The National Cranberry Cooperative

National Cranberry Cooperative

National Cranberry Cooperative

Introduction/Problem Statement

The National Cranberry Cooperative (NCC), formed by participating cranberry farmers in North America, is responsible for processing and marketing their product.  Hugo Schaeffer, President of Operations for NCC, realizes that they continue to have issues at one of their receiving plants – Receiving Plant 1 (RP1).   This is happening in spite of the fact NCC spent $75,000 on a Kiwanee dumper the prior year.  After discussing the issues with Will Walliston, Superintendent of RP1, Walliston believes the answer is to buy additional equipment (two dryers totaling $50,000) and convert the dry holding bins to accommodate both wet or dry product (16 bins for a total of $80,000).  Before NCC invests another $130,000 into Receiving Plant 1, Schaeffer asks his assistant Mel O’Brien to take a look at operations.   Schaeffer is concerned with the high employee absenteeism that is driving excessive overtime costs and the long wait times that are being experienced during the unloading process.  

Background/Key Issues

The National Cranberry Cooperative (NCC) is “one of the largest cooperatives in North America and services growers in Massachusetts, New Jersey, Wisconsin, Washington, Oregon, British Columbia, and Nova Scotia” (Tucker, 1983, p. 1).  In 1970, the growers and the government took advantage of the Agriculture Marketing Agreement Act and conferred to set aside 10% of the crops to control supply and maintain price.   This was known as the Cranberry Marketing Order of 1970.  Keeping up with current trends, NCC utilizes both wet and dry harvest methods.  This is an important benefit as water harvesting generally resulted in yields of 20% higher than those via a dry harvest.  The down side is that it did cause “some damage and shortened the time the fruit could be held prior to freezing” (Tucker, 1983, p. 2).  Peak season for NCC is 1 September through 15 December.  Expectations for fall 1971 look like the “percentage of water-harvested berries will increase to 70%, up from 58% the prior year” (Tucker, 1983, p. 1).  

There were several issues that need to be addressed at RP1 prior to the 1971 peak season.  A process flowchart was completed to gain a better understanding of how things were done (see Appendix A).  There are three primary problems facing NCC: (1) truck queue times for unloading are too long, (2) inaccurate grading of the berries is occurring, and (3) there are inefficient processing start-times.  

Waiting is one of the seven wastes of lean manufacturing, “it is the act of doing nothing or working slowly whilst waiting for a step in the process” (Wastes, n.d.).  Currently, growers are upset that trucks are waiting in long lines to unload berries.  Deliveries start as early as 7:00 a.m. and continue throughout the day until 3:00 p.m.  At times, wait periods can reach as long as three hours.  This backup is occurring when all Kiwanne dumpers are full.  This is where the first bottleneck occurs in NCC’s process.  A Bottleneck is “a step in the process where the process is limited in the volume it can handle” (Swan, n.d.).  In most cases, a bottleneck is caused by a task imbalance, constraint on capacity, or possibly a specialized process.  A constraint on capacity is occurring during the drying process.  A drying unit can only accommodate 600 bbl/hr (200 per each dryer).  The trucks start dumping berries at 7:00 a.m.  The maximum capacity of storage bins 17 – 27 total 3,200 bbls (bins 17-24:  8 x 250 and bins 25-27:  3 x 400).  Basically, the drying units are receiving 3,200 bbls an hour and can only dry 600 bbls an hour.  This is creating a bottleneck that ultimately causes the Kiwanne dumpers to backup and negatively impacting timely deliveries by the trucks.