Cranberry Cooperative Case Analysis

National Cranberry Cooperative Case Analysis

Critical Thinking, Reasoning, & Analysis

2012

Index

Problem Statement………………………………………………………………………..3

Executive Summary……………………………………………………………………….3

Analysis………………………………………………………………………………....3-7

Recommendations………………………………………………………………………...7

Appendix………………………………………………………………………………8-10

Problem Statement

National Cranberry Cooperative (NCC) vice president Hugo Schaeffer is concerned with the excessive overtime costs associated with employee absenteeism and long wait times for unloading at Receiving Plant 1 (RP1).

Executive Summary

At NCC trucks face up to three hours of waiting upon arrival due to lack of adequate temporary storage bins for the cranberries and bottlenecks at the dryers. In addition, the plant experiences considerable amounts of waste due to the miss-classification of berries. Hugo has asked myself, Mel O'Brien (assistant to Hugo) to determine if Will Walliston's (superintendent) suggestions to purchase two new dryers ($25,000 each) and to upgrade the dry berry holding bins to store water harvested berries as well ($5,000 per bin) are feasible. Before I make a recommendation he has asked me to evaluate the operation to see if we can improve them before the 1971 crop arrives.

Analysis

To begin my analysis I have given my team the task of creating a process flow diagram and time table (Exhibit 1-A) showing capacity and to gain an understanding of where our bottlenecks exist. In addition I have pulled the schedule for our High-Volume Periods (Figure E in the case) as we expect an increase in water-harvested berries to 70% for next season (also considered for the capacity time table).

First, to address the long wait times associated with the receiving trucks we need to examine where the bottle necks occur. According to Exhibit 1-A a back-up of berry processing occurs around 11am. At 11am the first batch of berries reaches the dryers which have our lowest capacity for processing (max 600bbls/hr). Currently, it takes 16 hours to completely clear the back-up at the dryers.

To figure out why we have a back up at 11am, I reviewed the shift schedules. Because the Destoning, Dechafting and Drying shift does not start until 11am and the capacity at the dryers is only 600bbls/hr, the inventory backs up. Because the Drying process takes so long, it would be beneficial to start the drying process earlier in the day so drivers do not need to wait as long for bins to become available. The longer we tie up the bins, the longer the drivers wait.

If the start time for the Destoning, Dechafting, and Drying shift moved up from 11am to 7am, when receiving opens, we would see a decrease in backed up inventory. The hours required to process the backed up berries would diminish from 16 to eight hours as shown in Exhibit 1-B. We could further reduce the back up of berries by staggering lunches and working through breaks. By changing the shift times, trucks will no longer wait up to three hours due to backed up berries at the dryers. Changing the shift times will not cary any additional costs; this would actually save money and boost employee morale. If morale goes up we could also see a slight reduction in absenteeism.

Although changing the shift times will reduce wait time for the trucks, it still does not increase total capacity or the bottleneck at the dryers. We must figure out a way to increase capacity. If we install new dryers we will reduce the bottleneck and wait times for the truck drivers even further. The two new dryers would increase capacity to 800bbls/hr maximum. If we can find a way to pay for the additional dryers ($50,000 total) and install them by next season, we will no longer experience a bottleneck here.

The bottleneck would then move to the bagging area of shipping where maximum total capacity is 667bbls/hr (total capacity per bagger is 222bbls/hr). Luckily, we have a fourth bagger reserved for breakdowns or jams that can be used to reduce the bottleneck. A bottleneck constitutes as a jam, therefore we should use this excess capacity to reduce it. Opening up this fourth bagger for use during one hour of the day will increase capacity of the bagging area to 889bbls/hr and eliminate the bottleneck here.

If we look at the new, desired process flow in Exhibit 3 we see that with new dryers the lowest capacity at the NCC exists at the bulk bin packaging and the dryers. Because