The Case of the Missing Flour

AMayesin Bakes is a family owned food manufacturing company located in Battle Creek, Michigan. The company was started by Clyde and Veronica Mayes on May 8, 1993, with the intention of providing freshly baked goods to local businesses and residents at a reasonable price. However, in recent months the company has experienced an increase in the amount they spend on raw ingredients, which in turn caused the company to raise the price of their finished goods in order to remain competitive in the food industry.

Mr. and Mrs. Mayes were concerned by the price increase and therefore instructed the Supplier Management team to investigate and determine which raw ingredient increased in price. From this point the company would need to locate and secure another supplier that has a more reasonable price on said raw ingredient. However the investigation uncovered there was not an increase in the price of raw ingredients, rather there was an issue with the flour supply. According to company records the amount of flour on hand is much less than the amount of flour purchased by the company. Research shows a large discrepancy, with nearly ten thousand pounds of flour being unaccounted for. Unfortunately, there isn’t enough evidence present to make any suggestions as to what could be the cause for this discrepancy.

At this point the Procurement Department was contacted to further the investigation and check company records against shipment receipts to pin point where the discrepancy occurred. Except, after weeks of gathering information, Procurement was unable to unveil the discrepancy, as the amounts listed on the shipment receipts matched what the company records show in their computer system as being ordered. Therefore, AMayesin Bakes decided to hire a third party to help them investigate and hopefully determine where the flour could be.

The company hired Karl Amerson of Good I Spy, Inc. to investigate and solve this mystery. Mr. Amerson has 16 years of manufacturing facility investigation experience and come highly recommended. Upon coming into the organization he was debriefed on the scenario surrounding the case and informed that he should investigate all possibilities including but not merely assuming theft. Thus, company officials would like to see hard evidence as to the whereabouts of the flour.

During the debriefing, Mr. Amerson was instructed to sign an affidavit of confidentiality and then he learned the process and flow of flour throughout the plant and was encouraged to ask questions that may assist him with his investigation. He learned that the flour comes in weekly by delivery truck and that it is dumped into a silo at the receiving dock. However, no one actually sees the flow of the flour coming in; the receiver just connects the flow pipe between the truck and silo and signs off on the truck drivers forms that the flour was received. Afterwards, the receiver documents the amount from a copy of the truck driver’s paperwork into AMayesin Bakes Inventory Computer System (ICS).

The receiver must also review the Certificate of Analysis (COA) to ensure that the flour is acceptable according to company standards. If the flour does not meet the minimum requirements, the receiver must refuse the shipment and document this in ICS, so that the purchaser will know to contact the supplier to either request a new batch or a credit to the company’s account for the unacceptable batch. The driver must return the flour to the shipping company without a signature from the receiver.

Once the flour is received it is moved to the manufacturing facility for processing and the plant workers also use ICS to document the flow of ingredients through the baking process as well as to request ingredients to replenish what has been used. Montrell Brooks, the plant manager is responsible for ensuring that everything is documented in an orderly fashion, including any scrapping of ingredients and for what reason. At this point, information is retrieved from ICS by the purchaser, Nikki Mayes, who orders the requested ingredients. Ms. Mayes also documents the amount ordered in ICS as well as when it was ordered and the price agreed upon.

Sometimes the plant has to scrap ingredients due to issues such as too much moisture in the ingredient which is a threat for salmonella or other bacteria growth, or infestation of bugs and larvae. However, proper procedures have been put in place to prevent such issues that cause waste. Montrell has a duty of ensuring that all lines, bins and silos are cleaned at least every 28 days to prevent issues that would cause scraping of ingredients. Nonetheless, if the ingredients are not within good standards and need to be discarded, this too should be documented into ICS.

Since all of the information on raw ingredients is suppose to flow through the Inventory Computer System (ICS), this was a good place for Mr. Amerson to refer to during his investigation. Also, years of experience prompted Mr. Amerson to question the amount of contact with the flour and by whom. Therefore he started with the workers on the receiving dock at AMayesin Bakes, asking questions as to the procedure of a typical delivery and who receives, test and documents the receipt of the flour into ICS.

At the receiving dock, Mr. Amerson found that the receiver, Mike Hale, was not following proper protocol, as was explained to him during his debriefing. For instance, the receiver would sign the paperwork as soon as the driver approaches him, and then he would check the COA certificate and hook up the flow pipe from the truck to the silo to receive the flour. Mr. Amerson questioned this procedure, because it could explain some of the discrepancy in the amount of flour received if ever the receiver turned away a batch due to an unacceptable COA. However, Mike informed Mr. Amerson that he doesn’t recall ever turning away the flour from ‘this supplier’ because it is a reputable company and the COA is always acceptable. Mike assured Mr. Amerson that if he ever received an unacceptable COA that he would request the driver to present the paperwork back to him for corrections.

Mr. Amerson determined that although Mike was not following proper procedure, there weren’t any significant findings that would deem the problem to have occurred primarily at the receiving dock, at least not at the moment. Therefore, after taking notes, he moved on to the plant area where the flour is taken to next. In the manufacturing facility, Mr. Amerson noticed several silos and bins that contained flour and he learned that the flour is used in all products and ran on several lines throughout the plant. He was informed that flour is sprinkled on some lines to prevent pastries from sticking to the conveyor belt. However, this is not documented as part of flour used, since it is such a minute amount.

As Mr. Amerson continued through the plant taking notes, he passed by a few empty bins and noticed that some of the bins had flour residue stuck to the walls inside, as if moisture was the cause. Upon questioning plant workers, he found that the bins had been rinsed from containing another raw ingredient and they were not completely dry before the flour was dumped, which happens from time to time. Mr. Amerson asked if this was documented as part of the scraps being discarded and was informed it was not.

Furthermore, Mr. Amerson learned that the plant is under strict regulation to discard flour that has been on the premises for six months. Although the normal shelf life of properly stored flour is approximately 8 months, the longer flour is stored the more susceptible it is to attract infestation of flour weevils. Therefore, this procedure was put in place to prevent infestation that could spread to other batches of flour throughout the plant.

It was noted that Montrell put the floor supervisor, Justin Sparkman, in charge of overseeing the rotation of flour. Justin always allowed the plant workers to take the flour that has been on the premises for six months. He states that “people in Africa go hungry every day and I just cannot bring myself to discard food”. However, Justin was not aware that he was to use the ICS system to document the removal of the flour from the plant. Although Justin was following orders, he was not using proper protocol.

It was obvious to Mr. Amerson that documentation was more than likely the main cause of the missing flour being unaccounted for. He believes the flour that is sprinkled on conveyor belts, stuck inside the bins and removed from premises due to shelf life issues should be documented as part of the scrapping to ensure accuracy of record keeping. Therefore he made note of this and moved on to the Procurement department, where he interviewed the purchaser, Nikki Mayes.

During this interview, Mr. Amerson learned that Ms. Mayes merely orders product that is requested by plant workers, without checking the records in ICS to ensure that it is really needed. He asked her why she wasn’t utilizing ICS as documented in her job description and Ms. Mayes replied “my job is to purchase ingredients, not baby sit those who request it”. This last visit confirms that the documentation process may be the main culprit of the discrepancy, as none of the departments seem to be in full compliance of the proper process and procedures when it comes to documentation.

At the end of the walk through and note taking process, Mr. Amerson went back to his office to write a review and evaluation of the investigation to turn in to the AMayesin Bakes owners, as to the whereabouts of the missing flour. He was more than positive that theft could be ruled out at this point. Unfortunately, the answer is not as simple as what the owners may want to hear. Therefore, Mr. Amerson decided to set up a meeting to speak with them face to face before submitting the written evaluation to them.

To conclude, Mr. Amerson must come up with the most constructive way to communicate the problem and possibly provide a solution to assist Mr. and Mrs. Mayes in implementing an effective documentation system.

Questions to consider:

What would be an effective method for Mr. Amerson to use to communicate the issue to the owners?

What should the owners do to correct the documentation issue at the company?

Who is to blame for the missing flour?