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(Patriot Ledger)   Baskin-Robbins closes last North American ice cream factory to focus on "core skills," which do not include making ice cream   (patriotledger.com) divider line 96
    More: Misc, Baskin-Robbins, North American, Dunkin' Brands, international business, factory, product innovations, outplacement, Peterborough  
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2855 clicks; posted to Business » on 19 Jul 2012 at 12:10 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-18 09:47:40 PM
I hate seeing crap like this. No one ever does business to make and sell quality products anymore; it's all about owning a brand and getting the lowest bidder to fuel your supply.

Capitalism fail.
 
2012-07-18 09:54:24 PM
I still want Baskin Robbins Daiquiri Ice sorbet, no matter who makes it. Absolutely delicious
 
2012-07-18 10:18:38 PM
Well at least the Canadian Shops will still get ice cream made in Canada...

But focus on your core business...
ummm, kids, your core business is ice cream, and you are not making it anymore. Why do I need to buy ice cream made by someone else, that I can get for less at the supermarket, from you again?
 
2012-07-19 12:41:54 AM
Headline could read "Bain Capital shuts down last Baskin Robbins ice cream factory to focus on turning Dunkin' brands into a dispensary store rather than actually making anything."
 
2012-07-19 12:51:46 AM

sno man:
ummm, kids, your core business is ice cream, and you are not making it anymore. Why do I need to buy ice cream made by someone else, that I can get for less at the supermarket, from you again?


Unfortunately, they apparently view their core business as marketing and branding, as do quite a lot of US companies these days. Basically, they think they'll do better if the answer to your question is "because you subconsciously associate our signs, logos, and decor with fun and other positive feelings".
 
2012-07-19 12:52:05 AM
progress! hurray!
 
2012-07-19 12:53:52 AM

Winktologist: I hate seeing crap like this. No one ever does business to make and sell quality products anymore; it's all about owning a brand and getting the lowest bidder to fuel your supply.

Capitalism fail.


I dunno - I'm not heartbroken by the fact that going out for ice cream means either Dairy Queen (which is ok in a pinch) or some local shop run by someone who is actually interested in selling good ice cream.
 
2012-07-19 12:56:31 AM

Thats_right_ALL_the_tea: sno man:
ummm, kids, your core business is ice cream, and you are not making it anymore. Why do I need to buy ice cream made by someone else, that I can get for less at the supermarket, from you again?

Unfortunately, they apparently view their core business as marketing and branding, as do quite a lot of US companies these days. Basically, they think they'll do better if the answer to your question is "because you subconsciously associate our signs, logos, and decor with fun and other positive feelings".


Yay "service economy"!
 
2012-07-19 01:00:59 AM
Not a loss. Anyone else notice that ice cream tastes like crap these days? I don't know what filler they are using, but the 31 flavors taste like 31 variations of whipped gum to me. There's just something so fake and rubbery about it.

And the stuff that tastes like real ice cream used to now is called gelatto or some stuff like that.

/off my lawn
//and no, you can't have my ice cream either
 
2012-07-19 01:05:21 AM
So, they're unable to meet demand with existing production capabilities... in the non-bizzare-o-world this would indicate that the time is right to expand production capacity and... create jobs... or grow. But let us not forget... It is the universal core business of any business to make money, not to produce a product. Making things costs money. So if you just don't make anything, the revenue should just WOOOOOOOOSH!!!!! See, in t his day and age, money is made by convincing others to give you money because Step #3 = Profit. Imagine how much money they'd make if they just liquidated all their assets and canned ALL the employees! It would be a banner quarter and by the time everyone stopped celebrating, heaping praise on the management team, and figured out that the company has ceased to exist, all the key players will have moved on to repeat the process for other shareholders in some other business and will have heaped the blame on some scapegoat in the accounting subcontractor. This is how jobs are created... think of how many business news site writers will be busy reporting on these developments!!!! If all those soon-to-be-unemployed Ice cream factory employees would just have liquidated all of THEIR assets and bought company stock, before this all happened they would be able to... well... BOOTSTRAPS BOOTSTRAPS!!! The best Chinese made bootstraps you can buy if you can afford to buy bootstraps!!!! Remember STEP #3 = Profit!!!! The rest is just details that some staffing agency or subcontractor can figure out part-time.
 
2012-07-19 01:17:08 AM
Many touched on the core point:

Companies in business for the sole purpose to make their investors money is detrimental to long-term viability of our society.
 
2012-07-19 01:21:16 AM
They're going to take a one time charge of $16 to $18 million for closing the factory. I'm pretty certain, that much money would allow for a lot of increase in production supply.
 
2012-07-19 01:22:22 AM

Winktologist: I hate seeing crap like this. No one ever does business to make and sell quality products anymore; it's all about owning a brand and getting the lowest bidder to fuel your supply.


MBAs are a parasite on American industry.
 
2012-07-19 01:23:37 AM

Peki: Not a loss. Anyone else notice that ice cream tastes like crap these days? I don't know what filler they are using, but the 31 flavors taste like 31 variations of whipped gum to me. There's just something so fake and rubbery about it.

And the stuff that tastes like real ice cream used to now is called gelatto or some stuff like that.

/off my lawn
//and no, you can't have my ice cream either


I got a tub of Breyers the other week and two things stood out to me immediately: it was disgustingly sweet and there was something weird about the texture of the melted ice cream - like it had the consistency of a thick milkshake. It was almost as if they put too much carageenan in it like McD's does.

/and the flaws stood out worse because the ice cream I had just before that was Blue Bunny, which is damn fine ice cream
 
2012-07-19 01:25:23 AM

Peki: Not a loss. Anyone else notice that ice cream tastes like crap these days? I don't know what filler they are using, but the 31 flavors taste like 31 variations of whipped gum to me. There's just something so fake and rubbery about it.

And the stuff that tastes like real ice cream used to now is called gelatto or some stuff like that.

/off my lawn
//and no, you can't have my ice cream either


Baskin Robbins was always a lower butter fat content ice cream.
 
2012-07-19 01:30:28 AM

nmemkha: Many touched on the core point:

Companies in business for the sole purpose to make their investors money is detrimental to long-term viability of our society.


Why do you hate America? It's like I always say, the problem with business is customers. Customers are nothing but problems. If you just get rid of the customers, there are no problems. The same goes for employees and factories and stores and inventory and infrastructure. If you just get rid of it all, all that remains is the money, right? PURE PROFIT in a very short term. Then you escape to your golden throne and government patronage job with the esteem of the shareholders you have thus enriched who will return the favor by voting you onto other corporate boards . See, you gotta think like a captain of industry: A fully sunken ship can never hit an iceberg.

I swear this is how corporate leaders really think.
 
2012-07-19 01:42:16 AM
Is Baskin-Robbins owned by Bane Capital?

If this is true, they're shifting jobs away to China.
 
2012-07-19 01:58:06 AM

Funk Brothers: Is Baskin-Robbins owned by Bane Capital?


Ownership is split between Bain, the Carlyle Group and Thomas H. Lee Partners.
 
2012-07-19 01:59:27 AM
So, they are going to pay 16 - 18 and it will save 4 - 5 million a year after that. This doesn't seem like that good a deal for them.
 
2012-07-19 02:02:17 AM

sno man: Well at least the Canadian Shops will still get ice cream made in Canada...

But focus on your core business...
ummm, kids, your core business is ice cream, and you are not making it anymore. Why do I need to buy ice cream made by someone else, that I can get for less at the supermarket, from you again?


As you probably know, Boeing decided, and I am serious and not joking, to get out of the aircraft building business. Now they do systems integration and final assembly of parts other people built. They only half-intended to make this decision. Some of it they decided by bad management of the 787, some of it they decided to do intentionally.

They had an enormous competitive advantage of course, in things like building wings, and then composites came along and the MBA and top dog engineers decided they had no knowledge of composites, so instead of getting that knowledge for the 787, they instead let Mitsubishi build the wings. And they let Vought build the rear fuselage.

Well Vought got so far behind schedule Boeing had to buy them, and now Boeing is an aircraft company that no longer knows how to build wings for its aircraft.

Here's a famous paper on how you can use outsourcing to lose all your profits:

Out-sourced profits - the cornerstone of successful subcontracting - Dr. L.J. Hart-Smith

Abstract

The purpose of this paper is to describe and explain some highlights associated with the contemporary business practice of out-sourcing more and more of a companies' activities in the belief that doing so will increase profitability. A strong case is made that it will not always be possible to make more and more profit out of less and less product and that, worse, there is a strong risk of going out of business directly as a result of this policy. The point is made that not only is the work out-sourced; all of the profits associated with the work are out-sourced, too. The history of the former Douglas Aircraft Company is cited as a clear indication of what these policies have done - and as a warning of what more may be done. The subcontractors on the DC-10 made all of the profits; the prime manufacturer absorbed all of the over-runs. The circumstances under which out-sourcing can be beneficial are also explained. They involve better access to improved facilities with which to make more precise detail parts to reduce the cost of final assembly. A strong warning is included about the perils of sub-optimum solutions in which individual costs are minimized in isolation. Indeed, the importance of thorough planning, accounting for all interdepartmental interactions, cannot be over-emphasized. A case is made that it is better to fill up "excess capacity" with additional work, even if unrelated to the core business, rather than to close it down and sell it off. Such practices can even be necessary for retaining the skills and facilities required to produce the prime products, but which would otherwise be under-utilized and become targets for elimination. The inherent traditional imbalance between budgets and head-counts can be resolved in this manner. The paper includes some observations about European experiences, good and bad, with out-sourcing. It closes with a list of recommendations by the author about how to operate and maintain profitable businesses.

Introduction

Out-sourcing is commonly looked upon by management as a tool for reducing costs. But the unresolved question is "which costs?". In addition, there is the matter of "what is the effect on overall costs?". The most important issue of all is whether or not a company can continue to operate if it relies primarily on out-sourcing the majority of the work that it once did in-house. The experiences of the former Douglas Aircraft Company would suggest that, in the context of the aerospace industry at least, it cannot! In the more general context, it should be obvious that a company cannot control its own destiny if it creates less than 10 percent of the products it sells.

One purpose of this paper is to explain why selective out-sourcing can be beneficial to all concerned, and why out-sourcing as a supplement to sales activities may be justified but needs to be recognized, on average, as an added cost, not a cost reduction.

A second objective is to discourage wholesale out-sourcing by highlighting the misleading costaccounting
procedures that have concealed its true cost for so many years. The hope is that, in
future, make-buy decisions will be based on complete assessments of all of the costs - and that,
in future, make-buy decisions will not be made until after the product has been defined and the
relative costs established.

The third objective is to ensure that, if out-sourcing is to be employed, it is under-stood to be absolutely necessary that detail parts and subassemblies be designed with that process in mind. This requires considerable additional up-front effort in planning to avoid the situation whereby major subassemblies do not fit together at final assembly, increasing the cost by orders of magnitude more than was saved by designing in isolation from the work-allocation activities.

The inescapable problem with outsourcing work that could be done in-house is that it necessarily increases the tasks and man-hours to carry out the work way above those needed to perform all assembly, including most subassemblies, at one site. Experience in the electronics industry has shown that out-sourcing work to regions of low labor rate is only a transitory phenomenon. The reason why the rates were low was that there had previously been no work there. Once the work became available, hourly rates increased, so that the primary electronic companies kept moving the work to yet another as-yet-under-developed area, and the cycle was repeated. This may be cost-effective for small items, with production lives of only a few years at most, but it is inappropriate for large aircraft that may need spare parts throughout a service live in excess of 50 years (80 or more for some military aircraft) and for which the manufacturing program itself may last 40 or 50 years. There are so many aircraft components that must be out-sourced, such as engines, avionics, and systems, because today's prime aircraft manufacturers are no longer equipped to undertake such work themselves, that the retention of a determinable minimum fraction of the structures work is a pre-requisite to developing sufficient cash to develop new products. Without new products, as distinct from derivatives, all companies will go out of business, no matter what their line of business.

The correctness of the author's position1 on these matters is easily confirmed by two facts. It was the suppliers who made all the profits on the extensively out-sourced DC-10s, not the so-called systems-integrating prime manufacturer. (The same thing has happened on aircraft assembled by Boeing, in Seattle, too.) Also, when plans were being formulated for the proposed MD-12 very large transport aircraft, almost all potential suppliers indicated a preference for being subcontractors rather than risk-sharing "partners". Could they have known more about maximizing profits, minimizing risk, etc., than the prime manufacturer who sought their help even though it could borrow money at lower rates of interest than potential suppliers could? The DC-8 was manufactured and assembled almost entirely within the Long Beach plant, with only the nose coming from Santa Monica. That policy was changed after the acquisition of the former Douglas Aircraft Company by the former McDonnell Aircraft Company, but the change did not improve the company's profitability. It is time for Boeing to reverse this policy.

...
 
2012-07-19 02:04:39 AM
 
2012-07-19 02:05:36 AM

RoyBatty: Out-sourced profits - the cornerstone of successful subcontracting - Dr. L.J. Hart-Smith


Links to quality reading on my Fark? More likely than you think.
 
2012-07-19 02:11:08 AM
Worth noting I suppose:

Our Owners

Dunkin' Brands, Inc. is owned by a consortium of global private equity firms: Bain Capital Partners LLC, The Carlyle Group and Thomas H. Lee Partners, L.P.

http://www.dunkinbrands.com/aboutus/parent_company.html
 
2012-07-19 02:14:53 AM

WhyteRaven74: Funk Brothers: Is Baskin-Robbins owned by Bane Capital?

Ownership is split between Bain, the Carlyle Group and Thomas H. Lee Partners.


chance4510: Worth noting I suppose:

Our Owners

Dunkin' Brands, Inc. is owned by a consortium of global private equity firms: Bain Capital Partners LLC, The Carlyle Group and Thomas H. Lee Partners, L.P.

http://www.dunkinbrands.com/aboutus/parent_company.html


Given what a dumbass Romney is, and what gun runners Carlyle is (and their ties to Bush and Bin Laden), I assumed WhyteRaven74 was joking....

Jeez Louise, it's for real.
 
2012-07-19 02:17:24 AM

WhyteRaven74: RoyBatty: Out-sourced profits - the cornerstone of successful subcontracting - Dr. L.J. Hart-Smith

Links to quality reading on my Fark? More likely than you think.


Step 1: Merge companies to gain efficiency by eliminating duplicate departments and associated management
Step 2: Outsource lost capabilities to other firms
Step 3: Profit
 
2012-07-19 02:45:12 AM
i.dailymail.co.uk
Approves.
 
2012-07-19 03:06:05 AM

wildcardjack: Step 1: Merge companies to gain efficiency by eliminating duplicate departments and associated management


Now if that's something that ever actually happened any more.
 
2012-07-19 04:10:51 AM
I haven't eaten BR ice cream in years and probably will not in any foreseeable future. When I was a kid it was one of the best one around, The only one that really beat it was Will Wrights in LA. Their fudge sauce was to die for. When Swenson's closed in our area that was the last time I regularly went to an ice cream shop as they made their own in-house. Now, if I want good ice cream I make it myself. Otherwise I go to McDonalds and get a cone or cup for a buck. Theirs is about as good as the rest of the overpriced ice cream shops in the area and is worth what you pay for it. In my opinion Coldstone is just an overpriced gimmick of mediocre quality.
 
2012-07-19 04:21:39 AM
So where was the manufacturing moved to? Did I miss that?
 
2012-07-19 04:35:17 AM

coco ebert: So where was the manufacturing moved to? Did I miss that?

The Peterborough plant makes ice cream for about one-third of Baskin-Robbins' shops outside of the U.S. The manufacturing work for shops outside of Canada will shift to Dean Foods, while the Canadian work will go to Scotsburn Dairy.


I guess this could be a "move" if Scotsburn Dairy has to hire more workers, or it could just be lost jobs if Scotsburn Dairy doesn't have to hire.

i.imgur.com
 
2012-07-19 04:41:58 AM
And again, we have the problem of international companies not giving a damn about things like countries. "Why are we exporting ice cream from Canada to the market where it sells, instead of just making it in situ?" I'm guessing Europe, but that information's not there.
 
2012-07-19 06:04:46 AM
Ice cream is VERY easy to make yourself. I recommend an electric machine with the core you put in the freezer. They are like $20. You will get sooooo fat.

/Mint chocolate chip with 60% cacao chips.... uuuuhhhhh
 
2012-07-19 07:02:25 AM

Doctor Jan Itor: Ice cream is VERY easy to make yourself. I recommend an electric machine with the core you put in the freezer. They are like $20. You will get sooooo fat.

/Mint chocolate chip with 60% cacao chips.... uuuuhhhhh


This. And pick up the Ice Cream Recipe book written by Ben and Jerry before they got really famous.
 
2012-07-19 07:04:57 AM

nmemkha: Many touched on the core point:

Companies in business for the sole purpose to make their investors money is detrimental to long-term viability of our society.


Except, like, that has been the sole purpose of companies since forever. So we've been able to advance and improve our society so far despite the hindrance of for-profit companies being, you know, for profit.
 
2012-07-19 07:07:34 AM
Chocolate Mousse Royale was the finest ice cream flavor ever. Once BR dumped it, I haven't been back. BR can go fark themselves for all I care.
 
2012-07-19 07:08:11 AM

DarkLancelot: So, they are going to pay 16 - 18 and it will save 4 - 5 million a year after that. This doesn't seem like that good a deal for them.


I havent read TFA, but using your numbers that's like a 26% annual return. If true, that's an awesome deal for them.
 
2012-07-19 07:18:10 AM
fark you, Bain.
 
ZAZ [TotalFark]
2012-07-19 07:18:19 AM
WhyteRaven74

A one time charge is a game, not a loss. Accountants gather $16 million in costs from the next few decades and put them on this year's books with a note saying "this was a freak occurrence, it won't happen again."
 
2012-07-19 07:28:25 AM
More people going on public assistance. Obama is pleased
 
2012-07-19 07:40:46 AM
To the Farkers complaining about how ice cream tastes these days:

Read the ingredients. You are specifically trying to find (and avoid) cellulose -- aka, sawdust. If you have to keep the fat content down -- real cream is expensive, you know -- then you have to have a binding agent that will still give the mixture both density and smoothness.

I don't actually give a shiat that I'm eating pulped tree -- I'll suck down some Dairy Queen when the kids are jonesing for it -- but it definitely produces a lower quality product.
 
2012-07-19 07:43:32 AM

Winktologist: I hate seeing crap like this. No one ever does business to make and sell quality products anymore; it's all about owning a brand and getting the lowest bidder to fuel your supply.

Capitalism fail.


A lot of this is due to the expenses of having employees, which are increased by the costs of complying with government bureaucracies enforcing all the various wage and hour, safety and employee protection laws. While the majority of the laws may be based on rational need, the compliance costs often are not.

Not to mention that there are tax differences between earning money from sales and earning money from capital gains, royalties and myriad other sources. It's easier to finagle numbers on paper than machinery and people in a plant that occupies real land and buildings, and deal with all the regulations all those things bring into play.

When it becomes cheaper to hire another company, in the same country, to do your actual business, there is a problem.

Governments need to simplify rules and regulations, and lower compliance costs. Fat chance of that.
 
2012-07-19 07:59:31 AM

Funk Brothers: Is Baskin-Robbins owned by Bane Capital?

If this is true, they're shifting jobs away to China.


Actuallly, they're shifting jobs from Canada to...Canada.

Article and headline are rather misleading...or the writer doesn't understand basic geography.
 
2012-07-19 09:05:44 AM

Dog Welder: Funk Brothers: Is Baskin-Robbins owned by Bane Capital?

If this is true, they're shifting jobs away to China.

Actuallly, they're shifting jobs from Canada to...Canada.

Article and headline are rather misleading...or the writer doesn't understand basic geography.


Well, it doesn't say where the new plant is opening up. It mentions that the particular plant was handling 1/3rd of BR's ice cream manufacture for ice creams destined for outside North America, and that other Canadian plants will pick up the NA slack, but the export work will go to Dean Foods. Dean Foods operates in the US and a few countries in Europe... Given that it's exports from NA, the other plant is probably going to be a European one.
 
2012-07-19 09:08:34 AM

Fecacacophany: So, they're unable to meet demand with existing production capabilities... in the non-bizzare-o-world this would indicate that the time is right to expand production capacity and... create jobs... or grow. But let us not forget... It is the universal core business of any business to make money, not to produce a product. Making things costs money. So if you just don't make anything, the revenue should just WOOOOOOOOSH!!!!! See, in t his day and age, money is made by convincing others to give you money because Step #3 = Profit. Imagine how much money they'd make if they just liquidated all their assets and canned ALL the employees! It would be a banner quarter and by the time everyone stopped celebrating, heaping praise on the management team, and figured out that the company has ceased to exist, all the key players will have moved on to repeat the process for other shareholders in some other business and will have heaped the blame on some scapegoat in the accounting subcontractor. This is how jobs are created... think of how many business news site writers will be busy reporting on these developments!!!! If all those soon-to-be-unemployed Ice cream factory employees would just have liquidated all of THEIR assets and bought company stock, before this all happened they would be able to... well... BOOTSTRAPS BOOTSTRAPS!!! The best Chinese made bootstraps you can buy if you can afford to buy bootstraps!!!! Remember STEP #3 = Profit!!!! The rest is just details that some staffing agency or subcontractor can figure out part-time.



Your newsletter -- I want to subscribe
 
2012-07-19 09:24:35 AM

Dog Welder: Funk Brothers: Is Baskin-Robbins owned by Bane Capital?

If this is true, they're shifting jobs away to China.

Actuallly, they're shifting jobs from Canada to...Canada.

Article and headline are rather misleading...or the writer doesn't understand basic geography.


outsourcing means different things to people.
 
2012-07-19 09:33:02 AM
Fine. I'll continue to get my ice cream from Strickland's and New Baltimore. When they close for the winter I'll go to Handel's. And of course the occasional pint of Ben & Jerry's.
 
2012-07-19 09:47:55 AM

Doctor Jan Itor: Ice cream is VERY easy to make yourself. I recommend an electric machine with the core you put in the freezer. They are like $20. You will get sooooo fat.

/Mint chocolate chip with 60% cacao chips.... uuuuhhhhh


As a self-proclaimed food nerd, I agree completely with this, except for the bit about mint chocolate.

/My opinion is that mint is to anesthetize your tongue so you don't notice the chocolate tastes like crap
//still experimenting with cocoa butter as a fat for use in ice cream...
 
2012-07-19 09:54:45 AM

Mrbogey: Dog Welder: Funk Brothers: Is Baskin-Robbins owned by Bane Capital?

If this is true, they're shifting jobs away to China.

Actuallly, they're shifting jobs from Canada to...Canada.

Article and headline are rather misleading...or the writer doesn't understand basic geography.

outsourcing means different things to people.


True...of course, I still can't figure out their reasoning. If they can't keep up with demand, why close a plant that is supplying 1/3 of your product? Wouldn't you open more production?
 
2012-07-19 09:59:32 AM
Are they going to move production to India? I mean everyone who works at the stores near my house is from there.

All of the Baskin Robbins/Dunkin Donuts stores near my house are absolutely atrocious. Dirty, poor service, and they are frequently out of flavors. My wife loves BR Mint Choc Chip. She gets so frustrated anymore and just goes without.
 
2012-07-19 10:04:26 AM
Ontario is in Canada, North American continent.
Nova Scotia is also in Canada, still the North American continent.

Writers probably think Mexico is in South America.
 
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