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Scharffen Berger Chocolate Maker A Case Solution

Solution Id Length Case Author Case Publisher
2468 1499 Words (6 Pages) Daniel C. Snow, Steven C. Wheelwright, Alison Berkley Wagonfeld Harvard Business School : 606043
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Chocolatiers Dr. Robert Steinberg and John Scharffenberger founded Scharffen Berger in 1996, as a premium quality chocolate brand. It employed 60 staff members and operated from a 27,000 square feet facility with 20,000 square feet dedicated to the production, leaving 2000 square feet retail and 5000 square feet of office space. With major competitors such as Hershey's food Corp., Mars Inc. and Nestle; They are one of the top brands for premium chocolate in America, in an industry with a 15-20% per annum growth rate. This case focuses on the expansion plans which will enable Scharffen Berger to cater to the rising demand of consumers. Here we look at how Scharffen Berger could enhance their production capacity to fulfill the forecasted demand, as well as go above the forecasted demand by stretching its capabilities. With the right mix of new equipment and increased working of existing Scharffen Berger will be able to achieve its goals.

Following questions are answered in this case study solution

  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?

  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%?

  3. Given your answer to question 2, what expansion step(s) would give you the greatest concern? Why? How would you address such concerns?

Case Analysis for Scharffen Berger Chocolate Maker A Case Solution

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 the Ball Mill is added the time required on Conche will reduce from 1800 min to 450 min and the output will increase from 1120 kg a day to 4480 kg a day. This will create a challenge for the melange, whose output is that of 1472 kg a day which works fine for the 1120 kg a day requirement of Conche but will create a lag if the Conche needs roughly four times more input. If Scharffen Berger can somehow manage this situation, then the output is likely to increase to 44160 kg a month. This means we are looking at a 10.4% increment in the output. The next challenge will be molding and packaging all this chocolate. Moreover, Ball Mill will be more feasible for recipes with higher sugar content. This means adding a Ball mill will not be a one-stop solution, it will require a considerable amount of shift in the production process and might even require a third party involvement in the process. This might cost Scharffen Berger either in terms of capital investment on a few more equipment or increase in personnel costs or both.

My implementation plan would be to Add Ball Mill and then manage shifts accordingly to cover for the bottlenecks on the production line. The reduced cycle time will call for relevant rebalancing and calibration of the production line to facilitate it. This can be done by adding a shift to the Roaster and running the Melangeur for 24 hours. This situation will make the roaster process 3200 kg a day and Melangeur 2208 kg a day. This will increase the monthly capacity to 66240 kg. This despite the bottleneck at Melangeur enhances the production to 65.6%. Since the Expected growth in the market is 30%, this production is enough to cater to the existing market, the future demand from existing markets, and the new bulk wholesaler as well. 

Once these changes to the Ball Mill, Roaster, and Melangeur are incorporated, provisions will be needed to be made to ensure their efficiency of these. This increased working time of the machinery will make it susceptible to wear and tear and hence the firm would need to increase its budget for the maintenance and repair. This situation, however, eradicates the need for a second Melangeur which in turn saves a considerable amount of capital expenditure.

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