To: Jim Harris, Robert Steinberg and John Scharffenberger
Date: February 20, 2014
SUBJECT: Expansion of Operations

In response to your request for a strategy recommendation to address the constraints to your firm’s operation expansion, I would like to revert with my analysis and detailed suggestions, after thoroughly reviewing your firm’s production process and in light of the firm’s short term to meet the increased demand and the foremost objective to assure the quality and taste that the product is known for.
Scharffenberger has been one of the world’s best premium chocolate makers for the past few years. A combination of quality raw materials and careful preparation processes have ensured the highest value for money for the consumers, and any potential expansion should ensure this continues when the firm increases its production to meet with the additional demand. In the premium chocolate market the firm competes in, the differentiating factor is not price but quality and taste, and therefore this measure will ensure that the firm retains its competitive advantage.
The two factors that determine the current output are the production rate and number of hours each machine is operated on a daily basis. The first step towards expanding production is to identify steps with the least output per day or fails to process the entire capacity of the previous step, and then to address these bottlenecks. The data available indicates that the current bottlenecks are the roaster and the conches. Addressing these two bottlenecks can significantly improve the production process output and help Scharffenberger meet its demand.
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