National Cranberry Cooperative

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  • Published : June 5, 2010
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25th May 2010
Submission by: Group-B
Dhananjay Kumar
Kshitij Kulkarni
Pankaj Shrivastava
Rajesh Premchandran
Salil Choudhary
Siddharth Sinha
Tanushree Datta

* Hugo Schaeffer, VP, Operations faces 3 problems during the harvest season at the National Cranberry Cooperative (NCC). a. Drivers and trucks spend up to 3 hours unloading cranberries when it takes around 5-10 minutes to actually unload if the holding containers are available b. Overtime costs have increased considerably as NCC struggles with absenteeism c. There are problems associated with Grading Inputs as NCC overpaid around 50% of the time for inferior quality cranberries *

* The current operations of NCC are analyzed based on Time, Cost, Quality and Flexibility as performance parameters. 1. Time
* The continuous process operation for Process Fruit consists of various stages. There are two parallel streams: wet and dry processing. Figure 1 shows how the two parallel streams merge at the Quality Grading Process Area. *

* This table shows the per hour capacity for each operation for Wet Process Dumping| Holding| Dechaff| Dry| Quality|
2100| 3200*| 3000| 600| 840**|

* This table shows the per hour capacity for each operation for Dry Process Dumping| Holding| Destone| Dechaff| Quality|
900| 4000*| 4500| 1500| 360**|


*Option of using part of 2000/hr from bins used for both dry and wet added to wet since capacity of dry is enough to sustain 900 bbl/hr. ** Capacity for wet and dry at 70:30, =.7*1200=840,360

* The rate at which cranberries are unloaded is greater than the rate at which the Temporary Holding bins are unloaded into the Dechaffing and Destoning process for wet and dry process respectively. Further, Drying for the wet process can only handle 600 bbl/hr. This would cause congestion at the Dechaff level which in turn causes delays in emptying holding bins for the wet process. * The same argument would hold for the dry process. “Separating” is the bottleneck for the Drying Process. *

2. Costs
* The Cost related to quality grading is covered in the next item. The Overtime costs incurred is about 87% of direct hours during peak season. See Figure 2. This reflects on the actual labour that is needed to process the volumes of cranberry produced. However, since only 1 shift is run, this area needs significant attention. *

3. Quality
* The problem of Quality Grading results in overpayment to the farmers. At .75c a bbl, 225000 bbls amount to $168750 in excess payments. The costs involved in tackling this problem is $20000 for light meter and another Salary paid to a new employee. This being a cooperative, any profit or loss is borne by the farmers. So the more equitable distribution of wealth happening currently is favourable to those farmers who produce inferior goods, but get compensated more. *

* If the Quality of customer experience is considered both the average truck wait times and the cost of the waiting period impact the farmers’ profits. *
4. Flexibility
* Flexibility in cranberry processing can be based on several factors. a. The percentage of berries that are water harvested determines the number of bins to allocate to wet berries. This also determines the dryer capacity, as it is the bottleneck for wet berries. That in turn affects the milling allocation and subsequent treatment at finish processing plants. b. The total production is seen as increasing each year. In order not to affect market prices 10% is set aside. Yet, RP1 struggles to process the 90% remaining berries on time. c. The ‘daily delivery’ also affects the manpower scheduling and truck arrival rates. From ‘Figure A’ in the case, we...
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