DSC 2340: Operations Management

By
Project report
H.R.R.P Zoysa 18223
P.C.U Perera 18310
G.W.N Kaushalya 18315
W.T.T.S Kavindi 18688
G.H.D.S Sathruwani 18693
M.G Nayanathara 18700
G.W.D Sewwandi 18707
D.H.U Dissanayake 18713
A.G.G Madhushani 18727
P.A.S Sandamali 18775

Analysis of production process of

Ceylon Chocolate Ltd.

A Project report submitted in partial fulfillment of requirements of the subject

Operations Management conducted by the
Department of Decision Sciences
Faculty of Management Studies and Commerce
University of Sri Jayewardenepura
January 2020
 Abstract

This project intends to analyse strengths & weaknesses of the production process of Ceylon
Chocolate Ltd. Ceylon Chocolate Limited is one of the prominent chocolate manufacturing
companies in Sri Lanka which is well known for 'Kandos' chocolates. Its production process
involves conversion of cocoa beans to chocolates. A continues flow production method is
used by Ceylon Chocolate Ltd for Chocolates manufacturing as it requires 24x7 operation of
machineries & may take up several days until cocoa beans are converted to chocolates. It was
observed that their production process has both strengths & weaknesses. As strengths high
concern on employee safety, continues supervision of employees, good location, good layout
design, and strong employee attitudes were noticed.

When it comes to weaknesses insufficient capacity, lack of usage of modern machineries,

using large amount of manual labour, high amount of wastage of machineries were prominent.
In conclusion, we would like to recommend Ceylon Chocolate Ltd that they should focus on
capacity enhancement, using the latest technology in manufacturing while increasing the
cleanliness in the factory of & applying for required standards such as ISO.

Acknowledgement
The success & final outcome of this project required a lot of guidance & assistance from
many people & we are extremely privileged to have got this all along the compaction of my
project. All that we have done is only due to such operation & assistance & we would not
forget to thank them.

A special thanks to our operation management lecturer & the course coordinator Ms.
K.T.A.P. Madhushanka whose help stimulating suggestions & encouragement helped us to
coordinate out report.

We respect & thank Mr. Thilan Gunarathne, the plant manager of Ceylon chocolate Ltd for
providing us an opportunity to do the project work in the Kandos chocolate manufacturing
factory & giving us all support & guidance which made us complete the project duly.

We owe our deep gratitude to Mr. Chinthaka, the production manager of Ceylon Chocolate
Ltd for explaining all the necessary areas related to the project with absolute clarity taking his
valuable time even though he had a busy schedule managing the corporate affairs.

Also, we would like to thank our departmental colleagues to make this report compute in a
very, short time with their best and utmost help.

Table of Contents
01.Introduction............................................................................................................................1

02. Selected organization function within the organization........................................................2

03. Literature...............................................................................................................................3

04. Detailed analysis of the selected function.............................................................................6

05. Recommendation................................................................................................................10

06. Conclusion..........................................................................................................................11
 1. Introduction

Ceylon Chocolates Limited was incorporated in 1962. It's initial board comprised Mr. Sarath
Wijesinghe, Mr. Dodwill Berenger, Mr. Erdly Perera & Mr. Ashley de Silva.

Since it's primary objective is production of chocolates, it had to find a suitable plot of land to
locate the factory. As weather conditions of hill country favours chocolates production & easy
access to raw materials, cocoa beans it was decided to locate the factory in Kundasale.

The Chocolate production commenced in 1965 even though the factory was incorporated in
1962. When determining the brand name, it was decided to add first letters of the first name of
the Board members.

"KAN" – from the word Kandy

"PO" – from the first name of the managing director Podwill

"S" – being the first letter of the chairman's mane Sarath Wijesinghe

In 1970 with the demise of the chairman Mr. Sarath Wijesinghe, Mr. Upali Wijewardena was
appointed as the chairman. With the expansion of his business in to international boundaries
"Kandos" became a very popular brand in the world over. Today Ceylon Chocolates Ltd
produces chocolates & other confectionary products under the brand names of Kandos, K
Super, Newgen, Pelta & Pinic.
 02. Selected organization function within the organization

Based on the factory visit, we decided to focus on the production process of Ceylon Chocolate
Ltd as for a chocolate manufacturing company, production process plays the most important
role. This production process involves transferring inputs to output those are delivered to the
customer at the end.

Any production process involves a series of links in a production chain. At each stage, value
is added in the course of production. Adding value involves making a product more desirable
to a consumer so that they will pay more for it. Thus, it is very important for businesses to
identify the processes that add value, So that they can enhance these processes to the benefit
of the business.

Production process of Ceylon Chocolate Limited

As per our observations, we noticed that CCL follows continues flow production process. It
takes a substantial time until cocoa beans are converted to chocolates & it requires nonstop
processing. Thus machineries are operated 24x7 and employees are required to work in two
shifts. Since continues flow process involves in moving one work unit at a time between each
step of the process with no breaks in time, sequence substance, Ceylon Chocolate Limited
has been able to save time, energy & cost.
 03. Literature
Production process

The production process is concerned with transforming a range of inputs into outputs that ore
required by the market. It is the act of creating an output, a good or sevice which has value
and contributes to utility of individuals.

There are five main types of production process.

1. Repetitive manufacturing

Repetitive manufacturing is the production of goods in rapid succession.

Goods that are created through repetitive manufacturing follow the same production
sequences. Repetitive manufacturing often goes hand in hand with automated
assembly processes. It is a useful approach when the same (or similar) products are
produced over a lengthy period of time.

Repetitive manufacturing can be used for mass production by both discrete & process
manufacturing.

Advantages of repetitive manufacturing

1. Cost efficient - The process reduces the cost to produce time.

2. Free resources - The continuous nature mean time is only spent on manufacturing
products.

3. Easier to schedule.

4. Performance visibility

Disadvantages of repetitive manufacturing

1. Tear downs - if a different item or how the manufacturing of an item changes, the
business needs to reassemble the production line.

2. Less customization

3. Low skill level

4. Difficult to track cost of goods sold.

 2. Process manufacturing.

This refers to the large scale production of items. Which flow from one operation in
the process to the next little flexibility in the use of equipment and operatives is
required, each operation being carried out by specialized machine and operators,

Advantages of process line

 Reduced Process sing time of workpiecess

 Saving costs for temporary storage.

 Control of the entire course of production.

Disadvantages of process product line

 Much capital is required to install product lines.

 Low flexibility of changing products.

3. Batch production,

Batch production is a method use to produce similar items in groups, stage by stage, In
batch production, the product goes through each stage of the process together. Before
moving. on to the next stage. The degree to which works are involved in this types of
production depends on the type of product it is common for machinery to be used for
the actual production and workers.

eg : bakeries, textiles, furniture.

Advantages.

 Materials can be bought in bulk. So they are less expensive.

 Workers specialize in one process.
Disadvantages,

 products are expensive to move around the workplace.

 Storage space will be mended to store raw materials.

4. Job shop production

Job shops are typically small manufacturing systems that handle job production that is custom
or semi-custom manufacturing processes. such as small to medium size customer orders or
batch jobs, Job shops typically move on to different jobs when each job is completed. Job
shops machines are aggregated in shops by involving each shop therefore may contain
different machines, which gives this production system processing flexibility, since jobs are
not necessarily constrained to a single machine.

Advantages

 High flexibility in product engineering.

 High robustness to machine failures.

 High production volume elasticity.

Disadvantages.

 Very hard scheduling due to product variability on twisted production flow.

 Low capacity utilization.

5. Discrete manufacturing

Discrete manufacturing is the production of identical items. Automobiles, furniture,

toys, smartphones & airplanes are examples of discrete manufacturing products, The
resulting products are easily identifiable & differ greatly from process manufacturing
where the products are undifferentiated. For example oil, natural gas & salt Discrete
manufacturing is often characterized by individual or separate unit production.

Advantages

 Increase Production efficiency & reduce costs, The flexibility & support for a lean
manufacturing approach in Discrete manufacturing software allows you to employ
various modes of manufacture.

 Enhance customer service.

 Improve internal & external collaboration.

04. Detailed analysis of the selected function

The Ceylon Chocolate Limited uses the cocoa beans those are cultivated in the farms belongs
to them. These beans undergo the fermentation process & they are placed in large, shallow,
heated trays covered with large banana leaves. This process may take 5 to 8 days. After
fermentation the cocoa seeds are dried before taken in to the manufacturing process.

The first step of production of chocolates is roasting cocoa beans. Ceylon Chocolates Ltd uses
a machine called 'Roaster' for this & it develops colour & flavour of the beans in to what our
modern palates expect from chocolates. This process makes the cocoa shells brittle, & cocoa
nibs pass through a series of sieves, which strain & sort according to size in a process called
'windowing'. Then the cocoa nibs are grinded to produce coca liquor. For this a machinery
called 'Pin mill' is used which operates at 5000 RPN. Then using large mixers this cocoa
liquor is mixed with cocoa butter & sugar. After mixing is completed, blend is further refined
to bring the particle size of the added milk & sugar down using a machine called 'Refiner'
which produces the cocoa powder ultimately. Then they are stored in tanks for 15 hours &
sent in to molling line. In the molling line there's a cooling box to maintain the temperature at
the standard levels. After molling, chocolate bars are packaged mostly using the manual
labour. It was observed that staff of 100 employees are assigned to wrap & package
chocolates manually with 6 supervisors supervising them. After packaging chocolates are sent
to be distributed around the country.

After a thorough analysis of production process, we have identified following strengths &
weaknesses.

Strengths

 Good location

A climate is an important factor when it comes to chocolate production. Since Sri Lanka is a
tropical country, it is quite difficult to find a suitable location to locate a chocolate
manufacturing factory as chocolate production requires factories to be located in areas where
the temperature is mild or to have controlled conditions within the factory premises. As
previously stated Kandos factory is situated in Kundasale, The climate there is quite cold
throughout the year. This enables Ceylon Chocolate Limited to case up the production process
& cut down substantial amount of costs as controlled conditions are not required.
Also easy access to raw materials makes up a good location. The main raw material for
chocolates is cocoa beans those grow in pods that are sprout of the trunk and branches of
cocoa trees. Since hill country is a perfect place to grow cocoa a number of cocoa farms could
be been around Kandy. This has enabled CCL to access the suppliers corpulently & maintain
the production process smoothly without disturbance.

 Good layout design

Layout design is really important for a manufacturing organization as poor layout design can
adversely affect system performance. During our factory visit, it was observed that CCL has
carefully designed their production process. Since chocolate manufacturing requires a
continues flow production process, the layout should be designed to facilitate it. It is reflected
from their layout design that they have understood this very well. Because of this they have
been able to,

1. Use workers and space efficiently

2. To avoid bottle necks
3. To minimize material handing cost.

 High concern on employee safety

It was observed that the management has paid attention to the employee safety & security.
Since chocolate manufacturing is a nonstop process involving machineries employees are
required to work long shifts. Thus, the company has given safety gloves & helmets to
employees who are operating machineries to make sure their safety is assured Moreover,
employees are also given specially manufactured boots as cocoa powder can damage ordinary
shoes.
  Continuous supervision

Ceylon chocolate Ltd uses both machineries & labour in their production process.
Furthermore, some machineries also require labour operate its certain functions manually.
Therefore, one little mistake by a labourer can jam up the entire production process. Thus, to
avoid this, a competent & experienced supervisors are assigned to monitor & supervise
employees which comprises 12 supervisors , 6 a shift.

 Strong employee attitudes

Kandos Company has a strong link between the state of the company & happiness of
employees & productivity. In the middle of that main are employee attitudes. When
employees are happy & engaged, attitudes & productivity are more likely to be positive. As
per our observation, it was noted that employee seems to be happy productive in their work
and strong employee attitudes seem to be playing a major role in this.

Weaknesses

 Insufficient capacity

Due to lack facilities to expand production, the organization is unable to fulfil even the local
demand. Earlier though they engaged with exports, now they had to stop the exports
temporarily due to the insufficient capacity.

 Lack of usage of modern machineries

The top management does not allow to purchase new machineries because of the high cost of
machineries. Hence the production process become slow and required higher number of
employees to cover the estimated production. Thus, the organization cannot reach the
expected profit level compared to their competitors.

 Using large amount of manual labor.

Rather than using machines the organization is using large amount of manual labor to their
production process. So, we can identify this as a labor sophisticated organization. Though
they use minor number of machines, there is no automated system or modernized machinery
system to streamline production step by step through only machines. It requires manual labor
to assist and fulfil a kind of tasks of machineries too. So, the usage of manual labor is
relatively higher than the other organizations.

 Dirty working environment

In the worksite we can see two main different working environments. Among them the area
with the machinery is dirtier and the cleaning process of that area is not functioning well
without the supervision. Because of this dirty environment the visitors who visit the
organization first time will get a negative impression about the organization. And there is a
possibility of occurring side effects too.

 Lack of funds to upgrade the worksite

The top management is not able to upgrade the worksite due to lack of funds. Though they
developed one part of the worksite till they use a greater number of machines and old
worksite. So, they cannot enhance their production process in accordance with developing
technology. Simply they couldn’t access the advantages of technological advancement due to
lack of funds.

 High amount of wastage from machineries

The organization has high amount of wastage because of using old machines which don’t have
enough facilities. So, the organization had to face non- recoverable cost & this may reduce the
profit of the organization.
 05. Recommendation
 Using latest technology for the production process .

When we look at the inside of the CCL (pvt) Ltd. We can see that they still use the old
machineries that used in the 1990's. So in present they have reached their limit and it has
caused for the lot of wastage and time consuming. So if we replace the new technology to the
production process we can increase the efficiency of the process.

When we look at this from another perspective ,CCL use a lot of labour force for the
packing and storage.There fore, if we can buy a machine for the packing and storage ,we can
increase the output too.

 Employees should be trained

We can see two types of employees in this firm. As permanent employees and casual
employees. When we look at the casual employees ,they don't have enough practice or
knowledge about the production process. So when they work the wastage is higher than
this ,we can reduce the wastage a lot, which cause for the incensement of the profit.

 Cleanliness in the factory should be increased

When we look at the interior structure of the factory, the cleanliness of the factory is at very
lower level. As we manufacturing the food component, we should pay more attention to the
cleanliness and the tidyness of the factory.

6. Conclusion
To sum up, the production process is concerned with transforming a range of inputs to
outputs. The production process is a function which should be carefully designed & selected.
A good production process can minimize wastage, save time & increase quality of the outputs.
Though there are various types of production processes in business organizations, in here we
identified a continuous flow production process according to the research we conducted to
study the production process of Ceylon Chocolate Ltd. After the factory visit we were able to
analyse & find key strengths & weaknesses in their present system. Accordingly strengths
such as,

- High concern on employee safety

- Continues employee supervision
- Good location
 - Good layout design

Were noticed.

Whilst, we also noticed major weaknesses that may affect negatively when adding
value to the customers, such as insufficient capacity, using lot of manual labour, not using
modern technology etc., thus, the company should concentrate on enhancing their existing
strengths whilst reducing weaknesses to become more successful in the competitive market.

References