Operations Management
Case study National Cranberry Cooperative
- Operations Management-SCH-MGMT-670
Group :
1. Deepika Gupta
2. Saloni Shukla
3. Sanya Talwar
4. Raghav Goyal
5. Zorawar Singh
1. What are the major reasons for trucks waiting and excessive worker overtime?
Solution:
Process flow in this case can be summarised as follows:
The truck unloads its contents onto 5 conveyor belts.
The conveyor belts shift the stock of cranberries onto temporary holding bins from
where they are moved for emptying.
The emptying process usually takes 7-8 minutes, unless there are any bottlenecks, in
which case it may go upto 3 hours.
The major root cause for truck waiting times and worker overtime is the bottleneck at
Receiving Plant 1. If holding bins are unavailable on the second floor, the delivery trucks
have to wait with the cranberries being full on the first floor receiving plant. Thus, trucks
have to match upto the amount of cranberries already in the temporary holding bins.
This is the bottleneck with the strategy of National Cranberries Cooperative and calls for
a change in the overall strategy of the firm to augment capacity and address the issue
of waiting times.
2. Draw the cranberry processing flow chart, showing the processing capacity at
each stage and determine the maximum throughput rate of the plant
Solution:
Process flow
3. Plot the cranberry inventory (in bbls) build-up by hour on a busy day, with
current resources and the processing start at 11:00 am. Determine the
average waiting time of trucks, worker overtime, and their financial
implications.
Solution:
The bottleneck for the process is the dryers. The capacity of the drying unit is 600 bbl /hour
which is lower than the required 1050 wet bbl/day. The trucks start arriving at 7:00 AM and
store the wet berries in storage bins (17 24, 25, 26, and 27).
The total capacity of the bins is 3x400 + 8 * 250 = 3200 bbls.
The trucks start waiting at 10.03 AM (3200 / 1050)
Inventory buildup rate = arrival rate processing rate = 1050 bbl -600 bbl = 450 bbl / hour
Inventory buildup rate = arrival rate processing rate = 1050 bbl -600 bbl = 450 bbl / hour
Total inventory buildup = 4200 + 8 * 450 = 7800
Total wait of the truck is calculated as follows:
At the end of the day (12 hours), there will be 7800 left in the inventory. Out of this 3200
will be in the bins and 4600 will be waiting in the truck. It will take 4600/600 = 7.67 hours
to clear them.
Truck Waiting = 16.67 hours
Waiting time for all the trucks = 16.67 * (4600/2) = 511 hours
4. What is the effect of starting processing at 7:00 am during a busy season?
Solution:
The following assumptions are made for calculation purpose:
On an average busy day, berries arrive continuously at rate of 15,00 bbls/ hour
There are 20 busy days in an average growing season.
Inventory buildup rate = arrival rate processing rate
1050bbl - 600bbl =450 bbl
At this buildup rate, wet bins will fill up in 3200/450 =7.11 hours. So the truck will start
waiting ar 2:06pm.
Total wait of the truck:
Inventory at the end of the day (12 hours) = 450*12=5400bbl, of which 3200bbl will be in
bins and rest
2200bbl will be in trucks. It will take 2200/600=3.67hours to empty the
waiting
It will take 2200/600=3.67 hours to empty the waiting trucks. So, inventory will start
building from 7.11 hours to 15.67 hours. And at 10:40 PM there will be no truck waiting.
Truck waiting = 15.67- 7= 8.67 hours.
Waiting time for all tracks adds to=8.67 hrs x (2200/2)/75 = 127 hours
Although the plant operations are moved to 7 AM, the over time remains at 13 hours.
On a busy day , 12600 out of 18000 bbl is wet. At an average processing rate of 600
bbl/ hour , it takes to 21 hours to process. Thus there is an overtime of 13 hours.
5. Make specific recommendations to improve the process performance
Solution :
National Cranberry Cooperative is plagued with issues of truck waiting time and excessive
overtime. It needs to review its strategy to being in efficiency in operations. Few
recommendations that can help NCC augment efficiency are:
Commence process at 7 AM
Install 2 dryers
Add another grading line
Implementing these changes can help NCC achieve savings and contain excessive waittimes. These recommendations can reduce the work hours by 8 hours and help NCC save
$194,040
