National Cranberry Cooperative analysis
In 1971, National Cranberry Cooperative (NCC) is facing two main issues. One is that the overtime costs were out of control. Another one is that the trucks and drivers had to wait for a long time to unload the fruit to the receiving plant. There are two suggestions from the firm. Firstly, buy two new dryer. Secondly, convert the dry berry holding bins to Wet-and-dry berry holding bins. Another smaller issue is that the firm paid more to the grower because the mistake of color grading and it was suggested to buy a light meter system. Here, I am going to solve the problem by finding out the bottle neck and explain why we should not by the light meter system. Operation Flowchart
The following charts show the flow of the processes and capacities of each process.
Sample for unusable rateTruck arriveDecide ColorNot bussy:2×3workers/groupBussy:5×3workers/group5-10minReceiving(dumping)Dry samplesCalculate Weight rateFirst qualityOperation: 1 workerControl room: 2 workers (each on two shift)DryWetDestong(3)Dechaff(3)WetDryDry(3)Not Bussy:2×5workers/groupBussy:3×5workers/groupSecond qualityMilling(3)DisposalBelt(5)1~16:250bbl (D)12~24:250bbl (D/W)25~27:400bbl(W)Buffer(Bin)Clean samplesUnacceptableBag station(4)Not Bussy:1×5workers/groupBussy:3×5workers/groupFreezer(bag)Freezer(bin)Finish process plantNot Bussy:1×2workers/groupBussy:2×2workers/groupBulk bin station(4)Bulk truck station(2)Shipping1worker
Dry:4000 bblsWet:3200 bblsBuffer(bin)1500 bbls/hDestong(only dry)4500 bbls/hDechaffBag:450 bbls/hTruck:600 bbls/hDry(only wet)1350 bbls/hMilling(only 12%)Bag:667bbls/hOther station:-Shipping
Solution for waiting and working overtime
According to the policy, the weight of this year will be 10% off. The maximum daily weight is 18,879bbls. As a result, we assume that the maximum of the weight will be 17,500 bbls. The following table shows the capacity required when operate for 8 hours. Total weight (bbls) 17,500 17,000 16,000 15,000 14,000 13,000
It is obviously, the bottle neck of the line is the process of “Dry” for the wet cranberry. Comparing to the required capacity of 1531 bbls/h, the maximum running capacity now is too low, with only 600 bbls/h. What’s more, most of the workers are arranged after dry process. As a result, these workers have to wait the products, which increased the labor cost. If the daily deliver weight is 17,500 bbls, the workers need to work at least 20 hours (12,250/600=20).
The lobar wage, $3.75/hour for the dry process is much lower than buying a new dryer, $25,000 and there is only one worker in the dry process. We can arrange that the dry process worker start working at 7AM with the receiving workers. The total working time for the dry process will be 12 hours. Then the max capacity for one hour will be 1020 (12,250/12). The dryer we need would be 1020/[(200+150)/2]=5.8. We should buy 2 or 3 more dryers depending on the bag shipping rate. We also need to consider the buffer after the dryer.
Total Capa. Require (bbls/h) 2,188 2,125 2,000 1,875 1,750 1,625 Wet70% (bbls) 12,250 11,900 11,200 10,500 9,800 9,100 Wet Capa. Require (bbls/h) 1,531 1,488 1,400 1,313 1,225 1,138 Dry 30% (bbls) 5,250 5,100 4,800 4,500 4,200 3,900 Dry Capa. require (bbls/h) 656 638 600 563 525 488
There is still a buffer of bins before the receiving process because the capacity of the dryer is only 1020 now. Eight hours later, the buffer weight will be increase to 4080 bbls wet cranberry. Right now, we only have 3200 bbls bins. We need four more bins.
For the shipping station, we do not have enough information about the rate of bag shipping. If the rate is high, we need more workers working in that station.
The solution introduce above is basing on the assumption that the truck deliver input is stable. According to the record in minutes, the input is not stable. Right now, we need to make sure that the dryer line will not stop. As a result, we should have enough wet cranberry in the buffer holding bins. We can build up rule that, from 7AM to 8AM, we only accept the wet cranberry. What’s more, a queuing system can help the growers arrange the arriving time and the firm can control the balance of delivery for each hour.
Color grading problem
We should not buy the light meter system for the color grading, which not only need $10,000 cost but also need to hire full skilled operator. The reason is that we should consider the whole profit of the share holders. The money of color grading mistake was paid to the growers, who are the owner of the firm. The total sum of the profit is unchanged. If we buy the light meter system, the total sum of the profit will be decreased. The solution should be discussing with the growers and make agreement of the rate determination.
Conclusion
In sum up, we should do the following works:
? Buy 2 or 3 more dryers according to the bag shipping rate. ? We need four more wet berry holding bins (convert from dry bins).
? Set up the buffer after the dryer.
? The worker of “Destone, Dechaff and Dry” needs to work from 7 AM
to 7 PM in harvest days. Others work as before.
? Only accept wet cranberry from 7AM to 8 AM. Set up a queuing system. ? We should not buy the light meter system for the color grading.
Discussing with the growers for the color rate.
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Cranberry 运营案例分析
