National Cranberry Cooperative
National Cranberry Case Report
All Excellent Team
Summer 2012
Memo
By calculating implied utilization of every process, we found that the drying process for wet berries is a bottleneck ofRP1. Utilization of dryers is 180%!!! (comparing to 8~48% of other processes, it is so problematic). Because of this bottleneck, 480 bbls of wet cranberries are not processed per hour on an average “busy” day (17,280 bbls arrive over the 12-hour period). As a result, our temporary holding bins are full from 1:40pm to 11:16pm, the dumping process (=truck waiting) is kept going until 11:16pm, and RP1 shut-down time is delayed to 4:36am. This means, our company has to pay huge money for overtime and dumping cost.
To solve this problem, I strongly recommend you to add one more dryer to drying process. We can save $61,819 overtime cost and $13,659 truck drivers’ waiting cost. However, the cost for installing a dryer is just $25,000. We can save $75,478!
With one more dryer, we can shorten over time from 5.6hours to 0.2hours and truck waiting time reduced from 7.6hours to0.8hours. Because 0.2hours and 0.8hours are so small numbers, we did not calculate the case when we invest on adding two dryers.
Just in case, we notify you that you do not need to consider new investment on bins conversion which cannot solve the problem of overtime cost and net cost saving is -$96,206.
Even though it is not related to above bottleneck issue, investment on light meter system for color grading is quite reasonable. Last year, we pay $337,500more because of inaccurate classification. Installing light meter system costs just $40,000. We can save $297,500!
To abbreviate, we recommend you to invest on one additional dryer and light meter system.
Supporting Analysis : Working process of process fruit side of RP1
Receiving Dumping Temporary Holding destoning dechaffing drying Separation
(1 for dry,
2 for wet
Berries)
(1 for dry,
All Excellent Team
Summer 2012
Memo
By calculating implied utilization of every process, we found that the drying process for wet berries is a bottleneck ofRP1. Utilization of dryers is 180%!!! (comparing to 8~48% of other processes, it is so problematic). Because of this bottleneck, 480 bbls of wet cranberries are not processed per hour on an average “busy” day (17,280 bbls arrive over the 12-hour period). As a result, our temporary holding bins are full from 1:40pm to 11:16pm, the dumping process (=truck waiting) is kept going until 11:16pm, and RP1 shut-down time is delayed to 4:36am. This means, our company has to pay huge money for overtime and dumping cost.
To solve this problem, I strongly recommend you to add one more dryer to drying process. We can save $61,819 overtime cost and $13,659 truck drivers’ waiting cost. However, the cost for installing a dryer is just $25,000. We can save $75,478!
With one more dryer, we can shorten over time from 5.6hours to 0.2hours and truck waiting time reduced from 7.6hours to0.8hours. Because 0.2hours and 0.8hours are so small numbers, we did not calculate the case when we invest on adding two dryers.
Just in case, we notify you that you do not need to consider new investment on bins conversion which cannot solve the problem of overtime cost and net cost saving is -$96,206.
Even though it is not related to above bottleneck issue, investment on light meter system for color grading is quite reasonable. Last year, we pay $337,500more because of inaccurate classification. Installing light meter system costs just $40,000. We can save $297,500!
To abbreviate, we recommend you to invest on one additional dryer and light meter system.
Supporting Analysis : Working process of process fruit side of RP1
Receiving Dumping Temporary Holding destoning dechaffing drying Separation
(1 for dry,
2 for wet
Berries)
(1 for dry,