CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
Case Study Analysis
National Cranberry Cooperative 1996
Tannaz Nayebi
Pepperdine University
Production and Operations Management – DESC
475.23
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
Abstract
National Cranberry Cooperative, 1996 (NCC) is one of the biggest manufacturers for
cranberry producers in North America. The National Cranberry Cooperatives (NCC) is a
corporation that processes and distributes cranberries. However, the recent changes in harvesting
methods along with higher produce yields have put great demands on the factories resources.
This shift has led to an increase in overtime costs, which has raised concern. Hugo Schaeffer, the
Vice President of operations at the (NCC), has discussed the problems that the factory needs to
solve to avoid continuous overtime costs that can likely jeopardize the plant's operations. To
improve operations before the 1996 crop arrives, they agree that there needs to be a quick indepth analysis of the (RP1) method to allocate overhead costs adequately. In this paper, I will
discuss and analyze the main issues. Furthermore, I will give recommendations on necessary
steps that could be used to improve their plants' methods. My analysis and recommendations will
be primarily based on the information obtained and provided in the case study published in,
(Shapiro, Roy D. "National Cranberry Cooperative, 1996." Hbs. N.p., 2011).
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
Background
“National Cranberry Cooperative is the largest cooperatives for Cranberry growers in North
America, its sales in the US reached to $138 million, making 1995 NCC’s most National
Cranberry Cooperation (NCC) is a company that processes and distributes cranberries.”( Harvard
Business Review)." Throughout its history, farmers harvested cranberries by using the dry
method, however not until recently did they begin to discover the wet method (flooding a field
that includes harvesting berries) which seemed to be a more practical means of picking berries.
This particular course should become more commonly the selective mean of gathering berries
because it provides a higher yield quickly.
Since this shift has happened, NCC’s( RP1) has experienced an increasing demand for the
factory’s resources. The wet berries have to stay in wet-designated holding containers as well as
go through a lengthy drying process. This change in the harvesting methods, along with higher
produce yields, have put great demands on the plant’s resources. The additional and overtime
costs are just a scratch on the surface of the many problems co-operative members, including the
vice-president, Mr. Hugo Schaeffer, have had to deal with. According to Schaeffer, VP of
operations, the plant lacks adequate maintenance in order to administer the methods of the
factory correctly. Without the proper steps to improve the primary problems they have
encountered last season, the central demands include identification of the cause of the problem
and suggestions to overcome these
Issues that currently exist.
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
analysis
One of the major dilemmas, in this case, is linked to the waiting period of these trucks
before dumping the cranberries in the Kiwanee dumpers. Every truck with a capacity, seventyfive bbls of cranberries must continue to be emptied out into five kiwanee dumpers. Each truck
would take approximately 7 - 8 minutes, to back a truck onto a Kiwanee dumper, while other
trucks would have to wait for several hours before its contents emptied out onto a conveyor belt.
The difficulty was that there remained a total of twenty- seven temporary holding bins of
differing sizes, but currently, the process needed all the holding bins to be full until they can
continue to move onto the next platform. When complete, the trucks had to be placed on hold till
all of the holding bins deposited all of the contents onto the first level conveyor belts. While
there was no constant flow of holding bins, the trucks had to wait for a batch-wise processing
that typically would take more than a few hours. Because the trucks remained leased by the
farmers, the price of each truck was extremely costly for them.
The holding bins were of different capacities, twenty-five of them have the capability of
holding up close to 250 bbls, with three remaining and capable of holding 400 bbls each. The
only dilemma with this method of holding bins was once the bins were at capacity, the dumping
process would pause until the bins are ready to continue the process. However, this caused a
huge dilemma by slowing down the operation. In addition to the number of trucks having to wait
for at least hour until the holding bins were cleared out.
The drying process required for only the wet berries, through the dryer system area, after
de chaffing, while the dry berries dealt with the destoning unit area. There was a total of three
drying units, which functioned at the rate of 200bbls per hour each, per dryer. ("The plant layout
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
had two de chaffing units specifically for wet berries and one unit for the dry berries") “Harvard
Business Review, (2011)”Adding up to 600 bbls per hour, and the demand rate on a high volume
day is 824 bbls per hour. Comparing the flow rate of this activity with other activities in the
process, we incorporate the drying activity to be the bottleneck of the entire process. Which led
to a decrease in the rate of trucks unloading, adding a huge delay to the process.
Currently, (NCC) continues paying a high-priced amount of capital for poorly graded
berries. Only about 70% of all berries are graded No. Three during the truck's arrival to the
processing plant. In addition, a premium of $1.50 spent for every barrel of No. three berries,
which is unneccesary because once the berries go through processing, just half of those quality
three berries are actually to be of that greatest grade. Currently, NCC is paying a total of
$675,000 for 450,000 barrels of No. three berries. Once NCC has finished processing the
berries, they are discovering that only 225,000 barrels are actually No. 3 grade. Which means,
that NC's current expenses are approximately about $337,500 more for No. three berries than
needed.
Recommendation
Conclusion
To manage the predicament of the expecting rate of the arrival of each truck to the plant,
NCC could ensure that the farmers direct some of the trucks to each factory to implement regular
intervals so that each process can coordinate with a set pace used to organize a time management
strategy. Another crucial component to be administered is the investment of the dryer method to
improve each process flow frequency. Furthermore, the (NCC) can also help manage the bulk of
the wet and dry bins according to the incoming demand. By implementing the alternative
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
suggestions, NCC would then be capable of reducing the waiting time of each truck load and
diminish the processing time it takes to unload as well. Connecting the light meter system
mechanism (color grading) will secure NCC's expenses as the premium of the particular grade 3
berries remaining decrease. TheNCC should additionally assure that the workers are non-idle.
Ensuring each worker is assigned to a particular duty. When times of high demand
(approximately one month), seasonal workers should be selected working alongside experienced
permanent employees for at least two shifts. However, on an average work day, permanent
employees working a single shift will satisfy the demand necessary.
National Cranberry Cooperative, 1996 (NCC) is one of the biggest cooperatives for
cranberry producers in North America. The National Cranberry Cooperatives (NCC) is a
corporation that processes and distributes cranberries. However, the recent changes in harvesting
methods along with higher produce yields have put great demands on the factories resources.
This shift has led to an increase in overtime costs, which has raised concern. Hugo Schaeffer, the
Vice President of operations at the (NCC), has discussed the problems that the factory needs to
solve to avoid continuous overtime costs that can likely jeopardize the plant's operations. To
improve operations before the 1996 crop arrives, they agree that there needs to be a quick indepth analysis of the (RP1) method to allocate overhead costs adequately. In this paper, I will
discuss and analyze the main issues. Furthermore, I will give recommendations on necessary
steps that could be used to improve their plants' methods. My analysis and recommendations will
be primarily based on the information obtained and provided in the case study published in,
(Shapiro, Roy D. "National Cranberry Cooperative, 1996." Hbs. N.p., 2011).Background
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
“National Cranberry Cooperative is the largest cooperatives for Cranberry growers in North
America, its sales in the US reached to $138 million, making 1995 NCC’s most National
Cranberry Cooperation (NCC) is a company that processes and distributes cranberries.”( Harvard
Business Review)." Throughout its history, farmers harvested cranberries by using the dry
method, however not until recently did they begin to discover the wet method (flooding a field
that includes harvesting berries) which seemed to be a more practical means of picking berries.
This particular course should become more commonly the selective mean of gathering berries
because it provides a higher yield quickly.
Since this shift has happened, NCC’s( RP1) has experienced an increasing demand for the
factory’s resources. The wet berries have to stay in wet-designated holding containers as well as
go through a lengthy drying process. This change in the harvesting methods, along with higher
produce yields, have put great demands on the plant’s resources. The additional and overtime
costs are just a scratch on the surface of the many problems co-operative members, including the
vice-president, Mr. Hugo Schaeffer, have had to deal with. According to Schaeffer, VP of
operations, the plant lacks adequate maintenance in order to administer the methods of the
factory correctly. Without the proper steps to improve the primary problems they have
encountered last season, the central demands include identification of the cause of the problem
and suggestions to overcome these
Issues that currently exist.
analysis
One of the major dilemmas, in this case, is linked to the waiting period of these trucks before
dumping the cranberries in the Kiwanee dumpers. Every truck with a capacity, seventy-five bbls
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
of cranberries must continue to be emptied out into five kiwanee dumpers. Each truck would take
approximately 7 - 8 minutes, to back a truck onto a Kiwanee dumper, while other trucks would
have to wait for several hours before its contents emptied out onto a conveyor belt. The difficulty
was that there remained a total of twenty- seven temporary holding bins of differing sizes, but
currently, the process needed all the holding bins to be full until they can continue to move onto
the next platform. When complete, the trucks had to be placed on hold till all of the holding bins
deposited all of the contents onto the first level conveyor belts. While there was no constant flow
of holding bins, the trucks had to wait for a batch-wise processing that typically would take more
than a few hours. Because the trucks remained leased by the farmers, the price of each truck was
extremely costly for them.
The holding bins were of different capacities, twenty-five of them have the capability of holding
up close to 250 bbls, with three remaining and capable of holding 400 bbls each. The only
dilemma with this method of holding bins was once the bins were at capacity, the dumping
process would pause until the bins are ready to continue the process. However, this caused a
huge dilemma by slowing down the operation. In addition to the number of trucks having to wait
for at least hour until the holding bins were cleared out.
The drying process required for only the wet berries, through the dryer system area, after de
chaffing, while the dry berries dealt with the destoning unit area. There was a total of three
drying units, which functioned at the rate of 200bbls per hour each, per dryer. ("The plant layout
had two de chaffing units specifically for wet berries and one unit for the dry berries") “Harvard
Business Review, (2011)”Adding up to 600 bbls per hour, and the demand rate on a high volume
day is 824 bbls per hour. Comparing the flow rate of this activity with other activities in the
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
process, we incorporate the drying activity to be the bottleneck of the entire process. Which led
to a decrease in the rate of trucks unloading, adding a huge delay to the process.
Currently, (NCC) continues paying a high-priced amount of capital for poorly graded
berries. Only about 70% of all berries are graded No. Three during the truck's arrival to the
processing plant. In addition, a premium of $1.50 spent for every barrel of No. three berries,
which is unneccesary because once the berries go through processing, just half of those quality
three berries are actually to be of that greatest grade. Currently, NCC is paying a total of
$675,000 for 450,000 barrels of No. three berries. Once NCC has finished processing the
berries, they are discovering that only 225,000 barrels are actually No. 3 grade. Which means,
that NC's current expenses are approximately about $337,500 more for No. three berries than
needed.
Conclusion
To manage the predicament of the expecting rate of the arrival of each truck to the plant, NCC
could ensure that the farmers direct some of the trucks to each factory to implement regular
intervals so that each process can coordinate with a set pace used to organize a time management
strategy. Another crucial component to be administered is the investment of the dryer method to
improve each process flow frequency. Furthermore, the (NCC) can also help manage the bulk of
the wet and dry bins according to the incoming demand. By implementing the alternative
suggestions, NCC would then be capable of reducing the waiting time of each truck load and
diminish the processing time it takes to unload as well. Connecting the light meter system
mechanism (color grading) will secure NCC's expenses as the premium of the particular grade 3
berries remaining decrease. The NCC should additionally assure that the workers are non-idle.
CASE STUDY ANALYSIS – NATIONAL CRANBERRY COOPERATIVE
Ensuring each worker is assigned to a particular duty. When times of high demand
(approximately one month), seasonal workers should be selected working alongside experienced
permanent employees for at least two shifts. However, on an average work day, permanent
employees working a single shift will satisfy the demand necessary.