National Cranberries Cooperative, 1996 Harvard Case Solution & Analysis

National Cranberry Cooperative (NCC) is formed by the group of cranberry growers, the decisions are also taken by the group of growers as well. NCC is not the sole cooperative of the growers of cranberries, there are many other cooperatives as well however, and NCC is one of the largest cooperative among all the cooperatives of cranberries growers. The operations of NCC are spreader in almost all parts of North America, Wisconsin, Washington and New Jersey are one of the main locations for the operations.
Despite the previous success of the NCC, the recent years have shown some adverse movements in the operational performance of the company. Significant spending have been made in the machines and equipment but it had not changed the level of performance considerably. This poor financial and operational performance of the NCC results in many concerns among the senior management of the cooperation. The growers of the cranberries are also demotivating and are very heated due to the poor operational strategies of the senior management.
In order to improve the operational efficiency, the senior management and members of the NCC are considering to spend huge amounts in the plant and equipment. It can be said that these capital expenditures could resolve these issues which are deteriorating financial and operational performance of the cooperation.
National Cranberries Cooperative, 1996 Harvard Case Solution & Analysis
Problem statement:
The growers have to wait for long as the trucks are taking more time to get the berries off, the majority of the trucks are being leased by the growers for transportation, taking more time to offload the berries results in increased cash outflows for the growers and they also have to pay more cash to the drivers as well. In addition to the operational inefficiencies, the cooperation is finding it very difficult to control the labor cost. There is a shortage of permanent workforce as well which is resulting in significant cash outflows as NCC have to hire temporary workforce and they also have to pay overtimes as well.
Root cause Analysis:
It can be said that there are many causes of these adverse performance of the NCC, firstly the strategies of the senior management are not effective enough to make performance attractive. The senior management have made some inappropriate decisions regarding the capital expenditures, they haven’t made capital expenditure decisions accurately, and they should have to increase the operational capacity by increasing the number of bins.
Onthe other hand, the absence of permanent workforce is also one of the main reason for the adverse performance, although the temporary workforce have been hired by the management but the temporary workforce is not competent enough to carry the operations. Furthermore, the wage rate of temporary workforce is also very high as compare to the permanent labors and the NCC have to pay overtime to permanent workforce during the peak seasons as they have to work longer than 40 hours per week in order to carry out the operations.................

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