A Plant Visit Presentation

Mission Our mission is to serve consumers with the best quality assortment of great-tasting bakery and related food and beverage products, with world-class manufacturing facilities and an efficient nationwide distribution network, thereby providing a fair return on shareholder investments. Vision Our vision is to become the premier company in the baking industry and the related food and beverage industry, known and emulated for our best quality products that delight the consumer. It is the pride of every employee, investor, trade partner and stakeholder. Tracing Back Its History: Gardenias Humble Beginnings Gardenia's roots go back to Singapore where, in 1978, it began as a humble in-store bakery. Increasing demand led to the opening of Gardenia's first-commercial bakery at Pandan Loop in March 1983. Gardenia has since been the market leader in Singapore and has expanded its operations in Asia to countries such as Malaysia and Thailand with the latest in the Gardenia chain of bakeries here in the Philippines.

It all began in 1997, QAF Limited through Gardenia International Pte. Ltd. established Gardenia Bakeries Philippines Inc. and started construction of its bakery plant in Laguna International Industrial Park (LIIP), Bian, Laguna. Gardenia Philippines started its operations in 1998 with the state-of-the-art bread factory rated as one of the most modern large scale bread manufacturing facility in the country. Its major, highly-automated equipment come from the best bakery equipment suppliers from Germany, Holland, UK and USA making it the leading manufacturing company in the Philippines. Over the years, Gardenia has gained wide acceptance and is now considered as the most widely distributed loaf brand, reaching many parts of the country.

History 1978 Gardenia first started as a small in-store bakery at Bukit Timah Plaza producing variety bread, with the help of experienced American baker, Horatio 'Sye' Slocumm, who had 35 years experience in the bakery business.

1981

Production was growing rapidly and plans were underway for a larger commercial bakery.

1983

A commercial bakery was finally started in March 1983 at Pandan Loop, producing 2000 loaves per hour. Originally based on the concept of a central bakery supplying a variety of products mainly to retail bakeries, this changed to a single-minded concentration on producing a white sandwich loaf distributed to all retail outlets including supermarkets and sundry shops. Launched against entrenched competition; but with a superior product (softer-textured, tastier-flavoured and enriched bread), modern distinctive packaging and good marketing

(effective advertising, merchandising and distribution),Gardenia bread gradually gained popularity. Its merits of being baked fresh, using the finest ingredients and delivered fresh made it the most popular brand of packaged bread in Singapore within two years.

1986

In August, Gardenia expanded its operations by building a modern bakery that utilized the latest processing techniques.

1987

Gardenia ventured into Thailand.

1991

The first Gardenia bakery in Kuala Lumpur, Malaysia was commissioned.

1993

A second bakery in Singapore was set up in June 1993, with a production capacity of 8,000 loaves an hour. To keep up with a growing demand and modern baking technology, substantial funds were ploughed into building this new state-of-the-art bakery. Costing S$18.5 million, this new Gardenia bakery in Singapore increased manufacturing capacity by 2.5 times without compromising on quality. Equipped with new computer-generated equipment, this highly automated plant ranks among the most technologically advanced in the region.

1994

Gardenia commissioned a second bakery in Kuala Lumpur, Malaysia.

1996

Gardenia expanded with new bakeries in China and India.

1997

Gardenia further extended its regional operations to the Philippines. Gardenia acquired a third bakery in Kuala Lumpur, Malaysia.

1999

Gardenia invested in a fourth bakery in Johore Bahru, Malaysia.

2001

Gardenia acquired Bonjour. It has since become the No. 2 brand in Singapore for packaged loaf bread after Gardenia. Gardenia set up a fifth bakery in Bukit Kemuning, Malaysia.

2002

Gardenia built a new bakery in the Philippines.

Present

Despite a competitive environment, Gardenia has remained the market leader till today. This speaks volumes for the many painstaking efforts that have been invested to ensure that its products are constantly a cut above the rest.

CURRENT SITUATIONS IN PRODUCTION AND OPERATIONS MANAGEMENT DEPARTMENT

A. PRODUCT/ SERVICE QUALITY STANDARDS ISO 9001:2008 (INTERNATIONAL ORGANIZATION FOR

STANDARDIZATION ) ISO 9001:2008 sets out the criteria for a quality management system and is the only standard in the family that can be certified to (although this is not a requirement). It can be use by any organization, large or small, regardless of their field of activity. In fact, ISO 9001:2008 is implemented by over one million companies and organizations in over 170 countries. It aims to enhance customer satisfaction through the effective application of the system, including process for continual improvement of the system and the assurance of conformity to customer.

In Gardenia, it serves as a proof that every aspect of the procedure meets the organizations high quality standard from the ingredients used to the over-all manufacturing process.

Hazard Analysis and Critical Control Point (HACCP) It is a systematic preventive approach to food safety and pharmaceutical safety that identifies physical, allergenic, chemical and biological hazards in production processes that can cause the finish product to be unsafe and designs measurements to reduce these risks to a safe level. Also, it attests that the continues process, plant and product meets food safety standards in the production of loaf and other breads they use equipments and machines to make their product.

B. LOCATION PLANNING

VICINITY MAP Location, as almost every business treats it, is one of the most essential parts of a business. Every firm must use location planning techniques. Location planning is a key success

in any business. For some, getting the right location can make difference between success and failure. There are lots of different factors considered in choosing the right location for a business such as labor, land/building, transport and communication links, natural resources, customers, language, image and competitors. I. Labor Gardenia hired employees both from inside and outside the vicinity. They hire employees who are living nearby the company to ensure that they will always be on time when it comes to working. How about those who live outside the vicinity? Gardenia provides a free shuttle service for those employees who are living far from the site. This is a way to keep the willingness of these employees to work for Gardenia. Another thing, Gardenia is located inside the Laguna International Industrial Park (LIIP), a center for industrial needs. This thing gives convenience to Gardenia in acquiring additional needed machines like conveyors and its maintenance. Also, it is accessible in Metro-Manila. It is only 12 kilometers from the Metro-Manila boundary, 25 kilometers from Makati and 30 kilometers from the Manila International Airport. II. Land/Building

Gardenia is said to be the Philippines finest and biggest bread factory, thus, they need wide space for its operation. Good thing is that, they are located in a space where they can operate conveniently. They are also far from residential area because as a factory, one requisite is that they will produce fumes and other chemicals which can harm people of the community. III. Transport and Communication Good channels to travel and deliver goods are available for Gardenia. They are near National Roads and of course, the South Luzon Expressways.

In terms of communication links, Gardenia can fully access the internet and make use of their telephone to aid different matters concerning their production and operation. The location can be able to transport materials and products in and out of the site.

IV.

Customers Aside from the target markets, Gardenia also provide breads for the people near the company through its Baker Station offering their products at its factory price. They treat walk-in customers as important as those who buys their product in stores nationwide.

V.

Competitors As the leading bread factory in the country, Gardenia locate their factory inside the LIIP where it is the only business there in its type. This serves as an edge for the company because they can keep confidential matters that adds to the success of the comnpany.

C. CAPACITY UTILIZATION Capacity Utilization is calculated as follows: Capacity Utilization (%) = Actual output per month (or per annum) x 100% Maximum possible output per month (or per annum) Capacity Utilization = 19,500,000x100% 30,000,000 = .65 or 65% Gardenias maximum output per month is 30,000,000, including white bread, wheat bread and all other flavor breads that they are producing but, they are actually producing a total of 19,500,000 per month, and its capacity utilization is only 65%.

Implications of Gardenias Capacity Utilization: 1. Fixed cost per unit become higher compared to having 100% capital utilization. 2. Wasted and overcooked bread, cause their financial implications. Benefit of not 100% Capacity Utilization: 1. Machines will be lesser prone to damages and maintenance, thus, lowering the cost of the production.

D. CAPITAL INTENSIVE (method of production) Since GARDENIA is in the industry of bread-making, to continue their high quality standard in their process of Capital-Intensive, they require a relatively high level of capital investment compared to the labor cost. Take note that for them to maintain their high quality standard of bread-making, they use machines that came from other countries. These processes are more likely to be highly automated and to be used to produce on a large scale. All of their machines are functioning 24-hours a day except Saturday morning for the cleaning of their machines; this is what they call wet cleaning. As to their equipments and machines maintenance, if it happens that a machine failure occurs, they will make sure that it will be fix as soon as possible by engineering.

E. LEAN PRODUCTION

Ingredients preparation

Sponge mixer

Fermentation

Rounding

Dividing

Dough Mixer

Intermediate Proofing

Moulding

Final Proofing

Spiral Cooler

Baking

Delidding

Bread Slicer

Automatic Bagger

G. Lock Sealing

Metal Detector
PRODUCTION PROCESS

PRODUCTION PROCESS In the initial process of bread production is the preparation of the base dough also known as sponge. The first half of the ingredients to make bread is put on a sponge mixer which will produce a quality sponge. Fermentation is an important process in bread production for it enhances the aroma flavor and texture of the bread production after the sponge has been prepared. It transferred to the fermentation room using the hydrolic pusher. It stayed there on several hours to allow the format of the sponge. From the fermentation room the sponge is transferred to the dough mixer using the dough throw elm. Then the fermented sponge is pour to the dough mixer together with the remaining half of flour and other ingredients. The sponge should remix to form the dough. After mixing content the prepared dough is put into an incline conveyor. Make up line consist the 4 major operations namely: dividing, rounding, intermediate proofing and moulding. After the mixing dough section, the dough is transferred where it cut to the required size and weight. Moulding it is the rounding of scaled pieces dough into a rolled and smooth surface. Rounding process will retained its gas during the intermediate proofing period. After the rounding process, the dough run on a check weigher wherein it record the weight deviation to ensure the correct weight of every loaves. Next, dough pieces are now transferred into intermediate proofer to allow the dough to rise so it will go to the moulding machine without tearing. In the intermediate proofing the dough convey into rows to two separate moulder in precise time. After this process moulding takes place to remove the gas on the dough. Here the dough pieces are flattened rolled into cylindrical shape and cut it into final form prior to the automatic element to the baking pan. The baking pans are automatically sprayed by highly special baking oil process before placing a loaded bread to prevent the bread from sticking to the pan during baking process. Baking pan containing moulded dough is conveyed to the giant overhead proof box for the final proofing. After this lidding is takes place wherein it automatically covers with the lid and transfer to the final oven. Before entering to the oven the pan aligns in rows is mechanically push into the final oven. They use special Programmable LPG in baking to ensure that no air pollutants escape to the environment. By using programmable LPG the heat will produce

consistent baking result. After this delidding takes place the lid are mechanically remove then depanning occurs wherein the air burst on the edge of bread pan. The twin spiral cooling tower lowers the temperature of newly baked loaves. Here thousands of loaves are cooled on moving conveyor at any given time. Before packaging the bread mechanically slice by bread slicer and bag by the automatic bagger then travels through the metal detector system to ensure that there is no metal contaminant. The high-speed automated bagging system closes the bread bags and seals in the brands freshness with the GLock. The G lock is a small yet strong clip that can be reused to close the pack and keep the breads freshness and quality. Lean production is an approach to management that focuses on cutting out waste, while ensuring quality. This aims to cut cost by making the business more efficient and responsive to market needs. This approach sets out to cut all activities that do not add value to the production process, such as holding of stock, repairing faulty product and unnecessary movement of people and product around the plant, JUST IN TIME Gardenia Philippines can produce minimum of 650,000buns and loaves daily and it ranges in to millions during fixed seasons. By Ensuring that only fresh breads reach consumers every day, Gardenia strictly follows its international policy of keeping only fresh stocks on the store shelves. As soon as products come out of the factory, delivery vans and trucks leave the production plant as early as 4 oclock in the morning to bring the products immediately to specific locations in the country. Replacing unsold breads in store shelves with only freshly baked top-quality products during each day of delivery is a Gardenia practice unmatched in the industry. CONTINUOUS IMPROVEMENT Gardenia Philippines continue improving the four ingredients of success a world plant, a manufacturing plant offering a highly develop concept. Baked quality products made by exclusive formula on pure ingredients and dynamic innovation made by people with a passion

for excellence, and consumer orientation. The four Ps plant, process, product and people are the Gardenias Pillar of success and proven on the past decades. Gardenia has the world advance and well creative facilities within the Philippines today. The combination of continue product quality upon bread baking technology and incentive system of distribution to the customer the highest level of 100 vision of gardenia Philippines that create consumers highest level of satisfaction in the bakery industry today by delivering and compromising the product quality and service. The gardenia consistently deprives the market forward, setting standard to the industry to follow.

F. PRODUCT/PROCESS INNOVATION Talking about Process Innovation, Gardenia has done a great improvement. From the old way of baking breads, nowadays Gardenia is the countrys largest bread manufacturing plant. They first had a 2k plant in Laguna on its first launch which produces 2,000 pieces of bread and buns a day. Then they put up a 4k plant in mid 2004-2005 that produces 4,000 pieces of bread and buns per day. Until they come up with their new 6k plant in 2009 which produces 6,000 pieces of bread and buns a day. After having a plant in Luzon, Gardenia launched their new 2k plant in Cebu at 2011 to supply the needs o f their customer in Visayas and its nearby cities. When it comes to Product Innovation, Gardenia had gone so far. By simply having a classic white bread as its first product, they come up having different variety of loaves and breads. They now have a lot of flavors like Black forest, Chocolate Chip Loaf and California Raisin Loaf. Aside from this, they are also making a healthy-licious bread like High Fiber Whole Wheat Bread, Sugar Free 12-Grain Loaf and Slim n Fit Wheaten Bread that has L-Carnitine that helps burn fat for weight management. They are also producing Bunch of Buns like Regular Pandesal, Hamburger and Hotdog Buns. Snacks and Toasts for kids like Muffins, Cream Roll and Butter Toast. In addition to this, Gardenia is the first to introduce the 2-in-1 concept the Gardenia Double Delights. This is an innovative bread product that combines two delightful flavors baked in one amazing loaf. Examples of Double Delights loaves include Choco and Mocha Loaf, and Ube and Cheese Loaf.

G. RESEARCH AND DEVELOPMENT

Research and development Department of Gardenia Philippines focus more firmly to the consumers health and wellness from the start of their operations. This is why the company always produces healthy bread that is incomparable to other Philippine bread industries. Gardenia Malaysia invests heavily in R&D. Their latest product, Gardenia Breakthru, demonstrate their commitment to give only the best to their customers. Gardenia Breakthru passed extensive clinical tests at the Glycemic Research Institute in Washington D.C. and are certified Diabetic-Friendly. This latest result reaffirms Gardenia Breakthrus extraordinary qualities. This new product is to be introduced in the Philippines for the near future. Because of its nutritional value and diabetic-friendly benefits, consumers can obtain good nutrition and stressfree food management while satisfying the taste of goodness with this product.

H. PATENTS AND REGISTERED DESIGN

Uncle SlocummsTag This so called Uncle Slocumms Tagserves as a trademark or registered design for Gardenia Products particularly for the White Bread. It symbolizes quality that Gardenia has in its products because of the fact that their breads are made using the process used by Horatio 'Sye' Slocumm who has 35 years in baking industry.

Colorful, Eye-catchy and Upward Positioned Bagging Gardenia is known to be one of those bread factory which uses very colorful and eye-catchy lay-out of bagging their breads. According to them, it is done so to capture the interestof their target customers. In addition to this, Gardenia is also the first tohave an upward position in packaging their breads. They do it that way so Gardenia products will be displayed in outlets and stores upwardly, capturing the interestof the consumers.

G-Lock System Gardenia is the first in the country to use the unique resealable and reusable plastic clip called G-lock that seals in the breads freshness. The G-lock is easy to locate, easy to read, easy to open and close and consumer-friendly. The G-lock contains all of the vital information that the consumers might need such as the "best before" date and the suggested retail price. It even contains information on which production line the bread was produced, and the batch number. The G-lock system is an unmatched approach by Gardenia in ensuring the freshness and quality of Gardenia breads. With unwavering dedication towards the attainment of total customer

satisfaction, the G-lock system is Gardenias way of keeping customers informed through a unique quality system that is accessible and understandable to all. Now, buyers have a reliable way of knowing which bread is the freshest giving them the freedom to choose whether theyre going to buy the bread or not. That is consumer empowerment rolled into the small, unique plastic chip.

COLOR-CODED G-LOCK The G-lock color-coding is part of Gardenias quality control system. To prevent confusion, 1 color per day is assigned, thus there are 7 G-lock colors assigned for the 7 days of the week. The day always matches the color. The following are the G-lock colors with the corresponding days:

This means, for example, that on a Thursday, a consumer will see on display shelf either a blue G-lock which means it was delivered on Thursday, or a yellow G-lock which means it was delivered the day before or Wednesday.

HOW TO USE THE G-LOCK

To open pack, simply twist the top of the plastic bag and lift the G-lock up and off the bag neck.

To reseal the pack, spin bag to twist bag neck and apply G-lock over bag neck with a downward, inward motion. The G-lock is a reusable closure to help keep your loaf fresh inside the bag.

The color of the Glock indicates the day the bread was "baked for" with the "best before" date also printed.

Problems and Issues in Production and Operations

Delayed Delivery of Product In delivering of products, Gardenia always ensure that they deliver their goods on time and convenient to the customers but when there is a fortuitous event like typhoon there is a possibility that their delivery/shipment process would be in delayed. Rejected Dough Dough are being process from the mixing machine down to fermentation, and make up line which includes dividing and rounding the dough in to a circular shape, in this process there are sometimes over weight dough which is being rejected by the weighing machine. Rejected Bread In the process of slicing of bread there are instances that there is an improper cutting of bread caused by the machine. There are also instances that the bread is overcooked because of longer stay in the oven, in that case excess breads are being wasted and not be edible anymore. Malfunction Machines As what always happen to all machines, it undergoes minimal malfunctions throughout the year, even this problem happens so rare still it may cause a few delays on their transaction. Returned Breads Making sure that only fresh baked breads was delivered or served to consumer, Gardenia makes sure that their breads wasn't last more than two days to every store, and as a result unsold breads was being returned to the factor.

Suggested Way Forward

Buy 1 Take 1 Bread When breads to be delivered are delayed (due to fortuitous events such as typhoon and flood), it can no longer be delivered the next day because Gardenia is up to customers satisfaction through providing them freshness in their products. One remedy for this phenomenon is to implement the Buy 1 Take 1 selling of breads. Through this, they can minimize their loss and holding cost for warehousing the delayed products.

Regular Maintenance of Check Weigher and other Machines Gardenia is having their maintenance every Saturday morning to check the status of their machineries whether it needs repair. We suggest that they have their regular maintenance of their machines particularly the check weigher so as to avoid over-weight or double dough in the process of making breads. This can help them to decrease their cost of rejected unfinished products.

Rejected or Returned Breads In cases when there are returned or rejected breads, they can still sell it at a lower price because it can be used as feeds for fish.