Case study: Daily Bread Co.

Daily Bread Co. is a big bakery company located in a bustling urban area. The company specializes in
baking different types of breads and cakes and distributing them to local cafes, restaurants, and
individual customers. As the demand for bread grows in the area, Daily Bread faces challenges in
optimizing its production processes to meet increasing customer demand while maintaining high-
quality standards. While the owners are pleased with the increase in their sales, they realize they
need to assess their capacity and maybe consider expansion.

Product Sales

Bread and cake production at Daily Bread is currently limited to a single 8-hour shift per day, 7 days
per week. During peak hours, Daily Bread maintains a staff of 3 to 4 employees who are more than
capable of running the highly automated process without any additional slowdowns. Currently, Daily
Bread sells, on average, 8320 pieces of bread per day of all varieties.

Production

The bread-making process consisted of four stages: (1) batching, (2) mixing, (3) production, and (4)
customizing.

Stage 1: Batching

The batching stage starts with an operator combining all the ingredients in a mixing bowl. Water is
added first, followed by all of the dry ingredients contained in the bread recipe. It takes 2 minutes to
place the ingredients in the mixing bowl. The equipment could handle batches of dough of various
sizes ranging from just 1 kg to over 10 kg. Each piece of bread required exactly 50 gr of dough.

Stage 2: Mixing

Once all of the ingredients are combined, the batch is placed in the mixer. The mixing process takes
2.5 minutes per batch, and the mixer turns off automatically at the end of the process. Daily Bread
has 2 mixers.

Stage 3: Production

The production stage consists of three steps: (1) extruding, (2) baking, and (3) glazing.

Extruding: After mixing, the dough is transferred into the extrusion machine container. There the
dough is pushed through cylindrical cutters that extrude the dough into individual pieces that are
eventually turned into the finished pieces of bread. The machine uses a set of 2 cutters. Each cutter
can extrude dough at a rate of 13 breads per minute. The machine has to be set up before each
batch is extruded. This includes cleaning the machine from the previous batch, cleaning the cutters,
and adding a fresh batch of dough. The setup takes approximately 1.5 minutes per batch.

Baking: After being formed by the extruder, the breads are dropped directly into hot shortening in a
long and narrow oven. The oven runs continuously and has sufficient space to handle as much bread
as the extrusion machine provides. The breads stay in the oven for 90 seconds. Surface rods push
the pieces of bread through the oven.

Glazing: The baked pieces of bread cooled on a conveyor for 45 seconds before passing through the
glazing machine. The cooling conveyor and glazer also ran continuously and had sufficient space to
handle as many pieces of bread as the extrusion machine provided, so finished pieces of bread were
produced at the rate at which they were made by the extrusion machine.

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Stage 4: Customising

In the customizing stage, breads are customized to either be placed for sale at the counter or
packaged for specific customer orders. One employee handles the customization step. On average,
the employee can customize two breads every 3.5 seconds.

The problem:

Daily Bread has noticed a disturbing trend. Each day, they are turning away customers because they
are unable to make enough pieces of bread to meet demand. They need to find a way to increase
their capacity. One change they consider is to increase the batch size. The standard batch size that
they use is 2600 gr. The mixer and the extruder can handle much larger batches; however, they want
to keep the batches as small as possible to not wear out their equipment prematurely. Alternatively,
the staff suggest there could be a way to keep the current batch size, and instead, focus on
improving some of the more manual steps in the current process to increase capacity. Finally, they
know that the extruder could be modified to operate with 4 cutters and increase the rate at which
pieces of bread could be extruded. They are cautious regarding this option though since setting up
the extruder for 4 cutters takes longer than the setup time required for the existing 2 cutters.

Questions:

1. What is the bottleneck of the process? What is the overall capacity for the process?
2. What happens to the position of the bottleneck if the batch size is increased to 4 kg? The
cycle times and the setup times for each step remain unchanged.
3. If the company decides to keep the batch size at 2600 gr and instead, focus on reducing
the setup time for the extrusion process, by how much must they reduce the setup time
in order to meet his demand?
4. If they decide to invest in the set of 4 cutters, what setup time would be needed to meet
the demand using the standard 2600 gr batch?
5. What would be your recommendations for the company managers?