National Cranberry Cooperative In Ncc's Production
National Cranberry Cooperative
September 22, 2011
National Cranberry Cooperative (NCC) is a major processor and distributor of cranberries. Through their full-scale processing operation at receiving plant, NCC is able to handle all aspects of production from the physical collection of cranberries from suppliers to the packaging of product for sale. Through detailed analysis, it has become apparent that significant issues exist within NCC’s operation. In particular, are the continuously growing overtime costs of their staff and the long wait times for trucks making deliveries to the receiving plant.
The underlying reasoning of these issues can be directly linked to the bottleneck in NCC’s production, the relative capacity of the dryers. …show more content…
In order for all 16,400 barrels to be processed at this rate, the plant, which begins at 11am, will have to work for roughly 19.13 hours, till just after 6am. This means we have 11.13 hours of overtime required for all processing employees. The second issue we find is that the bottleneck and limited wet berry bin capacity (3,200 wet barrels) causes a wait for trucks, resulting in the back-up at the drop off station as they are delivering barrels. Exhibit A depicts this backup. The backup of delivery trucks causes the receiving department to work for 17.8 hours till just before 6am. That equals 9.8 hours of overtime required for employees in the receiving department. All of this overtime leads to a daily payroll expense of $4,395 (52 employees* $7.88 Average OT pay rate), or $87,894 during the 20 day period we are analyzing. Refer to Figure 1 for these …show more content…
This is done by adding a 4th dryer, a capital investment of $40,000 that brings the capacity of the dryer operation to 800 barrels per hour. In doing so, the process has the ability to handle all capacity of product in just over 14 hours. This equates to roughly 6 hours of overtime for processing. At the same time, we are suggesting that the plant begins processing at 7am, rather than 11am. This completely eliminates any bin backup and the need for trucks to hold barrels while creating a waiting line. The 7am start time causes no added expense or need for extra overtime. With our suggestions implemented, receiving employees are now only there for roughly 5.3 hours of overtime till just after 8pm. Processing employees are only now working 6.3 hours of overtime till just after 9pm. Total overtime payroll is now $2,463 daily, reducing the cost for the 20 day period to $49,266. See Figure 2 for these
September 22, 2011
National Cranberry Cooperative (NCC) is a major processor and distributor of cranberries. Through their full-scale processing operation at receiving plant, NCC is able to handle all aspects of production from the physical collection of cranberries from suppliers to the packaging of product for sale. Through detailed analysis, it has become apparent that significant issues exist within NCC’s operation. In particular, are the continuously growing overtime costs of their staff and the long wait times for trucks making deliveries to the receiving plant.
The underlying reasoning of these issues can be directly linked to the bottleneck in NCC’s production, the relative capacity of the dryers. …show more content…
In order for all 16,400 barrels to be processed at this rate, the plant, which begins at 11am, will have to work for roughly 19.13 hours, till just after 6am. This means we have 11.13 hours of overtime required for all processing employees. The second issue we find is that the bottleneck and limited wet berry bin capacity (3,200 wet barrels) causes a wait for trucks, resulting in the back-up at the drop off station as they are delivering barrels. Exhibit A depicts this backup. The backup of delivery trucks causes the receiving department to work for 17.8 hours till just before 6am. That equals 9.8 hours of overtime required for employees in the receiving department. All of this overtime leads to a daily payroll expense of $4,395 (52 employees* $7.88 Average OT pay rate), or $87,894 during the 20 day period we are analyzing. Refer to Figure 1 for these …show more content…
This is done by adding a 4th dryer, a capital investment of $40,000 that brings the capacity of the dryer operation to 800 barrels per hour. In doing so, the process has the ability to handle all capacity of product in just over 14 hours. This equates to roughly 6 hours of overtime for processing. At the same time, we are suggesting that the plant begins processing at 7am, rather than 11am. This completely eliminates any bin backup and the need for trucks to hold barrels while creating a waiting line. The 7am start time causes no added expense or need for extra overtime. With our suggestions implemented, receiving employees are now only there for roughly 5.3 hours of overtime till just after 8pm. Processing employees are only now working 6.3 hours of overtime till just after 9pm. Total overtime payroll is now $2,463 daily, reducing the cost for the 20 day period to $49,266. See Figure 2 for these