Scharffen Chocolate Maker: A Case Study

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Introduction

Scharffen Berger Chocolate is a brand of chocolate that is manufactured by Artisan Confection Industry. It is in the year 2005 that the company changed its management team and, currently, it is operating under the name of Hershey. Scharffen Berger Chocolate is a pioneer in this industry and has maintained its reputation for ages. The product was founded by Steinberg and Scharffenberger, hence, the name Scharffen Berger chocolate. They manufactured and launched this product in the market using cacao beans imported from different parts of the world. They were engaged in the production of chocolate from beans to bar. Among the many companies engaged in the production of chocolate, Scharffen is the only one that was able to manufacture chocolate by turning beans into bars. In other words, the company (unlike others in the industry) uses raw materials to manufacture chocolates rather than purchasing from other chocolate manufacturing companies.

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As already mentioned earlier in this paper, the company was originally founded by John Scharffen and Robert Steinberg. In the year 1989, Robert who was a doctor was later diagnosed with cancer. He got discouraged with his profession and later resigned to explore other areas among them reading chocolate books. He applied for an internship in Bernachon Chocolate Company and worked there for two weeks. After the short tour, he went back and met with John Scharffenberger. He shared with him the idea he had. He gave him a piece of chocolate that he carried in his pocket. John admitted the chocolate was wonderful and the two decided to start a small enterprise involved in making chocolate.

Question 1: Explore the Interaction between Product Quality and Process Quality

Production Overview

The interaction between product quality and process quality is a complex one whereby the quality of output is highly dependent on the process quality. Process quality together with other factors, such as manpower, affects the processing time and the final end product. The case study shows clearly the link between quality of process and quality of products. All the steps in the processing stage are equally important, and slight changes in the time allocated to each or even some other settings will have significant effects on the end product. For example, a poorly maintained and leaking bean cleaner can lead to chocolates with poor flavour due to dirt leakages.

The quality of the process of making chocolates is very important to the product quality. To this end, all steps are carefully controlled by Scharffen Berger and his machine operators.

Production of chocolate in Scharffen Berger’s company goes through seven primary stages. These are bean cleaning, roasting, winnowing, melangeur, conche, temper- molding and packaging. Each step plays a significant role or function in the overall production process. Different processes take place during these different stages. The stages and the processes that take place in each of them are listed below:

The Seven Stages of Production

Bean Cleaning

The first stage involves bean cleaning. It is noted that Scharffen Berger has always used beans of the highest quality. The company blends up to nine kinds of beans at this stage. This is as opposed to other companies that tend to use at most two types of beans.

Roasting Stage

The second one is roasting stage. It is noted that Scharffen Berger roasts the different kinds of beans separately in order to optimize the flavor as well as to introduce the caramel flavour to the cocoa beans. Poor control of the roasting temperatures could lead to burning of the cocoa beans leading to poor quality products or even worse complete lose of the product.

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Melangeur Stage

From roasting, the product goes to the melangeur stage. This is necessary for a smooth paste of cocoa. This stage highly defines the texture of the finished product, a major quality parameter in chocolate production.

Conching Stage

Conching is another step involved in the making of Scharffen Berger chocolate. It involves refining the chocolate mass further while, at the same time, incorporating air into the mixture for a better taste. This greatly influences the quality of the end product.

Tempering Stage

Tempering is the stage that involves the hardening of the chocolate mass while ensuring that the gloss is well maintained. For the chocolate to attain the desired level of viscosity, the tempering stage has to be fully controlled.

Packaging Stage

The final step in the chocolate manufacturing process is the packaging stage. This involves holding the final product for display purposes. Quality packaging serves to attract more customers and increase sales volumes. In Scharffen Berger chocolate factory, quality of packaging is ensured by outsourcing 65% of the packaging process. The remaining 35% is done from the company’s premises.

In the meantime, the management inspects the products regularly and selects the co-packers with highest potential. This is extremely important to process quality management as a result of the re- melting and re-tempering carried out in the co-packers’ premises. If a product satisfies the customer’s expectations and needs, they will consider it as a high quality product. In order to satisfy the customer, all the business processes need to be executed in such a way that there is high consistency and predictability in the product’s quality.

Due to the fierce competition, the product quality is usually taken as a priority in majority of the firms. It is apparent that there is significant positive interaction between process and product quality. Therefore, process quality management is important in order to maximize the product’s quality and reduce wastage. This case vividly depicts this interaction. For instance, the cocoa beans are selected using criteria that are different from those used by mass- market chocolate companies. The beans are divided into nine categories to manufacture different flavors of chocolate. The selection process is monitored by Scharffen Berger and Steinberg to ensure that only the highest quality cocoa beans are selected. Otherwise, the product’s quality cannot be assured.

Scharffen Berger is known as ‘America’s Finest Dark Chocolate’, and it is at the high end of the premium chocolate market segment. The competitive chocolate market is such that if the company does not live up to this phrase, then its customers will slowly shift to Scharffen Berger’s competitors, resulting in loss of sales and profit. In order to achieve such a reputation, Scharffen Berger pays close attention to the standardisation processes, ensuring that the quality expectations are met at each stage of the chocolate making process.

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A high quality product is significant in a competitive market. To achieve this, Scharffen Berger needs to develop a high quality process. The quality of the chocolate making process will determine the standard of the product. Scharffen Berger is one of the few chocolate makers in the world that manufacture its products “from beans to bar”. For them, quality of ingredients is of the utmost importance. Their cocoa beans are grown at the finest locations in the world. They select high quality beans from several countries and work closely with farmers to maintain the quality through production. In addition, beans for different varieties of chocolate are carefully selected by the founders. This is one of the quality control steps in the ingredient selection process. To complement this, the chocolate making process is of high quality, taking advantage of Scharffen Berger founders’ experience in the traditional French artisan production methods.

Scharffen Berger adopts quality assurance procedures through all the stages of chocolate manufacturing. For example, during the roasting process, factors, such as temperature and time, are carefully monitored. The roasting operator samples beans from each batch to determine whether the roasting is complete. The company adheres to this quality assurance process during all the stages since the managers believe that the artisan production method (including the practise of tasting) is the best method of determining quality at each stage of chocolate production.

The relationship or interaction between product and process quality at Scharffen Berger Chocolate is a closely knit one. SB’s core values, as noted in the website’s mission statement, are “crafting the world’s most authentic, high-quality and flavourful chocolates”. To accomplish this ambitious mission, the company has to adopt total control over the production processes making it one of the few “bean -to- bar” chocolate makers in the market.

As one goes through the case study, it becomes obvious that the quality of the product is not only related to but also fully determined by each and every step of the chocolate making process. From selecting the best cocoa beans from all over the world to opting for the third party co-packers “based on their ability to temper and wrap at consistently high- quality levels”, these practices are in essence, and that is what has made SB’s products so successful and profitable in the market.

SB’s product quality is so crucial that the company has discarded any alternative process that would lead to alterations in the integrity of the chocolate’s flavour, such as replacing ingredients that would require less processing, roasting different kinds of beans in the same batch, experimenting with powdered sugar or leaving traces of dissimilar products in a conche or mill during the refining process. SB will reject any variation in the production process which can affect the product’s quality. As a result of the strong connection between process and product quality, SB has been able to produce some of the highest quality chocolates in America since 1997 while experiencing remarkable growth in sales volume. The sales volume rose from 0.6 to 10.0 million US dollars in 6 years. SB has successfully transformed the crafty traditional methods that guarantee only the finest chocolate as a final product and an ever increasing demand in the industry.

In spite of SB’s accomplishments recorded over the years, there have been several looming problems for some time. One such significant problem is meeting the high demand for chocolates. SB had to compromise quantity for excellence in a time when demand for high quality premium chocolate has been and will continue to be on the rise for years to come as opposed to the broader yet stagnant ‘mass’ market. SB constantly looks for production alternatives that can let it increase its capacity to meet the demand in the market, while maintaining its quality at the same time. This is especially since Jim Harris was appointed as COO in late 2003. Mr. Harris’ constant fights to keep up with demand has resulted in the acquisition of a ball- mill that will improve conche refining and reduce the time taken in this part of the production process from between 40 and 60hrs to about 15hrs. This goes with an attempt to preserve the quality of the brand, “even slightly enhancing the texture and flavour”. Additionally, Harris has continued to look for additional complementary services from packaging companies even trying to increase the share of moulded products packaged outside SB’s factory. Currently, 65% of the moulded products are packaged by an external player. In spite of this, Harris will need to make sure that any contracted company understands “the volumes that would be coming their way” as well as the level of quality that will need to be matched if they want to do business with SB.

The desired quality of the final product also influences and affects the quality of the process through which the chocolate is taken. The production for mass market which does not focus on product quality to the same degree as the production for premium market gives rise to chocolates through poor quality processes. Such companies use pre- mixed chocolate blends which they then customise into their own product with their own branded mould. With such manufacturing processes, the mass manufacturers have less control over the quality of the beans and the add-ins that are used. As a result, they are less able to customise the taste of the end- product. So, the quality (to which the final product is benchmarked) has great influence on the quality of the process through which it is made.

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As stated in the case study, the “premium market” should provide a taste experience. The process adopted by Scharffen Berger maintains and controls taste at every step. In the case of mass market production (where the producer use pre- mixed liquor), the management is unable to maintain and control taste at each and every step. Scharffen Berger conducts “blind taste testing” at least twice a month to calibrate the perceptions and standards of acceptable quality. These forms of imperceptible subtleties during the production process are the basis for the creation of high quality premium chocolate.

Due to the rapid growth in the company’s sales volumes, Scharffen Berger is facing the challenge of increasing the output to satisfy the growing demand. They are conducting various experiments to reduce the time taken in the manufacturing process. Changes made were meant to maintain or exceed current quality benchmarks, ensuring that Scharffen Berger’s reputation of “America’s finest dark chocolate” remains. Experiments and testing of the new ball- mill before it was purchased showed that it was able to speed up the production process while enhancing the product’s texture and flavour. At Scharffen Berge, it is understood that to produce a high quality chocolate, the production process needs to be of the highest quality possible. It is also evident that developing a high quality manufacturing process is highly dependent on the desired quality of the product. The two are mutually inclusive.

Question 2: Identify the Capacity Bottlenecks Throughout the Production Process

Overview

Three major issues face Scharffen Berger Chocolate Makers. The three are related to the level of output in the company. They are the need for expansion, bottlenecks and the economies of scale. A bottleneck is an occurrence through which the output of a given processing system is restricted in one of the steps in the processing line or even by the raw materials. In the Scharffen Berger Chocolate Makers, the conche stage is the one with such restrictions.

The Bottlenecks

One way of overcoming this bottleneck is to introduce more roasting machines. Scharffen Berger roasts different kinds of beans (Ghanaian, Jamaican, and so on) separately in order to optimise the flavour. This is especially so given that roasting time and roasting temperatures vary by bean. If more roasters are introduced, different kinds of beans can be roasted at ago using these machines which will reduce the backlog significantly.

The winnower is capable of processing approximately 450kgs of whole beans an hour. However, each batch is approximately 250kgs. The low input of the winnower is a result of the roasting process. The roaster is capable of producing 250 kgs in 1.5 hours which are then fed into the winnower. Hence, if the roasting process can be expedited by introducing more roasters, the winnower can be used continuously without it having to stand idle waiting for beans from the roaster. The waiting time at the winnower could potentially be used as an advantage to tackle the bottleneck between the cleaner and the roaster to push more beans through the process.

From the winnower, 185kgs of beans are sent to the melangeur at any time. The melangeur grinds nibs in 115kg batches every 1.25 hours. A minor bottleneck could develop 70kgs of beans in waiting as the winnower sends more beans at a slightly faster rate than the rate of the melangeur. If more roasters are not introduced, this minor bottleneck can turn into a major challenge for the company. Hence, it is necessary to add another melangeur to the manufacturing process.

The melangeur is also a significant bottleneck with a weekly production capacity only slightly above that of the conche process. After the ball mill is commissioned, SB will need to introduce one more shift to the melangeur stage and another half-shift to the roaster stage in order to meet their 150% target of 62% cocoa production.The cost of introducing the three melangeurs will surpass the benefits, and therefore, outsourcing these services should be considered.

The chocolate paste is transferred from the melangeur to the holding tanks till there is enough space for a 1400kgs conche recipe. Therefore, the conche stands idle for about 15 hours till the melangeur goes through 12 cycles to produce 1400kg of paste. Once operational, the conche will process a batch in about 40- 60hours. This is, therefore, another potential bottleneck in the process as while the conche is processing one batch, a potential 3- 4 batches are in waiting at the melangeur. As the process continues, this lack of capacity could potentially hold it up. However, with the introduction of the ball mill, Scharffen Berger was able to reduce the conche time from 40- 60 hours to 15 hours. This significant reduction in time during the conche process was one of the major steps towards increasing the production capacity. As a result of the use of the ball- mill, there are minimal batches or none waiting to be conched in the holding tanks. This potentially eliminates the bottlenecks between the melangeur and the conche ball- mill.

The production capacity of the conche, which function is to blend, purify and aerate the chocolate mass, is 1,400kgs per day. This is a limitation towards meeting the high demand for the product. This can be solved by using a high capacity ball mill which is said to be able to greatly reduce the production time while improving the texture of the final product at the same time. The ball mill reduces the time used in the conching process alone from about 40- 60 hours to about 15 hours. This means that the production may efficiently triple, and the increasing demand from the clients may be successfully met. The relatively few hours used in the production process will enhance the flavour of the chocolate as sugar degradation is minimised. This piece of equipment will be vital in relieving pressure caused by the main bottleneck in the current manufacturing process. With the addition of the ball mill equipment, SB will be able to bring the conche processing time in line with the other processes (as evidenced by exhibit A & B below). This will give the company more control over the manufacturing process.

Tempering and moulding stages should also be considered to see whether they can sustain the efficiency of the production process. These considerations may call for the expansion of the company’s premises making it incur more costs. The costs can then be transferred to the rest of the distribution channel, and the greater impact will, therefore, be felt by the consumers.

Another hurdle to be overcome is the outsourcing of the packaging materials. 65 % of the chocolate is packed by external operators. This poses a problem in the quality management process for the product. Quality control is made easier when products’ processing lines are continuous. The packers would also re- temper and re- melt the chocolate hence the need for quality control. This also adds to the processing time and costs as some of the processes have to be done twice. This could be solved by transporting the liquid chocolate to avoid reprocessing the chocolate mass. However, this too is difficult due to the problems posed by the transportation of the liquid chocolate to the packers.

Purchasing New Equipments

The conche stage is a big challenge in Scharffen Berger Chocolate Maker at this moment. Based on the current production capacity and hours of operation, the monthly output ranges from 26 to 29 conches and this has already greatly improved. This is considering that there were only close to 18 conches before Harris arrived. However, it still cannot meet the rapid growth of demand in the chocolate market. This is unless the management introduces more shifts in one day and more working days in a week. The company needs additional equipment with such a ball mill in order to reduce the time of grinding down particles and expand the production capacity. The two conches are used to refine, mix and aerate the chocolate but it takes longer to achieve this. For example, it takes between 40 hours and 50 hours for unsweetened chocolate and semi- sweet chocolate respectively. The ball mill would be able to perform the most rigorous refining tasks with the objective of grinding the particles from 100 microns to the targeted 25 micros in 3 hours instead of the current 40- 60 hours by using the conches. Additionally, the ball mill will complete the aeration and grinding processes in 15 hours instead of the current 40 to 60 hours in the conche. This is about 3 times faster than the previous production process. This can improve the efficiency of the production process and increase the production capacity by at least 75%.

However, the melangeur stage could be another potential bottleneck after the new equipment (ball mill) is commissioned. As already mentioned, the melangeur is used to grind the nibs. On average, the melangeur grind nibs in 115-kg batches. Each batch will stay in the machine for about 1.25 hours until there is enough grind nibs (1400 kg) for a full conche recipe. With the installation of the ball mill machine, the required time at conche stage will decrease significantly. Additionally, less time will also be required at the melangeur stage. One way to address this bottleneck is to add another melangeur which could grind more nibs at a go. But the cost of this is high at $50,000.

During the quality control process, some in- house molding is called for. However, the company will not spend the money to purchase larger capacity and faster molding machines because it is prohibitively expensive. This could lead to problems in the production capacity based on the molding machines used currently. One possible method is to outsource Scharffen Berger’s chocolate to several third- party co- packers with excess capacity. But with this outsourced packing, the quality of re-temp and re-melt processes in the co- packing companies need to be controlled. This is given the fact that once the management sets the wrong temperature, the resulting low quality chocolate will be taken to the market.

Effects of New Equipments

Through increased shifts and the commissioning of the ball mill, S&B can hit the target in the short- run. However, the company will continue to face significant production issues if demand increases at an exponential rate. The biggest concern for S&B is that their current facility can only be stretched so far. The ball mill will fix one bottleneck but the melangeur, tempering, moulding and roaster phases are all currently running at between 90- 99% of their full capacity. More shifts need to be added, but it is noted that room for expansion is limited. If the management at S&B is thinking seriously about long- term growth, they will need to complete a comprehensive net present value analysis to determine what will be the most cost effective strategy to significantly expand production. The firm will have to select one strategy from several alternatives. The company can opt for a costly complete overhaul of equipment, purchase another production facility or start outsourcing several stages of the production.

By choosing one of the first two options, the high degree of capital investment needed will likely pose financial challenges considering S&B is a privately held company. Important decisions regarding the capital structure and the long- term goals need to be reviewed so that production can be streamlined to meet future forecasts. Additionally from a marketing perspective, the management needs to decide what they are trying to achieve. Is the company a niche product with a large price premium? Or does it have a vision to compete on a grander scale which would require thinner margins and a world- class production process? All of these decisions have a major impact on how the company should proceed with the capital investments to ensure it is primed to meet the long- term goals.

The chocolate making process at Scharffen Berger (SB) is an elaborate and meticulous affair. With the highly articulated practices, each stage in the production line is equally important and associated to the quality of the final product. In the short time, this company has being in existence, SB has continuously launched new solutions to deal with the soaring demand for premium chocolate in the United States. The persistent craving for domestic high quality “ bean to bar” chocolate has forced this company to expand or open new facilities, hire experienced personnel, adopt new working practices and purchase new equipments in a span of seven years.

One can refer to some of the most significant developments to describe SB’s progress in its battle to address rising demand and bottlenecks throughout the chocolate making process. In chronological order, these issues can be divided into bottlenecks before appointing James Harris as COO and bottlenecks before and after purchasing the ball mill.

The Issues in Chronological Order

Bottlenecks before Appointing James Harris as Chief Operating Officer

It was evident to SB’s board of directors that the rise in demand for the company’s products and the growth of the company between the years 1998 and 2003 (from $0.6 to $5.8 million in sales) indicated that the way the company was operating up to that point has become unsustainable. SB needed a fast and decisive modification to the production process as a whole in order to take full advantage of the opportunities at hand. Consequently, SB’s board of directors made the decision to hand over the “day- to- day business operations” as well as the task of “overseeing growth at Scharffen Berger, including revenue, profit and market penetration and production expansion” to James Harris. James Harris was a former employee of “a private equity investment firm specialising in the acquisition and operation of manufacturing businesses”.

Bottlenecks before Purchasing the Ball Mill

Mr. Harris did not disappoint SB’s board of directors. He started by immediately tackling the issue of working hours, a topic which by that time had been avoided due to the presumption that “overtime did not pay”. Harris’ main strategy was based on optimising the usage of the existing equipment and by doing so increasing the working week from five to seven days for all stages of the process. This is with the sole exception of in- house packaging, a job that could be performed in six days every week. Additionally, some equipment started to be manned in dual 8- hour shifts every day. This is especially the Melangeur, the Tempering and the Moulding machines. The Conche began to be operated 24 hours a day.

By improving the productivity of its facilities and equipments, SB was able to accelerate its production and reach a projected 40% increase in sales. The success of this productivity tactic was more evident when the capacity of the Conche jumped from 18 batches per month (1,400kg each) to a maximum of 29 batches.

In spite of the substantial achievements in SB’s race to capture the growing market, it was clear that upgrading and purchasing the equipment were the inevitable next steps if SB wanted to promote its production to the next level.

The main bottleneck in the process, as far as equipment was concerned (up to this point), was clearly the conches as they were the only equipment that would take significantly great number of hours to process the product in the line. For example, as shown in the table below, when one calculates the time, it takes to run a 1,400 kg batch (limit for a single recipe for 99% unsweetened chocolate) by the Conche compared to the rest of the equipment. It is noted that the Conche represents the single major bottleneck in the process. This is according to the best case scenario.

Table 1: Processing Time

Process Time (hours)
Conche 40
Melangeur 15.2
Moulding 10
Tempering 10
Roaster 8.4
Winnower 4.2
Bean Cleaner 1.8

There are two conches available in the factory.

In order to address this bottleneck, Harris embarked on the search for a suitable solution that would not only speed up the process but also preserve the quality of the conches delivered using their distinctive aeration design. Harris was able to find a piece of equipment (namely the ball mill) which would be able to cut down grinding time and replace the conche in this task. However, the conche would still be necessary for the aeration process. The combined operation time for this new method would add up to 15 hours (10hrs for aeration, 3hrs for grinding and 2hrs for transitioning between machines) as opposed to 40 hours when using the conche alone.

The potential benefits of using the ball mill are immense as Harris estimates that the machine will boost capacity by a staggering 75%. This is a $300,000 investment well spent.

Bottlenecks after Purchasing the Ball Mill

After successfully solving the bottleneck at the grinding stage and upgrading the process by partially replacing the existing conche, Harris’ next concern was the Melangeur. This is the piece of equipment in charge of “turning dry nibs into chocolate paste”. SB was able to locate a second Melangeur similar to the one currently operating in the factory. SB trusts that by getting a second unit (the first one being “a replica of machines first used in Europe in the late 1800s”) will reduce the amount of time spent in this stage by half.

Another issue yet to be addressed by Harris is where to package the upcoming output of chocolates. At the moment, SB packages about 35% of its chocolate bars in- house. If the company wants to stick with this practice, the management may consider hiring more people, going from one to two 8-hour shifts and adding a seventh day in their weekly roster for this task. Alternatively, as the levels of production improve, SB could reduce the percentage of products being packaged in the factory and allocate even a bigger section of products to their partners than they had been able to offer before.

Q3: Assess the Attractiveness of a High Quality Process Development for a Premium Quality Product

A high quality process development for a premium quality product is vital as the best products in the market are basically consumed for the prestige they confer upon the end user. The development of a high quality process is advantageous to the organisation, the whole distribution channel and to the consumers at large. Coupled with other factors, such as ingredients quality, the effectiveness and the standards of formulation, development of a quality process determines the quality of the end product. The attractiveness of the end product influences its market value. A high quality premium product fetches more money and sells faster than a low quality one does. This translates to large volumes of sales and high profits to all the members of the distribution channel.

Quality products from quality processes also build the company’s name, and this is an important aspect in branding. Superior brands attract a lot of money in return as they are associated with quality and prestige. Also branding will help in product differentiation which will ensure that the product stands the test of time. A quality process minimises the loss of products and raw materials due to failures. This ensures that profits are maximised, and less money is spent on the raw materials. The savings made in the cost of raw materials could be used to develop the company’s premises. Quality processes also increase efficiency of the production meaning that the output is maximised in any given time.

Another attractive feature of developing quality process is the reduction of the manpower required. Some processes involve a great number of people who can be reduced by improving the processing lines. Also, it is important to note the fact that quality process development ensures uniformity in products giving the customers an even and continuous taste. The satisfaction of every consumer is the main goal of any processor hence quality products are able to meet this goal.

The quality of chocolate is much dependent on the quality of the raw materials or the ingredients and also the precautions taken during the production process. High quality process control is important in making high premium products, such as chocolates. The management has to strike a balance between three principles of quality control which are raw material control, process control and finished product inspection.

One of the benefits is that with high quality process control, the time allocated for each machine or each step could be reduced especially in Melangeur and Conche stages. In other words, the efficiency of making chocolates could be increased, and this is one important factor in addressing the capacity bottleneck. The increased chocolate production capacity with maintained quality could help the company dominate the market quickly and even expand the original market share. As a result of this possibility, the S&B Chocolate Maker could earn more money and add new machines or open several retail stores in order to expand its business.

Another potential benefit is that high quality process control could lead to reduced total costs in the whole production line. This is because with the introduction of higher quality process control, there is reduced quantity of poor quality chocolate raw material, less quantity and highly effective operators. This is in addition to higher packaging quality of chocolate. Take the operators for example. Operators determine the quality of the chocolate by examining its appearance and texture by breaking and tasting it. Since there is a higher quality control process, the quality of chocolate is absolutely preserved and guaranteed. As a result of this, few operators need to be hired to test the chocolate regularly as required.

High quality process development can also improve and guarantee the taste of chocolate which is very important in attracting the consumers. This is in addition to improving the chocolate brand. In addition to attractive packaging and marketing (for example, through celebrity endorsements), a premium chocolate to most consumers translates to an attractive chocolate brand. This is because most consumers believe that the good chocolate always comes with a good taste. An apparent trend in the chocolate market is that many retailers are enhancing their premium range as a way of differentiating their products to appeal to the increasingly demanding consumer. The S&B Chocolate Maker, as one of few manufacturers that produce their products “from beans to bar”, makes efforts to ensure that the end product remains the “America’s finest dark chocolate”. These factors could both increase the chocolates’ popularity and build the premium chocolate brand. Popularity and brand in turn closely depend on the chocolate’s taste. With maintained product’s quality, S&B could attract more chocolate lovers and turn them into loyal consumers. This is an important factor in premium chocolate brand development.

High quality process essentially involves the identification of critical components in the manufacturing process improving them to ensure the superior product quality. The high quality process development can define objectives and carry out enterprise development strategy or goals. According to goal- setting theory, goals are effective because they indicate the level of performance that is acceptable. Experts are of the view that a clear set of business objectives is an essential requirement in the process of aligning performance with business goals. Goals serve as regulators of human action by motivating project improvement teams. Since specific goals are necessary in aligning performance measures with strategy, quality- related goals incorporated in the production process may affect product’s quality. In this case, the firm’s goal to produce the best chocolate prompts the process not to neglect important details. This is including those imperceptible to many consumers, such as the taste of beans.

The high quality process also helps in providing feedback to the employees. In terms of influencing employee behaviour, feedback derives its motivating power almost exclusively from the information provided on an employee’s performance. This in turn enhances role clarity and helps in the identification of the task performed. Feedback is a fundamental means of learning for the employees. This increases the workers’ understanding of the process and, therefore, improves their ability to solve problems. They are also motivated to make suggestions. In the long-run, this improves their capability, and therefore, the processes remain controllable. It has been shown that when there is immediate feedback to a single operator (fast and short cycle feedback), high quality performance is achieved. Research also shows that process improvement is enhanced when information sharing is encouraged in the work place.

The chocolate industry is segmented into two categories. These are the mass and premium markets. Mass market accounts for 75% of the market while premium accounts for 25% of the market. Scharffen Berger belongs to the last one. The premium market is considered to be at the high end in both price and positioning. Although the ordinary chocolate in the mass market represents majority of the total sales, premium chocolate is considered to be experiencing a growth of between 15-20% per year. Premium chocolate is typically characterised by an emphasis on sourcing and the production process more like wine. A premium price tag also tends to accompany the pursuit for quality.

The mass market does not always select, roast and grind their own beans to produce their chocolate. Most of the processes in the mass market industry are outsourced resulting in a less controlled process quality. On the contrary, Scharffen Berger that manufactures chocolates from “beans to bar” pays much attention to the processes. This is by developing and manufacturing chocolates through processes that are of the highest quality in order to maintain premium quality chocolate. The management strives for pure, delicious chocolate flavours. Their affinity for high quality processes, the continued improvement and development of these processes have made it possible to maintain the premium product and develop a reputation within the market for ‘the finest American chocolate’.

As discussed previously in the first question of this case study, Scharffen Berger’s process and product qualities are intertwined. SB could not have achieved the current success by selling a premium quality product if every single stage in their chocolate making process were not of high quality. However, some of SB’s chocolate making processes (despite having being considered and proven to be of high quality) have become outdated, uncompetitive and ineffective for the current premium chocolate market.

It is true that each piece of equipment and step in the process exist for a reason. But as seen from the ball mill vs. conche example, an innovative method can bring many benefits to the development process as a whole. After all, the advantage of going from 40hrs to 15hrs in this process, while preserving the quality, can only be seen as a very important step in SB’s modus operandi.

Just like the conche, other equipments and processes in SB could be perceived as high quality yet not 100% tailored for high production. Here are three examples where this problem is presented throughout the process:

  • The roasting machine is 50 years old
  • The melangeur was built in the 1920s and is a replica of machines that were used in the late 1800s
  • Tempering machine only operates at 70% of its capacity due to the volume limit of the moulding machine

It is noted that according to these examples, there is room for improvement in this company. This is as a result of old-fashioned machines or equipment that is not being utilised fully. Taking the ball mill as a perfect example of a piece of equipment used to enhance the efficiency in the production line, it is safe to assume that SB can in fact make the factory more competitive by upgrading the machines and the production processes.

It is also important to note that these high- quality yet low- volume processes have an important advantage over more modern and innovative machines. This is a high novelty factor. It is indeed a very appealing component for SB’s factory. This is it considering the fact that they make chocolate using equipments and production methods similar to those used by artisan chocolatiers in Europe. Running a factory using these methods is particularly attractive when SB markets its product as traditional and hosts factory tours to support the legitimacy of their craft.

In conclusion, it is very attractive to have a high quality process development for a premium quality product as long as a company follows a strategy of continuous improvement for its processes. There is no doubt that SB’s current processes are of high quality. However, they can be optimised to match the increasing demand and opportunities in the market. The overall benefit of running a factory using high quality yet outdated equipments is debatable. This is considering that SB’s brand is marketed using the idea of a chocolate made in a traditional way (using old-fashioned equipment). However, the benefits of continued use of these methods are marginal if SB does not opt for quality- equivalent innovative processes.

Recommendations and Conclusions

Manufacturing Practice

Any company that is engaged in food production has a mandate to adhere to competent manufacturing protocols. In this case, the product quality is guaranteed hence the consumer will continue craving for the product. For this to be achieved and stipulated goals attained, the manufacturing process has to incorporate controlled procedures that are smooth and efficient. Mechanisms are to be put in place so as to note any changes and respond appropriately. The changes can alter the quality of the product, and therefore, manufacturing processes should accommodate changes for the sake of the quality process.

Chocolate is normally produced in batches which are then released to the market. For effective and proper follow- up records, each batch should be serialised so that in case of any complaint from the consumers, the mistake can be easily tracked and the cause of problem rectified.

Quality Control

Production in any company involves a number of processes before the product is finally released to the market. To enhance the quality of the product, the whole production process should be subjected to quality control (Pyzdek 55). The major areas that are involved in this initiative are the following:

  1. The production criteria should include control units and management of the work load assigned to each personnel making sure that each task is completed
  2. Competence of all individuals involved in the production process should be upheld as well as a high integrity
  3. Inspection of the final product should be a part and parcel of the process during and after production before the product is released to the market

Both the quality control and the quality assurance are of great significance in the manufacturing of chocolate. A product is only safe if the aspects mentioned above are followed with little or no deviation. Scharffen Burger always tests its products, but it should also do it at all the production phases so as to not only note a potential problem in advance but also to produce high quality chocolate.

Quality Based

This criterion addresses several issues touching on problem solving as well as improving the quality of a given product (Pyzdek 66). In this case, the chocolate is a commodity that is to be treated with care so as to minimise complaints from the market. During production, specific measures are put in place in attempts to solve problems that may occur and at the same time, improve the production of chocolate. These measures include the use of control charts, value analysis as well as the process capability analysis. These tools will assist in obtaining data on a particular problem, analysing the same and finally finding a binding solution to the problem. Scharffen has enacted quite a great number of measures regarding this criterion which include coming up with unique products as compared to those of the competitor. This was experienced when the management failed to detect and measure change as well as act in the process of modifying changes.

The changes would be appropriate if the management checks the machines that are used to manufacture the product today. If up to date machines are introduced to replace or phase out the old ones, the production may increase, surpass the current production rate and meet the huge demand that is experienced in the market (Pyzdek 45). In addition to this, the quality of the product will improve compared to the current one. The company should consider and decide whether this idea can work well with the new equipments.

Works Cited

Pyzdek, Thomas. Quality Engineering Handbook, Melbourne: Thomson Print, 2009. Print.

Appendix

Bottlenecks

Bean Cleaning and Roasting Process

The bean cleaner processes about 200kg every 15 minutes. It pushes approximately 192kg of clean beans to the roasting process1 every 15 minutes. The roaster processes 250kg at a time, taking 1.5 hours (including cooling).

  • Bean cleaner productivity = 768kg/hr
  • Roaster productivity = 167kg/hr

There is a clear potential bottleneck here, as while waiting to roast one batch (assuming zero waiting time), 1152 kg of beans are cleaned and ready for roasting, creating a back-up in the process1.

Calculations

Approximate processing time for 1,400 kg of unsweetened chocolate (99%) at each stage in the chocolate making process at Scharffen Berger is that where the time (t) is calculated in hours by dividing the reference mass of 1,400kg over the product mass (m) when the machine is run at a given time.

  • Conche: 1,400kg every 40hr
  • Molding Machine: 140kg/hr

Formula

  • Tempering Machine: 140kg/hr (to match molding machine capacity, otherwise 200kg/hr)

Formula

  • Melangeur: 115kg/1.25hr

Formula

  • Winnower: 450kg/hr from which 185kg of nibbles are recovered for every 250kg of beans

Formula

Formula

Formula

  • Roaster: 250kg/1.25hr + 15 min for cooling

Formula

Formula

  • Bean Cleaner: 200kg/15min, 96kg recovered for every 100kg

Formula

Formula

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BusinessEssay. (2022) 'Scharffen Chocolate Maker: A Case Study'. 9 May.

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BusinessEssay. 2022. "Scharffen Chocolate Maker: A Case Study." May 9, 2022. https://business-essay.com/scharffen-chocolate-maker-a-case-study/.

1. BusinessEssay. "Scharffen Chocolate Maker: A Case Study." May 9, 2022. https://business-essay.com/scharffen-chocolate-maker-a-case-study/.


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