Nberry Cooperative Case Summary
9-688-122
REV: JULY 7, 2011
Na ational Cranbe erry Co ooperattive, 19996
On
O February 14,
1 1996, Hug go Schaeffer, vice presideent of operatiions at the N
National Cran nberry Cooperative (NCC
C), called his assistant, a Mel O’Brien, into o his office.
Mel, I spen nt all day yesterday revieewing last falll’s process ffruit operatio ons at receiving pla ant #1 [RP1] with Will Walliston,
W
the superintendeent, and talkin ng with the cco-op membeers
[grrowers] in th hat area. It’s obvious to me m that we haaven’t solved our problem ms at that plan nt, yeet. Even though we spen nt $200,000 last winter fo or a fifth Kiw wanee dump per at RP1, o our ov vertime costs were w still outt of control last fall, and th he growers arre still upset tthat their truccks an nd drivers had d to …show more content…
spend so much time waiting w to unlload process ffruit into the rreceiving plant.
I can’t c blame th hem for being g upset. Theey are the ow wners of this ccooperative, aand they reseent ha aving to lease trucks and hire h drivers to o get the berrries out of thee field and th hen watch theem sta and idle, waitting to unload d1. Walliston th hinks that thee way to avo oid these prob blems next faall is to increaase our capaciity by y buying som me new equipm ment. I wantt you to go o out there and take a hard llook at the R
RP1
op peration and find f out whatt we need to do to improv ve operationss before the 1996 crop com mes in.. We’re goin ng to have to move quicklly if we are g going to ordeer new equipment, since tthe pu urchasing and d installation lead times arre in excess off six months. By the way,, the growers in tha at region indicated that th hey plan on about the sam me size crop th his year as laast. But it loo oks lik ke the percen ntage of waterr-harvested berries b this yeear will increease to 70% o of total proceess fru uit from last year’s 58%, which w meanss that we’ll h have to chang ge the way w we schedule o our da aily operation ns. NCC
C and the Cranberry
C
y Industry
NCC
N was an organization o formed and owned o by grrowers of cran nberries to p process and m market their berries. b In reecent years, 99%
9
of all salees of cranberrries were maade by the vaarious cooperatives activee in the cranb berry industry
y. NCC was one of the laarger cooperaatives and haad operations in all the prrincipal grow wing areas of North Ameriica: Massach husetts, New JJersey, Wisco onsin, Washin ngton, Orego on, British Co olumbia, and Nova Scotia. Table A con ntains industrry data for U
U.S. production and sales of o cranberriess.
1 Grow wers paid as much h as $100 per hou ur to lease a trucck and driver.
_______
_______________
_______________
________________
___________________________________________________________________
This casse represents a major revision of the case c “American Crranberry Cooperatiive” written by J. T
Tucker. Certain dattes and financial daata have been dissguised. HBS casess are developed so olely as the basis fo or class discussion
n. Cases are not inttended to serve ass endorsements, so ources of primary y data, or illustratio ons of effective or in neffective managem ment. Copyrig ght © 1988, 1991, 1992,
1
1997, 2002, 2006,
2
2011 Presiden nt and Fellows off Harvard College.. To order copiess or request permiission to reprodu uce materials, call 1-800-545-7685,
1
write Harvard Business School Publishin ng, Boston, MA 021163, or go to http:/
//www.hbsp.harvard.edu.
No part of this publication n may be reproduceed, stored in a retriieval system, used iin a spreadsheet, o or transmitted in an ny form or by any m means— electron nic, mechanical, pho otocopying, recording, or otherwise—
—without the permiission of Harvard B
Business School.
This document is authorized for use only in GMII Operations AUG 2014 by Associate Professor Kannan Sethuraman at Melbourne Business School from September 2014 to March 2015.
688-122
National Cranberry Cooperative, 1996
Table A
Data on U.S. Cranberry Harvest
Crop Year
Production/Utilization (in barrels)a
Acreage
Barrels
Fresh
Harvested per Acre
Production
Sales
Process
Average Price
(all uses, $ per barrel)b Five-Year Average
1960-1964
1965-1969
1970-1974
1975-1979
1980-1984
1985-1989
1990-1994
26,022
25,434
26,205
24,842
21,448
20,778
20,988
23.7
24.9
31.3
39.8
51.2
62.6
73.7
615,000
643,300
822,580
983,660
1,096,160
1,300,120
1,546,120
466,844
380,965
381,320
439,170
427,520
468,340
327,980
148,256
253,335
436,060
532,070
543,860
755,750
1,169,360
22.12
31.00
34.30
23.42
21.54
24.00
38.24
Annual
1990
1991
1992
1993
1994
c
1995
20,640
20,760
21,220
21,135
21,185
21,445
69.6
77.0
66.2
69.4
86.1
95.1
1,436,800
1,598,600
1,404,300
1,467,800
1,823,100
2,038,600
389,600
328,000
278,300
301,900
342,100
367,000
1,033,200
1,249,600
1,034,900
1,111,200
1,417,900
1,418,600
31.00
34.32
37.20
41.24
42.20
36.10
Source:
Annual reports of Crop Reporting Board, Statistical Service, USDA.
Note:
Data gathered on five states—Massachusetts, New Jersey, Oregon, Washington, and Wisconsin.
a Differences between production and utilization (fresh sales and process) represent economic abandonment. b Beginning in 1964 the series represents equivalent returns at first receiving station, fresh and processing combined. Years prior to 1964 represent season average prices received by growers for all methods of sale, fresh and processing combined. c Preliminary figures for 1995.
Some significant trends are observable in Table A. Probably the most important trend was the increasing surplus of cranberries produced over those utilized. This surplus was serious enough by
1993 for the growers to resort to the Agriculture Marketing Agreement Act of 1937. Under this act, growers can regulate and control the size of an agricultural crop if the federal government and more than two-thirds of the growers agree to a plan for crop restriction. In 1993, 87% of the growers agreed
(making it binding on the others also) that no new acreage was to be developed over the next six years and that each grower would have a maximum allotment at the end of six years equal to the average of the grower’s best two years from 1993 through 1998.
In 1995 the growers resorted to the Agriculture Marketing Agreement Act once again. Under the
Cranberry Marketing Order of 1995, the growers and the government agreed that 10% of the 1995 crop should be set aside. The set aside berries (berries that are either destroyed or used in a way that will not influence the market price) amounted to more than 200,000 barrels (bbls). (A barrel of cranberries weighs 100 lbs.) Handlers physically set aside 10% of the berries before harvesting, under the supervision of a committee of growers and representatives from the Department of Agriculture.
2
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Nation nal Cranberry Co ooperative, 1996
6688-122
Another
A
impo ortant trend was w the incrreasing mech hanization of cranberry h harvesting. W
Water
harve esting, in partticular, was developing d ra apidly in the v vicinity of reeceiving plantt No. 1. Under the tradittional dry harrvesting, berrries were han nd-picked from m the bushess. In water haarvesting, thee bogs were flooded, the berries weree mechanicallly shaken frrom the bush hes, and the berries then were colleccted easily sin nce they floateed to the surfface of the waater. Water h harvesting cou uld result in y yields up to o 20% greateer than thosee obtained viia dry harveesting, but itt caused som me damage aand it shorteened the timee that harvestted fruit could be held priior to either itts use or freeezing for long g-term storag ge. Water harvesting had developed att a remarkablle rate in som me areas. Recceiving plant No. 1 receiv ved 25,000 bblls. of water-h harvested fruitt in 1993, 125,,000 bbls. in 11994, and 350,,000 bbls. in 11995.
Rece eiving Plant No. 1 (R
RP1)
RP1
R received both b “fresh” fruit f and “prrocess” fruit d during a seasson that usually started eaarly in
September and wa as effectively finished by early e Decemb ber (see Figurre A). The freesh fruit operration
(preparing cranberrries for sale as whole freesh fruit) wass completely separate from m the processs fruit opera ation (that preepares cranbeerries for juicee, canning, freeezing, and otther process ffruit productss) and took the t fruit from m receiving th hrough packa aging. This ccase is concerned only witth the processs fruit opera ation.
Figurre A
Daily Delivery
D
of Bo oth Fresh and d Process Berrries to RP1
3
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688-122
National Cranberry Cooperative, 1996
The handling of process fruit at RP1 was highly mechanized. The process could be classified into several operations: receiving and testing, dumping, temporary holding, destoning,2 dechaffing,3 drying, separation, and bulking and bagging. The objective of the total process was to gather bulk berries and prepare them for storage and processing into frozen fresh berries, sauce, and juice.
Process Fruit Receiving
Bulk trucks carrying process berries arrived at RP1 randomly throughout the day as shown in
Exhibit 1. The average truck delivery was 75 bbls. When the trucks arrived at RP1 they were weighed, and the gross weight and the tare (empty) weight were recorded. Prior to unloading, a sample of about 30 lbs. of fruit (0.3 bbl.) was taken from the truck. Later, this sample would be run through a small version of the cleaning and drying process used in the plant. By comparing the before and after weight of this sample, it was possible to estimate the percentage of the truck’s net weight made up of clean, dry berries. At the same time, another sample was taken to determine the percentage of unusable berries (poor, smaller, and frosted berries) in the truck. The grower was credited for the estimated weight of the clean, dry, usable berries. (See Exhibit 2 for total 1995 deliveries of process berries.)
At the time the truck was weighed, the truckload of berries was graded according to color. Using color pictures as a guide, the chief berry receiver classified the berries as Nos. 1, 2A, 2B, or 3, from poorest color (No. 1) to best (No. 3). There was a premium of $1.50 per bbl. paid for No. 3 berries, since color was considered to be a very important attribute of both juice products and whole sauce.
Whenever there was any question about whether or not a truckload was No. 2B or No. 3 berries, the chief berry receiver usually chose No. 3. In 1995 the $1.50 premium was paid on about 450,000 bbls. of berries. When these berries were used, however, it was found that only about half of them were
No. 3’s.
To improve this yield, Schaeffer was considering the installation of a light meter system for color grading. This system was projected to cost $40,000 and would require a full-time skilled operator at the same pay grade as the chief berry receiver.
Temporary Holding
After a truckload of process berries had been weighed, sampled, and color graded, the truck moved to one of the five Kiwanee dumpers. The truck was backed onto the dumper platform which then tilted until the contents of the truck dumped onto one of five rapidly moving belt conveyors.
Each of the five conveyors took the berries to the second level of the plant and deposited them on other conveyors capable of running the berries into any one of 27 temporary holding bins. Bins numbered 1-24 held 250 bbls. of berries each. Bins 25, 26, and 27 held 400 bbls. each. All of the conveyors were controlled from a central control panel.
It usually took from 7 to 8 minutes to back a truck onto a Kiwanee dumper, empty its contents, and leave the platform. At times some trucks had to wait several hours, however, before they could
2Destoning was the separation of foreign materials, such as small stones, that might be mixed in with the berries.
3Dechaffing was the removal of stems, leaves, and so forth that might still be attached to the berries.
4
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National Cranberry Cooperative, 1996
688-122
empty their contents. These waits occurred when the holding bins became full and there was no place in the receiving plant to temporarily store berries before further operations.
The holding bins emptied onto conveyors on the first level of the plant. Once the bins were opened, the berries flowed onto the conveyors and started their way through the destoning (dry berries only), dechaffing, drying (water-harvested berries only), quality grading, and either bulk loading or bagging operations.
Destoning, Dechaffing, and Drying
Holding bins 25-27 were for wet (water-harvested) berries only. Holding bins 17-24 could be used for either wet or dry berries. Wet berries from these bins were taken directly to one of the three dechaffing units (destoning was unnecessary with water-harvested berries) which could process up to 1,500 bbls. per hour each. After dechaffing, these wet berries were taken to one of the three drying units where they were dried at rates up to 200 bbls. per hour per dryer.
Holding bins 1-16 were for dry berries only. Berries from these bins were routed through one of three destoning units, each of which could process up to 1,500 bbls. of berries per hour, before going through a dechaffing unit. Frequently, both wet and dry berries were processed at the same time though the system. The wet berries would be processed through the part of the system that included the dryers, while the dry berries were processed through the area containing the destoning units.
National Cranberry’s current plant layout had two dechaffing units dedicated to wet berries, and one to dry berries.
Superintendent Walliston had told O’Brien that, with an increasing percentage of wet berries coming to the plant, it might make sense to convert some of holding bins 1-16 so they could be used for wet berries also. This would cost $10,000 per bin. Or, perhaps, he had mentioned, a few new dryers might be needed. These would cost $60,000 each. He wondered what the benefits might be of adding more dryers and whether those benefits would warrant the cost.
Quality Grading
After destoning, dechaffing, and drying, berries were transported to large take-away conveyors that moved berries from the first level of the receiving building to the third level of the adjoining separator building. Here these take away conveyors became “feed conveyors” as they were now feeding berries into the jumbo separators (see Figure B). The jumbo separators identified three classes of berries—first quality berries, potential second-quality berries, and unacceptable berries.
5
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688-122
Figure B
Natiional Cranberry Cooperative, 1996
RP1 Separa ator Building
s pro ocess was a simple s one th hat was based d on the factt that good crranberries wiill
The separation bounce hiigher than poor cranberries (see Figure C for a drawiing of the sep paration proceess).
6
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Nation nal Cranberry Co ooperative, 1996
Fiigure C
6688-122
Sep parator Opera ation The first-qualitty berries went directly on nto one of thrree take-away y conveyors o on the second d level and were w transporrted to the sh hipping area. The unaccep ptable berriess fell through h waste chutees into waterr-filled waste flumes on th he first level and were flo oated off to th he disposal area. The pottential secon nd-quality berrries fell into the Bailey mills on the seccond level off the building
g. The Bailey y mills separated the strea am of incomiing berries in nto second-qu uality berries and unaccep ptable berries. The
Bailey
y mills operatted on the sam me principle as a the jumbo separators. O
Over the years the percentaage of secon nd-quality berrries had conssistently been close to 12%..
Each of the thrree separator lines could process p up to 4450 bbls. per hour, but thee rate of proceessing declin ned as the perrcentage of ba ad fruit increa ased. It was estimated thaat the averagee effective cap pacity was probably p closee to 400 bbls. per hour for each e line.
Bulk king and Bagging
B
Conveyors
C
carrried berries from f the sepa arator buildin ng into the shiipping building, feeding b berries onto any a one of thee three main flexible f conveeyors in the sh hipping area.. Each of the three convey yors in the sh hipping area could be mo oved to feed berries into b bagging statiions, bulk bin n stations, orr bulk
7
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688-122
National Cranberry Cooperative, 1996
truck stations. The berries left RP1 in bulk trucks for shipment directly to the finish processing plant or in bins for storage at freezers with bulk storage capability.
Scheduling the Work Force
During the harvest season—September 1 to December 15—the process fruit side of RP1 was operated seven days a week with either a 27-member work force or a 53-member work force, depending on the relative volume of berry receipts. Will Walliston explained to Mel O’Brien,
Last year, trucks arrived at 7:00, and we only staffed the dumpers and the bins, and then started the rest of the operation at 11:00. This year, with an increase in the percentage of wet berries that we expect, we’re going to have to fire up the operation, on peak days, with two shifts – one from 7:00 to
3:00, and one from 3:00 to 11:00. I’m hoping that’ll cut into last year’s huge overtime expenditures and will limit the extra capital that we’ll need to spend. But, that’s what your report will help me decide.
There were 27 employees at RP1 who were employed for the entire year; all others were hired for the season only.
The 27 non-seasonal employees were all members of the Teamsters Union, as were
15 seasonal workers. Seasonal workers could work only between the dates of August 15 and
December 25 by agreement with the union. Most seasonal workers were employed via a state employment agency that set up operations each fall. The employment agency helped in placing seasonal workers in the receiving plant and in harvesting jobs with the local growers. The pay rate for seasonal workers in the process fruit section was $8.00 per hour. They were paid the overtime rate of 1-1/2 times their straight-time rate for anything over 40 hours per week. The straight-time pay rate for the full-year employees averaged $13.00 per hour.
When it was necessary to work beyond 11 p.m., a crew of only eight or nine workers was required to run the holding bins empty and do bulk loading. Although dry fruit could be held in the bins overnight, it was considered undesirable to hold wet fruit any longer than necessary, so wet fruit was always run out before shutting down. The plant never ran more than 22 hours a day, since
at least 2 hours were required for cleaning and maintenance work. (Downtime due to unscheduled maintenance was very small; said Walliston: “We ran 350,000 bbls. through the wet system in 1995 and we were down a total of less than 8 hours.”)
8
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Nation nal Cranberry Co ooperative, 1996
Exhib bit 1
688-122
Log of Total Deliverries on Septem mber 23, 19955
9
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688-122
Exhibit 2
National Cranberry Cooperative, 1996
Deliveries of Process Berries 1995
Day
9/1–9/19
9/20
9/21
9/22
9/23
9/24
9/25
9/26
9/27
9/28
9/29
9/30
10/1
10/2
10/3
10/4
10/5
10/6
10/7
10/8
10/9
10/10–12/10
Total barrels
Total Deliveries
(scale weight in bbls.)
Delivered
Wet
44,176
16,014
17,024
16,550
18,340
18,879
18,257
17,905
16,281
13,343
18,717
18,063
18,018
15,195
15,816
16,536
17,304
14,793
13,862
11,786
14,913
238,413
54%
31
39
39
42
41
36
45
42
38
43
59
69
60
60
57
55
46
61
56
54
75
6%
0
0
0
2
0
0
0
0
0
1
1
1
2
3
5
2
7
3
0
0
0
72%
44
35
22
22
21
14
10
18
15
11
9
11
18
12
21
26
32
39
36
33
22
22%
56
65
78
76
79
86
90
82
85
88
90
88
80
85
74
72
61
58
64
67
78
610,185
58
1
25
74
Color No. 1
Color No. 2
Color No. 3
10
This document is authorized for use only in GMII Operations AUG 2014 by Associate Professor Kannan Sethuraman at Melbourne Business School from September 2014 to March 2015.
REV: JULY 7, 2011
Na ational Cranbe erry Co ooperattive, 19996
On
O February 14,
1 1996, Hug go Schaeffer, vice presideent of operatiions at the N
National Cran nberry Cooperative (NCC
C), called his assistant, a Mel O’Brien, into o his office.
Mel, I spen nt all day yesterday revieewing last falll’s process ffruit operatio ons at receiving pla ant #1 [RP1] with Will Walliston,
W
the superintendeent, and talkin ng with the cco-op membeers
[grrowers] in th hat area. It’s obvious to me m that we haaven’t solved our problem ms at that plan nt, yeet. Even though we spen nt $200,000 last winter fo or a fifth Kiw wanee dump per at RP1, o our ov vertime costs were w still outt of control last fall, and th he growers arre still upset tthat their truccks an nd drivers had d to …show more content…
spend so much time waiting w to unlload process ffruit into the rreceiving plant.
I can’t c blame th hem for being g upset. Theey are the ow wners of this ccooperative, aand they reseent ha aving to lease trucks and hire h drivers to o get the berrries out of thee field and th hen watch theem sta and idle, waitting to unload d1. Walliston th hinks that thee way to avo oid these prob blems next faall is to increaase our capaciity by y buying som me new equipm ment. I wantt you to go o out there and take a hard llook at the R
RP1
op peration and find f out whatt we need to do to improv ve operationss before the 1996 crop com mes in.. We’re goin ng to have to move quicklly if we are g going to ordeer new equipment, since tthe pu urchasing and d installation lead times arre in excess off six months. By the way,, the growers in tha at region indicated that th hey plan on about the sam me size crop th his year as laast. But it loo oks lik ke the percen ntage of waterr-harvested berries b this yeear will increease to 70% o of total proceess fru uit from last year’s 58%, which w meanss that we’ll h have to chang ge the way w we schedule o our da aily operation ns. NCC
C and the Cranberry
C
y Industry
NCC
N was an organization o formed and owned o by grrowers of cran nberries to p process and m market their berries. b In reecent years, 99%
9
of all salees of cranberrries were maade by the vaarious cooperatives activee in the cranb berry industry
y. NCC was one of the laarger cooperaatives and haad operations in all the prrincipal grow wing areas of North Ameriica: Massach husetts, New JJersey, Wisco onsin, Washin ngton, Orego on, British Co olumbia, and Nova Scotia. Table A con ntains industrry data for U
U.S. production and sales of o cranberriess.
1 Grow wers paid as much h as $100 per hou ur to lease a trucck and driver.
_______
_______________
_______________
________________
___________________________________________________________________
This casse represents a major revision of the case c “American Crranberry Cooperatiive” written by J. T
Tucker. Certain dattes and financial daata have been dissguised. HBS casess are developed so olely as the basis fo or class discussion
n. Cases are not inttended to serve ass endorsements, so ources of primary y data, or illustratio ons of effective or in neffective managem ment. Copyrig ght © 1988, 1991, 1992,
1
1997, 2002, 2006,
2
2011 Presiden nt and Fellows off Harvard College.. To order copiess or request permiission to reprodu uce materials, call 1-800-545-7685,
1
write Harvard Business School Publishin ng, Boston, MA 021163, or go to http:/
//www.hbsp.harvard.edu.
No part of this publication n may be reproduceed, stored in a retriieval system, used iin a spreadsheet, o or transmitted in an ny form or by any m means— electron nic, mechanical, pho otocopying, recording, or otherwise—
—without the permiission of Harvard B
Business School.
This document is authorized for use only in GMII Operations AUG 2014 by Associate Professor Kannan Sethuraman at Melbourne Business School from September 2014 to March 2015.
688-122
National Cranberry Cooperative, 1996
Table A
Data on U.S. Cranberry Harvest
Crop Year
Production/Utilization (in barrels)a
Acreage
Barrels
Fresh
Harvested per Acre
Production
Sales
Process
Average Price
(all uses, $ per barrel)b Five-Year Average
1960-1964
1965-1969
1970-1974
1975-1979
1980-1984
1985-1989
1990-1994
26,022
25,434
26,205
24,842
21,448
20,778
20,988
23.7
24.9
31.3
39.8
51.2
62.6
73.7
615,000
643,300
822,580
983,660
1,096,160
1,300,120
1,546,120
466,844
380,965
381,320
439,170
427,520
468,340
327,980
148,256
253,335
436,060
532,070
543,860
755,750
1,169,360
22.12
31.00
34.30
23.42
21.54
24.00
38.24
Annual
1990
1991
1992
1993
1994
c
1995
20,640
20,760
21,220
21,135
21,185
21,445
69.6
77.0
66.2
69.4
86.1
95.1
1,436,800
1,598,600
1,404,300
1,467,800
1,823,100
2,038,600
389,600
328,000
278,300
301,900
342,100
367,000
1,033,200
1,249,600
1,034,900
1,111,200
1,417,900
1,418,600
31.00
34.32
37.20
41.24
42.20
36.10
Source:
Annual reports of Crop Reporting Board, Statistical Service, USDA.
Note:
Data gathered on five states—Massachusetts, New Jersey, Oregon, Washington, and Wisconsin.
a Differences between production and utilization (fresh sales and process) represent economic abandonment. b Beginning in 1964 the series represents equivalent returns at first receiving station, fresh and processing combined. Years prior to 1964 represent season average prices received by growers for all methods of sale, fresh and processing combined. c Preliminary figures for 1995.
Some significant trends are observable in Table A. Probably the most important trend was the increasing surplus of cranberries produced over those utilized. This surplus was serious enough by
1993 for the growers to resort to the Agriculture Marketing Agreement Act of 1937. Under this act, growers can regulate and control the size of an agricultural crop if the federal government and more than two-thirds of the growers agree to a plan for crop restriction. In 1993, 87% of the growers agreed
(making it binding on the others also) that no new acreage was to be developed over the next six years and that each grower would have a maximum allotment at the end of six years equal to the average of the grower’s best two years from 1993 through 1998.
In 1995 the growers resorted to the Agriculture Marketing Agreement Act once again. Under the
Cranberry Marketing Order of 1995, the growers and the government agreed that 10% of the 1995 crop should be set aside. The set aside berries (berries that are either destroyed or used in a way that will not influence the market price) amounted to more than 200,000 barrels (bbls). (A barrel of cranberries weighs 100 lbs.) Handlers physically set aside 10% of the berries before harvesting, under the supervision of a committee of growers and representatives from the Department of Agriculture.
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Nation nal Cranberry Co ooperative, 1996
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Another
A
impo ortant trend was w the incrreasing mech hanization of cranberry h harvesting. W
Water
harve esting, in partticular, was developing d ra apidly in the v vicinity of reeceiving plantt No. 1. Under the tradittional dry harrvesting, berrries were han nd-picked from m the bushess. In water haarvesting, thee bogs were flooded, the berries weree mechanicallly shaken frrom the bush hes, and the berries then were colleccted easily sin nce they floateed to the surfface of the waater. Water h harvesting cou uld result in y yields up to o 20% greateer than thosee obtained viia dry harveesting, but itt caused som me damage aand it shorteened the timee that harvestted fruit could be held priior to either itts use or freeezing for long g-term storag ge. Water harvesting had developed att a remarkablle rate in som me areas. Recceiving plant No. 1 receiv ved 25,000 bblls. of water-h harvested fruitt in 1993, 125,,000 bbls. in 11994, and 350,,000 bbls. in 11995.
Rece eiving Plant No. 1 (R
RP1)
RP1
R received both b “fresh” fruit f and “prrocess” fruit d during a seasson that usually started eaarly in
September and wa as effectively finished by early e Decemb ber (see Figurre A). The freesh fruit operration
(preparing cranberrries for sale as whole freesh fruit) wass completely separate from m the processs fruit opera ation (that preepares cranbeerries for juicee, canning, freeezing, and otther process ffruit productss) and took the t fruit from m receiving th hrough packa aging. This ccase is concerned only witth the processs fruit opera ation.
Figurre A
Daily Delivery
D
of Bo oth Fresh and d Process Berrries to RP1
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National Cranberry Cooperative, 1996
The handling of process fruit at RP1 was highly mechanized. The process could be classified into several operations: receiving and testing, dumping, temporary holding, destoning,2 dechaffing,3 drying, separation, and bulking and bagging. The objective of the total process was to gather bulk berries and prepare them for storage and processing into frozen fresh berries, sauce, and juice.
Process Fruit Receiving
Bulk trucks carrying process berries arrived at RP1 randomly throughout the day as shown in
Exhibit 1. The average truck delivery was 75 bbls. When the trucks arrived at RP1 they were weighed, and the gross weight and the tare (empty) weight were recorded. Prior to unloading, a sample of about 30 lbs. of fruit (0.3 bbl.) was taken from the truck. Later, this sample would be run through a small version of the cleaning and drying process used in the plant. By comparing the before and after weight of this sample, it was possible to estimate the percentage of the truck’s net weight made up of clean, dry berries. At the same time, another sample was taken to determine the percentage of unusable berries (poor, smaller, and frosted berries) in the truck. The grower was credited for the estimated weight of the clean, dry, usable berries. (See Exhibit 2 for total 1995 deliveries of process berries.)
At the time the truck was weighed, the truckload of berries was graded according to color. Using color pictures as a guide, the chief berry receiver classified the berries as Nos. 1, 2A, 2B, or 3, from poorest color (No. 1) to best (No. 3). There was a premium of $1.50 per bbl. paid for No. 3 berries, since color was considered to be a very important attribute of both juice products and whole sauce.
Whenever there was any question about whether or not a truckload was No. 2B or No. 3 berries, the chief berry receiver usually chose No. 3. In 1995 the $1.50 premium was paid on about 450,000 bbls. of berries. When these berries were used, however, it was found that only about half of them were
No. 3’s.
To improve this yield, Schaeffer was considering the installation of a light meter system for color grading. This system was projected to cost $40,000 and would require a full-time skilled operator at the same pay grade as the chief berry receiver.
Temporary Holding
After a truckload of process berries had been weighed, sampled, and color graded, the truck moved to one of the five Kiwanee dumpers. The truck was backed onto the dumper platform which then tilted until the contents of the truck dumped onto one of five rapidly moving belt conveyors.
Each of the five conveyors took the berries to the second level of the plant and deposited them on other conveyors capable of running the berries into any one of 27 temporary holding bins. Bins numbered 1-24 held 250 bbls. of berries each. Bins 25, 26, and 27 held 400 bbls. each. All of the conveyors were controlled from a central control panel.
It usually took from 7 to 8 minutes to back a truck onto a Kiwanee dumper, empty its contents, and leave the platform. At times some trucks had to wait several hours, however, before they could
2Destoning was the separation of foreign materials, such as small stones, that might be mixed in with the berries.
3Dechaffing was the removal of stems, leaves, and so forth that might still be attached to the berries.
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National Cranberry Cooperative, 1996
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empty their contents. These waits occurred when the holding bins became full and there was no place in the receiving plant to temporarily store berries before further operations.
The holding bins emptied onto conveyors on the first level of the plant. Once the bins were opened, the berries flowed onto the conveyors and started their way through the destoning (dry berries only), dechaffing, drying (water-harvested berries only), quality grading, and either bulk loading or bagging operations.
Destoning, Dechaffing, and Drying
Holding bins 25-27 were for wet (water-harvested) berries only. Holding bins 17-24 could be used for either wet or dry berries. Wet berries from these bins were taken directly to one of the three dechaffing units (destoning was unnecessary with water-harvested berries) which could process up to 1,500 bbls. per hour each. After dechaffing, these wet berries were taken to one of the three drying units where they were dried at rates up to 200 bbls. per hour per dryer.
Holding bins 1-16 were for dry berries only. Berries from these bins were routed through one of three destoning units, each of which could process up to 1,500 bbls. of berries per hour, before going through a dechaffing unit. Frequently, both wet and dry berries were processed at the same time though the system. The wet berries would be processed through the part of the system that included the dryers, while the dry berries were processed through the area containing the destoning units.
National Cranberry’s current plant layout had two dechaffing units dedicated to wet berries, and one to dry berries.
Superintendent Walliston had told O’Brien that, with an increasing percentage of wet berries coming to the plant, it might make sense to convert some of holding bins 1-16 so they could be used for wet berries also. This would cost $10,000 per bin. Or, perhaps, he had mentioned, a few new dryers might be needed. These would cost $60,000 each. He wondered what the benefits might be of adding more dryers and whether those benefits would warrant the cost.
Quality Grading
After destoning, dechaffing, and drying, berries were transported to large take-away conveyors that moved berries from the first level of the receiving building to the third level of the adjoining separator building. Here these take away conveyors became “feed conveyors” as they were now feeding berries into the jumbo separators (see Figure B). The jumbo separators identified three classes of berries—first quality berries, potential second-quality berries, and unacceptable berries.
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Figure B
Natiional Cranberry Cooperative, 1996
RP1 Separa ator Building
s pro ocess was a simple s one th hat was based d on the factt that good crranberries wiill
The separation bounce hiigher than poor cranberries (see Figure C for a drawiing of the sep paration proceess).
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Nation nal Cranberry Co ooperative, 1996
Fiigure C
6688-122
Sep parator Opera ation The first-qualitty berries went directly on nto one of thrree take-away y conveyors o on the second d level and were w transporrted to the sh hipping area. The unaccep ptable berriess fell through h waste chutees into waterr-filled waste flumes on th he first level and were flo oated off to th he disposal area. The pottential secon nd-quality berrries fell into the Bailey mills on the seccond level off the building
g. The Bailey y mills separated the strea am of incomiing berries in nto second-qu uality berries and unaccep ptable berries. The
Bailey
y mills operatted on the sam me principle as a the jumbo separators. O
Over the years the percentaage of secon nd-quality berrries had conssistently been close to 12%..
Each of the thrree separator lines could process p up to 4450 bbls. per hour, but thee rate of proceessing declin ned as the perrcentage of ba ad fruit increa ased. It was estimated thaat the averagee effective cap pacity was probably p closee to 400 bbls. per hour for each e line.
Bulk king and Bagging
B
Conveyors
C
carrried berries from f the sepa arator buildin ng into the shiipping building, feeding b berries onto any a one of thee three main flexible f conveeyors in the sh hipping area.. Each of the three convey yors in the sh hipping area could be mo oved to feed berries into b bagging statiions, bulk bin n stations, orr bulk
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National Cranberry Cooperative, 1996
truck stations. The berries left RP1 in bulk trucks for shipment directly to the finish processing plant or in bins for storage at freezers with bulk storage capability.
Scheduling the Work Force
During the harvest season—September 1 to December 15—the process fruit side of RP1 was operated seven days a week with either a 27-member work force or a 53-member work force, depending on the relative volume of berry receipts. Will Walliston explained to Mel O’Brien,
Last year, trucks arrived at 7:00, and we only staffed the dumpers and the bins, and then started the rest of the operation at 11:00. This year, with an increase in the percentage of wet berries that we expect, we’re going to have to fire up the operation, on peak days, with two shifts – one from 7:00 to
3:00, and one from 3:00 to 11:00. I’m hoping that’ll cut into last year’s huge overtime expenditures and will limit the extra capital that we’ll need to spend. But, that’s what your report will help me decide.
There were 27 employees at RP1 who were employed for the entire year; all others were hired for the season only.
The 27 non-seasonal employees were all members of the Teamsters Union, as were
15 seasonal workers. Seasonal workers could work only between the dates of August 15 and
December 25 by agreement with the union. Most seasonal workers were employed via a state employment agency that set up operations each fall. The employment agency helped in placing seasonal workers in the receiving plant and in harvesting jobs with the local growers. The pay rate for seasonal workers in the process fruit section was $8.00 per hour. They were paid the overtime rate of 1-1/2 times their straight-time rate for anything over 40 hours per week. The straight-time pay rate for the full-year employees averaged $13.00 per hour.
When it was necessary to work beyond 11 p.m., a crew of only eight or nine workers was required to run the holding bins empty and do bulk loading. Although dry fruit could be held in the bins overnight, it was considered undesirable to hold wet fruit any longer than necessary, so wet fruit was always run out before shutting down. The plant never ran more than 22 hours a day, since
at least 2 hours were required for cleaning and maintenance work. (Downtime due to unscheduled maintenance was very small; said Walliston: “We ran 350,000 bbls. through the wet system in 1995 and we were down a total of less than 8 hours.”)
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Nation nal Cranberry Co ooperative, 1996
Exhib bit 1
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Log of Total Deliverries on Septem mber 23, 19955
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Exhibit 2
National Cranberry Cooperative, 1996
Deliveries of Process Berries 1995
Day
9/1–9/19
9/20
9/21
9/22
9/23
9/24
9/25
9/26
9/27
9/28
9/29
9/30
10/1
10/2
10/3
10/4
10/5
10/6
10/7
10/8
10/9
10/10–12/10
Total barrels
Total Deliveries
(scale weight in bbls.)
Delivered
Wet
44,176
16,014
17,024
16,550
18,340
18,879
18,257
17,905
16,281
13,343
18,717
18,063
18,018
15,195
15,816
16,536
17,304
14,793
13,862
11,786
14,913
238,413
54%
31
39
39
42
41
36
45
42
38
43
59
69
60
60
57
55
46
61
56
54
75
6%
0
0
0
2
0
0
0
0
0
1
1
1
2
3
5
2
7
3
0
0
0
72%
44
35
22
22
21
14
10
18
15
11
9
11
18
12
21
26
32
39
36
33
22
22%
56
65
78
76
79
86
90
82
85
88
90
88
80
85
74
72
61
58
64
67
78
610,185
58
1
25
74
Color No. 1
Color No. 2
Color No. 3
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