Harvard Business School
August 5, 1997
Natural Blends Inc.
Natural Blends, Inc., located in Orange Grove, Florida, manufactured orange juice concentrates1, typically prepared for brand-name juice producers, such as Minute Maid, Tropicana or Sunkist. The market for premium orange juice concentrates with distinctive color, consistency and taste had become increasingly specialized in recent years, as national brands demanded a variety of customized juice blends. Natural Blends met these needs by blending its four different concentrates to customer specifications. In light of rapidly changing customer needs, Natural Blends’ management had decided to conduct a review of its existing operations and an analysis of its future plans.
Recently, a team of bright and juice-conscious students from a well-known Eastern U.S. business school visited one of Natural Blends’ smaller-sized facilities in Orange Grove, Florida. Utilizing knowledge and skills from their first-year operations course, they decided to first assess the facility’s existing operations in order to advise Natural Blends management in their selection of production contracts for the coming year.
The Production System
The facility operated at capacity, with one 8-hour shift per day, six days a week, for a total of 36 weeks per year during the prime orange growing season. Exhibit 1 depicts the key elements of the continuous production process. The production process consisted of six operations: (1) sorting/storing, (2) extraction, (3) filtration, (4) concentration, (5) testing, and (6) blending. Comparing the capacity of different steps in the process was complicated by the fact that the product’s volume was reduced (due to removal of seeds, water, etc.) as it moved through some of the process steps. To simplify matters, capacity was measured in terms of the equivalent amount of finished juice concentrate. Thus, to analyze each step, the production capacity or storage capacity was described in units of finished product actually achieved.
1 Concentrate: liquid orange juice which has had some water removed.
Research Associate Karen Krause prepared this case under the supervision of Professors H. Kent Bowen and Ramchandran Jaikumar as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
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Schematic Representation of Natural Blends’ Orange Juice Process
Natural Blends Inc.
Sorting/Storage. Florida growers delivered three sizes of oranges (small, medium and large) to the Orange Grove plant on a daily basis. Natural Blends ordered only what it needed to meet daily production requirements. Oranges were sorted by size and stored in three separate bins. (Time spent sorting and filling bins was negligible.) Each storage bin had a capacity of 80,000 pounds. (This meant that each bin could have held the number of oranges required to produce 80,000 pounds of finished juice concentrate.)
Juice Extraction. In this process step, the extractor had to be setup to extract the juice from one of the three sizes of oranges. The time required to change over the extractor when switching from a bin of one size to another size was 20 minutes. When it ran, the extractor had the capacity to produce up to 20,000 pounds/hour of finished juice concentrate, irrespective...
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