The National Cranberry Cooperative

NCC is an organization formed and owned by growers of cranberries to process and market
their berries. It’s one of the largest organizations and a leader in the fruit industry. It has two
types of harvests, which are wet and dry cranberries. The management of the company
is planning to make some changes in the operations specifically in the process of cranberries.
The management believed that it’s necessary to make some changes that in turn will increase the
productivity and level of effectiveness and efficiency in the overall operations of the company
especially during peak season of harvesting which is in between September 1st to first week of
December. However, the company was facing the problem of inefficiency in the production
process and management, due to which it was decided to invest in the capital funds in order to
overcome this problem. But it did not solve the problem, overtime costs were still out of control
and the growers were still upset with the unloading process at the receiving plant. In addition, to
several other problems that can be summarized as follows:

 Inefficiencies in process management

 Truck driver sit idle and wait to unload
 Inaccurate grading system
 Insufficient holding capacity

The Process through which the cranberries are processed can be drawn as follows:
 Process fruit Receiving

(weighing and sampling)

:DRY

: WET

Dumping

Temporary Holding
Temporary Holding Temporary Holding
25-27
1-16 17-24

Destoning Dechaffing Drying

Dechaffing
(DRY) (WET)

Separating

(9 jumbo separators, 3
conveyors )

Bagging

(4)
 Capacity analysis:

Bulk bin Bulk Truck

 Dumping: the average truck delivery is 75 bbls. The Kewanee dumper takes 5 to 10
(4) (2)
minutes to service a truck. By taking the average, we will get 7.5 minutes to unload a
truck. We can then calculate the capacity of one dumper which is 75/(7.5)=10 bbls/min=
600 bbls/hr and since we have 5 dumpers the total capacity will be 600 x 5 = 3000 bbls/hr
 The first capacity of holding bin no. 1-16 is calculated at 4000 bbls (16 x 250bbls)
Freeze Finish Processing Plant
followed by Bin 17-24 at 2000 bbls (8 x 250bbls)

and Bins 25-27 at 1200 bbls (3x 400bbls).

This indicates that the third part of the holding bin has the highest capacity.

 After the holding, the berries will go for the drying. There are three processes available in
the company for drying. Wet berries are taken to one of the two dechaffing unit with a
capacity of 1500 bbls each. So in total, 3000 bbls. After dechaffing, wet berries are taken
to one of the three dryers each of capacity of 200 bbls, so in total 600 bbls/hr. On the
other hand, Dry berries were processed through one the three destoning units (cap of
1500 bbls each) of total capacity of 4500 bbls/hr. After the process of destoning the
berries will go for dechaffing process where the berries are separated from its shells and
the capacity of this process is 1500 bbls/hr.
 Finally, the separator has 3 lines each of capacity 400bbls so in total 1200bbls/hr.

Now, if we assumed that we have 18000 barrels arriving uniformly over 12 hour period. We will
have 18000/12 = 1500 bbls/hour. 70% of them are wet -> 1050 bbls/hr. and therefore we have
450 bbls/hr dry cranberry. In order to identify the bottleneck, we can calculate the utilization of
each process as follows:
 Process Utilization Percentage

(demand/ capacity)
Dumping 1500/3000 50%
Dechaffing (wet berries) 1050/1500 70%
Drying (wet berries) 1050/600 175%
Destoning (dry berries) 450/4500 10%
Dechaffing (dry berries) 450/1500 30%
Separator 1500/1200 125%

So from the above calculation we can conclude that the bottleneck of the process is the dryer
with an utilization of 175%.

Now to calculate when processing can be completed on a peak day:

Flow Rate = min(Demand, Capacity) = min( λ , sμ) =min (600, 1050) = 600bbls/hr

Now since we must process 12600 barrels of wet berries (18000 * 0.7) in a day

The process will be completed after 12600/600 = 21 hours after the start of the process.

Now concerning the last truck unload. The numbers of barrels processed in 12 hours is 12*600=7200 bbls

However the total number of wet berries coming in 12 hours is 18000*0.7 =12600 bbls

So the inventory accumulated will be 12600 – 7200 = 5400 bbls

The total capacity of the holding bins for wet berries is 3200 bbls

Hence 5400-3200 = 2200 bbls will be waiting in trucks. So at flow rate of 600 bbls/hr. the last truck must
wait 2200/600 = 3.67 hours to unload.

From the analysis above, it’s clear that the dryer is a bottleneck. So one solution to improve the
performance is to increase the capacity of the bottleneck. i.e by adding an additional dryer.
This will increase it’s capacity to 4* 200 = 800 bbls/hr. Therefore, the flow rate will change now to
become 800 bbls/hr. Since we have to process 18000*0.7 =12600 bbls of wet berries in 12 hours. And the
flow rate is 800 bbls/hr, therefore we can process 800*12= 9600 bbls, hence the accumulated inventory
will be 12600-9600= 3000bbls which is less than the holding capacity of the bins (3200 bbls). This
solution will also resolve the waiting of the trucks. The processing time will become 12600/800= 15.75
hours. Which is a reduction of about 5 hours and hence the overtime cost of workers will be reduced.

Note that the cost of one dryer is 40,000$. However, the benefits would much greater.

Another solution could be converting some of bins 1-16 to wet holding bins. The number of bins required
is 2200/250 = 9 bins which yields to a total cost of 9 * 7500 = $ 67500. But this will not reduce the
amount of trucks waiting. Therefore, the overtime cost will stay the same.

In 1980, 75 premium cent was paid on about 450,000 bbls of berries. But when these berries were used, it
turned out that only half of them were were No. 3’s. ie they lost about 225000 * 0.75 =$168,750

So adding a new light meter system at a cost of $20,000 would definitely be worth it.