A Plant Visit Presentation

Mission

Our mission is to serve consumers with the best quality assortment of great-tasting

bakery and related food and beverage products, with world-class manufacturing facilities and an

efficient nationwide distribution network, thereby providing a fair return on shareholder

investments.

Vision

Our vision is to become the premier company in the baking industry and the related food

and beverage industry, known and emulated for our best quality products that delight the

consumer. It is the pride of every employee, investor, trade partner and stakeholder.

Tracing Back Its History: Gardenia’s Humble Beginnings

Gardenia's roots go back to Singapore where, in 1978, it began as a humble in-store

bakery. Increasing demand led to the opening of Gardenia's first-commercial bakery at Pandan

Loop in March 1983. Gardenia has since been the market leader in Singapore and has expanded

its operations in Asia to countries such as Malaysia and Thailand with the latest in the Gardenia

chain of bakeries here in the Philippines.

It all began in 1997, QAF Limited through Gardenia International Pte. Ltd. established

Gardenia Bakeries Philippines Inc. and started construction of its bakery plant in Laguna

International Industrial Park (LIIP), Biñan, Laguna.

Gardenia Philippines started its operations in 1998 with the state-of-the-art bread factory

rated as one of the most modern large scale bread manufacturing facility in the country. Its

major, highly-automated equipment come from the best bakery equipment suppliers from

Germany, Holland, UK and USA making it the leading manufacturing company in the

Philippines. Over the years, Gardenia has gained wide acceptance and is now considered as the

most widely distributed loaf brand, reaching many parts of the country. 

History

1978 Gardenia first started as a small in-store bakery at Bukit Timah Plaza producing variety

bread, with the help of experienced American baker, Horatio 'Sye' Slocumm, who had

35 years experience in the bakery business.

   

1981 Production was growing rapidly and plans were underway for a larger commercial

bakery.

   

1983 A commercial bakery was finally started in March 1983 at Pandan Loop, producing

2000 loaves per hour.

Originally based on the concept of a central bakery supplying a variety of products

mainly to retail bakeries, this changed to a single-minded concentration on producing a

white sandwich loaf distributed to all retail outlets including supermarkets and sundry

shops.

Launched against entrenched competition; but with a superior product (softer-textured,

tastier-flavoured and enriched bread), modern distinctive packaging and good marketing

(effective advertising, merchandising and distribution),Gardenia bread gradually gained

popularity. Its merits of being baked fresh, using the finest ingredients and delivered

fresh made it the most popular brand of packaged bread in Singapore within two years.

   

1986 In August, Gardenia expanded its operations by building a modern bakery that utilized

the latest processing techniques.

   

1987 Gardenia ventured into Thailand.

   

1991 The first Gardenia bakery in Kuala Lumpur, Malaysia was commissioned.

 

1993 A second bakery in Singapore was set up in June 1993, with a production capacity of

8,000 loaves an hour.

To keep up with a growing demand and modern baking technology, substantial funds

were ploughed into building this new state-of-the-art bakery. Costing S$18.5 million,

this new Gardenia bakery in Singapore increased manufacturing capacity by 2.5 times

without compromising on quality. Equipped with new computer-generated equipment,

this highly automated plant ranks among the most technologically advanced in the

region.

   

1994 Gardenia commissioned a second bakery in Kuala Lumpur, Malaysia.

   

1996 Gardenia expanded with new bakeries in China and India.

   

1997 Gardenia further extended its regional operations to the Philippines.

Gardenia acquired a third bakery in Kuala Lumpur, Malaysia.

   

1999 Gardenia invested in a fourth bakery in Johore Bahru, Malaysia.

   

2001 Gardenia acquired Bonjour. It has since become the No. 2 brand in Singapore for

packaged loaf bread after Gardenia.

Gardenia set up a fifth bakery in Bukit Kemuning, Malaysia.

   

2002 Gardenia built a new bakery in the Philippines.

Present Despite a competitive environment, Gardenia has remained the market leader till

today. This speaks volumes for the many painstaking efforts that have been invested

to ensure that its products are constantly a cut above the rest.

CURRENT SITUATIONS IN PRODUCTION AND OPERATIONS MANAGEMENT

DEPARTMENT

A. PRODUCT/ SERVICE QUALITY STANDARDS

ISO 9001:2008 (INTERNATIONAL ORGANIZATION FOR

STANDARDIZATION )

ISO 9001:2008 sets out the criteria for a quality management system and

is the only standard in the family that can be certified to (although this is not a

requirement). It can be use by any organization, large or small, regardless of their

field of activity. In fact, ISO 9001:2008 is implemented by over one million

companies and organizations in over 170 countries.

It aims to enhance customer satisfaction through the effective application

of the system, including process for continual improvement of the system and the

assurance of conformity to customer.

In Gardenia, it serves as a proof that every aspect of the procedure meets

the organization’s high quality standard from the ingredients used to the over-all

manufacturing process.

Hazard Analysis and Critical Control Point (HACCP)

It is a systematic preventive approach to food safety and pharmaceutical

safety that identifies physical, allergenic, chemical and biological hazards in

production processes that can cause the finish product to be unsafe and designs

measurements to reduce these risks to a safe level. Also, it attests that the

continues process, plant and product meets food safety standards in the production

of loaf and other breads they use equipments and machines to make their product.

B. LOCATION PLANNING

VICINITY MAP

Location, as almost every business treats it, is one of the most essential parts of a

business. Every firm must use location planning techniques. Location planning is a key success

in any business. For some, getting the right location can make difference between success and

failure.

There are lots of different factors considered in choosing the right location for a business

such as labor, land/building, transport and communication links, natural resources, customers,

language, image and competitors.

I. Labor

Gardenia hired employees both from inside and outside the vicinity. They hire

employees who are living nearby the company to ensure that they will always be on time

when it comes to working. How about those who live outside the vicinity? Gardenia

provides a free shuttle service for those employees who are living far from the site. This

is a way to keep the willingness of these employees to work for Gardenia.

Another thing, Gardenia is located inside the Laguna International Industrial Park

(LIIP), a center for industrial needs. This thing gives convenience to Gardenia in

acquiring additional needed machines like conveyors and its maintenance. Also, it is

accessible in Metro-Manila. It is only 12 kilometers from the Metro-Manila boundary, 25

kilometers from Makati and 30 kilometers from the Manila International Airport.

II. Land/Building

Gardenia is said to be the Philippines’ finest and biggest bread factory, thus, they

need wide space for its operation. Good thing is that, they are located in a space where

they can operate conveniently.

They are also far from residential area because as a factory, one requisite is that

they will produce fumes and other chemicals which can harm people of the community.

III. Transport and Communication

Good channels to travel and deliver goods are available for Gardenia. They are

near National Roads and of course, the South Luzon Expressways.

In terms of communication links, Gardenia can fully access the internet and

make use of their telephone to aid different matters concerning their production and

operation. The location can be able to transport materials and products in and out of the

site.

IV. Customers

Aside from the target markets, Gardenia also provide breads for the people near

the company through its “Baker Station” offering their products at its factory price. They

treat walk-in customers as important as those who buys their product in stores

nationwide.

V. Competitors

As the leading bread factory in the country, Gardenia locate their factory inside

the LIIP where it is the only business there in its type. This serves as an edge for the

company because they can keep confidential matters that adds to the success of the

comnpany.

C. CAPACITY UTILIZATION

Capacity Utilization is calculated as follows:

Capacity Utilization (%) = Actual output per month (or per annum) x 100%

Maximum possible output per month (or per annum)

Capacity Utilization = 19,500,000x100%

30,000,000

= .65 or 65%

Gardenia’s maximum output per month is 30,000,000, including white bread, wheat

bread and all other flavor breads that they are producing but, they are actually producing a total

of 19,500,000 per month, and its capacity utilization is only 65%.

Implications of Gardenia’s Capacity Utilization:

1. Fixed cost per unit become higher compared to having 100% capital utilization.

2. Wasted and overcooked bread, cause their financial implications.

Benefit of not 100% Capacity Utilization:

1. Machines will be lesser prone to damages and maintenance, thus, lowering the cost

of the production.

D. CAPITAL – INTENSIVE (method of production)

Since GARDENIA is in the industry of bread-making, to continue their high quality

standard in their process of Capital-Intensive, they require a relatively high level of capital

investment compared to the labor cost.

Take note that for them to maintain their high quality standard of bread-making, they use

machines that came from other countries. These processes are more likely to be highly

automated and to be used to produce on a large scale.

All of their machines are functioning 24-hours a day except Saturday morning for the

cleaning of their machines; this is what they call ‘wet cleaning’. As to their equipments and

machines maintenance, if it happens that a machine failure occurs, they will make sure that it

will be fix as soon as possible by ‘engineering’.

E. LEAN PRODUCTION

PRODUCTION PROCESS

Ingredients preparation

Sponge mixer

Fermentation

Dough Mixer

DividingRoundingIntermediate ProofingMoulding

Final Proofing Delidding Baking Spiral

Cooler

Bread SlicerAutomatic Bagger

G. Lock Sealing

Metal Detector

PRODUCTION PROCESS

In the initial process of bread production is the preparation of the base dough also known

as sponge. The first half of the ingredients to make bread is put on a sponge mixer which will

produce a quality sponge. Fermentation is an important process in bread production for it

enhances the aroma flavor and texture of the bread production after the sponge has been

prepared. It transferred to the fermentation room using the hydrolic pusher. It stayed there on

several hours to allow the format of the sponge. From the fermentation room the sponge is

transferred to the dough mixer using the dough throw elm. Then the fermented sponge is pour to

the dough mixer together with the remaining half of flour and other ingredients. The sponge

should remix to form the dough. After mixing content the prepared dough is put into an incline

conveyor.

Make up line consist the 4 major operations namely: dividing, rounding, intermediate

proofing and moulding. After the mixing dough section, the dough is transferred where it cut to

the required size and weight. Moulding it is the rounding of scaled pieces dough into a rolled and

smooth surface. Rounding process will retained its gas during the intermediate proofing period.

After the rounding process, the dough run on a check weigher wherein it record the weight

deviation to ensure the correct weight of every loaves. Next, dough pieces are now transferred

into intermediate proofer to allow the dough to rise so it will go to the moulding machine without

tearing. In the intermediate proofing the dough convey into rows to two separate moulder in

precise time. After this process moulding takes place to remove the gas on the dough. Here the

dough pieces are flattened rolled into cylindrical shape and cut it into final form prior to the

automatic element to the baking pan.

The baking pans are automatically sprayed by highly special baking oil process before

placing a loaded bread to prevent the bread from sticking to the pan during baking process.

Baking pan containing moulded dough is conveyed to the giant overhead proof box for the final

proofing. After this lidding is takes place wherein it automatically covers with the lid and

transfer to the final oven. Before entering to the oven the pan aligns in rows is mechanically push

into the final oven. They use special Programmable LPG in baking to ensure that no air

pollutants escape to the environment. By using programmable LPG the heat will produce

consistent baking result. After this delidding takes place the lid are mechanically remove then

depanning occurs wherein the air burst on the edge of bread pan.

The twin spiral cooling tower lowers the temperature of newly baked loaves. Here

thousands of loaves are cooled on moving conveyor at any given time. Before packaging the

bread mechanically slice by bread slicer and bag by the automatic bagger then travels through

the metal detector system to ensure that there is no metal contaminant. The high-speed

automated bagging system closes the bread bags and seals in the brands freshness with the G-

Lock. The G lock is a small yet strong clip that can be reused to close the pack and keep the

breads freshness and quality.

Lean production is an approach to management that focuses on cutting out waste, while

ensuring quality. This aims to cut cost by making the business more efficient and responsive to

market needs. This approach sets out to cut all activities that do not add value to the production

process, such as holding of stock, repairing faulty product and unnecessary movement of people

and product around the plant,

JUST IN TIME

Gardenia Philippines can produce minimum of 650,000buns and loaves daily and it

ranges in to millions during fixed seasons. By Ensuring that only fresh breads reach consumers

every day, Gardenia strictly follows its international policy of keeping only fresh stocks on the

store shelves. As soon as products come out of the factory, delivery vans and trucks leave the

production plant as early as 4 o’clock in the morning to bring the products immediately to

specific locations in the country. Replacing unsold breads in store shelves with only freshly

baked top-quality products during each day of delivery is a Gardenia practice unmatched in the

industry.

CONTINUOUS IMPROVEMENT

Gardenia Philippines continue improving the four ingredients of success a world plant, a

manufacturing plant offering a highly develop concept. Baked quality products made by

exclusive formula on pure ingredients and dynamic innovation made by people with a passion

for excellence, and consumer orientation. The four P’s plant, process, product and people are the

Gardenia’s Pillar of success and proven on the past decades.

Gardenia has the world advance and well creative facilities within the Philippines today.

The combination of continue product quality upon bread baking technology and incentive system

of distribution to the customer the highest level of 100 vision of gardenia Philippines that create

consumers highest level of satisfaction in the bakery industry today by delivering and

compromising the product quality and service. The gardenia consistently deprives the market

forward, setting standard to the industry to follow.

F. PRODUCT/PROCESS INNOVATION

Talking about Process Innovation, Gardenia has done a great improvement. From the old

way of baking breads, nowadays Gardenia is the country’s largest bread manufacturing plant.

They first had a 2k plant in Laguna on its first launch which produces 2,000 pieces of bread and

buns a day. Then they put up a 4k plant in mid 2004-2005 that produces 4,000 pieces of bread

and buns per day. Until they come up with their new 6k plant in 2009 which produces 6,000

pieces of bread and buns a day. After having a plant in Luzon, Gardenia launched their new 2k

plant in Cebu at 2011 to supply the needs o f their customer in Visayas and its nearby cities.

When it comes to Product Innovation, Gardenia had gone so far. By simply having a

classic white bread as its first product, they come up having different variety of loaves and

breads. They now have a lot of flavors like Black forest, Chocolate Chip Loaf and California

Raisin Loaf. Aside from this, they are also making a healthy-licious bread like High Fiber Whole

Wheat Bread, Sugar Free 12-Grain Loaf and Slim n’ Fit Wheaten Bread that has L-Carnitine that

helps burn fat for weight management. They are also producing Bunch of Buns like Regular

Pandesal, Hamburger and Hotdog Buns. Snacks and Toasts for kids like Muffins, Cream Roll

and Butter Toast. In addition to this, Gardenia is the first to introduce the 2-in-1 concept – the

Gardenia Double Delights. This is an innovative bread product that combines two delightful

flavors baked in one amazing loaf. Examples of Double Delights loaves include Choco and

Mocha Loaf, and Ube and Cheese Loaf.

G. RESEARCH AND DEVELOPMENT

Research and development Department of Gardenia Philippines focus more firmly to the consumers’ health and wellness from the start of their operations. This is why the company always produces healthy bread that is incomparable to other Philippine bread industries.

Gardenia Malaysia invests heavily in R&D. Their latest product, Gardenia Breakthru, demonstrate their commitment to give only the best to their customers. Gardenia Breakthru passed extensive clinical tests at the Glycemic Research Institute in Washington D.C. and are certified Diabetic-Friendly. This latest result reaffirms Gardenia Breakthru’s extraordinary qualities.

This new product is to be introduced in the Philippines for the near future. Because of its nutritional value and diabetic-friendly benefits, consumers can obtain good nutrition and stress-free food management while satisfying the taste of goodness with this product.

H. PATENTS AND REGISTERED DESIGN

Uncle Slocumm’sTag

This so called “Uncle Slocumm’s Tag”serves as a trademark or registered design for

Gardenia Products particularly for the White Bread. It symbolizes quality that Gardenia has in its

products because of the fact that their breads are made using the

process used by Horatio 'Sye' Slocumm who has 35 years in

baking industry.

Colorful, Eye-catchy and Upward Positioned Bagging

Gardenia is known to be one of those bread factory which

uses very colorful and eye-catchy lay-out of bagging their breads.

According to them, it is done so to capture the interestof their target customers.

In addition to this, Gardenia is also the first tohave an upward position in packaging their

breads. They do it that way so Gardenia products will be displayed in outlets and stores

upwardly, capturing the interestof the consumers.

G-Lock System

Gardenia is the first in the country to use the unique resealable and reusable plastic clip

called G-lock that seals in the bread´s freshness. The G-lock is easy to locate, easy to read, easy

to open and close and consumer-friendly. The G-lock contains all of the vital information that the

consumers might need such as the "best before" date and the suggested retail price. It even

contains information on which production line the bread was produced, and the batch number.

The G-lock system is an unmatched approach by Gardenia in ensuring the freshness and

quality of Gardenia breads. With unwavering dedication towards the attainment of total customer

satisfaction, the G-lock system is Gardenia´s way of keeping customers informed through a

unique quality system that is accessible and understandable to all. Now, buyers have a reliable

way of knowing which bread is the freshest giving them the freedom to choose whether they´re

going to buy the bread or not. That is consumer empowerment rolled into the small, unique

plastic chip.

COLOR-CODED G-LOCK

The G-lock color-coding is part of Gardenia’s quality control system. To prevent

confusion, 1 color per day is assigned, thus there are 7 G-lock colors assigned for the 7 days of

the week. The day always matches the color. The following are the G-lock colors with the

corresponding days:

This means, for example, that on a Thursday, a consumer will see on display shelf either a

blue G-lock which means it was delivered on Thursday, or a yellow G-lock which means it was

delivered the day before or Wednesday.

HOW TO USE THE G-LOCK

To open pack, simply twist the top of the plastic bag and lift the G-lock up and off the bag neck.

To reseal the pack, spin bag to twist bag neck and apply G-lock over bag neck with a downward, inward motion. The G-lock is a reusable closure to help keep your loaf fresh inside the bag.

The color of the G-lock indicates the day the bread was "baked for" with the "best before" date also printed.

Problems and Issues in Production and Operations

Delayed Delivery of Product

In delivering of products, Gardenia always ensure that they deliver their goods on time

and convenient to the customers but when there is a fortuitous event like typhoon there is a

possibility that their delivery/shipment process would be in delayed.

Rejected Dough

Dough are being process from the mixing machine down to fermentation, and make up

line which includes dividing and rounding the dough in to a circular shape, in this process there

are sometimes over weight dough which is being rejected by the weighing machine.

Rejected Bread

In the process of slicing of bread there are instances that there is an improper cutting of

bread caused by the machine. There are also instances that the bread is overcooked because of

longer stay in the oven, in that case excess breads are being wasted and not be edible anymore.

Malfunction Machines

As what always happen to all machines, it undergoes minimal malfunctions throughout

the year, even this problem happens so rare still it may cause a few delays on their transaction.

Returned Breads

Making sure that only fresh baked breads was delivered or served to consumer, Gardenia

makes sure that their breads wasn't last more than two days to every store, and as a result unsold

breads was being returned to the factor.

Suggested Way Forward

“Buy 1 Take 1 Bread”

When breads to be delivered are delayed (due to fortuitous events such as typhoon and

flood), it can no longer be delivered the next day because Gardenia is up to customer’s

satisfaction through providing them freshness in their products.

One remedy for this phenomenon is to implement the “Buy 1 Take 1” selling of breads.

Through this, they can minimize their loss and holding cost for warehousing the delayed

products.

Regular Maintenance of Check Weigher and other Machines

Gardenia is having their maintenance every Saturday morning to check the status of their

machineries whether it needs repair.

We suggest that they have their regular maintenance of their machines particularly the

check weigher so as to avoid “over-weight or double dough” in the process of making breads.

This can help them to decrease their cost of rejected unfinished products.

Rejected or Returned Breads

In cases when there are returned or rejected breads, they can still sell it at a lower price

because it can be used as feeds for fish.