Instructor : Prof. S. Babu

ME 711 Course Project

Cocoa Chocolate

Manish Sharma Sandeep Gunjal Rahul Kamde Sanat Kachhwaha Ram Nivas M. Venkateswararao. K

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Overview of product

Process details

Location & layout

Forecasting & inventory

Management strategies & IT

application

Risk Management

Feasibility analysis

Marketing strategies

Table of contents

Overview of product

Vision and Mission

Cocoa chocolate means Quality; this is our promise.

Our commitment to continuous improvement will ensure that our

promise is delivered.

Promotion of brands carrying mass franchise without comprise

on quality

Increasing the product quality continuously by customer feedback.

Increasing the market depth including rural Indians coverage.

Vision

Mission

Milk Chocolate

White Chocolate

Plain dark Chocolate

Natural or artificial sugar

Milk or milk powder

Cocoa powder

Additives for flavours like

vanilla, Elashi.

Product Details

Varieties

Ingredients

Fig 1. Shows varieties of products

Process details

There are two different basic classifications of cocoa, which can be categorised as:

1. Criollo

2. Forastero cocoas

It can flourish only in the hottest regions of the world.

Eg. South regions of India like Karnataka, Tamilnadu Andhra Pradesh etc.

Raw Material

Process Details - Process Flow

Collecting the cocoa beans

Separating and drying Roasting Winnowing

Grinding Mixing with sugar Conching Molding

Finishing chocolate bars

Fig 2 Shows flow of the process

Separating the seeds Beans are separated from the fruit

by drying out it in an open environment.

Cleaning Raw cocoa is thoroughly cleaned by

passing through sieves, and by brushing. Finally, the last vestiges of wood, jute fibres,

sand and even the finest dust are extracted

by powerful vacuum equipment.

 

Process Flow

Fig 3 Shows separation

Fig 4 Shows Cleaning

Roasting It is designed to develop the aroma.

The air in the high furnaces reaches a

temperature of 130 °C, is carried out

automatically.

Crushing The roasted beans are broken into medium sized pieces in the crushing machine.

Blending The crushed beans are weighed and blended with some additives to get various

flavours.

Steps in Process Flow

Fig 5 Shows roasting of beans

Grinding The crushed cocoa beans are pre-ground by special

milling equipment and then fed on to rollers

to get a fine paste.

Conching This process removes bitter test of the paste by heating it at 80°C to get velvet smoothness by

adding certain amount of cocoa butter.

Attains the outstanding purity which gives it reputation.

Steps in Process Flow

Fig 6 Shows grinding of crushed cocoa beans

Location & layout

Location parameters

Climate (M1)= Hot

Rain fall (M2)=1500-2000mm( avg. rain per year )

Temp. (M4 ) = Min.(180-220C) & Max (300-320C)

humidity(M5)= 50-60%

Availability of raw material (M8)= high

Labour cost(M9)= low

Land cost(M10)= low

Water(M12)= medium

Karnataka & Tamil Nadu is best feasible solution for plant location

Plant layout

location (M1)

10

(M2)

8

(M4)

10

(M5)

10

(M8)

10

(M9)

6

(M10)

10

(M12)

6

total

Rajasthan 9 5 9 6 2 6 8 2 47

Karnataka 8 8 8 8 9 5 7 5 58

Tamil Nadu 9 6 9 8 9 5 7 4 52

Maharashtr

a

7 7 7 8 9 2 5 4 49

Location & layout

Parameters Critical value Assigned value

M1 , M4 , M5 , M8 , M10 absolutely Essential

10

M2 Essential 8

M9 , M12 Important 6

Location & layout

Cooperate office : Chennai

Layout : U Shape

In U Shape

• A = Store section

• B = Drying and cleaning section

• C = Roasting and winnowing section

• D = Grinding & Mixing section

• F = Conching section

• G = Molding & Packing section

Layout of process departments

Forecasting & Inventory

Forecasting

Is a Prediction tool for future events, such as,

customer demand.

As an art & a science. The science part deals

with mathematical models, whereas the art part

deals with judgment, experience and intuition

Two methods of forecasting

Qualitative methods (subjective)

Quantitative methods (objective)

Delphi method

A coordinator asks a group of outside experts

to estimate future demand. A statistical

summary of their responses is prepared and

sent back to the experts who can then revise

their estimates if they choose to do so. The

purpose is to reach consensus. Names of the

participants are not revealed.

Exponential smoothing method.

Forecasting & Inventory

Ordering process in chocolate industries

RM Suppliers Manufacturing Facilities Sales Depot Re-Distributors Retail Shops

Flow of Demand data Information

CRS (Continuous Replenishment System):

Ordering is done on real time basis by getting the actual sales data from retailer. The retailer

will be given a system to enter to the actual sales data. This data is aggregated at distributed

level. The aggregated data is used to define the norms for order up to level. In this system

whenever the actual stock is below the norm level an order is generated by the system and

send to the branch approval.

Out Of Norms:

If the actual demand is more than pre-defined norm approval must be taken from the branch

office.

Lead strategy:

It is adding capacity in anticipation of an increase in demand.

It is an aggressive strategy with the goal of luring customers away from the company's competitors.

It often results in excess inventory, which is costly and often wasteful.

Lag strategy:

It refers to adding capacity only after the organization is running at full capacity or beyond due to increase in demand.

This is a more conservative strategy. It decreases the risk of waste, but it may result in the loss of possible customers.

Match strategy:

It is adding capacity in small amounts in response to changing demand in the market.

Capacity planning

Focus on smart goals

S = Specific

M = Measurable

A = Achievable

R = Relevant

T = Timely

Measure the performance of process by applying these measurement equations.

Performance Measurement equations

Management strategies & IT application

Supply chain management

Raw Material from Farming

Manufacturing and Packaging

Sales and Distribution

Customer

Stores

Customer Stores

Manufacturing

Plants

E – Business and IT Integration

Fig. 7 Business enabled ERP system

Benefits of ERP

Risk Management

Why ?

Chocolate companies face the uncertain or

adverse future events.

These uncertainties will have an impact on a

company's ability to generate capital and

shareholders returns

How ?

The ability to manage risks across

geographies, products, assets, customer

segments and functional departments is of

paramount importance

Types of risks

Market Risks

Operational Risks

Reputation Risks

Strategic Risks

Financial Risks

Risk and Risk Management

Government Policy Risks

The management has to be aware about any forthcoming

changes by the government

Product Risks

develop a well defined production policy, quality control

and storage and distribution policy

Environmental risks

The company does not use and generate hazardous

substances in its manufacturing operations.

The company should have policy for disposal of

waste.

Fire & Allied risks

The company should take necessary steps to

mitigating such risks by taking recovery and

insurance Policy

Reputation Risks

The company should take precaution for the

quality of the raw material and packing material.

Management of the risks

Feasibility analysis

SWOT analysis

• uncaptured chocolate market in India ( sugar free chocolate sector)

• Large number of occasion celebrations and festivals

• Preference and availability of other substitutes (sweets and deserts)

• Availability of large brands chocolate in market

• High cost of advertisements

• New market• Single product• Lack of awareness

• New Flavors like Elaichi, Badam, Kesar.

• Larger population of kids and teenagers.

• New shapes(cartoons and funny type)

Strength Weakness

OpportunitiesThreats

Total parts are produced at break-even point = X

FC+X*(VC)= X* total sales ( quantity)

Here FC = Fixed Cost , VC = Variable Cost

FC= land cost+ machine cost + other costs.

VC = direct cost + indirect cost

direct cost = material cost + labour cost

Indirect cost = office expanses + indirect used product

In our cases FC = 287920000, VC = 980 per shift

Than X = 4 months ( it is depends on assumed data )

Break-even analysis

Marketing strategies

Flavors like Elaichi, Badam, Kesar etc could be introduced in dark

chocolates to appeal to a wider Indian market.

Make a brand image not only through advertisements alone but

through performance.

advertisements with different genres and themes to attract different

age groups.

promote encouraging events & sports.

Attractive packaging.

By using social networks (Facebook, twitter)

Sales campaign in different location(offices, schools, colleges).

Discounts on E-shopping.

Competition

Marketing strategies

70

14

6 10

consumption of chocolate in India

Cadbary

Nestle

Amul

others

Inspection at every stages

7 Quality tools are used to control the quality.

GMP are followed for food quality.

PDCA cycle

Maintenance

Daily inspection of machines

TPM are used

House keeping.

Right thing at Right place at Right time in Right manner.

plan

do

Check

ActContinuous improvement

Inspection & Quality control

Thank you

cocoa chocolate

Healthy & fit

spreading Smile