Case Analysis-National Cranberry Cooperative
National Cranberry Cooperative was an organization that was formed by cranberry growers with operations in New Jersey, Washington, Massachusetts, Oregon, Nova Scotia, Wisconsin and British Colombia. The cooperative is concerned with the processing and marketing of the cranberries. The farmers incur the losses of the cooperative and there is therefore a need to reduce unnecessary expenses at all costs. The cranberry industry has experienced many changes over the years. Some of the changes have been good and positive and has enabled the growers to produce more cranberries even in minimal acreage. However, as the industry grows, the farmers have also realized that they can make more money by changing the growing and processing methods. They have introduced water harvesting, which despite realizing more yields than dry harvesting have resulted to less fresh produce. Water harvesting caused more damage to the berries and shortened the shelf life. Picking fresh fruits is not an easy process as it requires the berries to be handpicked from the bushes and all berries are inspected individually before they are packaged. The processes involved at RPI are receiving and testing, dumping, temporary holding, destining, de-chaffing, drying, separation, bulking and bagging. They are then stored or processed into sauces, juice and frozen fresh berries. The berries are graded according to color- No. 1 is the poorest color and No. 3 is the best the other colors are 2A and 2B. Sometimes it is not clear how to grade the berries and at such times, the berry receives a No. 3 color. This often causes many expenses to be incurred since No.3 colors usually receive a premium. The berries are held in holding bins before they are destoned or dechaffed. The water-harvested berries are also dried before being graded for quality and bulked or bagged. The fresh fruit process has four hundred workers during the peak, most of who are involved in the inspection. The process fruit section has a workforce of either 27 or 53 during harvesting.
Some of the costs, which are incurred in RPI, can be avoided or minimized. For instance, it takes a lot of time for trucks to unload and this is expensive for the cooperative since the trucks are on lease and the drivers have to be paid for the time spent at the factory. Most of this time is spent when the trucks are waiting to empty their contents in the Kiwanee dumper. The holding bins do not have the capacity to hold many berries and the RPI does not have temporary stores where the berries can be held. Having a holding pool with water would mean that more than one truck can empty the berries in the pool and this would reduce the time taken. This could also reduce the processes since wet berries do not need destoning. Another area where there are unnecessary costs is in the work schedule. When there is a high rate of absenteeism, a lot of money is spent paying overtime to the workers who are already there. The management seems lenient in handling the employees’ absenteeism and this should change. The management should introduce two shifts during the peak season. This will reduce the number of hours that the firm will stay open since more work will have been accomplished. One of the reasons why the level of absenteeism is high could be of the overwhelming workload. Introducing two shifts will give the employees enough time to rest and be ready for the next shift. Despite this change, the management should find a better incentive to reduce the number of absent employees at any time in the company. Grading some of the berries as No. 3 should be changed since it is incurring many expenses. Many berries are regarded as top quality and yet they are not. The cooperative should either introduce another color class to grade the berries or classify them as 2B. The farmers should be willing to work together with the cooperative since a loss to the cooperative means a loss to the farmers (Porteus, 1993).
HBS. (2006). National cranberry cooperative (abridged). Cheneyville Louisiana, Harvard Business School.
Porteus, L. E. (1993). “Case analysis: Analyses of the national cranberry cooperative-1 tactical options.” Interfaces (23) 4 21 – 39
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