NCC Issues at Receiving Plant No.1 (RP1):
Hugo Schaeffer, vice president of operations at NCC has currently identified three problems at the core of RP1. These three problems are: - Idle time: under the current process trucks are spending too much time waiting to unload cranberries at RP1 - Resource Utilization: the current allocation of full time and part time workers has resulted in increased costs as a result of both over time and absenteeism - Quality Assurance: NCC current quality check and grading of cranberries results in a large amount of bulk being wrongly classified resulting in premiums issued to lower quality or defective goods These three problems are a result of both ineffective manufacturing process flow and capacity management. To reduce overall costs and increase utilization, NCC needs to reengineer its production flow process and implement a structured capacity planning procedure.
Sources of NCC Variability:
There are several grey areas of inconsistency within the case that impacts the overall efficiency of NCC’s operations. These areas of inconsistency include; - Inspection: When the chief berry receiver grades the cranberries, if there is discrepancy between whether the berries are 2A or 3, the inspector allocates a grading 3. However, it is identified later in the case that a high percentage of grade 3 berries are actually 2A or below. This inconsistency impacts the NCC cost by issuing unwarranted premiums - Wet/Dry Break down: Although there is an assumption that 70% of berries will be wet each day, the figures in Exhibit 2 show that this figure is varies greatly, where most days during 1970 are far less. (ie, 9/28 38% wet berries). This inconsistency causes issues with regards to NCC capacity planning. - Temporary holding: Considering the breakdown of wet and dry cranberries the temporary holding bin capacity is not consistent with the amount produced. The current capacity...