scharffen berger chocolate maker
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Scharffen Berger Chocolate Maker Case, Case, Chocolate Case, Chocolate Maker Case, HBS Case, Case Write upTRANSCRIPT
Scharffen Berger Chocolate Maker
Company Overview• Scharffen Berger was founded in 1996 by Robert Steinberg and John Scharffenberger.• The chocolate maker in US market competing for $1.2 billion premium quality chocolate
segment.• Company had 60 employees and operated from a 27,000 sqft facility with 20,000 sqft
production area, office space of 5,000 sqft and retail space of 2,000 sqft* Facing high market demand which is outstripping production. High growth in demand is
expected for its premium chocolate products and hence planning capacity expansion
Business OverviewPrimary products at Scharffen Berger were
• Unsweetened (99% cacao) , Extra Dark (82% cacao) , Bitter sweet (70% cacao), Semi-sweet , Mocha, Mint (all have 62% cacao), Milk Chocolate (41% cacao)
• Others: chocolate sauce, drinking chocolate, cocoa powder and chocolate covered figsPricingRetail: $0.50 for 5 gm, $2.00 for 1 ounce, $4.00 for 3 ounce, $10.00 for 10 ounce. Wholesale: approximately $0.35 per ounceSales$0.6 million in 1998,$10 million in 2004,Over $15 million estimated revenues for 2005
Production Process At Scharffen Berger
Current Capacity and expansion• Monthly production capacity of 40,000 kgs i.e. around 29 chonc of chocolate (each
approximately worth $ 30,000 in sales)• Expansion options being considered– Purchasing more of same machines already being used– Adding a new ball mill at $ 300,000 (assuming quality remains same). Expected time
reduction to 15 hrs from avg. 60 hrs of choncing.– When ball mill is installed, Mixer will be next bottleneck. Additional mixer could be
purchased & refurbished at $ 50,000.– Outsourcing the tempering and molding process to co-packers and remove duplication.
However, transporting liquid chocolate was risky and expensive proposition.
Analysis: Current SituationCurrent analysis of the plant shows production capacity of 40000 Kgs
Cleaner Roaster Winnower MixerConches (2) Temper Mold
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140 140
Output 96 250 185 115 1400 140 140
Quantity of Machine 1 1 1 1 2 1 1
8 hour Shifts 1 1 1 2 3 2 2
Cycle Time (mins) 15 75 15 75 1800 60 20
Output in Kgs Per Minute 6.40 3.33 12.33 1.53 0.78 2.33 7.00
Output in Kgs Per hour 384.00 200.00 740.00 92.00 46.67 140.00 420.00
Output in Kgs Per Day 3072.00 1600.00 5920.00 1472.00 1120.00 2240.00 6720.00
Current Capacity Per Month (Kgs) 40000
Analysis: Adding Ball Mill
Adding ball mill will reduce the average conch time from 60 hrs to 15 hours and hence increase capacity by around 10%. Mixer will be next bottleneck.
Cleaner Roaster Winnower MixerConches& Ball Mill Temper Mold
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140 140
Output 96 250 185 115 1400 140 140
Quantity of Machine 1 1 1 1 2 1 1
8 hour Shifts 1 1 1 2 3 2 2
Cycle Time (mins) 15 75 15 75 450 60 20
Output in Kgs Per Minute 6.40 3.33 12.33 1.53 3.11 2.33 7.00
Output in Kgs Per hour 384.00 200.00 740.00 92.00 186.67 140.00 420.00
Output in Kgs Per Day 3072.00 1600.00 5920.00 1472.00 4480.00 2240.00 6720.00
Capacity Per Month with Ball Mill (Kgs) 44160Increase in production from As Is (%) 10
Analysis: Ball Mill and Shift AdjustmentsAddition of ball mill when also supported by increasing shifts achieves an increase in capacity by almost 66%.
Cleaner Roaster Winnower MixerConches& Ball Mill Temper Mold
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140 140
Output 96 250 185 115 1400 140 140
Quantity of Machine 1 1 1 1 2 1 1
8 hour Shifts 1 2 1 3 3 2 2
Cycle Time (mins) 15 75 15 75 450 60 20
Output in Kgs Per Minute 6.40 3.33 12.33 1.53 3.11 2.33 7.00
Output in Kgs Per hour 384.00 200.00 740.00 92.00 186.67 140.00 420.00
Output in Kgs Per Day 3072.00 3200.00 5920.00 2208.00 4480.00 2240.00 6720.00
Capacity Per Month with Ball Mill (Kgs) 66240Increase in production from As Is (%) 66
Analysis: With Ball Mill & 2 Mixers (2 Shifts)Further capacity can only be increased by adding additional mixer, and lets operate that also at 3 shifts. Now, Temperer will be next bottleneck.
Cleaner Roaster Winnower MixerConches& Ball Mill Temper Mold
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140 140
Output 96 250 185 115 1400 140 140
Quantity of Machine 1 1 1 2 2 1 1
8 hour Shifts 1 2 1 3 3 2 2
Cycle Time (mins) 15 75 15 37.5 450 60 20
Output in Kgs Per Minute 6.40 3.33 12.33 3.07 3.11 2.33 7.00
Output in Kgs Per hour 384.00 200.00 740.00 184.00 186.67 140.00 420.00
Output in Kgs Per Day 3072.00 3200.00 5920.00 4416.00 4480.00 2240.00 6720.00
Capcacity Per Month with Ball Mill (Kgs) 67200Increase in production from As Is (%) 68
Analysis: Ball Mill, 2 Mixers & Shift AdjustmentsFurther capacity can be increased by increasing shifts of Temperer, then increasing shift of cleaner and then increasing shift of Roaster
Cleaner Roaster Winnower MixerConches& Ball Mill Temper Mold
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140 140
Output 96 250 185 115 1400 140 140
Quantity of Machine 1 1 1 2 2 1 1
8 hour Shifts 2 3 1 3 3 3 2
Cycle Time (mins) 15 75 15 37.5 450 60 20
Output in Kgs Per Minute 6.40 3.33 12.33 3.07 3.11 2.33 7.00
Output in Kgs Per hour 384.00 200.00 740.00 184.00 186.67 140.00 420.00
Output in Kgs Per Day 6144.00 4800.00 5920.00 4416.00 4480.00 3360.00 6720.00
Capcacity Per Month with Ball Mill (Kgs) 100800Increase in production from As Is (%) 152
Conclusion• In the current situation conchs are the clear bottleneck.• After addition of ball mill the production capacity will increase by around 10%, however
further capacity can be increased by increasing shifts of mixer up to almost 66% increase in capacity until mixer becomes bottleneck
• Then adding a mixer will increase the production capacity to 68%, which can further be increased up to almost 150% by increasing shifts of Temperer, cleaner and roaster.
• Since the expected increase in demand is around 30% by end of the year. Adding ball mill and adjusting shifts would be sufficient for now.