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National Cranberry

In: Business and Management

Submitted By preetosh
Words 1108
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Team 3

National Cranberry Cooperative
Analysis and recommendations

1.

2. The resource with least capacity determines the maximum long-term achievable throughput rate. Because wet and dry berries follow different routes at RP#1 there will be a maximum achievable throughput for each. The capacity of the dryers is the bottleneck for the wet berries. The maximum throughput for wet berries is 600 bbls/hr. For dry berries the separation process is the bottleneck. The maximum throughput for dry berries is 1200 bbls/hr.

The percentage of wet berries to dry berries would affect the throughput rate. Given the current proportion of berries received the capacity of the dryers would be the maximum throughput of the system. The dryers are the system bottleneck. And as the trend of water harvesting continues, this situation worsens. All the process/resources at RP#1 contribute to the throughput but the limitation is the bottleneck.

3. The trucks wait because the processing capacity is less than the system input. And the temporary holding bins are inadequate to buffer the berries coming in and the plants processing capacity. But by using the Theory of Constraints to identify the system bottle necks we are able to discover the root cause of the waits. The large back log of berries is caused by several factors

The plant is not currently equipped to handle the supply of wet berries. This problem has likely been increasing over the years as more cranberries are being wet-harvested. This problem is evident in the lack of web berry temporary storage and inadequate berry drying capacity. These bottlenecks are slowing the entire system.

The demand for and production of cranberries is uneven. The seasonal nature of cranberry harvesting creates a need for a flexible system that can utilize full capacity in harvesting season and minimize loss from excess capacity during off season. NCC current system at Receiving Plan #1 is not meeting the input levels. NCC has two immediate options: increase the temporary storage capacity or increase the maximum throughput capacity of the system.

4. Under the current system trucks carrying dry berries have no wait times because the plant has adequate temporary storage for them. The trucks that must wait are the ones carrying wet berries and have the following wait times.

11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (600*12) - 3200 4600 2200
Bottleneck (bbls/hr) 6000 600
Max wait time 7.67 3.67
Average wait time (for those who wait) 3.83 1.83
Weighted average wait time (hrs) 1.60 0.76
Weighted average wait time (min) 95.83 45.83

5. Using the current system the RP#1 is not capable of receiving last years supply if 70% of the berries will be wet harvested. The first benefit is continued operation without a processing emergency.

Recommendations

a. Purchase the Light Meter System for color grading. While this system will not directly help the plants flow problems but it will pay for its self three times over within the first year and continue to save the plan money from erroneous berry quality premiums.

1980 Premium No. 3 Berries Paid (bbls) 450000 Premium per barrel 0.75 Total premium paid 337500 Berries not grade 3 225000 Premium per barrel 0.75 Total paid for berries not grade 3 168750 1981 Premium No. 3 Berries Paid (bbls) 292500 Premium per barrel 0.75 Total premium paid 219375 Premium savings 118125 Less: Purchase price 20000 Operator costs* $6.50 * 12 * 365 28470 Light Meter will save $69,655.00 * Assuming the light meter system can reduce grading errors by only 30% and was manned full-time all year

b. Purchase two additional dryers. The addition of new dryers will eliminate the current bottleneck for wet berries. Two new dryers increase throughput enough that there will be no trucks waiting during the peak operations when processing starts at 7:00 AM. The new dryers are an improvement but not enough to eliminate waiting times if operations start at 11:00 AM. The theoretical capacity of the combined dryers would become 1000 bbls/hr which is more than the current capacity of the separators if they are devoted to 70% wet berries. The new bottleneck becomes the separators at 840 bbls/hr. These wait times are much better, but there is still a lot of overtime holding the profitability of the plant down. 11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (840*12) - 3200 2680 0
Bottleneck (bbls/hr) 840 840
Max wait time 3.19 0.00
Average wait time (for those who wait) 1.60 0.00
Weighted average wait time (hrs) 0.66 0.00
Weighted average wait time (min) 39.88 0.00

c. Convert five dry bins to wet/dry bins. Given the excess temporary storage capacity dry berries five dry bins should be converted to wet/dry bins. If anymore than five bins were converted trucks delivering dry berries would have wait times during normal operations (starting at 11:00 AM). Converting these bins would greatly decrease waiting time/cost of idle drivers and trucks while optimizing the resources the plant currently owns. 11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (840*12) - 3200 1430 0
Bottleneck (bbls/hr) 840 840
Max wait time 1.70 0.00
Average wait time (for those who wait) 0.85 0.00
Weighted average wait time (hrs) 0.35 0.00
Weighted average wait time (min) 21.28 0.00

d. Purchase four new wet bins or purchase one additional separator. In order to eliminate wet berry truck wait times completely, four additional wet bins would be or one additional separator is needed. Further information would be needed to determine the most effective purchase but the effects can be calculated for either.

Four Additional Wet Bins Dry Wet
Minimum 2750 2800
Maximum 6000 6050
Optimal * 2750 6050
* With the current set up and ratio of 70% wet berries the Wet/Dry bins will be utilized for incoming wet berries. Max Build up = (1500*.7*12) - (840*12) - 6050 -170
Max wait time 0.00

Alternatively the plant can purchase one additional separator and devote it to wet berries. This would shift the bottleneck back to the dryers at 1000 bbls/hr. At this rate of throughput wait time for trucks delivering wet berries would be eliminated.

11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (1000*7) - 3200 0 0
Bottleneck (bbls/hr) 1000 840
Max Wait Time (hrs) 0.00 0.00

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