Case Analysis Of Hostess Brands

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Manufacturing Strategy
Created in 1930, Twinkies have been a regular part of the American diet, and the brand is one of the most popular products manufactured by Hostess. Demand for this product has fluctuated very little; instead, the Twinkie brand has experienced a steady increase in the volume of sales. A notable exception occurred in early 2012, when Hostess Cakes announced it was going bankrupt. The future existence of the Twinkie was uncertain; however, Hostess Brands, LLC bought the brand in March 2013, and the Twinkie was back on supermarket shelves in July of that year (Isador 2013). As of the end of 2014, Hostess Brands produced 500 million Twinkies a year—1,000 Twinkies a minute—in its Emporia, KS location (“About” 2015). Because of the stability of demand for Twinkies, Hostess uses a level manufacturing strategy. According to Jacobs and Chase, this method “maintain[s] a stable workforce working at a constant output rate” (p534) in which employees experience stable work hours and the company does not need to continually locate new workers. Before its bankruptcy, Hostess Cakes employed 2,500 workers (Cover 2015) in its production department, and part of the company’s insolvency resulted from those workers unionizing and demanding higher wages. Currently, Hostess Brands’ production department employs only 1,800 workers (Cover 2015), who will not be unionizing as Kansas is a right-to-work state (“Kansas” 2015). Further, the decrease in the number of workers is due to Hostess Brands dropping some brands that Hostess Cakes manufactured, as well as increasing the use of machinery in its manufacturing process

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