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    National Cranberry Cooperative Case

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    Mano Ranjani
    The National Cranberry Cooperative processes cranberries at its Receiving Plant 1. There are several issues with the current operations: trucks have long wait times to unload berries, overtime costs are high, and the berry grading process is inaccurate. To address these issues, the report proposes: 1) Adding one dryer to increase drying capacity and reduce bottlenecks, 2) Converting holding bins to store both wet and dry berries to eliminate truck waiting, and 3) Installing a light meter system to improve berry grading accuracy and reduce losses from misgrading. These changes would improve the processing workflow and lower costs.

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    © All Rights Reserved
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    National Cranberry Cooperative Case

    Uploaded by

    Mano Ranjani
    17K views7 pages
    The National Cranberry Cooperative processes cranberries at its Receiving Plant 1. There are several issues with the current operations: trucks have long wait times to unload berries, overtime costs are high, and the berry grading process is inaccurate. To address these issues, the report proposes: 1) Adding one dryer to increase drying capacity and reduce bottlenecks, 2) Converting holding bins to store both wet and dry berries to eliminate truck waiting, and 3) Installing a light meter system to improve berry grading accuracy and reduce losses from misgrading. These changes would improve the processing workflow and lower costs.

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    National Cranberry Cooperative Case

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    The National Cranberry Cooperative processes cranberries at its Receiving Plant 1. There are several issues with the current operations: trucks have long wait times to unload berries, overtime costs are high, and the berry grading process is inaccurate. To address these issues, the report proposes: 1) Adding one dryer to increase drying capacity and reduce bottlenecks, 2) Converting holding bins to store both wet and dry berries to eliminate truck waiting, and 3) Installing a light meter system to improve berry grading accuracy and reduce losses from misgrading. These changes would improve the processing workflow and lower costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17K views7 pages

    National Cranberry Cooperative Case

    Uploaded by

    Mano Ranjani
    The National Cranberry Cooperative processes cranberries at its Receiving Plant 1. There are several issues with the current operations: trucks have long wait times to unload berries, overtime costs are high, and the berry grading process is inaccurate. To address these issues, the report proposes: 1) Adding one dryer to increase drying capacity and reduce bottlenecks, 2) Converting holding bins to store both wet and dry berries to eliminate truck waiting, and 3) Installing a light meter system to improve berry grading accuracy and reduce losses from misgrading. These changes would improve the processing workflow and lower costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    The cranberry processing plant is facing issues with long wait times for trucks, inaccurate berry grading, lack of capacity for wet berries, and overtime costs. The key bottleneck is identified as the drying process for wet berries.

    Long wait times for trucks, inaccurate berry grading between #2B and #3 berries, lack of capacity for wet berries resulting in more holding bins needed, and overtime costs being out of control are the main issues identified.

    The drying process for wet berries is identified as the bottleneck with 175% implied utilization at a capacity of 600 bbls/hr.

    1 National Cranberry Cooperative

    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,


    M. Thiruvarasu

    Introduction and issue statement


    National Cranberry Cooperative (NCC) is an organization, formed and owned by
    growers of cranberries, to process and to market their produce. Through a
    Receiving Plant # 1 (RP1), it processes dry and wet berries to prepare them for
    process fruit products (for example, juice, canned, frozen berries etc.). A recent
    review of last falls operations at RP1 by Superintendent and co-op members has
    identified following issues.
    Even after installing a 5th Kiwanee dumper at RP1,

    The waiting time to unload at receiving is too long and inconsistent. Once
    started, receiving is a 7 to 8 minute process, but the growers are upset as
    their leased trucks with hired drivers are sitting idle for unknown periods of

    time.
    Overtime at the plant is out of control.
    The berry grading process between numbers 2B and 3 berries is not accurate.
    Whenever there is a close comparison as to whether a load is 2B or 3, the
    chief berry receiver usually grades it a 3. In 1995 the number 3 berry
    premium was $1.50 and was paid on about 450,000 bbls. It was found that
    when the berries were used, only about half of them were number 3. This is a

    considerable loss in terms of price paid.


    There is not enough capacity for wet berries. There need to be more holding
    bins.

    Following business case discusses measures that can be adopted to cut wait times
    for better serving of our growers, to help decide equipment purchase for increasing
    capacity, to make the berry grading process more accurate as well as to cut
    overtime for cost controlling.

    NCC Process Analysis


    Process Flow Diagram

    2 National Cranberry Cooperative


    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,
    M. Thiruvarasu
    The process flow diagram of the process fruit operation at NCC is as shown on the
    next page.

    3 National Cranberry Cooperative


    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,
    M. Thiruvarasu

    4 National Cranberry Cooperative


    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,
    M. Thiruvarasu

    Capacity calculation
    Capacity of each process step is calculated in barrels per hour (bbls/hr). Please refer
    appendix page for detailed calculations.

    Receiving

    Dechaffing

    Drying

    2 units
    3000 bbls/hr

    3 dryers
    600 bbls/hr
    Separator

    5 dumpers
    3000
    bbls/hr

    3 lines
    1200bbls/hr
    Destoning

    Dechaffing

    3 units

    1 unit
    1500 bbls/hr

    Bottleneck identifi cation 4500 bbls/hr

    It was observed that on a peak harvest day RP1 receives 18,000 barrels of berries of
    which 70% are wet harvested and 30% are dry. If we assume that the trucks arrive
    uniformly over a period of 12 hours, the bottleneck could be identified by
    calculating the implied utilization:
    Process Step

    Calculations

    Implied Utilization

    Receiving (dry and wet

    (Demand/Capacity)
    1500/3000

    (In Percentage)
    50%

    berries)
    Dechaffing (wet berries)
    Drying (wet berries)
    Destoning (dry berries)
    Dechaffing (dry berries)
    Separator

    1050/3000
    1050/600
    450/4500
    450/1500
    1500/1200

    35%
    175%
    10%
    30%
    125%

    It is evident from the above calculations that here the bottleneck is


    Drying process for wet berries with 175% implied utilization at a capacity
    of 600 bbls/hr.

    Processing time on a peak day


    The peak day processing time can be calculated as,

    5 National Cranberry Cooperative


    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,
    M. Thiruvarasu

    Flow rate = Minimum {Demand, Process Capacity}


    o At a capacity of 600 bbls/hr & demand of 1050 bbls/hr, the flow rate =
    600 bbls/hr
    o Hence, Cycle time = 1/flow rate = 1/600 hr/bbls
    Time to produce 12600 barrels of wet berries = Time through empty system
    +( Units/ Flow rate)
    o Time through empty system = # of steps * cycle time = 4/600
    o Time to produce 12600 barrels of wet berries = 4/600 + 12600/600 =
    21.0066 ~= 21 hrs

    Hence, on a peak day it would take 21 hrs to process 18000 bbls of


    berries. Assuming that the process starts at 7.00 AM, it will continue until
    4.00 AM the next day with continuous operations.

    Unloading and waiting time for trucks

    At this flow rate, the number of barrels of berries processed in 12 hrs = 12 *

    600 = 7200 bbls/hr


    The total wet berries coming in for 12 hrs = 18000 * 0.7 = 12600 bbls
    The inventory accumulated = 12600 7200 = 5400 bbls
    Now, the holding bins for wet berries have a capacity of 3200 barrels, hence
    5400-3200 = 2200 bbls of berries will be waiting in trucks after 7.00 PM. Until
    the holding bins are emptied for the remaining 2200 barrels, the trucks would

    continue to wait.
    With the flow rate of 600 bbls/hr, time taken to free up these 2200 barrels=
    2200/600 = 3.6 hrs.

    Assuming every batch of trucks arrive simultaneously, the last truck would
    arrive at 7pm and wait 3.6 hours and unload at 10:40 pm.

    Proposed changes
    Add one dryer
    It is evident from the above calculations that drying wet berries is a bottleneck.
    Addition of one dryer would be beneficial as shown in these calculations.

    One dryer addition will change flow rate to, 4 * 200 = 800 bbls/hr
    In 12 hours, number of barrels processed = 12 * 800= 9600 bbls

    6 National Cranberry Cooperative


    A business case report by A.Chhatre, J. Parkinson, A. Sivaraman,
    M. Thiruvarasu
    Accumulated Inventory = 12600-9600 = 3000 bbls
    As the holding bin capacity is 3200 bbls, it will accommodate the accumulated
    inventory. This will resolve issue with waiting of trucks.
    The processing time now becomes (4/800) + (12600/800) = 15.8 hrs. This is a
    reduction of 5 hours over 21 hours. This helps reducing overtime payments to
    workers.
    A point to note is the cost of the new dryer is $60,000.

    Add holding bins


    Let us calculate impact of converting holding bins 1-16 from holding just dry berries
    to dry as well as wet berries.

    Number of holding bins required to hold the last 2200 bbls of inventory

    = 2200/250 = 8.8 ~= 9 bins.


    The cost required for this conversion will be 9*10000 = $90,000.

    Add a light meter system for color grading


    In 1995, NCC lost 1.5 * 450,000/2 = $337,500 on premium due to shortcomings in
    color grading process. A new light meter system installation that costs $40,000 with
    an additional full time skilled operator will help drastically reduce this loss.

    Summary
    In conclusion,
    By adding one dryer instead of the holding bins, we would solve the
    problem of the trucks waiting and also reduces the overtime costs
    which would not be possible by just increasing the number of holding

    bins.
    In addition to the dryer, the light meter system would reduce losses
    incurred by paying extra premium.

    Appendix
    Receiving:
    Although the berries in the truck are sampled for weighing and color coding we shall
    take the Kiwanee dumpers as the main equipment to calculate capacity at
    receiving.

    Time taken to empty 1 truck at Kiwanee dumper: 7 to 8 min.


    Average Time per truck: 7.5 min.
    Number of trucks per hour by 5 dumpers = 7.5*60*5= 40
    Capacity in barrels per hour = 40 * 75 = 3000 bbls/hr

    Wet Processing

    Dechaffing: Capacity of 2 units = 2 * 1500 = 3000 bbls/hr


    Drying: Capacity of 3 units = 3 * 200 = 600 bbls/hr

    Dry Processing

    Destoning: Capacity of 3 destoning units = 3 * 1500 = 4500 bbls/hr


    Dechaffing: Capacity of 1 dechaffing unit = 1 * 1500 = 1500 bbls/hr

    Separators

    Capacity of 3 line separators with average efficiency of 400 bbls/hr = 3*400


    = 1200 bbls/hr

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