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V.

BENEFITS OF SHIFTING PROCESS TIME

A significant issue facing the National Cranberry Co-operative’s receiving plant #1 is the amount of
time that the trucks are sitting idle waiting to download their product. This issue is further magnified by
the fact that as a cooperative, the costs of the leased trucks and hired drivers increases as the trucks
sit idle which directly impacts the bottom line of our business partners. We need to keep the growers
happy.
Moving the processing time from 11:00 a.m. to 7:00 a.m. during the peak period is critical to
downloading trucks quickly and avoiding costly idle time. Based on the assumption that we receive
18000bbl on a single day during the peak season, 66% or 12,000bbl is wet and 33% or 6,000bbl is
dry equates to 240 truckloads of berries. Of these truckloads, 160 would be wet berries and 80 would
be dry. It takes trucks 8 minutes to back onto the dumper, empty its contents, and leave the platform.
With additional storage bins to hold berries added to the process, we could keep trucks moving. By
beginning the process at 7:00 a.m., the receiving plant would be able to end operations at 8:00 p.m.
More importantly, these improvements would benefit the growers.
Based on Exhibit 2 total barrels delivered from 9/1 through 12/10 is 610,185. From 9/20 through 10/9
RP#1 receives 327,596 or 54% of the production for the entire season. The 7:00 a.m. start time would
be most critical during these three weeks, but I feel the benefits of keeping the trucks moving makes
this start time a good idea for the entire season.
VI.

PROPOSED CHANGES: COST/BENEFIT ANALYSIS

In sum, we propose to start the process at 7:00 a.m., and install 2 dryers and an additional grading
line. This will cut the workday from 7:00 a.m. through 4:00 a.m. (under current capacity) to a workday
of 7:00 a.m. through 8:00 P.M.
Hourly cost of labor:


Length of season: 16 weeks



Workdays per week: 7



Average salary per employee: $10.5 (assuming no overtime)



Average number of employees: 40 (assuming equal time of heavy and light



volume days)
Total Cost per hour of having workforce: $47,040

Past 11 PM:


Total Cost per hour of workforce: $10,584 (only 9 employees are needed beyond
11 p.m.

If we only purchased one Dryer it would reduce the work hours from 4:00 a.m. to 11:00 p.m. This
would only produce savings of $52,920 and therefore not enough to cover the cost of one dryer.

If we purchased two Dryers it would reduce the work hours from 4:00 a.m. to 10:00 p.m. this would
produce savings of $99,960 again not enough to cost of this solution ($120,000).
However, if we purchased 2 dryers and added an additional separator line hours of operation would
be reduced from 4:00 a.m. to 8:00 p.m.
Savings due to reduced hours:
X = 5 * ($10,584) + 3* (47,040)
X = $52,920 + $141,120 = $194,040
Total Cost of implementing recommended solution:


Total cost of dryers: $120,000



Maximum cost of new separator line to maintain this option as viable: $74,040

VII.

CONCLUSION

In conclusion, National Cranberry Cooperative is facing a bottleneck in RP #1 that is causing several
hours of excessive overtime and delivery truck wait-time at the front-end of the facility. Our team
analyzed the data and offered alternative solutions towards correcting the problem that is upsetting
suppliers because of idle time and additional cost burdens. National Cranberry understands that it
must augment its processes to become more efficient or potentially lose business and overall profits.
As discussed in detail above, commencing the process at 7:00 am, installing 2 dryers, and an
additional grading line, will ultimately decrease the amount of hours worked by 8 hours, and National
Cranberry will achieve a savings of $194,040 because of these reduced hours and proposed
recommendations. Our team after reviewing the data believes this proposed solution is the most
proactive, and cost-effective way to reduce the bottleneck issue and excessive wait-times plaguing our
front line. Our team suggests we implement said changes immediately as they are critical to
effectively adjust the efficiency, and overall productivity of National Cranberry Cooperative in the
future.

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