Malt House Renovation Strategy for Dragon Brewery Beijing
This case study examines the operational and quality challenges facing Franz Berger, quality assurance manager at Brewing Partner Ltd. (BPL) in Beijing. The paper focuses on the deteriorating malt house at Dragon Brewery, identifying problems including unbalanced ventilation fans, sludge-clogged gear boxes, fire hazards from exposed wiring and dust accumulation, rodent infestation, and dangerously low equipment utilization. Four solutions are evaluated: partial refurbishment, complete equipment re-fitting, leasing to a foreign maltster, and selling the malt house outright. The paper recommends complete re-fitting as the most practical option given China's centralized management culture and the brewery's preference for maintaining an internal production cycle, while emphasizing the necessity of worker safety education.
- Introduction: BPL and the Dragon Brewery Challenge: BPL's mission to improve Dragon Brewery quality
- Malt House Operations and Their Role in Beer Production: Malt's role in beer and Dragon's 1988 facility
- Key Problems Identified in the Malt House: Dust, fire hazards, rodents, and low utilization
- Proposed Solutions for Malt House Improvement: Four solutions from refurbishment to asset sale
- Evaluating the Best Solution: Re-fitting recommended given Chinese management context
- Conclusion: Summary of problems, solutions, and final recommendation
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What makes this paper effective
- The paper grounds its analysis in concrete operational detail — specific cost figures in Rmb, utilization rates (100 days vs. 330 optimal), and equipment lifespan projections give the argument practical credibility.
- The author goes beyond the case's presented solutions by proposing a fourth option (selling the malt house), demonstrating independent analytical thinking while clearly flagging data limitations.
- The recommendation is contextualized within China's broader management culture and regulatory environment (restrictions on firing workers, centralized economic planning), showing awareness of external constraints on business decisions.
Key academic technique demonstrated
This paper demonstrates structured comparative analysis: each solution is introduced with its implementation requirements, costs, and advantages before being weighed against the others. The author explicitly flags trade-offs — for example, noting that refurbishment is a "patching" solution, while the re-fitting option justifies higher upfront cost through a 20-year lifespan. This cost-benefit framing, tied to contextual feasibility, is the paper's central analytical method.
Structure breakdown
The paper opens with context about BPL and Dragon Brewery, then narrows to the malt house's role in beer production. It systematically catalogs equipment and safety problems before presenting four solutions in ascending order of scope and cost. The final sections evaluate feasibility in the Chinese business context and deliver a clear recommendation, closing with a brief summary of the argument.
Introduction: BPL and the Dragon Brewery Challenge
Franz Berger is quality assurance manager and master brewer at Brewing Partner Ltd. (BPL), a Beijing-based management services organization. BPL had been established by the China Investment Group (CIG) with the precise mission of helping two local breweries — Dragon and Golden Spring — realize their aggressive return on invested capital targets. One of the main tools in achieving these goals was an improved product that could begin to rival some of the Western beers that had appeared on the Chinese market (Foster's, Budweiser, etc.). These beers, even when sold at a much higher price than local beers, had become serious competitors through their higher quality and Western brand recognition.
In his attempt to improve product quality, Berger implemented several measures aimed at monitoring and controlling the production process. Among these, he introduced testing programs and sampling methods to track everything from alcohol and pH levels to microbiological control and taste tests. Despite obvious successes, Berger maintained that improvements remained minimal after two and a half years on the job. This was mainly because many gains had been counterbalanced by problems related to the malt house or to specific features of Chinese management practice — including the fact that many production facilities were overcrowded due to strict governmental policies restricting layoffs. For Berger, however, the central concern remained quality as it related to the production facilities, and specifically to the malt house.
Malt House Operations and Their Role in Beer Production
Because malts act as the catalysts that transform starch into sugar, malt production is a key stage in beer production. A brewery generally has two options regarding malt supply: it can either produce malt internally within its own facilities, or it can purchase it from an outside producer. Even though business trends in the late twentieth century leaned toward decentralization, Dragon chose to produce malts internally and built its malt house in 1988 using mostly local equipment.
The malt house Dragon built consists of two separate buildings, each with a specific purpose. The first building is used for cleaning grain entering the malt house and for processing the finished malts. The second building is used for steeping, germination, and kiln-drying operations.
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