium strategy, they believe because they offer the freshest

and best quality products on the shelf they can charge more

than their competitors.

PlaceWarburton’s operate from 12 bakers and 14 depots the headquarters are found in Bolton, where

the company was founded (Warburtons, 2015). As you can see from the operations map to the

right most of the bakery’s and depots surround the North West section of the UK, close to the

headquarters. In 2003 Warburton’s opened a bakery and depot in Enfield, London with hopes to

increase their market share in the area. Ten years later they have managed to achieve their

goal and now have the top baked goods brand in the Capital, with a market share of 14.8

percent (Montague-Jones, 2013). You can currently purchase Warburton’s products at

Tesco, Asda, Sainsbury’s, Aldi, Pound land, Amazon, Waitrose, British Corner

Shop, Ocado and Iceland,

PromotionLooking at the marketing time line in appendix D, Warburtons have been marketing through TV, internet and billboard

since 2008 but it is only from 2013 that they have become a real contestant in the marketing sector. In 2013 Warburton’s

Marketing

7

launched their new sandwich alternatives range, and tied this in with their Dear Mr. Warburtons advert. In the same year

they purchased rights to advertise a massive billboard, showing the half & half loaf on the Chiswick Towers. The total

cost of these campaign combined was £32 million and resulted in a 52 percent increase in operating profit and a 26.9

percent increase in sales (Jones, 2014). Furthermore, in 2015 Warburton’s launched two very unique campaigns

featuring Sylvester Stallon and the Muppets, with the Giant Crumpet Roadshow being awarded the ‘most successful

Christmas ad of the year’ beating John Lewis, who has held the title for the past three years (Brown, 2015).

Human ResourcesMintzberg’s Organisational Configurations Henry Mintzberg explains an organisations structure is created from the relationships between the strategy,

environmental forces and the organisational structure itself. He goes on to explain when these factors fit together, they

create an organisation that performs well. Mintzberg explains that there are five types of successful organisation

Human

8

structures – entrepreneurial, machine, professional, divisional and innovative. Warburton’s company structure fits into the

machine structure. Mintzberg goes on to state the machine organisation is defined by standardization (Mind Tools

Editorial Team, 2016). The organisation has numerous procedures and routines, decision- making is centralized and

tasks are grouped by departments and jobs clearly defined, see appendix E for the Operations, HR and Marketing

structures and defined responsibilities for each department.

Bakery Structures Of all the twelve bakery’s every one has the same structure through out. As you can see from the hierarchy below each

department has Middle Managers, Team Managers and Team Leaders, with each one supporting each other. Benefits of

this type of structure is a clear direction of flow for information and a defined ladder for internal progression of employees .

Recruitment Process According to the Recruitment and Selection: A Competency Approach (Roberts, 2004) the purpose of recruitment is to

match people to the right role. It is the most important element of organisation management of people. The book states

that neither praise or pay can motivate employees to perform beyond their capabilities, that is why it is important to select

the right person for the role at the selection process. To see Warburton’s Recruitment policy, see appendix F.

Human

9

How Warburton’s advertise position and attract applicantsThey currently have a system called Jobtrain which allows them to advertise all positions currently available. This system

retains candidate’s information and allows them to search the “Talent Bank” for suitable candidates for specialist roles.

With the individual login for every person who uses the system, they can differentiate from internal and external

applicants, allowing them to post job advertisement for internal only without external applicants applying accidently. In

addition, to having a sophisticated system to help advertise positions the attraction to join the company has increased

due to them becoming the first food manufacturer selected to be in the Sunday Times Top 25 Company’s To Work for

2016 (Perrett, 2016).

Interviewing Candidates Once the job advertised has reached its closing date it is the responsibility of the HR team to sort through the list of

candidates for the most suitable fit for the role, this is called short listing. If the application passes this stage the

candidate will be invited to a success factor based interview. There are four types of success factors used in the

organisation these are Energy and Engagement., Raising the Bar, Winning as a Team and Driving for Results. To see

the information on each factor, go to appendix G.

Cost Implications to RecruitmentA report by Oxford Economics has calculated that on average the hiring and training a new employee cost £30,614 (HR

Review, 2014). This cost is separated into two sections -

1. Cost of lost productivity while replacement employee gains level of experience required = 28 weeks and £25,181

2. Logistical cost of recruiting a new employee = £5,433

Staff Retention and Benefits Warburton’s operates with 4,500 employees and pride themselves on retaining employment with over 40 percent of their

workforce stated in the business for over 10 years (Warburtons, 2015). Due to the high levels of staff reaching landmark

service, Warburton’s have devised a benefit scheme to award long serving employees. The long service scheme is as

follows –

5 years – 3 days’ paid holiday

10 years – 3 days’ paid holiday + £100 gift

15 years – 1 weeks’ paid holiday

10

20 years – 1 weeks’ paid holiday + £200 gift + presentation + breadboard

25 years – 1 weeks’ paid holiday + £250 gift + presentation

30 years – 2 weeks’ paid holiday + £300 gift + presentation + breadboard


40 years – 4 weeks’ paid holiday + £400 gift + presentation


To see the long service awards policy, see appendix H.

Engagement Warburton’s Company ValuesFamilyWork together as one family and learn from each other. The actions and decisions we take aim to benefit the whole of

the business not just the one shift, department, site or business unit.

AmbitionTo make Warburton’s ever stronger in a rapidly changing environment, it is vital that we focus even more on innovation

and growth. Encourage ambition and helping people to do their best is really important.

ResponsibilityTaking responsibility is the heart of the business, where everyone plays a part. An environment of trust through listening

to and respecting other people’s points of view is important to us.

Human Human

11

CareValue the commitment and loyalty of our people, investing in them and in health and safety. Care about consumers and

the communities we serve.

QualityFreshness and quality of our products has always been, and will always be, at the heart of Warburton’s. Surpassing

customer expectations, knowing what they want and meeting their needs is a top priority.

VIP System – Values in PeopleAward scheme designed to recognise the people who best demonstrate Warburton’s Values (see above). The scheme is

about celebrating people who really go that extra mile, no matter where they work or what they do. To see the booklet on

the VIP guide, see appendix I. The judging panel meet monthly to chose which employees will receive either a £10

bronze award, £20 silver award or an £30 gold award. The quarterly winners are reviewed by Brett Warburton, they

receive a thank you card and £50 worth in vouchers. They are then invited to the VIP Annual Awards Dinner held in

November of each year. The Annual Winner is chosen by Brett Warburton and Neil Campbell (Company Director) and

receives a glass award and special prize (Warburtons, 2010). For the judge’s guide to choosing the VIP’s see appendix

J.

Gallup’s Hierarch of EngagementGallup’s report measured 100,000 employees from 2,500 business and 12 different industries’. His findings showed

more engaged employees are more productive and stay with companies longer than the less engaged employees.

Gallup adapted Maslow’s Hierarch of Needs and applied it to employee engagement (Human Capital Review, 2012).

Human

12

For Warburton’s guide to recognise success see appendix K.

Training and DevelopmentIn Warburton’s Training and Development policy (appendix L) states that the company actively encourages all

employees to seek opportunities to learn. In addition, the policy goes on to say all employees must have an annual

Appraisal meeting with their Manager to discuss each individuals training and development needs. In the Continuous

Development pack (appendix M) explains six different types of development you can take advantage of, these include –

1. Personal Development Plans (PDP) – To develop an individual needs using traditional and non traditional

learning.

2. Continuous Professional Development (CPD) – Structured approach to learning to help ensure continued

capability in a specialist area.

3. On the job development – Secondments, projects etc.

4. Mentoring and Coaching – Being a mentor or having a mentor as a useful development tool.

5. Formal Training – Use of home grown website to look at the courses and workshops available.

6. Informal Training – Work with different groups on projects and give employees more responsibility.

BitesizeBakery Bitesize is a learning tool created and developed by Warburtons Center Team. Each site has a Bitesize

champion to offer guidance and support and are measured monthly on number of modules completed. Each plant has

multiple modules you must study to gain the full knowledge of the process. This includes a workbook with on site activity

Human

13

and a questionnaire at the end of each module. Once a module is complete the employee is awarded with a certificate

and their progress is monitored in their one to ones. The aims of Bitesize is to increase all employees baking knowledge

and explain how the Quality Campaign underpins our ability to consistently deliver high quality products. To see an

example of an workbook and activity see appendix N.

OperationsWarburton - Mass Production Definition and BenefitsWarburton’s is a mass production company which manufactures products on a large scale typically using machinery and

an assembly line. The process is analysed and reviewed regularly to produce the greatest quality of items while using

the fewest resources (Investopedia, 2015). Benefits of mass production include –

Large numbers are made; unit costs are lower.

Labor costs are lower.

Materials can be purchased in large quantities, so they are often cheaper.

Large number of goods are produced.

The worker spends little or no time retrieving and/or preparing materials and tools.

The probability of human error and variation is also reduced.

Operations

14

Chain of ProductionThere are a number of different stages in the chain of production. The system starts with raw materials and may involve

one or more manufacturing processes. It then finishes with final products that are ready for consumers. During each of

the different stages, value is added to the product (Business Case Studies, 2010). Value is added in a number of ways,

for example:

Converting wheat into finished baked goods

Packaging them in a way that keeps them fresh

Delivering them to places that are convenient for the consumers to purchase from

Using sustainable methods and materials

Having the trusted Warburton’s premium brand name.

Focus on QualityWarburton’s has always marketed itself on the Quality of its products. The website states that “We're so obsessed with

quality that we can track every one of the 2 million products we bake every day to ensure they're fresh when they get to

your local store – we even send our own mystery shoppers to test the freshness of our bread. Our dedicated Quality and

Technical team carries out rigorous tests to ensure the highest standards of quality are met and that continuous

improvements are made. From the performance of the flour, to the colour of the crust and the texture of the bread, there

is no part of the product that goes untested. We also recognise and reward our bakeries which strive to produce the

highest quality bread daily through our monthly 'Derek Warburton Trophy”. (Warburtons, 2014) The way Warburton’s

source their ingredients is absolutely key to the quality of their products and we source all our ingredients to ensure the

highest ethical and quality standards. For example, we’ve been contracting with the same farmers in the UK and Canada

for more than 15 years, this continuity helps us ensure that we source only the best wheat for our products. Quality

Operations

15

targets are set to ensure every loaf baked is the best bread every time. Manufacturing is a balancing act where bakeries

have to manage their cost, this involves making high quality products whilst providing vale for its customers. It involves

being efficient, reducing waste and keeping health and safety risks down. On the other hand, improved efficiency should

not be an excuse for poor quality (Business Case Studies, 2010) .

New TechnologyA food manufacturing organisation has to constantly move forward to keep track with eating trends. Warburton’s

continually invests in their plants, people and products. It often invests large amounts in new machinery to be ahead of

their competitors. An example of this is when they launched a brand new £20million sheet and cut plant in Burnley with

the objective to bring their own thins and wraps to the market (Lancashire Telegraph, 2014). Another example is to

improve efficiency the organisation increased its oven insulation and gas burners to shut down automatically when

productions stops (Business Case Studies, 2010).

Six SigmaSix Sigma is a business management strategy used to improve the quality and deficiency of operational processes. Its

aims are to make processes more uniform and precise through the application of statistical methods (Sharon A.

Schweikhart, 2010). Warburton’s currently use the Six Sigma model in its Continuous Improvement teams to with

projects. The six sigma’s are as follow -

1. Define - defining the project goals and customer (internal

and external) requirements;

2. Measure - measuring the process to determine current

performance;

3. Analyze - analyzing and determining the root cause(s) of

relevant defects;

4. Improve - improving the process by eliminating defect

root causes

5. Control - controlling future process performance

To see a completed continuous improvement project using six

sigma see appendix O.

Operations

16

Warburton’s Operational Long Term PlanWarburton’s goal is to supply continuously high quality baking products, whilst investing in new products, innovation and

development. Warburton’s operational long term plan is divided into five sections –

(Managing the supply chain to meet customer needs, 2012)

17

warburtons company report

Documents