November 22, 2002 -- President George W. Bush and Commerce Secretary Don Evans today announced three winners of the 2002 Malcolm Baldrige National Quality Award, the nation's premier award for performance excellence and quality achievement. For the first time in the history of the Baldrige awards, a winner was named in the health care category.
The 2002 Baldrige Award recipients are: Motorola Inc. Commercial, Government and Industrial Solutions Segment, Schaumburg, Ill. (manufacturing category); Branch-Smith Printing Division, Fort Worth, Texas (small business category); and SSM Health Care, St. Louis, Mo. (health care category).
"The three 2002 Baldrige Award winners are role models of world-class excellence, and they have achieved extraordinary results. The men and women of these organizations represent the highest ethical standards in public responsibility and corporate stewardship. I am particularly pleased to join the President today in announcing a first-time winner in health care," said Evans.
These three organizations are expected to receive the Baldrige Award in a ceremony in Washington, D.C., early next year.
The Malcolm Baldrige National Quality Award is given to U.S. organizations that have exemplary achievements in seven areas: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and results.
All applicants for the Baldrige Award undergo a rigorous examination process that involves a minimum of 300 hours of review by an independent board of examiners primarily from the private sector. Final-stage applicants receive about 1,000 hours of review and are visited by teams of examiners to clarify questions and verify information. Each applicant receives a report citing strengths and opportunities for improvement.
Named after the 26th secretary of Commerce, the Malcolm Baldrige National Quality Award was established by Congress in 1987 to enhance the competitiveness of U.S. organizations. The award promotes excellence in organizational performance, recognizes the quality and performance achievements of U.S. organizations, and publicizes successful performance strategies. It has five categories: manufacturing, service, small business, education and health care. The award is not given for specific products or services. Since 1988, 49 organizations have received the Baldrige Award.
Below is the profile of Branch-Smith Printing
Type of Work:
Branch-Smith Printing Division (BSPD), one of two divisions within Branch-Smith, Inc., is a fourth-generation family business. BSPD specializes in providing a wide range of "turnkey" services—including designing, printing, binding, and mailing—related to sheet-fed printing of multipage bound materials. Products include publications, magazines, catalogs, directories, and books. BSPD received the Texas Award for Performance Excellence in 1999.
Sales: Over $10 million
Workforce: 68 employees
Location: Fort Worth, TX
Quality and Performance Achievements:
- With the use of the McKinsey landmark study on the printing industry, BSPD crystallized its market niche to provide expert solutions leveraging cost advantages normally associated with web press operations, while capitalizing on its specialized sheet-fed printing capabilities. The systematic process used by the division consists of actively pursuing customers whose printing needs may be too small for a larger competitor but fit perfectly with the core competencies of BSPD.
- The success of this approach is supported by the financial data overall for BSPD, which show positive trends and demonstrate leadership in many areas, even during difficult economic times and increasing competitiveness in the industry. For example, its sales growth rate has outperformed the industry sales growth rate each year since 1998, as reported monthly by the National Association for Printing Leadership's - NAPL - Printing Business Panel. BSPD experienced a 72 percent growth over four years and held that gain in 2002, when the industry declined 6.6 percent. Even though BSPD is a very small business in a highly fragmented industry, its market share in the Dallas-Fort Worth area has almost tripled, increasing from 0.50 percent in 1997 to 1.46 percent in 2002.
- BSPD compares financial performance results using the Printing and Imaging Association of America Ratio Study, a benchmark study of printing companies. In 2001, BSPD's gross profit level (over 35 percent) exceeded those for book and magazine profit leaders (approximately 31 and 33 percent, respectively). BSPD's earnings before interest and taxes (EBIT) on sales has consistently exceeded the averages for sheet-fed, book, and magazine printers (approximately 1, 3, and 3 percent, respectively). In addition, since 1997, BSPD's value added asset turnover level has approached or exceeded that of profit leaders in all three market segments, and its percent return on non-cash assets exceeded the average performance for these market segments.
- BSPD's commitment to its customers is evidenced through such mechanisms as a systematic customer complaint process, use of customer satisfaction surveys, regular meetings with key customers, and use of a Customer Plan and on-line "Goldmine" database to identify and meet the specific needs of customers.
- BSPD's results for overall customer satisfaction and weighted customer satisfaction (areas of most importance to customers) show strong results against competitors identified by its customers and against the average scores of competitors responding to an external survey administrator. From 1998 to 2002, the division was rated at least 8.7 out of a possible 10 and exceeded competitors' ratings, which ranged from 7.6 to 8.1 during that time period. From 1996 to 2002, BSPD's ratings for customers' satisfaction with product quality, a key differentiator for BSPD, exceeded those for competitors; the division's ratings ranged from 8.3 to 8.7, as compared with competitors' ratings of 7.9 to 8.1. In addition, BSPD's success in developing strong customer relationships is indicated by a significant increase in the number of customers, growing from 91 in 1998 to 167 in 2002.
- BSPD demonstrates its commitment to furthering the well-being, satisfaction, and motivation of its employees through an annual employee satisfaction survey, a systematic performance appraisal system, and retention of its workforce during the recent economic slowdown. Results from the employee survey show improvement from 1996 through 2001 for BSPD's indicators of overall employee satisfaction, with the average employee satisfaction growing from 67 percent to 86 percent, 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 recipient of the Baldrige Award for small business. In 2001, levels for five of the measures exceeded 90 percent.
- BSPD produces a quarterly training effectiveness report for the Quality Review Team (QRT) that includes data on the Price of Non-Conformance, customer complaints, accidents, employee performance, Internal Non-Conformance (INC), and survey results. For example, the total Price of Non-Conformance as a percentage of sales fell from about 5.5 percent in 2000 to 3 percent as of Sept. 30, 2002. 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), with levels in 2001 below those for both the industry average and the benchmark company, a Baldrige Award recipient in the small business category. In addition, the division has reduced the voluntary turnover rate of employees over the past seven years, from a high of 43.7 percent in 1996 to an annualized percentage of 7.75 in 2002. From 1999 through 2001, BSPD's rate was comparable to the average for Fortune magazine's top 15 Best Companies to Work for in America.
- BSPD's senior leadership uses the Management Review Team (MRT) process to set and monitor organization direction, review key measures, take corrective action, and review the progress of Action Plans and Quality Improvement Process Teams. The MRT also reviews all opportunities for improvement (OFIs), customer complaints, supplier non-conformance, and INC submissions to determine the best approach. This process ensures timely review of results and enables the organization to integrate results from the worker level to top leadership. For example, although an increased focus on recording customer complaints has resulted in a recent rise in complaints per 100 prepress plates, complaints were reduced by 73 percent from 1997 through 2001. In addition, the process encourages communication, involvement, and accountability at all levels.
- Development and investment in new technologies and software for customer service, production, continuous improvement, and decision-making is a key commitment of the division. For example, it has implemented a Quality Improvement Database (QID), a relational database that integrates multiple types of key data into a central location. The tool is used regularly by the management team to document and track progress concerning OFIs, INCs, customer complaints, and supplier non-conformance. Another critical tool is software that links shop floor data collection, inventory, job costing, and accounting.
- The impact of the division's investments and improvements on employee productivity is demonstrated in the results of value added sales per employee, which has increased a total of 33 percent over the past five years. Following the transition in 1999 to new processes and equipment, levels increased and presently exceed the performance of industry leaders in each operating segment (i.e., sheet-fed documents, books, and magazines). As a result, BSPD's value added sales per employee exceeded the level for PIA sheet-fed profit leaders, about $85,000.
- The division addresses potential hazards related to the printing process—in particular those related to volatile organic compound (VOC) emissions and hazardous waste disposal. In 1988, BSPD was an early adopter of an alcohol substitute in press solutions that eliminated isopropyl alcohol as a waste. The use of aqueous (water-based) chemistry in the prepress areas has eliminated VOCs as well. From 1988 to 2001, BSPD reduced its level of VOCs from 13 tons to 6 tons, well below the 10-ton threshold for state reporting requirements.
- As part of its efforts to support and strengthen its community, BSPD has increased both employee and company contributions to United Way for the past five years. In addition, its participation rate of 63 percent in 2001 significantly exceeded the United Way average of 40 percent. BSPD also adopted an employee's suggestion to implement a blood drive, it participates in a work place mentoring program with a local junior high school, and it donates in-kind printing to support a variety of organizations, including the American Red Cross and the Quality Texas Foundation.