Reference no: EM132230744

The 2-Good Chocolate Factory (2G) produces milk chocolate wafers that are bagged in 3 kg quantities. While the wafers are delicious to eat and occasionally purchased by retail customers, 2G mainly sells to commercial customers such as bakers and restaurants, where the wafers are used in the preparation of dishes such as deserts and other specialty items. Sales have been “through the roof” for 2G and they have been having a hard time keeping up with demand. Despite this difficulty in meeting demand, work-in-process (WIP) inventory has, on occasion, also been a problem for 2G, thus they are asking for your help in applying the Theory of Constraints to their operations and providing advice for how they can better manage their capacity in order to maximize system output while avoiding excessive WIP.

The Production Process – General

The general process for the production of chocolate is to (1) roast and winnow the cocoa beans that have been purchased from external suppliers into small pieces known as “cocoa nibs”, (2) grind the cocoa nibs into unsweetened chocolate, known as “cocoa liquor”, (3) blend the cocoa liquor with other ingredients to make milk chocolate, which is then formed into wafers by pouring it into molds, and (4) package and ship the final product (milk chocolate wafers, sold in bags). Each of these general steps has sub steps; capacities of each of these sub steps as well as operational nuances will be described below. *All capacity figures are given as averages, and will vary about the averages, in some cases significantly.

Roasting and Winnowing

The first step in the roasting and winnowing process is that of cleaning the beans. The cleaning of beans is an automated process whereby beans (in the form that they arrive from the supplier) are poured from a holding vat into a spinning/washing machine. There is one washing machine that is capable of washing 68 kg of beans in a 20-minute wash cycle. It then takes approximately 10 minutes for a worker to empty, rinse, and refill the machine with beans from the vat before another cycle can begin. The vat is refilled as needed with beans that are kept in storage silos. The vat holds enough beans for approximately 12 wash cycles. If the levels in the vat are not monitored correctly, the vats can become empty, resulting in a delay in the starting of a wash cycle. However, if the vat is re-filled too often (i.e. before becoming empty enough) then the beans that remain at the bottom for an extended time can become compressed.

2G has implemented a number of quality assurance checks, one being a sorting/inspectingstep that takes place after beans are cleaned. Beans are dumped from the wash machines onto conveyors where workers visually inspect the beans and those that are too small or appear unfit for production are removed. The conveyor and staff can generally handle up to 180 kg of beans per hour, with about 90% of the volume making it through to the next step – roasting.

From the inspection conveyor, beans are poured directly into roasting drums, each able to roast approximately 25 kg of beans in 45 minutes. There are six roasting drums. Upon completion of the roasting, another approximately 13 minutes is needed to allow the drum and contents to cool (this is needed because of the poor circulation of the room and the need to avoid putting hot materials on the conveyor belt.) The roasted beans are then poured onto an additional set of conveyors and put through a cracking machine that is able to extract the inner part of the cocoa bean and break it into cocoa nibs, which are sorted by size in a process known as “winnowing”. The cracking and winnowing operation outputs approximately 225 kg per hour.

Grinding

Grinding the cocoa nibs comprises of two basic steps, carried out in a large drum. First, the cocoa nibs are ground into “cocoa liquor”, and following this the cocoa liquor is mixed with cocoa butter and sugar. There is enough capacity at this grinding/mixing step to produce an average of approximately 175 kg of output each hour; however, this step has a high degree of variability, and the drum and grinder require significant preventative maintenance and are thus productive only approximately 80% of the time. Following the grinding/mixing, the mixture is poured into batches of 26 kg in bowls used for the next process – blending. (If the mixture is ready but no bowls are available, then the mixture is poured into a temporary storage unit, if the storage unit is not full, otherwise it remains in the drum until there is space in the storage unit. However, it is not uncommon for the storage unit to be empty, such as when preventative maintenance (on drums) occurs and/or when one or more batch(es) is(are) taking longer than normal and tying up drum(s)).

Blending and Molding

Blendingrequires that the mixture from the grinding process be blended with more sugar, milk, cocoa powder, lethicin and vanilla. The time required to blend one batch (bowl) of chocolate averages 30 minutes (with a high degree of variability), followed by an approximately five-minute changeover required between batches. There are three blending bowls available (assume that they can all be productive at the same time). Occasionally, bowls will sit empty waiting for output from the grinding process, such as in the case of a preventative maintenance shutdown of the grinding drums.

After blending, a molding step occurs where the milk chocolate is poured directly into molds. Molds are put into trays that can hold 10 kg of milk chocolate, and trays are stored in a specialized cooling rack that holds 25 trays. There is one rack available, but with space in the molding room for another, and approval is being sought to purchase a second rack (they are surprising expensive!) – your advice on this matter would be helpful. Molds must sit in their trays for 1⁄2 hour. There is about five minutes needed to load/unload trays.

Packaging and Shipping

Following molding, the milk chocolate wafers are bagged, bags are boxed, and boxes are palletized for shipment from the factory. It has been found that the packaging and shipping processes operate at well above the capacity of other process steps and thus are beyond the scope of this analysis.

THE PROBLEM:

Managers at 2G are generally concerned about the “system flows” and “problems with generating enough system output while simultaneously preventing excessive WIP buildups”. They would like for you to evaluate the production system and apply the theory of constraints. This should include a calculation of workstation capacities and ideas to exploit, subordinate to, and elevate the bottleneck. Note that the theory of constraints is a cyclical process, and also that there is some variability in the numbers, so although you should address the main bottleneck(s) most prominently, you should also address other opportunities in the system to improve total output whilst reducing WIP in the system.