Cadbury Schweppes PLC Operations - Case Study Example

Operations 1 Student’s Name Institution Cadbury Schweppes PLC In the contemporary business world, operations management has become a critical function among many businesses. The dynamic consumer needs have forced companies to integrate operations management with their corporate strategy, in order to achieve growth (Vildler, 2001). To shed light on operations management, this report focuses on Cadbury Schweppes PLC. Cadbury Schweppes PLC is a British confectionery company located in Uxbridge, England. The company manufactures different kinds of chocolate with the main brands being Cadbury dairy milk chocolate and Cadbury old Gold dark chocolate. Description of the type of processes According to Smith & Rowlinson (1990), the production of chocolate is based on traditional expertise and other processing methods that are unique and known to Cadbury. Nonetheless, the techniques have been enhanced over the years with the new production methods leading to newer tastes and preferences. Currently, the production process is highly computerized and sophisticated. The presence of new specialist machinery that produces chocolate of Cadbury’s own specifications and design is evident. People responsibilities in the process Chocolate production starts with production of cocoa beans. The cocoa beans are harvested upon maturity, graded, and highest quality beans are transported to the factory. The cocoa beans are then processed to produce a cocoa mass that contains cocoa butter and cocoa beans. As the ingredients move to the next production stage, fresh cream milk is condensed and passed to the next production stage where sugar is then added to the already condensed milk to form a rich cream chocolate liquid which is condensed to produce a milky chocolate crumb. Chocolate production process flow Start the process by processing cocoa beans Condensation of fresh cream and sugar Cooking the ingredients If not properly cooked If properly cooked Crumbs mixture with cocoa liquor Conching Tempering Molding and wrapping Activities at each stage of the production process The production of chocolate over the years has been an incredible phenomenon. First, cocoa beans are processed to generate a cocoa mass. This is a complex process, and utmost care is taken, in order to produce a cocoa mass that contains more than 60% cocoa butter. Fresh full cream is condensed, and sugar added to form a creamy chocolate liquid which is then evaporated to make a milk chocolate crumb. The dark chocolate is made by mixing cocoa liquor, bourbon vanilla, and sugar in compliance with the set standards. The mixture is then passed through a series of rollers for further processing. In this process, the sugar, cocoa and vanilla particles are grind to such extent that they cannot be felt in the mouth. However, conventional chocolates are not refined in such a manner hence less expensive to manufacture. The ingredients are then cooked together to produce a rich creamy taste of Cadbury chocolate. The crumbs are then transferred to a pin mill after which they are mixed with cocoa liquor and butter, as well as, a special chocolate flavor. Both chocolate and milk are the passed through refining, conching and tempering stages to enhance gloss, smoothness and snap of Cadbury chocolate. Basically, conching involves beating and mixing the semi-liquid mixture to develop a flavor, remove unwanted flavors, while at the same time, reducing particle size and viscosity. Conchig process derived it word from the traditional vessels, which resembled a conch shell that was used together with one roller that could slap chocolate back and forth for a couple of days. Over the years, the modern production process has gotten much larger vessels with paddles that stir the heated chocolate eliminating volatile acids. The process helps in production of fine flavored chocolate that is homogeneous. Where flavor development is done earlier in the production process, the conching process is usually shorter. However, the dark chocolate takes a bit of conching hours. Tempering is the last step before moving to molding bars for packaging. Tempering is a complex stage which involves cooling and mixing the liquid chocolate under controlled conditions to ensure the fats in the chocolate are crystallized to a stable form. This process ensures that the chocolate is shiny, has clean snap with grey streaks and does not freeze in very low temperatures or melt in high temperatures. Notably cocoa butter can either have stable or unstable fat crystals. Thus, all the fat crystals must be as per the set standards to achieve high quality tempered chocolate. During this process, the chocolate is first heated in temperatures of about 118 degrees Fahrenheit with an aim of melting the fatty crystals. The solution is then cooled to about 81 degrees Fahrenheit to aid in correcting the fatty crystals necessary to provide the right structure. During this process, some unstable fat components are formed necessitating increase in temperatures to about 90 degrees Fahrenheit, warm enough to melt the unstable fat crystals, but not stable crystals. Notably, highly sophisticated machinery has been developed for this process which is one of the duties of a chocolatier. Afterwards, tempered chocolate is poured on bar-shaped moulds, shaken thoroughly and cooled. Further, the molded blocks are then transferred at very high speed to wrapping plant. Approximately 42000 blocks of chocolate are produced per hour. Information that is communicated between people throughout the production process Throughout the production process, people are encouraged to observe the quality and ensure the right quantities of ingredients are added. Key suppliers to the company The main suppliers include cocoa farmers, dairy farmers and sugar factories. Performance objectives The performance objectives of Cadbury includes delivering superior returns to the shareholders, increase their product supply and sales and also, invest more on information technology to keep pace with the intense competition. In the face of globalization, the company has embarked on replacement of chilling system machines and air compressors at all their packaging and manufacturing lines. Notably, Victoria and Ringwood plant have developed new technologies that will help in reducing chocolate waste. Layout of the process At Cadbury, the production process is continuous and programmed in such a way to estimate time the raw materials added to the process and the probable time that the finished product will consume. Layout facilities The production facilities are under one roof, and they follow each other sequentially in accordance with the production process. Notably, the machinery is laid out in such a way that, as soon as the production material leaves a certain production stage, it is transferred automatically to the next level by the machines. Job design At Cadbury, the tasks are designed with respect to production stages. Each stage requires expertise, and therefore, for the entire production to be successful, the organization hires individuals with the capacity to operate machinery. The company respects the rights of its employees and allows them to join legally recognized labor unions. Nonetheless, as a strict observer of children rights, the company does not employ children under the age of eighteen. Special consideration is given to children only if they guarantee to continue with their studies. Moreover, the company ensures safety and sound work environment for its workers. The company provides reasonable remuneration to its employees. This provides the firm with a competitive edge from other fast food production companies which are constantly faced with workers unrest occasioned by lower pay (Saul, 2010). The 4C"s and 4V"s An organization should carry out a situation analysis so as to satisfy the needs of its clients. Successful strategies usually depends on the company’s strategic capabilities i.e. the ability of a firm’s strategies to fit well in the internal as well as the external environment in which it operates. The 4C’s usually provides a framework in which the situation analysis is performed. The 4C’s of a company entails the four main areas that the firm uses in its marketing strategies, and it covers both the internal as well as the external environment. The four C’s comprises such aspects as customer needs, cost, convenience and communication. Cardburys’ marketing strategy is strongly influenced by delivering superior products as a lower cost. The company segments its clients into various groups depending with their needs and characteristics. This allows the company to serve its clients well based on their status (Hoffmann, Farrell & Ellis, 2008). The 4V’s, on the other hand, involves such aspects as validity, value, venue and vogue. Over the years, Cadbury have strived to improve its product features in order to enhance their user friendliness. The company has leaned towards producing unique products and, this has provided the company with a sustainable competitive advantage. Cadbury also collaborates with suppliers and distributors in order to ensure that the products reach the clients. Cadbury believes that buyers are ready and willing to purchase only those goods they believe in. As such, the company has strived to keep prices as low as possible, in order to maintain its competitiveness in the market. In an effort to create a positive perception about its products, the company communicates the product features through key advertising media such as internet, radio and television. The company also provides its clients with key consumer information to ensure they come up with informed decisions before purchasing, and therefore, avoid regretting later (Hoffmann, Farrell & Ellis, 2008). Improvement recommendations In the face of global competition, Cadbury should invest heavily on research and development. Cadbury should also consider automating the whole production process to enhance production and cut costs. The company should also consider investing in cocoa rich areas such as West Africa where raw materials are in plenty as this will help in cutting overall production cost. To increase chocolate consumption, the company needs to increase its advertising and the promotion budget to counter the heated competition offered by other forms of beverages. In order to achieve a competitive edge over its rivals, the company should come out with innovative products, and also, add value to the already existing products. The company should also lower prices for its products, in order to attract a large client base. Cadbury should also, take advantage of location economies, and in turn, invest in regions with lower cost of production. In recent years, African nations have proved to be low wage countries, and therefore, Cadbury should take advantage of low wage rates in those nations. The company can take advantage of the experience curve, and in turn, produce goods in high volumes. This will allow the company to minimize the cost of value addition in every unit of production. The first step towards achieving the advantage curve is the ability to meet clients’ expectations. In addition, the company must enhance the demand for its products through advertising, in order to support the volume. Conclusion It is evident from the above report that operations management can enhance an organizations potential for delivering value. The manner in which an organization manages its operations management function determines its corporate strategy. Therefore, an organization should manage its operations management function effectively, in order to attain growth. References Hoffmann, E, Farrell, D & Ellis, M. (2008).Operations & Management Principles for Contact Centres. Hungary: Juta and Company Ltd. Saul, J. (2010). Social Innovation, Inc.: 5 Strategies for Driving Business Growth through Social Change. Hoboken: John Wiley & Sons. Smith, S & Rowlinson, M. (1990). Reshaping Work: The Cadbury Experience: Volume 16 of Cambridge Studies in Management Series. Cambridge: Cambridge University Press. Vildler, C. (2001). Operations Management: Studies in Economics and Business. New Orleans: Heinemann. Read More