National Cranberry Cooperative
As a leader in the fruit industry, National Cranberry Cooperative (NCC) is ready to take on some changes in order to increase efficiency in its operation. The entire process flow by which cranberries enter, move, and exit Receiving Plant No. 1 (RP1) can be improved by tweaking certain stages of the overall operation. Such improvements will reduce the expensive overtime costs that have been incurred and reduce the waiting time for inbound delivery trucks, hence, enabling the plant operate at more normal business hours and increase the overall profitability of NCC.
After running a process flow [see Exhibit 2], it becomes apparent that a main bottleneck exists at the …show more content…
By reducing the number of total working hours from 18,560 to 16,780 over the 20-day peak cycle, which in turn brought down the overall cost of paying employees from $107,860 to $96,680, a savings of $11,180 [see Exhibits 6 and 9 for complete breakdown of regular and overtime hours analysis]. This is significant, considering the plant was also able to shut down at 6:00 AM, which is a vast improvement over the previous 9:00 AM, leaving more than the minimum window of two hours for cleaning.
By bumping the start time up to 7:00 AM, we are not only limiting the early backflow of raw goods being introduced into the process, but we are also avoiding major overtime costs since employees are able to come in closer to the time the Bins are being loaded, making the overall day shorter in terms of overtime hours. Since 53 people are needed in the busy season, compared to 27 in the regular times of year, we want to limit the amount of overtime that is being worked by the 26 extra part-time hires who incur the exponentially high overtime rate of $6.00/hr compared to the regular $4.00/hr, while full-timers receive the same $6.50/hr as they always do.
NCC needs to start the plant’s production at 7:00 AM to even have a chance at making improvements at RP1, but it also needs to purchase an additional Dryer, as well as find more ways to start accepting more Wet Berries than Dry Berries, since the key here is that Dry Berries are able