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

 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
– 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 Roaster Winnower Mixer Conches (2) Temp

Available Capacity 450 200

Input: batch size (Kgs) 100 250 250 115 1400 140

Output 96 250 185 115 1400 140

Quantity of Machine 1 1 1 1 2 1
8 hour Shifts 1 1 1 2 3 2

Cycle Time (mins) 15 75 15 75 1800 60

Output in Kgs Per Minute 6.40 3.33 12.33 1.53 0.78 2.33

Output in Kgs Per hour 384.00 200.00 740.00 92.00 46.67 140.0

Output in Kgs Per Day 3072.00 1600.00 5920.00 1472.00 1120.00 2240

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
Cleaner Roaster Winnower Mixer & Ball Mill Tempe
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140
Output 96 250 185 115 1400 140
Quantity of Machine 1 1 1 1 2 1
8 hour Shifts 1 1 1 2 3 2
Cycle Time (mins) 15 75 15 75 450 60
Output in Kgs Per Minute 6.40 3.33 12.33 1.53 3.11 2.33
Output in Kgs Per hour 384.00 200.00 740.00 92.00 186.67 140.00
Output in Kgs Per Day 3072.00 1600.00 5920.00 1472.00 4480.00 2240.0

Capacity Per Month with Ball Mill (Kgs) 44160

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
Cleaner Roaster Winnower Mixer & Ball Mill Tem
Available Capacity 450 200
Input: batch size (Kgs) 100 250 250 115 1400 140
Output 96 250 185 115 1400 140
Quantity of Machine 1 1 1 1 2 1
8 hour Shifts 1 2 1 3 3 2
Cycle Time (mins) 15 75 15 75 450 60
Output in Kgs Per Minute 6.40 3.33 12.33 1.53 3.11 2.33
Output in Kgs Per hour 384.00 200.00 740.00 92.00 186.67 140.0
Output in Kgs Per Day 3072.00 3200.00 5920.00 2208.00 4480.00 2240

Capacity Per Month with Ball Mill (Kgs) 66240

Increase in production from As Is (%) 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
Cleaner Roaster Winnower Mixer & Ball Mill Tem

Available Capacity 450 200

Input: batch size (Kgs) 100 250 250 115 1400 140

Output 96 250 185 115 1400 140

Quantity of Machine 1 1 1 2 2 1

8 hour Shifts 1 2 1 3 3 2
Cycle Time (mins) 15 75 15 37.5 450 60

Output in Kgs Per Minute 6.40 3.33 12.33 3.07 3.11 2.33

Output in Kgs Per hour 384.00 200.00 740.00 184.00 186.67 140.0

Output in Kgs Per Day 3072.00 3200.00 5920.00 4416.00 4480.00 2240

Capcacity Per Month with Ball Mill (Kgs) 67200

Increase in production from As Is (%) 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
Cleaner Roaster Winnower Mixer & Ball Mill Te

Available Capacity 450 200

Input: batch size (Kgs) 100 250 250 115 1400 140

Output 96 250 185 115 1400 140

Quantity of Machine 1 1 1 2 2 1

8 hour Shifts 2 3 1 3 3 3

Cycle Time (mins) 15 75 15 37.5 450 60

Output in Kgs Per Minute 6.40 3.33 12.33 3.07 3.11 2.3

Output in Kgs Per hour 384.00 200.00 740.00 184.00 186.67 140

Output in Kgs Per Day 6144.00 4800.00 5920.00 4416.00 4480.00 336

Capcacity Per Month with Ball Mill (Kgs) 100800

Increase in production from As Is (%) 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 - Ashutosh Rastogi

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