Case Notes/Answers
Scharffen Berger Chocolate Maker (A) by Daniel C.
Snow, Steven C. Wheelwright, Alison Berkley
Wagonfeld
Discussion Questions:
Materials
Scharffen Berger Chocolate Maker (A) (9-606-043)
Scharffen Berger Chocolate Maker (B) (9-610-035)
Company Website: http://www.scharffenberger.com/vtour.asp
Assignment
Based in Berkeley, Calif., Scharffen Berger Chocolate is a rapidly growing, high-end chocolate
company. Jim Harris, the COO, is faced with deciding how best to alter the operations side of the
company in order to keep pace with the surging demand. In addition to addressing questions of
capacity, Jim is also considering technical changes in the process that would both increase the
plant’s output and strengthen the product quality.
With the goal of being “America’s Finest Dark Chocolate,” Scharffen Berger Chocolate is
concerned with protecting the brand and avoiding actions that would put the hard-won quality
image at risk.
1. What are your conclusions regarding the proposed ball mill? As Jim Harris, would you
proceed with the implementation of that change? How would you do so?
2. Assuming that all of the production is of semi-sweet (62%) chocolate, what changes beyond
addition of the ball mill will you need to consider to increase your capacity by 150%?
3. Given your answer to question 2, what expansion step(s) would give you the greatest concern?
Why? How would you address such concerns?
, 5-606-091
REV: APRIL 14, 2010
TEACHING NOTE
Scharffen Berger Chocolate Maker (A) & (B)
A. Description
By May of 2005, Scharffen Berger Chocolate Maker had become a high-end, premium chocolate
manufacturer, wholesaler and retailer, with its company headquarters and manufacturing facilities
located in Berkeley, California. The company’s goal was to produce and market “America’s Finest
Dark Chocolate,” and unlike many of its competitors, the company had chosen to manufacture their
products “from beans to bars.”
Founded in 1996 by two friends, the company had grown to $15 million in revenues by early 2005,
and with this growth, had added professional management. The successful growth plan had been
accompanied with multiple expansions of manufacturing capacity, the addition of company-branded
retail stores, and further penetration of the co-branded premium food market.
At the time of the case (May 2005), the COO, Jim Harris, was once again faced with the task of
expanding capacity in a significant way while ensuring that the quality of the product was
maintained and even enhanced.
The case describes the company, its basic manufacturing processes, and its current capacity at
each stage of manufacturing. In addition, the company’s decision to acquire a soon-to-be-delivered
major new piece of equipment is described. Harris is faced with preparing for a board meeting later
in the month where he will be expected to explore with the board the production options the
company has available for meeting significantly increased levels of demand of 50% to 150% by the
start of 2006.
In Scharffen Berger Chocolate Maker (B), the purchase and installation of the ball mill has taken
place. A situation is described in which the quality of chocolate produced by a ball mill might be
inferior to that produced exclusively in the conch. Data from food science research are presented to
show that ball mills tend to produce chocolate particles with a narrower size distribution, and
grinding mills like the conch tend to produce chocolate particles with a wider size distribution. The
case asks what can be done if this difference affects the taste quality of the chocolate.
, 606-091 Teaching Note—Scharffen Berger Chocolate Maker (A) & (B)
B. Teaching Objectives
There are four primary purposes for which this case is well suited.
1. Exploring the interaction of product quality with process quality.
2. Identification of the capacity bottlenecks when the product is yield distributed and there
is a need to calculate equivalent units throughout the process steps.
3. Capacity planning through bottleneck identification and elimination.
4. Assessing the attractiveness of a high-quality, artisan-based process step (involving
equipment new to this organization) for a premium quality product.
5. Approaching the challenge of using old-technology production equipment in a modern
setting.
6. Recognizing the possibility that upgrading to new-technology production equipment
may bring hidden costs.
C. Materials and Assignment Questions
Materials
Scharffen Berger Chocolate Maker (A) (9-606-043)
Scharffen Berger Chocolate Maker (B) (9-610-035)
Company Website: http://www.scharffenberger.com/vtour.asp
Assignment
Based in Berkeley, Calif., Scharffen Berger Chocolate is a rapidly growing, high-end chocolate
company. Jim Harris, the COO, is faced with deciding how best to alter the operations side of the
company in order to keep pace with the surging demand. In addition to addressing questions of
capacity, Jim is also considering technical changes in the process that would both increase the plant’s
output and strengthen the product quality.
With the goal of being “America’s Finest Dark Chocolate,” Scharffen Berger Chocolate is
concerned with protecting the brand and avoiding actions that would put the hard-won quality
image at risk.
1. What are your conclusions regarding the proposed ball mill? As Jim Harris, would you
proceed with the implementation of that change? How would you do so?
2. Assuming that all of the production is of semi-sweet (62%) chocolate, what changes
beyond addition of the ball mill will you need to consider to increase your capacity by
150%?
3. Given your answer to question 2, what expansion step(s) would give you the greatest
concern? Why? How would you address such concerns?
2
Scharffen Berger Chocolate Maker (A) by Daniel C.
Snow, Steven C. Wheelwright, Alison Berkley
Wagonfeld
Discussion Questions:
Materials
Scharffen Berger Chocolate Maker (A) (9-606-043)
Scharffen Berger Chocolate Maker (B) (9-610-035)
Company Website: http://www.scharffenberger.com/vtour.asp
Assignment
Based in Berkeley, Calif., Scharffen Berger Chocolate is a rapidly growing, high-end chocolate
company. Jim Harris, the COO, is faced with deciding how best to alter the operations side of the
company in order to keep pace with the surging demand. In addition to addressing questions of
capacity, Jim is also considering technical changes in the process that would both increase the
plant’s output and strengthen the product quality.
With the goal of being “America’s Finest Dark Chocolate,” Scharffen Berger Chocolate is
concerned with protecting the brand and avoiding actions that would put the hard-won quality
image at risk.
1. What are your conclusions regarding the proposed ball mill? As Jim Harris, would you
proceed with the implementation of that change? How would you do so?
2. Assuming that all of the production is of semi-sweet (62%) chocolate, what changes beyond
addition of the ball mill will you need to consider to increase your capacity by 150%?
3. Given your answer to question 2, what expansion step(s) would give you the greatest concern?
Why? How would you address such concerns?
, 5-606-091
REV: APRIL 14, 2010
TEACHING NOTE
Scharffen Berger Chocolate Maker (A) & (B)
A. Description
By May of 2005, Scharffen Berger Chocolate Maker had become a high-end, premium chocolate
manufacturer, wholesaler and retailer, with its company headquarters and manufacturing facilities
located in Berkeley, California. The company’s goal was to produce and market “America’s Finest
Dark Chocolate,” and unlike many of its competitors, the company had chosen to manufacture their
products “from beans to bars.”
Founded in 1996 by two friends, the company had grown to $15 million in revenues by early 2005,
and with this growth, had added professional management. The successful growth plan had been
accompanied with multiple expansions of manufacturing capacity, the addition of company-branded
retail stores, and further penetration of the co-branded premium food market.
At the time of the case (May 2005), the COO, Jim Harris, was once again faced with the task of
expanding capacity in a significant way while ensuring that the quality of the product was
maintained and even enhanced.
The case describes the company, its basic manufacturing processes, and its current capacity at
each stage of manufacturing. In addition, the company’s decision to acquire a soon-to-be-delivered
major new piece of equipment is described. Harris is faced with preparing for a board meeting later
in the month where he will be expected to explore with the board the production options the
company has available for meeting significantly increased levels of demand of 50% to 150% by the
start of 2006.
In Scharffen Berger Chocolate Maker (B), the purchase and installation of the ball mill has taken
place. A situation is described in which the quality of chocolate produced by a ball mill might be
inferior to that produced exclusively in the conch. Data from food science research are presented to
show that ball mills tend to produce chocolate particles with a narrower size distribution, and
grinding mills like the conch tend to produce chocolate particles with a wider size distribution. The
case asks what can be done if this difference affects the taste quality of the chocolate.
, 606-091 Teaching Note—Scharffen Berger Chocolate Maker (A) & (B)
B. Teaching Objectives
There are four primary purposes for which this case is well suited.
1. Exploring the interaction of product quality with process quality.
2. Identification of the capacity bottlenecks when the product is yield distributed and there
is a need to calculate equivalent units throughout the process steps.
3. Capacity planning through bottleneck identification and elimination.
4. Assessing the attractiveness of a high-quality, artisan-based process step (involving
equipment new to this organization) for a premium quality product.
5. Approaching the challenge of using old-technology production equipment in a modern
setting.
6. Recognizing the possibility that upgrading to new-technology production equipment
may bring hidden costs.
C. Materials and Assignment Questions
Materials
Scharffen Berger Chocolate Maker (A) (9-606-043)
Scharffen Berger Chocolate Maker (B) (9-610-035)
Company Website: http://www.scharffenberger.com/vtour.asp
Assignment
Based in Berkeley, Calif., Scharffen Berger Chocolate is a rapidly growing, high-end chocolate
company. Jim Harris, the COO, is faced with deciding how best to alter the operations side of the
company in order to keep pace with the surging demand. In addition to addressing questions of
capacity, Jim is also considering technical changes in the process that would both increase the plant’s
output and strengthen the product quality.
With the goal of being “America’s Finest Dark Chocolate,” Scharffen Berger Chocolate is
concerned with protecting the brand and avoiding actions that would put the hard-won quality
image at risk.
1. What are your conclusions regarding the proposed ball mill? As Jim Harris, would you
proceed with the implementation of that change? How would you do so?
2. Assuming that all of the production is of semi-sweet (62%) chocolate, what changes
beyond addition of the ball mill will you need to consider to increase your capacity by
150%?
3. Given your answer to question 2, what expansion step(s) would give you the greatest
concern? Why? How would you address such concerns?
2
