At Holsum Bakery, the suggestion box is out. The opportunity-for-improvement box is in, and it's jam-packed with submissions.

Bob Gansel, director of administrative services, says between 1,000 and 2,000 opportunities are submitted annually.

A suggestion box implies that the participant must submit a solution. An opportunity for improvement box enables the individual to raise a problem that he or she has seen. Perhaps, an employee was working on the production line, saw a problem and notified management through the improvement box.

"Mistakes happen, we focus on the processes, not the people," Gansel explains.

Holsum Bakery's focus on the processes has contributed to its survival since its 1881 opening. About 500 employees operate the company and its three bakeries in the Greater Phoenix area, providing fine breads, rolls and other baked goods to Arizona and Clark County, Nevada. People stay with the company, Gansel says, noting Holsum sustains a 90 percent labor stability rate, which is measured by the laborers who have stayed at least a year.

Holsum is a mix of everything, making it the largest supplier of breads, buns and rolls in the Southwest in a national market dominated by mega-companies, Gansel says.

Holsum focuses its efforts on three markets—the fast food industry such as McDonald's, Burger King and Jack in the Box, the frozen bakery industry for institutions and a branded business, which is seen on regional grocery store shelves. "We compete with different companies on different products," Gansel says.

As a smaller-size competitor, Holsum's strategic advantage is the ability to react more quickly to the marketplace than a large company. "We have an idea and get it to market on a much faster basis," he says. "We continue to try to guess what the next fad is going to be."

That ongoing effort to meet the market's interest and demand follows what the company founders started more than a century ago. Edward Eisele, the grandfather of the current owner and president who shares the same name, first cooked and baked for a team surveying the Arizona Canal. In 1881, as the job was nearing completion he entered into the baking business and three years later purchased the company, then known as Phoenix Bakery. He was one of the first to ride a bicycle, balancing his bread baskets on the back tires, to deliver his product. In 1894, he began the first horse-drawn bakery wagon in the state and in 1910 bought the first gas-powered auto for delivery in Arizona.

The innovations have been almost endless—they were the first to use sanitary waxed paper wrappers in the early 1900s, first to sell sliced bread in 1931, first to advertise their products on the radio and later first in Arizona to advertise on TV.

Fads and diets today have the biggest impact on the company's product, Gansel says. But health consciousness began long before the low-carb craze of today. In the 1940s, Holsum was baking enriched bread even before the federal government initiated its health-conscious enrichment program. In the last year, Holsum was first in the market with low-carb products and unveiled a sugar-free bread nine months ago.

"Our strategic advantage is the ability to react much quicker to the trends," Gansel says. e

Holsum Bakery is a client of Leading Edge firm Henry & Horne, which provides audit services.