Deliverable(s):
Submit Case Report Before Class Start. Scharffen Berger Chocolate Maker (A)
Read, analyze, and be prepared to discuss the case. Please answer following questions in your case
report.
1. What are your conclusions regarding the proposed ball mill? Would you proceed with the
implementation of that change? How would you justify your decision.
If I was Mr. Harris I would definitely go forward with the implementation of the proposed ball mill as
it decreases the production time remarkably. When we look at the current situation Company is using
2 conche machines and each conche can hold an approx. 1400 kg batch of a single recipe. Each
batch takes 40-60 hrs to finish. Ball mills, which are used to grind down particles, can handle 1400
kgs at a time. And it can turn particles from 100 microns to 25 microns in 3 hrs, a process which
takes about 40-60 hrs with a conche alone. Conches would still be used for aeration and mixing
which would take 10 hrs and the rest of the process would be conducted by ball mill. And as a result
this entire process would be completed within 15 hrs instead of 40-60 hrs. Ball mill will be more
crucial in production of the products with higher sugar content as these require the most conching.
Ball mill also increases the quality of the chocolates as it preserves flavor better. This new machinery
was taste tested and results were satisfactory. This was the biggest concern for the company owner
as he didn’t want to compromise the quality of the chocolates while trying to keep up with the
increasing demand. Ball mill promises to increase the capacity by 75% and can increase even more
if other process changes were made as well.
2. Assuming that all of the production is of semi-sweet (62%) chocolate, what changes
beyond the addition of the ball mill will you need to consider to increase your capacity by
150%?
The ball mill has a great potential to be a step forward in increasing the production capacity. The ball
mill has the ability to reduce the particle levels in the chocolate significantly so it will decrease the
time spent in the conch. Even though the ball mill has a huge potential to increase the output, there
are still some inefficient parts of the production. The melangeur is also a process that takes time and
could benefit from some innovation. We can include the very old artisanal roaster to the parts of the
production that might need some improvement as well.
Bean cleaning process can be improved by outsourcing it. Since it is not a crucial part for the quality
there should be less concerns on that part. Scharffen Berger can benefit from outsourcing cleaning
by buying already cleaned beans if possible or introduce an outsource step to the production as the
outsource cleaning. If possible Scharffen Berger can allocate the savings made from that to other
in-house machinery parts.
The roaster and the melangeur are the two major bottlenecks of this production line. The 50 year old
roaster is not perfect for productivity but looks like it is the perfect option for the quality. The research
and development studies should be made for that step of the production.
Given that Mr.Harris has a way of having a second melangeur with an acceptable cost, this should
definitely be one of the improvement steps. This would improve the capacity, however may not be
enough to respond to an 150% increase in the demand.
The molding process could be outsourced. Since the molding is not a crucial step for the quality, the
chocolate produced within the high quality standards of Scharffen Berger can be transferred to other
producers while it is still liquid and could be molded there. On the other hand the transfer of liquid
chocolate is not an easy process and might result in costs. Mr. Harris’s research suggests that buying
another molding machine would be also expensive. At that point I believe Mr. Harris should be doing
a more detailed analysis on the costs and benefits of outsourcing or doubling the in-house molding
capacity.
The packing process is already mostly outsourced. The risk here is that the third party packaging
companies should also be ready for an increase in the quantity of chocolate that needs to be packed.
Mr. Harris should definitely communicate the potential changes in the quantity and make sure that
existing partners will be ready for it. If not, finding new packaging companies might be a good idea.
That also creates a potential benefit, if Mr.Harris can make better agreements with the new partners
based on the quantity, that can decrease the unit cost of packaging.
On top of all these actions, the shifts can also be increased for some steps. Night shifts can be a
part of the company. But this contains lots of questions about productivity I believe.
3. Given your answer to question 2, what expansion step(s) would give you the greatest
concern? Why? How would you address such concerns?
Based on our answers to question 2, the greatest concern would be the increase in the shifts. Even
if the company would work on double shifts, the old machinery will still remain as bottlenecks and
this would end up with some swollen quantities in some steps. For example even the bean cleaner
would work 16 hours 7 days, the roaster won’t be able to roast all the beans cleaned. So this wouldn’t
speed up the production. This solution simply does not make sense when trying to maintain an
efficient and lean management style. This option would also be responsible for adding more cost,
due to increased wages, instead of just becoming more efficient.
Scharffen Berger could create more gains by taking a closer look at their entire supply chain, and
working to make the whole process leaner with the help of some very detailed scenario analysis.
The brand image of Scharffen Berger is also another risk. While trying to increase productivity
through more outsourcing and labor automation, Scharffen Berger risks the reputation they have
been holding for years as a handcrafted, artisan, and quality chocolate producer.Seeking to
standardized testing or any other quality measures presents the possibility of diminishing the value
of operator tasting and the artisanal image. Scharffen Berger could prevent this from becoming an
issue by doing both auto-sampling and random taste sampling.
Another risk, that was touched upon briefly earlier is the risk of possible decrease in quality if
company increases the volume of third party packing of their products. This poses as a threat to
the chocolate quality, as a major component in getting the product ready for consumption and
retail would not be happening by Scharffen Berger employees. This risk is easily
removed if Scharffen Berger will train a quality manager to be present at each of the
packing facilities.