National Cranberry Case Analysis
Introduction/ Statement of Problem
The two main problems facing NCC are cranberry harvesting and the poor grading of process berries (National Cranberry Cooperative, 1974). Over 50 percent of the berries graded as top quality are in real sense not top quality and do not even qualify for extra premiums paid on top of the quality berries. As a leading company in the fruit sector, the management of NCC is determined to implementing a few changes so as to increase its operations efficiency. In the process of cranberries entering, moving, and exiting receiving plant No. 1 has been a major issues and the company believes it can be contained by adjusting certain stages in its overall operations. These adjustments will lower the costly overtime expenses that the company incurs as well as containing the time spent by trucks waiting to be unloaded. As a result, the plant will enhance operational efficiencies at normal business hours hence increasing the overall productivity of the company.
Identify and Provide Analysis of Key Issues/ Root Causes
A few years ago, NCC was among the largest cooperatives in all main fruit growing areas of North America: Nova Scotia, Washington, Massachusetts, British Columbia, New Jersey, Oregon, and Wisconsin. The management considers the purchasing and installation of two new dyers ($25,000 each) or water harvested / dry berries ($5,000) to convert NCCs dry berry into holding bins as a strategy avoiding these problems.
Increased mechanization of cranberry harvesting
In the vicinity of receiving plant No. 1, water harvesting was in particular rapidly developing. The management of NCC trust that water harvesting could yield 20 percent more than what dry harvesting could yield (National Cranberry Cooperative, 1974). However, this created a lot of damage to harvesting. Also, fruit harvesting time was shortened something which inconveniences the entire process.
Development of water harvesting method for fruits
At NCC, water harvesting continued to grow to a remarkable rate in some North America areas. The number of water harvested fruits in receiving plant No. 1 grew from 25,000 bbls to 350,000 bbls by 1970. However, water harvesting was not the preferred method for fruits that were being sold while afresh for fresh fruit should remain undamaged as well as having as long a shelf life as possible. The failure to ship fruit sold fresh to receiving plants in the field contributed to NCCs mess in receiving plant No. 1 for this contributed to increased fruits damage in the waiting bay (National Cranberry Cooperative, 1974). Prior to packaging, fresh fruit was highly inspected, this made fresh fruit production a labor-intensive process which was a total mess.
Agriculture Marketing Agreement Act of 1937
From the US Cranberry Harvest data report, the growth of surplus cranberries produced exceeded the number of those consumed. The data suggest that supply of cranberry in the North American areas exceed its demand. This was a big mistake by NCC. Also, increased supervision of growers by handlers led to berries destruction in a way that led to a market price increase in an attempt to compensate for the destroyed berries. Growers advocated for physical handling, and this is also a root cause of the current NCC problems.
Identify Alternative Courses of Actions and their Associated Consequences
The realization of these errors attributed to NCC’s failure, the management had to identify alternative courses of action in order to restore its operational efficiencies. These alternative courses of action adopted by NCC include:
Process Fruit Receiving
The bulk trucks carrying process berries randomly arrived at receiving plant No. 1 loaded with 20 to 400 bbls. On average, each truck delivered 75 bbls (National Cranberry Cooperative, 1974). This alternative was introduced to ensure that all trucks are weighed and the gross weight recorded prior to unloading. Sampling of about 30 lbs was also introduced and run through a small version of the cleaning and drying processes utilized in the plant.
The management advocated for the emptying of bins into conveyors at the first stage in the plant. Immediately the weighing, sampling, and color grading were completed; the truck was to be backed into the dumper platform. Five (5) conveyor belts were introduced to process the berries to the second level of the plant which were then transferred to temporary holding bins. The contents of the dumper platform were to be emptied immediately the bins were full. The alternative ensured that when bins got opened, berries flowed onto conveyers appropriately.
Milling- Quality Grading
Immediately destoning, dechaffing, and drying; the management considered the transportation of berries to one of the three newly established conveyors that transferred berries from the first receiving level to the third one as the best approach for quality grading (Porteus, 1989). The conveyors were adjusted to feed berries into the separators to obtain the three classes of berries namely first quality berries, second quality berries, and the third one being unacceptable berries. As a result, quality grading of the berries was achieved.
Bulking and Bagging
Another alternative course of action was the installation of six conveyors. The aim of launching six conveyors was to ensure that the berries carried from the separator building to the shipping building was done efficiently with little or no defect. All the conveyors were of high quality in those feeding berries onto the three major flexible conveyors in the shipping area and ensured that feed berries in the bagging stations promptly completed the processing process.
Develop Action Plan (s) and Identify Measures for Success after Implementation
The management of NCC will have to initiate new success measures to ensure that the proposed and implemented action plans are strictly adhered to and followed.
National Cranberry Cooperative Action Plan
|i. NCC major issue is related to the cost or truck arrival and waiting. Truck drivers have been spending three or more hours and paid $100 per hour waiting to be offloaded. The management seeks to ensure that trucks take 7-8 minutes to be unloaded and the cost be reduced to a reasonable amount.
ii. The other problem is overtime costs. Overtime expenses of NCC had been beyond limit and control and demanded limiting capital related to overtime expenses. Pay rate for employees was also poor at $8.00 per hour. The management seeks to ensure that overtime costs are eliminated and workers paid for overtime hours in all plants.
|i. Weighing- The management seeks to ensure all trucks are weighed to determine the gross weight and the tare weight of the trucks are recorded.
ii. Sampling: The management seeks to ensure that prior to unloading trucks, a sample of 30 lbs fruits is taken from the truck to scale out wet deliveries effectively.
iii. Grading: The approach of quality grading will be adopted to ensure that customers get their desired cranberry class among the three classes used in the company.
|i. The management seeks to ensure that cranberries are held in the trucks in case dumping cannot be undertaken immediately until they can be processed in the conveyors.
|Storing Cranberries into Bins
|The management seeks to introduce three initiatives in order to ensure that cranberries are safely stored in the bins, these include:
i. Dry bins
ii. Wet bins
iii. Dual bins- they must be properly allocated in the conveyors
Continuous flow processing: In which bottlenecks are properly and addressed to expand production capacity.
Preemptive Demand measures: Demand for wet berries produced by the company increase by 7 percent every year. The management should do some preemptive demand measures to deal with this demand and find out whether the percentage rate increased to 100% to curb the supply surplus problem.
Workforce scheduling: The number of workforce needs to be increased in order to increase the company’s capacity to produce more berries. More workers be assigned to all levels of milling, shipping, and bagging.
Implementation and Control: Who is Responsible for what? How will you measure progress? What are the milestones?
The last fall’s process fruit operations at NCC are a clear indication that the management has not solved the problems surrounding its operations. There is need to control the overtime issue and that experienced by trucks waiting to be unloaded. The management of NCC led by Mel and Walliston are responsible for the problems witnessed in the trucks unloading and poor grading of cranberries are top quality when they are not. The growers of berries are responsible for not taking accurate records of the weight of their berries before they reach the organization and this is why most time is spent waiting to be weighed before unloading them (Porteus, 1989). Hiring more workers in every department is a control measure. Also, ensuring quality grading by the company is also a control measure. The progress of these control measures will be measured by measuring the time spent by trucks in waiting to be unloaded, the time must be reduced. Further seasonal workers working overtime needs to be compensated for the overtime. The milestones to be considered are measuring the time that trucks wait to be unloaded; this should drop from 3 hours to less than 8 minutes per truck. Further, any employees having worked for any hours exceeding 40 per week has to be compensated for the overtime. A straight-time rate approach should be employed in determining a workers overtime pay per every hour. Finally, the number of workers that the company requires in the peak season should increase from 27 to 53.
National Cranberry Cooperative (1974).
Porteus, E. L. (1989). The Case Analysis Section: National Cranberry
Cooperative. Interfaces, 19(6), 29-39.