Team 3
MBA 640C
10/09/06
National Cranberry Cooperative
Analysis and recommendations
1.
De-stoning 3 (Dry) De-chaffing 1 (Dry)
1500 bbls/hr 1500 bbls/hr Bagging 4
Bins 1-16
4500 blls/hr 1500 bbls/hr
250 bbls/bin First Quality
4000 bbls
Receiving
Weigh Separate 3
Sample 400 bbls/hr Bailey Mills Shipping Bulk bin 4
Truck Queue Color code
Bins 17-24
1200 bbls/hr
75 bbls/truck Dumping 250 bbls/bin Potential second quality
1500 bbls/hour 2000 bbls
De-chaffing 2 (Wet) Drying 3 (Wet)
1500 bbls/hr 200 bbls/hr Bulk truck
Bins 25-27
3000 bbls/hr 600 bbls/hr
400 bbls/bin Unacceptable
1200 bbls
2.
The resource with least capacity determines the maximum long-term achievable
throughput rate. Because wet and dry berries follow different routes at RP#1 there will be
a maximum achievable throughput for each. The capacity of the dryers is the bottleneck
for the wet berries. The maximum throughput for wet berries is 600 bbls/hr. For dry
berries the separation process is the bottleneck. The maximum throughput for dry berries
is 1200 bbls/hr.
The percentage of wet berries to dry berries would affect the throughput rate.
Given the current proportion of berries received the capacity of the dryers would be the
maximum throughput of the system. The dryers are the system bottleneck. And as the
trend of water harvesting continues, this situation worsens. All the process/resources at
RP#1 contribute to the throughput but the limitation is the bottleneck.
3.
The trucks wait because the processing capacity is less than the system input. And
the temporary holding bins are inadequate to buffer the berries coming in and the plants
processing capacity. But by using the Theory of Constraints to identify the system bottle
necks we are able to discover the root cause of the waits. The large back log of berries is
caused by several factors
The plant is not currently equipped to handle the supply of wet berries. This
problem has likely been increasing over the years as more cranberries are being wet-
harvested. This problem is evident in the lack of web berry temporary storage and
inadequate berry drying capacity. These bottlenecks are slowing the entire system.
The demand for and production of cranberries is uneven. The seasonal nature of
cranberry harvesting creates a need for a flexible system that can utilize full capacity in
harvesting season and minimize loss from excess capacity during off season. NCC
current system at Receiving Plan #1 is not meeting the input levels. NCC has two
immediate options: increase the temporary storage capacity or increase the maximum
throughput capacity of the system.
4.
Under the current system trucks carrying dry berries have no wait times because
the plant has adequate temporary storage for them. The trucks that must wait are the ones
carrying wet berries and have the following wait times.
11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (600*12) - 3200 4600 2200
Bottleneck (bbls/hr) 6000 600
Max wait time 7.67 3.67
Average wait time (for those who wait) 3.83 1.83
Weighted average wait time (hrs) 1.60 0.76
Weighted average wait time (min) 95.83 45.83
5.
Using the current system the RP#1 is not capable of receiving last years supply if
70% of the berries will be wet harvested. The first benefit is continued operation without
a processing emergency.
Recommendations
a. Purchase the Light Meter System for color grading. While this system will not
directly help the plants flow problems but it will pay for its self three times over
within the first year and continue to save the plan money from erroneous berry
quality premiums.
1980 Premium No. 3 Berries Paid (bbls) 450000
Premium per barrel 0.75
Total premium paid 337500
Berries not grade 3 225000
Premium per barrel 0.75
Total paid for berries not grade 3 168750
1981 Premium No. 3 Berries Paid (bbls) 292500
Premium per barrel 0.75
Total premium paid 219375
Premium savings 118125
Less:
Purchase price 20000
Operator costs* $6.50 * 12 * 365 28470
Light Meter will save $69,655.00
* Assuming the light meter system can reduce grading errors by only 30% and was
manned full-time all year
b. Purchase two additional dryers. The addition of new dryers will eliminate the
current bottleneck for wet berries. Two new dryers increase throughput enough
that there will be no trucks waiting during the peak operations when processing
starts at 7:00 AM. The new dryers are an improvement but not enough to
eliminate waiting times if operations start at 11:00 AM. The theoretical capacity
of the combined dryers would become 1000 bbls/hr which is more than the
current capacity of the separators if they are devoted to 70% wet berries. The new
bottleneck becomes the separators at 840 bbls/hr. These wait times are much
better, but there is still a lot of overtime holding the profitability of the plant
down.
11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (840*12) - 3200 2680 0
Bottleneck (bbls/hr) 840 840
Max wait time 3.19 0.00
Average wait time (for those who wait) 1.60 0.00
Weighted average wait time (hrs) 0.66 0.00
Weighted average wait time (min) 39.88 0.00
c. Convert five dry bins to wet/dry bins. Given the excess temporary storage
capacity dry berries five dry bins should be converted to wet/dry bins. If anymore
than five bins were converted trucks delivering dry berries would have wait times
during normal operations (starting at 11:00 AM). Converting these bins would
greatly decrease waiting time/cost of idle drivers and trucks while optimizing the
resources the plant currently owns.
11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (840*12) - 3200 1430 0
Bottleneck (bbls/hr) 840 840
Max wait time 1.70 0.00
Average wait time (for those who wait) 0.85 0.00
Weighted average wait time (hrs) 0.35 0.00
Weighted average wait time (min) 21.28 0.00
d. Purchase four new wet bins or purchase one additional separator. In order to
eliminate wet berry truck wait times completely, four additional wet bins would
be or one additional separator is needed. Further information would be needed to
determine the most effective purchase but the effects can be calculated for either.
Four Additional Wet Bins
Dry Wet
Minimum 2750 2800
Maximum 6000 6050
Optimal * 2750 6050
* With the current set up and ratio of 70% wet berries the Wet/Dry bins will be utilized for
incoming wet berries.
Max Build up = (1500*.7*12) - (840*12) - 6050 -170
Max wait time 0.00
Alternatively the plant can purchase one additional separator and devote it to wet
berries. This would shift the bottleneck back to the dryers at 1000 bbls/hr. At this
rate of throughput wait time for trucks delivering wet berries would be eliminated.
11:00 AM Start 7:00 AM Start
Max Build up = (1500*.7*12) - (1000*7) - 3200 0 0
Bottleneck (bbls/hr) 1000 840
Max Wait Time (hrs) 0.00 0.00