Analysis

Topics: Chocolate, Chocolate milk, The Hershey Company Pages: 7 (1299 words) Published: September 8, 2013
9/3/13

Scharffen Berger Chocolate Maker

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 Overview
Primary 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 figs Pricing Retail: $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 ounce Sales $0.6 million in 1998, $10 million in 2004, Over $15 million estimated revenues for 2005

Production Process At Scharffen Berger

[http://4.bp.blogspot.com/DY6txg73x5Q/T_sE8WZl4SI/AAAAAAAAF1M/1SWqEdAZvW4/s1600/Untitled.png]

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 mbacase.blogspot.in/2012/07/scharffen-berger-chocolate-maker.html 1/5

9/3/13

Scharffen Berger Chocolate Maker

– 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 Situation
Current analysis of the plant shows production capacity of 40000 Kgs

Cleaner Available Capacity Input: batch size (Kgs) Output Quantity of Machine 8 hour Shifts Cycle Time (mins) Output in Kgs Per Minute Output in Kgs Per hour Output in Kgs Per Day 100 96 1 1 15 6.40 384.00 3072.00

Roaster

Winnower 450

Mixer

Conches (2) Temper 200

Mold

250 250 1 1 75 3.33 200.00 1600.00

250 185 1 1 15 12.33 740.00 5920.00

115 115 1 2 75 1.53 92.00 1472.00

1400 1400 2 3 1800 0.78 46.67 1120.00

140 140 1 2 60 2.33 140.00 2240.00

140 140 1 2 20 7.00 420.00 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. Conches & Ball Mill

Cleaner Roaster Winnower Mixer Available Capacity Input: batch size (Kgs) Output Quantity of Machine 8 hour Shifts Cycle Time (mins) Output in Kgs Per Minute Output in Kgs Per hour Output in Kgs Per Day 100 96 1 1 15 6.40 384.00 3072.00 250 250 1 1 75 3.33 200.00 1600.00 450 250 185 1 1 15 12.33 740.00 5920.00 115 115 1 2 75 1.53 92.00 1472.00

Temper 200

Mold

1400 1400 2 3 450 3.11 186.67 4480.00

140 140 1 2 60 2.33 140.00 2240.00

140 140 1 2 20 7.00 420.00 6720.00

mbacase.blogspot.in/2012/07/scharffen-berger-chocolate-maker.html

2/5

9/3/13

Scharffen Berger Chocolate Maker

Capacity Per Month with Ball Mill 44160 (Kgs) Increase in production from As Is (%) 10

Analysis: Ball Mill and Shift Adjustments
Addition of ball mill when also supported by increasing shifts achieves an increase in capacity by almost 66%. Conches & Ball Mill

Cleaner Available Capacity Input: batch size (Kgs) Output Quantity of Machine 8 hour Shifts Cycle Time (mins) Output in Kgs Per Minute Output in Kgs Per hour Output in Kgs Per Day 100...
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