National Cranberry Cooperative Case Report
NCC is a leading organization in the fruit industry and it has failed to find the bottleneck in its Receiving Plant 1. It is faced with the challenge of long queues at RP1 leading to reduced operational efficiency. This paper aims to determine the bottleneck of its operations, calculate overtime, and the time wasted while trucks are waiting to unload the berries. It will further provide recommendations on the best ways to improve the operations at the organization.
- Process Flow Diagram:
- Determine the bottleneck of the operation(s)
Number of dumpers = 5
Average time used = 7.5 minutes
Average = 75 barrels
Therefore, the total dumping capacity,
= 75* 5 *(60) / 7.5
=3000 barrels/hour
Individual bins’ capacity 1-16 = 250
So, total Individual bins’ capacity 1-16 = 6*250
= 1,500 barrels
Individual bins’ capacity 17-24 = 250
So, Individual bins’ capacity 17-24 = 8*250
= 2,000 barrels
Individual bins’ capacity 25, 26 and 27 = 400
So, Individual bins’ capacity 25, 26 and 27 = 3*400
= 1,200 barrels
Total dryers = 3
One dryer capacity/hour = 200 barrels
Total capacity = 600 barrels/hour
Available Jumbo separators = 3
Capacity for one separator/hour = 400 barrels
Total capacity/hour = 1,200 barrels
Wet berries (de-chaffing capacity/hour) = 3,000 barrels
Dry berries (de-chaffing capacity/hour) = 1,500 barrels
Total de-chaffing capacity/hour = 4,500 barrels
Therefore, drying capacity is the bottleneck operation because it has the lowest capacity per hour (600 barrels).
- Overtime Required
Operations commence at 11.00 AM while dumping bins start at 7.00 AM. The time difference for the two operations is 4 hours.
Dry Berries
In one hour, there is 450 barrels
So in 4 hours, there will be,
4 hours* 450 barrels = 1,800 barrels
Dumping bins total capacity = 4,000 barrels.
This means that within the 4 hours, there is no hitch in the processing of dry berries.
Wet Berries
In one hour, there is 1050 barrels
Dryer capacity/hour = 600 barrels
So in 4 hours, there will be,
4 hours* 1050 barrels = 4,200 barrels
Dumping bins total capacity = 3,200 barrels
From the given data, the drying capacity is less than the required capacity and thus there is waiting in order for trucks to unload. There is hourly added 450 barrels after 11.00 AM. This means that for a day, the barrels,
= 4,200 + (8 *450)
= 7,800 barrels (wet berries)
Total barrels in truck at end of day = 4,600 barrels
Total barrels in wet dumping bins at end of day = 3,200 barrels
Total time to unload = 4,600/600,
Where 600 is the processing rate.
= 7.67 hours
This means that the earliest time for all the trucks to unload is 2.40 AM the following day.
Loading process further takes another 5 and a half hours to drive the process to 8.00 AM the next day. Therefore, the total overtime during peak days is approximately 13 hours.
Overtime = 13 hours
- Truck Delay and Time Lost
Assuming that a truck will unload within 7.5 minutes and 18 trucks unload per hour, there will a back-up challenge of approximately 1 hour 15 minutes. Consequently, considering that truck 1 arrives at 7.00 Am and plant operations begin at 11.00AM, truck one waits for at least 4 hours to unload.
- Recommendations
- This case strongly recommends a re-scheduling of the arrival time for the trucks. According to calculations;
Total deliveries= 610,185 barrels
Standard deliveries/truck = 20-400 barrels
Average = 75 barrels
Therefore, the total truck load per season will be,
= 610,185/75
= 8,136
Time used to dump berries = 5-10 minutes
So, average time used = 7.5 minutes
So in a day,
= (8 hours * 60 minutes) /7.5 minutes
=64
=64 trucks per dumper in a day
Total dumpers = 5
Total trucks/day = 64 *5
=320
So, in one hour = 320/8
No. of trucks that can be scheduled per hour = 40 trucks/hr.
- The organization should also better re-schedule its labor to reduce the total overtime cash paid.
At Receiving Plant 1, there is an approximately 12,000 overtime labor hours.
The average normal time pay rate = $6.50 per hour
Therefore,
Total overtime pay = $39,000
- Introduction of 2 additional dryers at the Receiving plant No. 1 (RP1). This will help lower the output time as well as in increasing the volume.
Currently, there are 3 dryers with a capacity of 600bbls per hour.
Therefore, 5 dryers will be 1000bbls/hour
3 dryers utilize 175% (bottleneck of the process)
- dryers = 105%, (not the bottleneck of the process anymore)
- The dechaffing process should commence at 7.00 AM and not 11.00 AM, especially in peak periods. This is important in reducing overhead cost through the reduction of the unloading time.
- Acquire light meter systems
From calculations,
Net benefit = premium saving cost – cost of the system
168750- 20000
Net benefit= $148,750