You may have taken notice of Deschutes lately. In the last few years, it has become much more commonplace to find the brewery’s products on draft at your local pub or at your nearest retailer. Such a marketplace presence did not happen overnight, and the brewery credits the lessons learned from Six Sigma as having played a big part in its successful expansion. Six Sigma is such a significant part of the Deschutes story, the brewery even named a beer after the Six Sigma principle of continuous improvement, the Kaizen Cream Ale, after the Japanese term for “continuous improvement.”

A commitment to continuous improvement means honoring quality, improving your processes, and increasing the value of your product/service for your customers at every stage of the development of your organization, not sacrificing quality in the pursuit of expansion. By focusing on the 3p approach, Deschutes was able to buck the cliche of quality suffering when a company gets bigger.

Deschutes found themselves in a rare position among the microbreweries that gained popularity in the 1990s and then seemingly plateaued. The organization was able to continue expanding. Throughout its expansion, it found ways to keep making its product better, improve its processes, and retain its stellar reputation among craft beer enthusiasts, from those who were there in its earliest days to the new fans it gained during its growth.

This was accomplished by never betraying the organization’s own core values and embracing the Six Sigma 3p approach to quality. This means focusing on processes, products, and people as three key factors in the company’s quality systems.

Deschutes Had To Keep Its Stellar Reputation for Quality Throughout Major Growth

Deschutes Brewery began in 1988 as a brewpub in Deschutes County, Oregon, and was the first of its kind in the city of Bend. The brewery’s dark beer caught on, and by 1992 it was making nearly 4,000 barrels of beer, with two-thirds of it being distributed beyond the restaurant.

It soon moved into a larger facility, and by the mid-1990s, despite a slowdown of microbreweries across the United States, Deschutes was able to grow to produce 45,000 barrels of beer by 1996. This was accomplished while the organization’s focus was still chiefly on Oregon and Washington.

The organization then proceeded to tap into the West Coast market, expand its facilities, and install automation equipment. It was able to do all this without sacrificing quality. By 2001, the company was brewing 102,000 gallons of beer and winning prestigious prizes, such as a gold medal from the Brewery International Awards.

Deschutes continued to expand year after year, but when Kris Scholl was brought on from Anheuser Busch as Technical Director, he noticed some issues that could hinder Deschutes’ continued growth and commitment to quality.

Small Problems That Can Add Up

When Kris Scholl was brought on as Technical Director for Deschutes in 2013, he noticed something during a walk-through. There was a small issue with cardboard tearing with a master carton’s flaps. Scholl stopped the line in order to determine what was causing the issue. It was determined to be a box-cutting problem, where a clean cut was not being made. The cutting blade was not properly positioned, so it was adjusted, and business then carried on as usual.

This led to Scholl having a lot of questions that would then be carried over into every aspect of how Deschutes handled their processes:

• How can we make certain that this problem does not happen again?
• Was the machine actually set up correctly from the get-go?
• Was a standard operating procedure in place that showed exactly what the proper set-up is?
• Are the employees sufficiently trained to recognize that there is a problem?
• Is there a process in place for reviewing incidents as they happen, in order to prevent them from occurring again in the future?

Scholl’s understanding of how small seemingly small issues can add up to the overall effect on quality and efficiency of an organization and its products was deeply engrained from his stint at Anheuser Busch. Rising up in that organization to ultimately become the Global VP of Brewing Quality, he has several stories of the lengths that he would go to during his time at Anheuser Busch in order to provide consistent quality to customers with minimal variation. One such story involves spending a week tasting the condensate off of the kettle stacks to ensure that the condensate coming off of the kettles was harsh and bitter. The idea was that if the condensate was bitter tasting, that was a good thing since that meant that the unpleasant flavor was not in the beer. This pursuit of quality, catching the small things, and minimizing variation put Scholl in a solid position for answering the types of questions posed above and helping Deschutes continue to improve, moving up into the next level of growth and success.

Scholl brought this type of questioning into examining the processes of every aspect of the brewing and distribution at Deschutes with his role as Technical Director there. This included decisions on strategic direction, packaging, line expansion, and many more aspects that he could bring to a central question that every organization must answer when moving toward expansion:

“How can we improve quality while growing our business?”

Deschutes Focused on Continuous Improvement Without a Sacrifice to Quality

One of the largest problems that an organization encounters in its efforts to expand its reach and grow is that the quality and consistency of its products can suffer. Often, when a company expands, maintaining the same level of quality can be difficult due to a wide variety of factors. With Scholl as part of the Deschutes team, the company worked towards maintaining its core values during the expansion.

There was some concern about bringing in someone from such a large corporation as Anheuser Busch in order to help Deschutes reach its goals for its expansion. Could someone that worked with such mainstream brands work out in an organization that was smaller and known for having a certain culture and level of quality in the craft beer world?

Thankfully, Schorr’s commitment to quality aligned perfectly with the culture at Deschutes.

Every stage of the expansion raised questions that required strategic answers across nearly every aspect of the organization about how best to proceed.

There were many decisions to be made along the way that could be seen as difficult, if not for the company’s well-established credo of sticking to its core values as its compass.

One example would be the question of whether to expand the shelf life of Deschutes’ beers from 60 days to 120 days. Doing so would make it so that Deschutes could expand its reach even further. The decision to do so ultimately lost out due to concerns about quality consistency with that long of shelf life.

Another question was whether to have bottle conditioning on any of their beers beyond their few flagship varieties. Knowing that doing so could be costly, there was some pushback within the organization. The cost ended up being negligible when compared against the quality and consistency improvements that could be offered to Deschute’s line of beers across the board.

How Deschutes Incorporated the 3ps Approach in Its Expansion

During its expansion, Deschutes has paid particular attention to the 3ps approach to quality. Here are some examples of how this approach has been a major part of Deschutes’s commitment to quality during growth:

Process: During the expansion of Deschutes, every part of their processes was being looked at for ways to improve efficiency and quality.

Product: At no point during its expansion did the organization take shortcuts in the quality of its products or the consistency of that quality.

People: Deschutes made sure to bring on people that were highly qualified and aligned with their core values. They also made sure to empower their workers by having them involved in the decision-making in the company, such as doing experimental taste-testing among the staff regularly to determine what the next products would be to introduce.

The Outcome for Deschutes Has Been Stunning

By focusing on the 3ps approach to quality, holding onto its core values during growth, and maintaining its dedication to continuous improvement, Deschutes has managed to retain its reputation as a stellar craft beer even as it proceeds to expand its reach. A look at recent news stories over on the Deschutes website shows that they have continued to expand into new territories and partnerships, all without tarnishing their reputation for quality and receiving the awards to prove it.

3 Best Practices When Implementing the 3p Approach to Quality During Your Company’s Growth

1. Bring people on board who understand your values

Deschutes already had a commitment to quality when it brought on Kris Scholl as its technical director and his wisdom about continuous improvement efforts helped take Deschutes to the next level. Now, Deschutes lists an understanding of continuous improvement and even Six Sigma certification as a valued benefit when recruiting new hires. Bringing on the right people for your person that have the same dedication to quality and continuous improvement as well as the models used to achieve these efforts can have an extremely positive effect on your organization.

2. Find the root cause of incidents

One point that Scholl stresses is the importance of finding the root causes of incidents. It is easy to find band-aids for issues that arise, instead of sorting out what the actual root cause of the issue is, especially when the issue appears to be a small one. Over time, however, these seemingly small items can add up and lead to big problems with efficiency.

3. Do not sacrifice the quality of your product during your expansion

In a podcast interview, Schorr talked about the importance of staying focused on quality. He discussed how when consumers are excited about the quality of a product, they are willing to pay more for it. The implication here is that it is better for your organization and your reputation with your customer base to spend a bit more to ensure quality during your expansion, even if that means having a slightly pricier product. This is preferable to lessening the quality of a product, as your customers will stay with you if they believe in what you are doing and you continue to earn their trust.

The Example Set By Deschutes

The example laid out by Deschutes offers some key takeaways. First off, getting bigger does not need to mean that your product suffers in quality. By embracing the core values of your organization and continuing to improve even as you grow, your business will keep the trust and loyalty of the customers that made your growth possible. Whatever growth strategies you have, it should absolutely not be at the expense of quality. Also, pay close attention to your processes, even in the smallest details. Issues that may appear trivial can multiply, adding up to a notable dip in the efficiency of your organization and the quality of your products. Finally, do not underestimate how important the right people are to the success of your organization, and make them a valued part of its operations, growth, and culture. Be sure to bring people on board who align with the core values of your organization and that are just as dedicated to quality and continuous improvement.

By following these principles during the expansion of your organization, there is no telling just how far it can truly go.

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