National Cranberry Cooperative Essay

1. Problems facing receiving plant No. 1 (RP1)
The problems that The National Cranberry Cooperative is facing with are described in the table below. Mostly they are related to the problem of capacity.

Problem | Implications | Presence of bottlenecks in the stages of drying and separating of berries. | Excessive overtime costs. | | Overcapacities in other stages of processing of berries. |

2. Process Flow Diagram
From 8-10 min to few hours

400*3= 1200 bbls/h

1500*3 = 4500 bbls/h

1500 bbls/h

Separators
Dry bins 1-16-(24)

Dry
Delivery

Dechaffing
Destoning

Wet Bins (17)-25-27

Wet Delivery

Dechaffing
Drying
Sorting & Shipping

200*3 = 600 bbls/h
1500*2 = 3000 bbls/h

From 8-10 min to
fewhours

Peak harvest day:
18.000 barrels unloaded in 12 hours. Arrival rate from 7 AM to 7 PM is 1500 bbls/h. Wet harvested: 50%

Delivered | 18,000 | | | | Wet | 9,000 | 7:00-13:00 | 4,500 | 750 bbls/h | | | 13:00-19:00 | 4,500 | 750 bbls/h | Dry | 9,000 | 7:00-13:00 | 4,500 | 750 bbls/h | | | 13:00-19:00 | 4,500 | 750 bbls/h |

3. Inventory build-up diagram
When observing our process flow, we identified two bottlenecks: (1) drying for wet cranberries and (2) separation of both dry and wet berries.
According to the data provided, there is 50 % of incoming berries which were wet harvested. In the absolute terms, this amounts to 750 bbls/h. The three drying machines can only handle 600 bbls/h altogether, meaning that 150 bbls of berries have to be stored in the bins each hour while waiting for the drying process. The second bottleneck is “located” at the separators. The three separating lines have the capacity to separate 1200 bbls/h, while there are 1350 bbls/h ready to be separated. Therefore, 150 bbls of dry berries have to be stores each
hour.

At the end of the day (7 PM) there are 2400 bbls wet berries waiting for drying and separating, while also 2400 bbls of dry berries still have to go through the separation process. Drying process of 2400 bbls of wet harvested berries takes 4 additional hours and is finished at 11 PM. Simultaneously the separation is in process (for the dry harvested berries). After the last 600 bbls of wet harvested berries are dried it takes additional half an hour to separate them for quality measures. Separation process is finished at 11.30 PM.

4. When would the last truck unload and how long would it have waited?
Due to the fact that the capacity of the bins is large enough for both, dry (4000 bbls) and wet (1200 bbls only wet + 2000 bbls wet & dry) harvested berries to be stored before entering the production process, there is no waiting needed for the truck drivers. All the trucks are able to unload by 7PM.

5. Changes in order to improve performance (estimate the costs and benefits)
Based on our analysis we propose three possible solutions that would resolve a problem of company’s bottlenecks. We estimated the costs of each possible solution and pointed out their benefits and limitations.

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Proposal: Add a new dryer
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Cost: $60,000
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Benefits: A new dryer implemented in the working process would mean that instead of only 600 bbls being dried per hour, then 800 bbls would go through the production process at the same time. This would increase the productivity and efficiency of the process. With an increasing percentage of wet berries coming to the plant this investment seems inevitable. Even more, we believe that it would make sense to invest in two additional dryers (total costs $120,000).
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Limitations: Besides the costs that a purchase of a new dryer would cause to the company, also the bottleneck problem still would not be solved completely; each hour there would still be extra wet berries left for the storage.

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Proposal: Add a new separator
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Cost: $60,000
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Benefits: By adding a new dryer to the process, the new bottleneck would become the separator. For this reason, the company would be best off by also investing into a new separator unit, thus killing two birds with one stone. With the current separator capacity weighing in at 1200 bbls/h, an additional separator would bring the number up to 2400 bbls/h. Doing so would shave off as many as four working hours per day, reducing operating and wage costs as a result.
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Limitations: The cost of the additional separator unit would amount to $60,000.
That is not all – the addition of a new separator would also most likely necessitate additional pairs of hands, thus also bringing along additional wage costs.

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Proposal: Employ workers in high season for the »3rd shift« (from 7pm to 11pm)
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Costs: $32 per worker per day
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Benefits: The company could hire additional workers only for the 4 overtime working hours from 7 PM until 11 PM. These workers would be employed only for 3 months, during the high season. Employing seasonal workers instead of suggesting full-year employees to work overtime would save $5 per hour per worker.
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Limitations: We suggest that the company pays the additional workers $8 per hour, as they them in the receiving plant and harvesting jobs. We assume that the dryer units need one employee, so the cost for one additional worker would be $32 per
day.