National Cranberry Cooperative - Increasing the Productivity in Rp1 in 1981

Feb 23 2011

To, Hugo Sachaffer

Vice President of operations

National Cranberry Cooperative

Subject- Increasing the productivity in RP1 in 1981

At the National Cranberry Cooperative's receiving plant number 1 (RP1), overtime costs are too high and delivery trucks and their drivers have to wait several hours to unload. The trucks start delivering at 7 am whereas the processing does not start until 11 am. The trucks have to wait because the plant's holding bins fill up and there is not temporary storage. The holding bins fill up because within the cranberry operating system there is a bottleneck. This bottleneck is being caused by the lower relative capacity of the dryers. Relieving the bottleneck in the dryers by adding more dryers will allow the trucks to move through the dumping area more efficiently and decrease overtime costs in 1981. The predicted increase in the wet berries growth to 70% will increase the overtime issues as the dryer is the bottle neck in the process and wet berries require going through this step.

There is also a secondary problem regarding grading of process berries. Half of the berries graded top quality is actually not top quality and do not deserve extra premiums paid on the top quality berries. This is due to the inefficient quality assessment method.

The waiting of the Trucks can be reduced by adding an extra storage bin (converting the bins to be used for both wet and dry berries) to the system. The other reason for the increased wait time is that the processing at the plant starts at 11:00 am whereas the trucks start delivering at 7:00am due to which the trucks have to wait for a longer time. So the working shift should be change to 7:00 am instead of 11:00 am (TABLE 3). This will effectively decrease the wait time of the berries. This will also eliminate the need of adding the extra storage to the system as the process will start as soon as the deliveries start eliminating the berry stock build up. Scheduling and holding capacities will not work if we cannot dry the berries. By adding two additional driers, NCC will be able to dry 400 barrels per hour of wet berries decreasing the bottleneck.

The issue of over incentives paid for the quality berries can be reduced by changing the accessing method. This could be reduced by implementing the light meter system for color grading.

The best solution is to acquire2 additional drying unit and advancing the processing

Shift from 11AM to 8AM. The backlog per hour of 300bbl/hr. (due to the separation unit), will be manageable by the available storage capacity in the bins, eve without converting the bins. The truckers will not have to wait to offload the berries. The accumulated backlog of berries can be processed in approximately 3.75 hours after the end of scheduled 12 working hours. With the new expected ratio of wet to dry berries (7:3), not adding an additional drying unit will require the plant to work 9 extra hours to eliminate the backlog. The cost benefit of adding the additional drying unit and advancing the shift start time are higher than the cost benefit of other options considered.

Appendix

FLOW DIAGRAM

Table 1

Operation Available Capacity

Dumpers 3000 bbls/hr

Wet storage 3200 bbls

Dry storage 4000 bbls

Dryers 600 bbls/hr

Destoning 4500 bbls/hr

Dechaffers 4500 bbls/hr

Separators 1200 bbls/hr

PART A

Proportion of wet berries = 0.7

Hourly arrival rate of berries =[243/ {(1140- 411)/60}]

= 20 trucks/ hour

=20*75 =1500 bbl/hour

Table 2

Berry Flow during day (processing starts at 11 am)

Deliv. Amount Process Amount Stored Amount Backup Backup Total

Time Dry Wet Dry Wet Dry Wet Dry Wet Backup

...