National Cranberry Case Study

Sath Arjdthanoo        

Thaer Sabaana

Jory Simmons

National Cranberry Cooperative Case Study

Introduction

As one of the leaders in the cranberry industry, National Cranberry Cooperative (NCC) was an organization formed and owned by growers of cranberries. The organization was very successful; however, on February 14, 1996, Hugo Schaeffer, vice president of operations at NCC, came to realize that its operation had problems at receiving plant #1 [RP1]. After he reviewed last fall’s process operation, he realized that there were problems at RP1 affecting the organization. The problems at RP1 were overtime costs being expensive and the long waiting time for trucks and drivers to arrive at the plant. Schaeffer ordered his assistant, Mel O’Brien, to figure out the improvements needed to RP1’s operations. Schaeffer suggested that installing a light meter system, which costs $40,000, would benefit the plant for color grading. After O’Brien saw RP1’s operation, Will Walliston, the superintendent, recommended to her that with the wet berries increasing from 58% to 70%, it might be beneficial to add extra bins for wet berries or add more dryers to its process operations.

1. What are the problems facing receiving plant number 1 (RP1)?

1. The waiting time to unload at receiving is too long. Processing should take 7 to 8 minutes to complete. Stakeholders/growers are losing money having leased trucks with hired drivers sitting idle for up to several hours waiting for bins to become available for receiving.

Alternatives: Add more bins for wet berries at a cost of $10,000 each or add more dryers at cost of $60,000.

B.  Underestimation of staff hours needed for optimal operation.  During peak seasons, the plant paid more overtime than necessary to employees due to an unexpected increase in wet berries being harvested. Also, the two shift times, 7 am (receiving), and 11 am (entire operation) was also deemed to be inefficient for the employees to process the amount of increase in wet berries being harvested.  

        Alternatives: Continue having two shifts during peak seasons, but with a complete operating crew (not just receiving) working both shift the 7 am shift and the 3 pm shift.  

C. The grading process of berries between 2B and 3 is inaccurate. When there is a close comparison as to whether a load is 2B or 3, the chief berry receiver usually grades it a 3, this results in an overpayment to the growers.

           Alternatives: Installation of a light meter system for color grading at a cost of $40,000 and requiring a full-time skilled operator at the same pay grade as the chief berry officer.  

1. Draw a process flow diagram of the cranberry process beginning with receiving and ending with the Bailey Mills:

[pic 1]

1. Compute the capacity in barrels per hour for each step

• Bins

- 1-16= Dry Berries (250 bbls)= 16*250= 4000 total bbls

- 17-24= Dry and Wet Berries (250 bbls)= 8*250= 2000 total bbls

- 25-27= Wet Berries (400 bbls)= 3*400= 1200 total bbls

• Dechaffing (Wet Berries)

- 3 Units (1,500 bbls per hr)

- 3*1,500= 4,500 bbls per hr

• Drying (For Wet Berries after Dechaffing)

- 3 Dryers (200 bbls per hr

- 3*200= 600 bbls per hr

• Destoning (For Dry Berries Only)

- 3 Units (1,500 bbls per hr)

- 3*1,500= 4,500 bbls per hr

• Dechaffing (For Dry Berries After Destoning)

        - 1 Units (1,500 bbls per hr)

        - 1*1,500= 1,500 bbls per hr

• Separator

- 3 Separator Lines (400 bbls per hr)

- 3*400= 1,200 bbls per hr   

1. Consider a peak harvest day (19,000 barrels of berries unloaded with 70% of them wet harvested). Assume that trucks arrive uniformly over a period of 12 hours. Identify the bottleneck for the process.

On a peak harvest day, 19,000 barrels of berries are to be processed and out with 70% of them wet

→  19,000 * 70% = 13,300 bbls per day

→ 13,300 / 12 hrs = 1,108.4 bbls per hour

** The bottleneck could be identified by calculating the implied utilization:

⇒  The bottleneck is the Drying process for wet berries with 175% implied utilization at a capacity of 600 bbls per hour.

1. When would processing be completed on a peak day?

Flow rate R = Min { Demand, Process Capacity } →  { 1050, 600 } →  600 bbls per hour.