National Cranberry Cooperative

Table of Contents

1.) Introduction 2

2.) Process Analysis 2

3.) Process Flow at National Cranberry Cooperative 4

4.) Installing a Light Grading System 5

5.) Decreasing the truck waiting time 6

6.) Bag pack or Bulk Pack 8

7.) Conclusions 9

1.) Introduction

This case analysis looks at the two primary problems at the receiving plant no. 1 (RP 1) faced by National Cranberry Cooperative during the cranberry harvesting period, viz. 1) too much waiting period for trucks before they unload berries at the RP1 and 2) too much overtime costs. There is also a secondary problem regarding grading of process berries. Half of the berries graded top quality are actually not top quality and do not deserve extra premiums paid on the top quality berries.

2.) Process Analysis

We start by making a process flow diagram for the flow of berries at RP1 from the moment berries arrive at the RP1 in trucks to the moment they leave in RP1 after being bag packed, bulk loaded into trucks or loaded into bulk tins.

The capacities of the various processes are based on the assumptions or data as shown below:

Dumping Capacity

Number of Kiwanee Dumpers = 5

Average time taken by truck to load the berries onto Kiwanee Dumpers = 7.5 minutes

(Maximum being 10 and minimum being 5 minutes)

Average weight of berries in a truck = 75 bbls.

Dumping Capacity = 5 * 75 * 60 / 7.5 = 3000 bbls/hr.

Holding Bin Capacities

Bin No. 1-16 can hold dry berries only up to 250 bbls per bin.

Total capacity of bin numbered 1-16 = 250*16 = 4000 bbls

Bin No. 17-24 can hold dry/wet berries up to 250 bbls per bin

Total capacity of bin numbered 17-24 = 250*8 = 2000 bbls.

Bin No. 25-27 can hold wet berries up to 400 bbls per bin

Total capacity of bin numbered 25-27 = 400*3 = 1200 bbls.

De-stoning Capacity

No. of de-stoning units = 3

Capacity of each unit = 1500 bbls/hr

Total de-stoning capacity = 4500 bbls/hr

De-chaffing Capacity

No. of de-chaffing units = 3

Capacity of each unit = 1500 bbls/hr

Total de-chaffing capacity = 4500 bbls/hr

Jumbo Separator and Bailey Mill Lines

No. of separator units = 3

Average capacity of each unit = 400 bbls/hr

Total separator capacity = 1200 bbls/hr

Bagging Station Capacity

Maximum output per day = 8000

Working hours = 12hrs.

Capacity = 8000/12 = 667 bbls per day

Bulk Bin Loading Capacity

No. of loaders for bulk bin loading = 4

Capacity of each loader = 200 bbls/day

Total bulk bin loading capacity = 4 * 200 = 800 bbls per day.

Bulk Truck Loading Capacity

No. of loaders of bulk trucks = 2

Capacity of each loader =1000 bbls/hr

Total Capacity Bulk Truck loading Capacity = 2000 bbls/hr

3.) Process Flow at National Cranberry Cooperative

The bottleneck for wet berries is the drying process with a capacity ranging from 450-600 bbls/hr depending upon whether the wet berries are to be finally bagged or bulk frozen.

For dry berries the bottleneck will be the separator operation with a capacity ranging from 600-1200 bbls/hr. depending upon whether the separators are being used for separating dry berries alone or both wet and dry berries.

4.) Installing a Light Grading System

As given, out of a total of 4,50,000 bbls of berries graded as top quality only half were top quality and deserved the 50 cent per bbl premium. The light grading system which would accurately grade the berries would save 4,50,000*0.5/2 = $1,12,500 per season at one time investment of $10,000 and recurring cost of hiring a skilled operator at $10,000 (assumed)..This would lead to a substantial saving. But another fact needs to be considered that this is a cooperative organization. Although installing a light grading system would lead to increase in the margins of the receiving plant 1 but would be loss for the cooperative as a whole as money instead of being paid to farmers would go to worker who is hired. But status quo can also not be maintained as it leads to wrong distribution of benefits to farmers with a lower quality crop. An alternate solution can to be stricter in the manual grading process and increasing the variety of shade cards so that berries can be rightly classified. One more category in between 2A and 3 can also made having a lesser premium than quality 3. But the various other implications of this step should be taken into account like increased final processing cost and resentment from the farmers.

5.) Decreasing the truck waiting time

The main problem that the receiving plant is facing is that the trucks have to wait a lot particularly in the peak season before they can unload the berries. This cope up with the problem the cooperative installed an additional Kiwanee Dumper last year (i.e. 1969) but that didn't help in solving the problem.

We first analyze the average truck