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

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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
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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

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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 96 1 1 15 6.40 384.00 3072.00

Roaster Winnower Mixer 450 250 250 1 2 75 3.33 200.00 3200.00 250 185 1 1 15 12.33 740.00 5920.00 115 115 1 3 75 1.53 92.00 2208.00

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

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

66240 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. 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 96 1 1 15 6.40 384.00 3072.00

Roaster Winnower Mixer 450 250 250 1 2 75 3.33 200.00 3200.00 250 185 1 1 15 12.33 740.00 5920.00 115 115 2 3 37.5 3.07 184.00 4416.00

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

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Scharffen Berger Chocolate Maker

Capcacity Per Month with Ball Mill (Kgs) Increase in production from As Is (%)

67200 68

Analysis: Ball Mill, 2 Mixers & Shift Adjustments

Further capacity can be increased by increasing shifts of Temperer, then increasing shift of cleaner and then increasing shift of Roaster 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 96 1 2 15 6.40 384.00 6144.00

Roaster

Winnower Mixer 450

Temper 200

Mold

250 250 1 3 75 3.33 200.00 4800.00

250 185 1 1 15 12.33 740.00 5920.00

115 115 2 3 37.5 3.07 184.00 4416.00

1400 1400 2 3 450 3.11 186.67 4480.00

140 140 1 3 60 2.33 140.00 3360.00

140 140 1 2 20 7.00 420.00 6720.00

Capcacity Per Month with Ball Mill (Kgs) Increase in production from As Is (%)

100800 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.

Posted 9th July 2012 by - Neo

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