III.

Tracing Back Its History: Gardenias 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 firstcommercial 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), Bian, 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.

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.
Objectives
Gardenia has several objectives

To gain highest recall in bread products

To promote healthy lifestyle in the consumers.
To maintain loyal consumers.
To capture a larger chunk of market
To improve the availability of the product.

Internal Aspect
Operation

Production Aspect
Started at production level of 2,000 loaves per day in 1998, Gardenia has
since enjoyed an unprecedented growth in both sales and market share. The
continued patronage of the market and weak competition has allowed it to
expand its production to at present of 6,000 loaves per day and product line to
more than 30 products.
Gardenias main value proposition is its product quality and superior taste,
tapping the need of market on ensuring freshness, reliability and availability,
allowing the company to peg its products slightly higher than the other players.

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 breadmaking, 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. 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.

Marketing Aspect
Every consumer has different needs and wants, so Gardenia supplies
many variety of bread in order to meet the demand of the consumer in order to
satisfy them. Demand is a principle that the consumer willing to pay for the price
and also desire to buy the goods and services.
Consumers are very delicate when it comes to the food purchasing. Especially in
the Philippines, they want their breads to be fresh in the oven. Knowing this,
Gardenia Bakeries Philippines Inc. thought of how to ensure their market in the
country whenever purchasing their product.

Marketing Communications (Promotion) Strategy

 Integrated Creative Message Strategy

- So good you can even eat it on its own or masarap kahit walang
palaman
Media Advertisements (Radio and TV)
Sales and Promotional
Educational Tours
Distribution Channel
Gardenia Philippines pioneered a unique distribution system, ensuring that
only fresh breads will reach consumers every day. It strictly follows its
international policy of keeping only fresh stocks on the store shelves. Delivery
vans leave the production plant as early as 4 oclock in the morning to distribute
the products in specific locations nationwide as soon as it is produce from the
factory. Gardenia Philippines always replace unsold breads with their freshly
baked premium quality breads and other products.
Gardenia conducts extensive mass distribution of their product through
Retail Stores, Supermarkets, direct selling and grocery stores. Sponsorship in
events helps the company to distribute and promote their product by this new
channel. Products of Gardenia are mostly available nationwide, because of its
availability in the channel power.

External Aspect
Political/Legal Factors

Government rules and regulations affect Gardenias operation because of

it has to cope with the changes imposed by the Government. These rules will
help Gardenia improve its business operation but also it could have negative
impact on it since the government has control over the products and its price.
Gardenia is expected to comply with the requirements ordered by the
government.
Taxation policy affects the production costs of Gardenia. The price of Gardenia
breads depends on the price of its raw materials and higher taxes on these raw
materials indicates an increase in price in production costs of Gardenia which is
also an indication of an increase in the price of Gardenia products.

Economic
Key economic indicators include interest rates, gross domestic, retail price
index, unemployment rates and exchange rates. Philippines provide a growing
market for premium food product. Economy growth, and especially employment
in services sector jobs, is driving demand for more convenient and prepared
foods. Gardenia believes that the Gardenias success is brought regarding by the
dedication and commitment of each member of the Gardenia family. These
dedications are leading Gardenia to be the no1 in bread industry. During global
economic crisis, the industry had a flat growth but Gardenia continue to grow by
two to four percent. Gardenia should continue encouraging and providing more
opportunities for employment while making Gardenia bread more widely
available conveniently to customer.
Due to changes in economic factors such as increase in interest rates
could affect demand of customer for Gardenia products and this could be an
opportunity for the substitute products which might have negative impact on
Gardenias operation and profit.

Socio-Cultural Factors
Rapid growth of population in the Philippines is an indication of growth of
potential customers of Gardenia which could increase the demand for its
products.
Socio-cultural forces will affect the values, beliefs, and lifestyles of a
society. Over the past few years, rising levels of obesity, heart disease, and
diabetes in the Philippines have rapidly increased consumer interest in healthy
and nutritionally food and government interest in promoting healthier eating and
lifestyles. Breakfast is important for people for having healthier. According to the
Philippine Association of Flour Millers Inc. (PAMFIL) said that 85 percent of
Filipinos prefer to eat bread instead of rice for their breakfast. Consumers are
willing to pay anything that will make healthy and fit.
Technological
Developments in technology lead to new products and services and
improve how they are produced and delivered to the end user. As the top-bread
maker and leader of bread manufacturing industry, Gardenia using state-of-theart-bread manufacturing plant is capable making 6000 loaves of bread per hour
or nearly 150000 loaves per day. It is the equipment whereby almost untouched
by human hands. Therefore, it ensures providing safe and best quality of bread
product. New baking tools and equipments will help enhance/speed up
Gardenias production.
The development of internet is an opportunity for Gardenia to promote its
products online and enhance its brand image. Gardenia could enhance its
website and maximize the use of social media to offer online services and reach
new potential market. This will help Gardenia increase its market share and
influence customer purchasing decisions.

Plant Location and Design

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.
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.

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.

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.
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.

Observation and Interview

Capacity Planning
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%

Gardenias 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%.
Forecasting
Assembly line Balancing

Plant Layout
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,

Plant Location

Vicinity Map
Total Quality Management
Inventory Management
Operations Scheduling

References:
https://www.scribd.com/doc/101311816/Manmark-Final-Paper
https://www.scribd.com/doc/96893602/DMG-2063-Operation-ManagementAssignment-Gardenia-Report
https://www.scribd.com/doc/106065521/Gardenia-Bakeries-Philippines-Inc