National Cranberry

Cooperative
A Case Study Solution submitted in partial fulfillment of the
course Manufacturing Strategies
To
Prof. Prasad Chakrabarty
On
January 23rd, 2013

By
Arthi Kumar (E027)
Devakshi Garg (E012)
Megha Agarwal (E001)
Russell Rebello (E046)
Sandhya Patil (E042)
Sourabh Dhawan (A018)

Contents
Ques 1 What are the sources of variability in the NCC case? ....................................................................... 3
Sources of Variability ................................................................................................................................ 3
Ques 2 What are the problems NCC is experiencing that should be addressed? ........................................ 4
Problems ................................................................................................................................................... 4
Solution ..................................................................................................................................................... 4
Ques 5: How would you assess converting some dry bins to wet? .............................................................. 5
Ques 8: How would you deal with the distribution of wet/dry and volume over the days of the season?. 5
Assumptions:............................................................................................................................................. 5
Case 1 ........................................................................................................................................................ 5
Analysis ..................................................................................................................................................... 6
Case 2 ........................................................................................................................................................ 6
Adding one dryer ...................................................................................................................................... 6
Analysis ..................................................................................................................................................... 6
Payback Period Estimation........................................................................................................................ 6
Case 3 ........................................................................................................................................................ 7
Adding 2 dryer........................................................................................................................................... 7
Adding 1 dryer and required bins ............................................................................................................. 7
Payback Period for 2 dryers ...................................................................................................................... 8
Scheduling of workforce and another shift .............................................................................................. 9

Ques 1 What are the sources of variability in the NCC case?

Sources of Variability
Trucks arrived at random throughout the day.
The absence of a schedule for the arrival of trucks led to huge waiting lines. It usually took 510min to back a truck onto a Kiwanna dumper, empty its contents and leave the platform. At
times some trucks had to wait up to 3 hours before they could empty their contents. This wait
occurred when the holding bins became full and there was no place in the receiving plant to
temporarily store berries before further operations.
Bulk trucks were loaded with anywhere between 20 to 400 bbls.
There was no minimum load weight for a truck, so trucks came with highly varying weights.
Hence the number of trucks carrying the load would increase. Present average weight was 75
bbls. Even if this is increased to 100bbls the number truck reduces by 25%.
Employee Absenteeism
This problem caused NCC to carry more employees on payroll than really needed. Higher than
expected absenteeism often resulted in overtime. For the 1970 season, the process fruit
operation at RP1 utilised about 22000 man-hours of straight-time direct labour and about 12000
man-hours of overtime.
Colour Grading of Berries
At the time the truck was weighed the truckload of berries was grade according to color. Using
the color pictures as a guide, the chief berry receiver classified the berries as Nos 1, 2A, 2B or 3
from poorest to best. Whenever any question about whether the or not a truckload was No. 2B
or No. 3, the chief berry receiver chose 3. When these berries were used only 50% of them were
found to be No. 3's.

Ques 2 What are the problems NCC is experiencing that should be addressed?
Problems
Long Waiting time for Trucks
The absence of a schedule for the arrival of trucks led to huge waiting lines. It usually took 510min to back a truck onto a Kiwanna dumper, empty its contents and leave the platform. At
times some trucks had to wait upto 3 hours before they could empty their contents. This wait
occured when the holding bins became full and there was no place in the receiving plant to
temporarily store berries before further operations.
Overtime
This problem is seen in the peak months of September through October. During these months
the workers required are 53 instead of the usual 27. However despite carrying higher number of
workers than necessary, the shifts run into overtime because of absenteeism.
Also, in order to prevent the wet fruit from getting spoilt the labourers need to work the extra
hours in the peak months.
Limited room to process water harvested berries
Water harvesting is the latest method for harvesting cranberries. The bogs are filled with water
and then the berries are mechanically shaken from the bushes, the berries then float to the
surface. Water harvesting leads to 20% higher yields, however it reduces the shelf life of the
fruit.
The water harvesting method is being increasingly used thereby increasing the necessity to
increase capacity at NCC. This year too wet harvested berries will form 70% of the total produce.

Solution
Scheduling needs to be improved. This includes not just the operations but also the delivery
time and amount of berries.
A smoother schedule will ensure less waiting time. A standard minimum weight will ensure that
less number of trucks are used to transport the produce, thereby further reducing waiting time.
The absenteeism is directly related to employee payroll. The management can try to find an
optimum pay during the peak months to tempt more seasonal labourers so as to ensure that
absenteeism too has minimum effect.
Finally, increasing capacity is NOT a solution. The capacity should be increased when present
capacity cannot handle the workload after everything has been tried out. The planned capacity
increase should be allowed only after everything else has been tried.

Ques 5: How would you assess converting some dry bins to wet?
Ques 8: How would you deal with the distribution of wet/dry and volume over the
days of the season?
Assumptions:
There is a cost associated with trucks waiting to be unloaded and it is $5 per hour.
We have not considered per hour operating cost of plant
Overtime for both regular and part time worker has been taken to be $6.50 per hour.
In calculating the payback time, the same cost saving will occur every day.
It is given in case that wet berries will make 70 % of total berries and that normal running hours
for plant is 11 (12-1) hours.
Case 1: 10000 bbl/day
Wet Berries (WB) 7000 bbl/day
Dry Berries (DB) 3000bbl/day
Total Time = 11 Hrs
WB feed=7000/11 = 637 bbl/hr
DB feed= 3000/11 = 273 bbl/hr
Minimum processing rate for WB is at dryers, which is = 600 bbl/hr
Minimum processing rate for DB is = 1500 bbl/hr
Hence, after 11 hours total accumulation of WB = (637-600)*11 = 407 bbl
Overtime = 407/600 = 0.7 hrs
Now, assuming this is not a peak season, we have considered only 27 workers. Since plant is working
suboptimal level during overtime , only two-third of the work force will be working on wet berries drying
process.
=2/3 work force
= 20*(2/3)
= 12
Savings per day = 12 * 6.5= 78
Savings for season = 78* 90 = 7020
If we add another dryer, to save overtime cost, cost will be = 40000

Analysis
Considering the cost of depreciation and cost of investment in dryer(8-10%) it will not be economical to
buy another dryer.
Case 2: 15000 bbl/day
Wet Berries (WB)= 10500 bbl/day
Dry Berries (DB)= 4500bbl/day
Total Time = 11 Hrs
WB feed=10500/11 = 950 bbl/hr
DB feed= 4500/11 = 410 bbl/hr
Minimum processing rate for WB is at dryers, which is = 600 bbl/hr
Minimum processing rate for DB is = 1500 bbl/hr
Hence, after 11 hours total accumulation of WB = (950-600)*11 = 3850 bbl
Overtime = 3850/600 = 6.5 hrs

Adding one dryer

Feed capacity = 800+400=1200
Accumulation of WB in 11 hrs = (950-800)*11 = 150*11 = 1650
Overtime = 1650/800 = 2 hrs
Analysis
Adding another dryer will create bottleneck at separator.
Payback Period Estimation
Overtime saved in receiving = 12.16-11 = 1.16 hrs
Workers = 15
Cost saved = 15*1.16*6.5= $113
Overtime saved in Processing = 6.5 2 = 4.5 hrs
Workers = 36
Cost Saved =36*4.5*6.5=$1053
Cost connected to truck weighting period= $ 600
Total cost saved = $1766 per day
6

Payback Period = 40000/1766 = 22.7 days

Case 3: 20000 bbl/day
Wet Berries (WB)= 14000 bbl/day
Dry Berries (DB)= 6000bbl/day
Total Time = 11 Hrs
WB feed=14000/11 = 1270 bbl/hr
DB feed= 6000/11 = 550 bbl/hr
Minimum processing rate for WB is at dryers, which is = 600 bbl/hr
Minimum processing rate for DB is = 1500 bbl/hr
Hence, after 11 hours total accumulation of WB = (1273-600)*11 = 7403 bbl
Overtime = 7403/600 = 12.34 hrs
Adding 2 dryer
Total feed = 1000+200
Accumulation of WB in 11 hrs (1270-1000)*11 = 2970
Accumulation of DB in 11 hrs (550-200)*11 =3850
Overtime = (2970+3850)/1200 = 5.7 hrs
Adding 1 dryer and required bins
WB feed = 800
Accumulation = (1270-800) * 11 = 5170
Holding Capacity = 3200
Capacity of a bin = 250
Cost of a bin = 7500
Well have to convert dry bins to wet bins, number of bins needed to be converted = (5170-3200)/250
=8
Total Cost = 8* 7500 = 60000
This is more than the cost of adding one more dryer (40000).

Payback Period for 2 dryers

Saving in overtime for receiving process = 18-11 = 7
Workers = 15
Cost saved = 15*7*6.5 = $682.5
Cost of Trucks Weighting $3500
Processing Hours = 12.34-11 = 1.34
Worker= 36
Cost saved = 36*1.34*6.5 = $313.5
Total cost saved = 682.5+3500+313.5 =$4496 per day
Payback period = 80000/4496 =17.8 days
The chart displaying the initial scenario in all three cases 10000, 15000, 20000 bbls/day has been
provided below:

The chart displaying the new scenario in all three cases 10000, 15000, 20000 bbls/day with
additional dryers (as applicable), has been provided below:

Scheduling of workforce and another shift

In the case of 10,000 bbl per day, overtime is minimal so another shift is not needed.
In the case of 15000 bbl per day, overtime is about 2 hrs which is not enough to schedule
another shift. Moreover, since it is almost a continuous process, we can start all the processes at
same time. At most De-stoning, De-chaffing, Milling and shipping can start one hour after
receiving and control room operator has started working.
In case of 20000 bbls per day, overtime is approximately 6 hrs, which means that we can
schedule another shift of part time workers on busy or peak days. All the operations will have to
start at same time otherwise if we wait one hour, holding bins (both dry and wet) will be full and
trucks will have to wait.