It was founded in 1996 by Robert Steinberg and John

Scharffenberger.

By 2000, they expanded their business. They acquired a

27,000 sq. ft. warehouse where the production and retailing
happened.

In 2003, Jim Harris was recruited as the Chief Operating

Officer and was made to handle companys growth.

As of May 2005, they were around 60 employees with 24 in

production area, 18 in retail stores and another 18 in
administration.
2

There are two categories in chocolate industry: mass market

& premium category. The company falls in the latter of the
two.

It was competing in a market of $1.2 bn. where in the

products were priced in a range of $10 to $100 per pound.

The premium industry projected a growth of 15-20% between

2000 2010

Being at the higher end in premium category, its major

competitors were brands such as Godiva, Ghirardelli/Lindt
and so on.
3

The primary products are: unsweetened(99% cocoa, by weight),

extra dark(82%), bittersweet(70%), semi-sweet(62%),
mocha(62%), mint(62%), rubby bar(62%) and milk
chocolate(41%).

The derivative products are: chocolate sauce, cocoa powder

and chocolate-covered figs.

Sales of these products grew from $1.1 mn in 1999 to $10 mn in

2004.

The products were sold through their five retail stores, distribution
to retail stores and their website.

Price of their products stand as:

Weight

Price($)

5 gram

0.50

1 oz.

2.00

3 oz.

4.00

10 oz.

10.00

i
n
p
u
t

Capacity = 200kg
100 kg

Bean Cleaner

Capacity = 250kg
96 Kg
Of 100 kg

Bins

time = 15mins

time = 75mins
185 Kg

Bins

Roaster

Of 250 kg

Capacity = 450kg

Winnower
time = 7.5mins

rack
Cooling = 15mins

Capacity = 1400kg
Capacity = 115kg

Melangeur
time = 75mins

Conche1
conche2

rack

time = 50mins
Capacity = 140kg

Packaging

Molding
time = 20mins

Capacity = 140kg

Tempering
time = 60mins

Table 1
Process

Output in
one
cycle(kg)

Time taken
(minutes)

8-Hour shifts

End of day
production
(kg per day)

Bean
Cleaner

96

15

3072

Roaster

250

75

1600

Winnower

185

15

5920

Melangeur

115

75

1472

Conches (2
in number)

1400

1500(avg. of
both)

1344

Temper

140

60

2240

Mold

140

20

6720

End of day production = (o/p in one cycle)/(time taken)*60*shifts

6

A system is no stronger than its weakest link.

Dr. Eliyahu M. Goldratt, in his book - The Goal, had mentioned that
the bottlenecks, no matter where they occur, limit the production
capacity of your system. The success of the entire factory lies on
that choker.

In the above scenario, as tabulated, we found that the conches are

the bottle necks whose output capacity is limiting the entire plants
capacity to only 40,000 (~1344*30) per month. This needed
improvement.

Jim Harris, came forward with a plan to tackle this bottleneck by

introducing Ball Mill. Let us see how.
7

Jim Harris expected the Ball Mill to reduce the refining time
to15 hours as opposed to some odd 50 hours taken by the
conches.

Effect on output(in kg per day)

Output in one cycle(kg) = 1400
Time taken in minutes = 450
Total hours deployed = 8*(3shifts) = 24 hours
End of day production = (1400/450)*60*24 = 4480

* We observe that the refining process which, initially, was a bottleneck at

1344 kg per day now produces 4480 kg per day. Definitely not the
bottleneck anymore!! So who is new the bottleneck?

Referring to Table 1, we find that the Melangeur is now a

new bottleneck as it processes the least in a given day as it
was processing just higher than the bottleneck but not as
high as others.

End of month production of the mixer = 1472*(30)

= 44160 kg in a month

Good News. The net production capacity finally increased to

44,160 kg per month from 40,000 kg per month. Registering an
increase of 10%!!

Goldratts idea of maximizing capacity was by eliminating

the bottlenecks. All of them.

Once the bottleneck is cleared, we can now increase the

shifts of other processes.

We work on the similar lines. Invest $50,000 refurbishing the

Melangeur and also getting a new one so the cycle time for
115 kg now reduces to 37.5 min. from 75 min. because there
are 2 mixers now and also their 8 hour shifts are increased to 3
in number.

End of day production of Melangeur =(115)/(37.5)*24*60

4416 kg per day
10

Therefore, we now a new bottleneck, Temper

End of the month production = 2240*(30)
= 67200 kg per month

We see a substantial increase of around 68% from the

previous scenario where in we were not using any Ball Mill
and no refurbishing of Melangeur was done.

This is directly in line with what Goldratt had proposed that

maximum capacity production can be achieved by
targeting and eliminating the bottleneck one after the other.

11

But the target to be achieved is around 150% by the start of

2006 because their production is driven by demand in the
market.

Following on the previous lines of elimination of bottlenecks

by increasing the shifts and machines we see that a growth in
capacity is possible.

12

Process

Output in
one
cycle(kg)

Machines
installed

Time
taken
(minutes)

8-Hour
shifts

End of
day
productio
n
(kg per
day)

Bean
Cleaner

96

15

6144

Roaster

250

75

4800

Winnower

185

15

5920

Melangeur

115

37.5

4416

Ball Mill

1400

450(avg.
of both)

4480

Temper

140

60

3360

Mold

140

20

6720
13

In the final process, the ultimate bottleneck turns out to be

Temper whose production in kg in one day is 3,360 kg in a
day.

End of month production = 3360*30 = 1,00,800 kg per month.

Hence, the percentage increase in production capacity

= [(100800-40000)/40000]*100
= [60800/40000]*100
= 152%

14