National Cranberry Cooperative

Backgrounds

NCC is Cooperative owned by growers. Peak session runs September 1 – December 15. Water Harvested berries is expected to increase from 58% to 70% in coming season. On February 14, 1996, Hugo Schaeffer, the vice president of operations at National Cranberry Cooperative (NCC) is reviewing the previous year’s process of fruit operations at receiving plant 1 (RP1). Problem faced at NCC were not properly addressed in the new capital expenditures made in 1995. The previous $100,000 investment in a new dumper did not solve the problem because NCC did not recognize the existence bottleneck in RP1 operations. As a result, overtime expenses continue to plague NCC due to slow throughput time. In addition, growers (owners) are upset at the additional cost burden and idle time of truck deliveries. This report will analyze the current state of RP1, analyze the Superintendent Walliston’s recommendations, and provide justification for implanting the recommendations.

In the existence of a bottleneck, few dimensions can be altered to alleviate it. The path of the process can be elongated or altered (Which adds time), work-in-progress area can be created or the path can be widened with increased capacity (capital investment). Based on the predicted harvest makeup of 70% wet berries, RP1 needs to augmented to accommodate wet capabilities through additional capital equipment expenditure (widening the path) or additional labor expense (Stretch the time).The exact decision will be based on NCC's short and long term strategies.

If the VP of the operations anticipate fluctuation in berry harvests from year to year in terms of wet vs dry berry composition, it may be more practical to keep costs low and flexible by continuing to rely on additional labor when needed. This however comes with sessional overtime expense. If the composition of future berry harvests is expected to remain consistent over the long term, then capital expenditure is better option. This will eventually eliminate overtime expenditure too.

Process Flow diagram of NCC:

[pic 1]

Problem Analysis:

In my analysis, RP1 has two major problems affecting its performances and two non-critical problems in the case:

Problem 1: Long waiting hours to unload the truck

The RP1 plant that was originally equipped to process more dry cranberries, now faces an increasing supply of water-harvested (wet) cranberries (which is estimated to now make up 70% of the total cranberries processed for the year). This is seen from great disparity in holding capacity for the dry berries (up to 24 x 250 = 6000 bbls) compared to (3 x 400 + 8 x 250) 3200 bbls of wet berries prior to the processing of these raw materials.