Felicity Zhu

Assignment 3

1. What is the main problem? What are the causes of the problem?
The main problem for the National Cranberry Cooperative is the overtime issue from the
plant’s processing inefficiency, which not only brings excessive overtime costs but also
dissatisfaction from the suppliers. There are a few causes of the problem: the limited capacity of
the holding bins which lengthened the wait time of unloading, the inaccuracy in the grading
process, and another slow bottleneck section that holds back the entire process.
The usage of water-harvesting techniques for cranberries has increased to “70% of total
process fruit from last year’s 58%”, meaning receiving plant 1 (RP1) is anticipated to receive
more wet cranberries this year. While the wet cranberries are significantly higher in proportion
than that of the dry cranberries, the holding bins do not correspond to the ratio of the two.
Holding bins 1-16 are only for dry berries, while 17-24 can be used for both, and 25-27 are for
wet only. The maximum holding volume for wet berries is at (3 x 400 + 8 x 250 = 3200 bbls),
against dry berries’ (16 x 250 = 4000 bbls), which means there is a shortage of the wet bins,
contributing to the long wait-time.
The inaccuracy in grading the cranberries is also a push factor to the issue. In the step
separating 2B from 3 berries, only “about half of them are (actual) No.3’s” in the graded berries.
The yield is low, meaning the process is likely to be repeated or lengthened, and hence
inefficient. Using manual labor in assisting the decision has brought a high amount of errors to
the process: the chief berry receiver usually “chooses No.3” when undecided between the two.
In addition, from the passage it is evident that the drying section is a bottleneck that
slows down the entire production process. The step before drying is dechaffing, which can
operate at up to 1500 bbls per hour (per one of the three machines), while drying is only at 200
bbls per hour (for each of the three units), the slowests section in the entire process chain. Since
the entire processing speed is dependent upon the slowest section, the drying units are a
significant contributor to the overtime issues.
2. What recommendations would you make to Mr. Schaeffer?
A few recommendations can be made to address the root causes mentioned in question 1:
converting some dry bins to wet bins, adding drying machines and purchasing the light meter
system.
The current trend of mechanization means that water-harvesting technology will likely be
the dominant method in the near future, implying that these bins (if lasting as long-term assets)
will be useful for the long term. The benefit of this addition is the reduced wait time of truck
drivers, which prevent their losses of labor costs from truck drivers’ extended work hours.
However, this step is ​not​ the priority as the most significant issue is the slow drying section,
which means having more wet bins does not necessarily improve the efficiency of the entire
process; the wet berries also expire faster, meaning storage will face new issues. This strategy
should only be implemented if the drying process can be improved drastically.
The most important suggestion is the purchase of additional drying machines. For every
one extra dryer purchased, the capacity can increase by 200 bbls per hour. Considering that
drying is the bottleneck in the production chain, if budget allows, at least 2 dryers priced at
$60000 each should be purchased to be close to the second-slowest step, grading. The addition of
a light meter system will also improve efficiency of the production by improving the accuracy of
grading. Currently the average effective capacity is “close to 400 bbls per hour for each line”, by
purchasing the advanced machine it can be upgraded to 450 bbls per hour, giving a total of 1350
bbls per hour. Furthermore, the increase in grading accuracy can prevent possible loss from
mistakes in the process. These two measures together should be an effective solution to the
overtime issue, by addressing the bottleneck and the expense from operational errors.
It should be noted that the cost of these recommendations is likely to be high, and can
potentially be the downside of the suggestions. This drawback can be mitigated by calculating
how much wait-time reduction is needed, and determine the precise numbers of machines needed
for the reduction.