Executive Summery
Scharffen Berger was founded in 1996 by two friends, Robert
Steinberg and John
Scharffenberger.
The chocolates from the company had received a good response
from the market.
By 2000, Steinberg and Scharffenberger faced huge demand for
their chocolates and
they realised that they need to add capacity in order to meet
the demand.
At the end of 2003, Harris was recruited to lead the business
and manage the
companys growth.
In 2005, they had ordered a ball mill, custom manufactured
machine that promised
to increase the capacity while retaining the original taste.
Problem Description
Scharffen Bergers current maximum capacity is approximately
40,000 kg equivalent
to 29 conches.
The current capacity is not able to meet the growing market
demand, this lead to
lost sales opportunity. Distributors and retailers also feel the
shortage of goods and
loss of sales which will lead to dissatisfaction.
Even after adding a ball mill in the production process the
output will not meet the
forecasted demand.
Harris has to decide how to increase the capacity but he does
not have exact sales
forecast, so he does not wants to add extra capacity which will
not be useful. At the
same time, he does not want to miss the opportunity to capture a
huge market
share.
Analysis
Current production process has a bottle neck in conche process
it takes most
amount of time which limits the production capacity
There are few production processes that that are underutilised,
if all the processes
are utilised to the maximum possible the increased demand could
met to an extent.
Many of the processes run only one shift, to add extra capacity
we can use them for
more than one shits.
After a point the existing machines would not be able to meet
the growing demand
then Harris has to take a call to add capacity to meet growing
demand.
Final Recommendation
Addition of ball mill does not solve the problem as the bottle
neck shifts to
melanguer which can be overcome by increasing the no of shifts
melanguer works
for.
Then the bottle neck shifts to winnower which is underutilised
so we need to use it
at full capacity.
Then the bottle neck shifts to roaster which runs only for one
shift if we use it for
more than one shift the capacity will increase.
Like this we can utilise all the available resources to the
maximum possible under the
process requirements.
After a time, effective utilisation of resources does not help
and if the demand
increases by a huge margin as being anticipated, Harris has to
take a call to add
capacity so that they do not have to chase the demand. There is
risk involved in this
but if they do not add capacity then a part of market which
could be easily captured
will be lost.
