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    OM Scharffen Berger Case Facts

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    Pratima Rani
    Scharffen Berger was founded in 1996 in Berkeley, California to produce high-quality chocolate from fine cocoa beans. By 2004, sales had reached $10 million and were projected to exceed $15 million in 2005. The company's production process included bean cleaning, roasting, winnowing, grinding in a melangeur, refining in conches, tempering, molding, and packaging. Installation of a ball mill was proposed to reduce conching time from 40-60 hours to 15 hours total with the ball mill, creating a new bottleneck at the melangeur.

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    OM Scharffen Berger Case Facts

    Uploaded by

    Pratima Rani
    675 views13 pages
    Scharffen Berger was founded in 1996 in Berkeley, California to produce high-quality chocolate from fine cocoa beans. By 2004, sales had reached $10 million and were projected to exceed $15 million in 2005. The company's production process included bean cleaning, roasting, winnowing, grinding in a melangeur, refining in conches, tempering, molding, and packaging. Installation of a ball mill was proposed to reduce conching time from 40-60 hours to 15 hours total with the ball mill, creating a new bottleneck at the melangeur.

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    Scharffen Berger was founded in 1996 in Berkeley, California to produce high-quality chocolate from fine cocoa beans. By 2004, sales had reached $10 million and were projected to exceed $15 million in 2005. The company's production process included bean cleaning, roasting, winnowing, grinding in a melangeur, refining in conches, tempering, molding, and packaging. Installation of a ball mill was proposed to reduce conching time from 40-60 hours to 15 hours total with the ball mill, creating a new bottleneck at the melangeur.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    675 views13 pages

    OM Scharffen Berger Case Facts

    Uploaded by

    Pratima Rani
    Scharffen Berger was founded in 1996 in Berkeley, California to produce high-quality chocolate from fine cocoa beans. By 2004, sales had reached $10 million and were projected to exceed $15 million in 2005. The company's production process included bean cleaning, roasting, winnowing, grinding in a melangeur, refining in conches, tempering, molding, and packaging. Installation of a ball mill was proposed to reduce conching time from 40-60 hours to 15 hours total with the ball mill, creating a new bottleneck at the melangeur.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 13

    Founded in 1996 by Robert Steinberg and John Scharffenberger The vision was to produce of highest quality chocolate from

    the finest beans available Established at 27000-square-foot brick warehouse in Berkeley, California In 2003, Jim Harris recruited as COO to lead the business and manage companys growth The company 60 employees, 24 working in production area, 18 at retail stores and 18 in Administrative functions Scharffen Berger sold its chocolate through its 5 retail stores, various other retail outlets and its own website

    The chocolate industry was segmented into two categories :


    Mass market Premium

    Premium segment was considered as the growth segment of the industry, with 15-20 % annual growth projected between 2000 to 2010 Scharffen Berger competed in the 1.2 billion premium segment , a large part of which was dark chocolate The retail price of the product spanned from $10 to $100 per pound In premium segment, Scharffen Berger was considered to be at the high end, in terms of price and positioning

    Sales in 2004 was $10 million and it was estimated 2005 revenues would exceed $15 million Product Mix included 7 different products with differing amount of contents leading to nearly 80 SKUs Market Offerings in four consumer sizes 0.2 oz, 1 oz, 3 oz and 10 oz The company also made professional sizes of 2 kg, 3 kg and 15 kg that were used primarily in food industry Trader Joes is the companys largest customer which accounts for 20% of its sales. Scharffen Berger also made a speciality 60% cacao blend in two ounce bars for Traders Joe.

    Production Area 20,000 sq. ft. Beans sourced from various countries Beans purchased 6-9 months prior to use Maximum production of 40,000 kgs in a month Bottleneck in Conche due to high processing time (50 hours on average) Average Monthly output 27 Conches

    Bean Cleaning Roasting Winnowing Melangeur Conche Tempering Molding

    200 kg beans 8hr/day

    250 kg in 1.5 hrs 8 hr/day


    192 kg in 15 mins

    Bean Cleaner

    Capacity 450 kg in 1 hr Input is 250 kg 8 hr/day

    Roaster
    Conche (1)
    1400 kg in 2436 hrs effectively. 24 /day

    Winnower
    185 kg nibs

    140 kg in 1 hr Capacity 200kg/hr 16 hrs/day

    Temperin g

    Melangeur
    115 kg in 1.25 hrs 16hrs/day

    Conche (2)
    140 kg in 2 hrs 8hrs/day

    Molding

    Packagin g

    Bean cleaner
    The machine could process approximately 200kg at a time Time required for the operation is 15 min The cleaner operated during one 8 hour shift, 7 days a week Output = (192*8)/0.25 = 6144kg/day

    Roaster

    The beans from different places were roasted separately in order to optimize the flavour, as roasting time and temperature varied It can roast 250kg at a time and the time required was 1.25 hrs it operated during one 8 hour shift, 7 days a week 15 minutes kept for cooling Output = (250*7.75)/1.25 = 1550kg/day

    Winnower
    It could process 450 kg of whole beans each hour Each batch was approximately 250 kg, from which 185 kg nibs were recovered It operated during 8 hour shift, 7 days a week Output = (185*8)/0.56 = 2642kg/day

    Melangeur
    Melangeur ground nibs in 115 kg batches and each batch stayed in the machine for approximately 1.25 hrs The Melangeur was used seven days a week in two 8 hr shift Output = (115*2*8)/1.25 = 1472kg/day

    Conche
    Scharffen Berger used 2 Conches to refine, mix and aerate the chocolate Each conche processes approximately 1400 kg batch of single recipe 99% conching process contains 1400 kg of nibs whereas 62% contains 850 kg of nibs. Average 1050kg of nibs is used in batch with approximately 35% additives Each batch spent between 48-72 hrs in the conche The conche was staffed 24 hrs a day, 7 days a week Output = (1050*24)/30 = 840kg of cocoa processed/day Output = 840 * 1.35 = 1134 Kg of final chocolate/day

    Tempering
    Moulding

    It could process up to 200 kg/hr run at 140kg/hr Tightly coupled with Moulding The moulding machine processed about 140 kg/ hour It operated in two 8 hr shifts, seven days a week

    Packaging
    Scharffen Berger did the packaging for 35% of its products, remaining 65 % were outsourced It operated in one 8 hr shift, six days a week

    Bean Cleaner

    Roaster

    Winnower

    Tempering and Molding

    Conche Conche

    Melangeur

    Packaging

    Install Ball Mill to reduce 40-60 hours spent in Conche to 15 hours in conche and ball mill combined New bottleneck will be melangeur. Install additional melangeur for $50,000

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