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National Cranberry Cooperative

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by

Tessel Bonekamp

on 2 October 2014

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Transcript of National Cranberry Cooperative

Case study
Process flow
Dry process
Wet process
Bottleneck wet berries
Bottleneck dry berries
Assumptions
- Dryers process all wet berries at 200 bbl/h
- Effective capacity of each separator line is 400 bbl/h
- Capacity of 5 dumpers; 3,000 bbl/h
- Holding bins 17-24: wet berries only because of their percentage (70%)
- One dechaffing machine solely for dry berries, 2
for wet berries
- Berries must go into temporary holding before entering dechaffing and destoning units
- Travel time between processing operations is negligible & no storage except bins and trucks.

Company background
- National Cranberry Cooperative
- Owned by growers
- Operations all over North America
- Analysis of the process at receiving plant #1 (RP1)
- Water vs. dry harvesting
- Peak season fresh fruit: 1st Sept. - 15th Dec.
- Expected water-harvested berries: 70% of total
Statistical Fluctuations
- Timing of deliveries & nr. bbls

- Ratio water to dry harvests (increasingly water harvested)

- Received various qualities of cranberries

- Difficult to manage work schedules and shifts
(overtime)

- High and different volumes of waste
National Cranberry Cooperative
Problems
NCC needs to create efficiencies for process
during peaks in production.
If not: a bottleneck will occur --> delays &
increased overtime costs


- Bottleneck in the process
- Poor unloading driver schedule
- Unnecessary overtime costs
- Inaccurate grading system
- Insufficient processing start time

Recommendations
Short term:
1. Start process earlier (dechaffing at 7AM, not 11AM)
2. Schedule truck arrival time --> four-hour shifts
Total deliveries in 1980: 610,185 barrels
Normal deliveries per truck: 20-400 barrels
Average: 75 barrels
-->
610,185/75 = 8,136
truck loads each season
5-10 minutes to dump berries onto Kiwanee dumper
Average 7.5 minutes
(8 h * 60 min) / 7.5 min = 64
trucks / dumper / day
64 trucks * 5 dumpers = 320
trucks per day
--> 40 trucks per hour can be scheduled
3. Reduce workers absenteeism: strict policy
4. Schedule the workforce better
For 1980; RPI utilized about 12,000 labor-hours in overtime
Straight time pay rate averaged $6.50 / hour
--> total overtime payment $39,000
5. Convert wet bins into dry bins: nr. of bins to be converted:
(4,488 - 3,200) / 250 = 5.15
--> Convert 6 wet bins into dry bins
Romain van Nieuwenhuyse
Gaetan Morval
Tessel Bonekamp

Assumptions
- % wet cranberries will continue to rise
- For all calculations the 70/30 ratio is used
- Trucks currently do not receive time tables
- 1980 data is sufficient for predictions for
following season
- Averages used when specific data was unavailable.
- AVG "busy" day: 19 000 bbl in 11 hours
Problems defined
1) Bottleneck occurs when:

A: Wet holding bins (17-27) are full:
--> Capacity = 3 200 bbls/hour
--> Backs up into Kiwanee dumpers

Example from 1980:

Bins become full after arrival 3 200 barrels
Dumpers become full at 3 000 barrels
B: Trucks waiting time:
Wet Berry
Arrival Rate
(19,000/11) * 70% = 1,209 bbl/hour
Wet Berry
Process Rate
(drying unit)
600 bbl/hour
Excess Inventory =
AR - PR
609 bbl = 1,209 bbl - 600 bbl
Wet berry only bins 25-27, capacity 1 200 (400 bbl/bin)
Wet or dry berry bins 17-24, capacity 2 000 (250 bbl/bin)
Wet berry bins will be full after 5.25 hours
3200/609=5.25 (12:15 PM)
C: Dryers for wet cranberries are full:
--> Capacity = 600 bbls/hour
--> Estimate flow = over 900 bbls/hour
- Estimate the number of hours the plant must operate to complete one day's work
- 19 000 bbl to be processed and 70% wet
- Evenly spaced arrivals starting 7AM (for 11 hours)
- Processing starts at 11AM

Bottleneck is dryer capacity (600 barrels/hour)
Wet berries:
70% * 19,000 = 13,300
barrels
One day:
13,300/600 = 22
hours to complete
19 000 barrels

2) Overtime cost:
High % of overtime hours:
12,000/34,000 * 100% = 35.3%
of total hours

In 1980: 12 000 overtime hours
--> estimated costs
MAX.:
$9.75*12,000 hours = $117,000

full year employees
MIN.:
$6*12,000 hours = $72,000
seasonal workers

Why so high?
- Length of time to process berries
- How long to operate plant/schedule workers
3, 4& 5)
3) Inaccurate berry grading system:
- Numbers 1, 2A, 2B, 3
- Unnecessary $0.75 premium costs
for number 3
- 450,000 bbls NR. 3 --> 50% was
actually NR. 3 quality:
(450,000*$0.75)/2 = $168,750
4) Insufficient temporary holding
capacity:
- Wet bin holding capacity: 3 200 bbls
- Max. inventory (bins & trucks):
4 488 bbls

5) Inefficient processing start time:
Trucks arrive at 7AM to load
the cranberries but the process
only starts at 11AM

Long term:
1. Purchase 2 dryers
2. Purchase light meter system
premium cost saving-system cost =net benefit
$168,750-$20,000=$148,750
6 months to set up new equipment
3. Decrease nr. of full time workers &
increase nr. of seasonal workers
4. Find use for RP1 during cranberry off-season
--> Possible crops: Cherries, blueberries, peaches, rhubarb, peas, strawberries, sweet onions
Recommendations
Conclusion
- Purchasing new machines (dryers & light meter system): enable RP1 to process faster --> reduce labor cost & overtime premium

Improving workforce schedule: decrease overtime costs

Conversion of bins & trucks schedules: reduce truck waiting time

Implementation of policy: improve absenteeism situation
Full transcript