Case Study: ‘SK Food Enterprises Ltd.’

SK Food Enterprises Ltd. is a company specialising in vegetable growing and distribution. Its most important customer group is the major UK
supermarkets which require fresh produce to be delivered to them 364 days a year.

The company has all the staff, expertise and specialised facilities needed to supply these supermarkets throughout the year. One of the most important vegetable products of this company is radicchio (a leaf chicory also known as Italian chicory), which is grown in England during the summer and on the European continent in the remainder of the year.

Radicchio are dense and round, but are easily bruised so have to be harvested with great care, after which they are stored and transported in chilled conditions to avoid deterioration.

From the time of cutting, they must be packed quickly to minimise water loss and taken rapidly to a cool store. Market demand varies greatly, dependent on the season and on weather conditions, with demand rising rapidly in periods of hot, dry weather and in the preceding day. Supermarkets rely on weather forecasts to
predict demand for salads and fresh sandwiches.

Radicchio (Italian chicory):

The harvesting rigs
The company has developed specialised machinery to assist in the harvest of millions of radicchio every year. Each of the company’s six radicchio picking machines (known as ‘rigs’) is a large mobile factory which is mechanically powered to move very slowly across the enormous radicchio fields, at a speed and direction controlled by the supervisor using a simple joystick control.
The rig runs on caterpillar tracks, allowing it to cross the soft, deep peaty soils on which radicchio thrive. However, in very wet conditions, this very heavy piece of equipment can get stuck and may need assistance from an additional crawler tractor.

At the very back of the rig is attached an open fronted road trailer, into which the trays of packed radicchio are carried and stacked. This trailer can
be released when full, and attached to a four-wheel drive tractor for subsequent transportation to the company’s local cold store. Another trailer is then connected in its place to allow picking to continue uninterrupted.
Each crew (picking team) comprises 17 people and a supervisor; there are nine cutters, five packers and three people preparing cardboard trays, labelling the individual supermarket radicchio and carrying completed trays and crates to the trailers. The supervisor, who is fully responsible for product quality and output of the rig, also provides assistance at any point on the rig to relieve any
short-term bottleneck and to cover any short period when an operative needs to leave the rig.

The crew members are paid piecework, and usually work eight-hour days (plus breaks), although overtime may be necessary on very busy days in mid-season.

Crew members of the most successful teams can earn more than double the UK hourly minimum wage, but this requires sustained effort and concentration, and cooperative crew behaviour.

The picking process
The nine cutters work on the ground in a wide line just in front of the rig, which slowly moves towards them. They stand astride the rows of radicchio, working slowly backwards. The average cutting speed per person, in good conditions, is eight seconds per radicchio. Within this cycle time the picker selects and cuts each radicchio using a sharp, slightly hooked knife, trims away the outer leaves (which are often muddy and/or damaged), and the drops the prepared radicchio into a polythene bag pulled from a bundle attached to the cutter’s waist belt.

The cutter can choose to leave uncut any radicchio exhibiting defects, for example, under-size, poor shape or damaged, and these are later ploughed back into the soil. They are also very skilled at judging radicchio weights, and will avoid under- or over-sized specimens. The best-quality wrapped radicchio are then thrown carefully forward to a packer.

Others are thrown further forward straight into plastic crates of 20 for subsequent industrial processing, depending on quality. These are known as ‘process grade’ and are used to make prepared salads and bulk chopped radicchio for the sandwich industry. In persistently wet weather, the average picking rate can slow by up to 25 per cent, as a result of a combination of mud slowing the picking and packing process, rigs getting stuck and a general deterioration in morale of the crew.
The five packers sit on seats attached to the front of the rig, in front of the pickers and just off the ground. They seal the bags with tape, and place the radicchio in a single layer in cardboard trays, selecting (grading) them – the best quality for the supermarkets in trays of 10, the remainder for wholesale markets in trays of 12. On average, this task takes five seconds per radicchio. The full trays are then quickly pushed forward to the final group of employees who work further back on the rig, higher up and level with the trailer floor.
These three workers have several tasks. Firstly, they have to erect the cardboard trays from flat ‘cut and creased’ blanks which the company buys in from an outside supplier of cardboard packaging. This tray preparation entails a folding and tucking action, and one skilled worker can make and stack the trays in an average of about seven seconds each. Typically, half of this person’s time is spent on this activity, and the remaining time on labelling.
The next task is to label all the supermarket radicchio. Self-adhesive labels are provided on a long roll, and are simply peeled off and stuck on each radicchio bag. These labels customise the radicchio for individual supermarkets and also provide the bar code and sell-by/use-by dates. Although they have to be positioned carefully with minimal creasing, a skilled worker can apply a label about every two seconds. On completion, each tray is then pushed forward, ready for conveyance to the trailer by another worker.

Each filled tray or crate has to be carried from the deck of the rig into the transport trailer, where it is stacked. Although the walking time for this action depends on the extent to which the trailer has been filled. An average time is approximately 15 seconds, which includes the time needed to return for the next tray or crate. This is the heaviest task, so the three workers rotate the jobs on the upper level of the rig. The supervisor is based here too – weighing equipment and quality records are kept at the back of the rig – so is able to assist with these jobs when needed.
Trailers are changed approximately every two hours, but this does not stop the operation of the picking, packing or labelling part of the rig. Two workers are needed to uncouple the trailer and reconnect the empty replacement. This takes approximately 10 minutes.
On average, during a normal working period, each worker uses about five per cent of the time for personal needs and for occasional activities; such as collecting packaging material. Breakdown time averages approximately two per cent of the available time, and this is usually used for cleaning and preparation.
Although the supervisor is able to assist others when the need arises, he or she spends about two hours a day on quality assurance. Statistical process control (SPC) is used to ensure that radicchio weight is within the requirements of each customer, and samples are inspected to ensure that their appearance remains within tolerance. Records of quality and output are maintained per rig.

Output statistics
During a busy period of sustained good weather in August, the average daily (eight hours) output from each rig was as follows:
Supermarket – 1800 trays
Wholesale     – 230 trays
Process         – 200 trays

Questions

Section 1 – (5%)
Describe the inputs and outputs of the transformation process outlined in this case, supported by an appropriate diagram.

Section 2 – (10%)

Describe the five operations performance objectives for the macro-operation (Quality, speed, dependability etc.).

Section 3 – (50%)

Calculate and discuss the capacities for each micro-operation of the radicchio rig, and from this estimate the total capacity. Discuss to what extent the overall capacity depends on the product mix. Discuss what problems are encountered when attempting these capacity calculations.

Your calculations should be completed in a spreadsheet and screenshots included in the main body of your report; additionally, your appendices should include screenshots of the formula view of the spreadsheet.

(Note: students who submit data of a spurious nature will later be required to forward an electronic copy of their actual spreadsheet).

Section 4 – (20%)
How well balanced are the capacities, and what could adversely affect this balance? (Present further calculations to support a scenario).
Section 5 – (5%)
Using your data to compare actual output to the capacity, what does this suggest about the operations management tasks involved in running all six rigs?
Section 6 – (10%)

In a typical British summer, the weather can cycle frequently between cool, dull periods with spells of heavy rainfall, and periods of hot, dry and sunny weather.

What capacity management problems could arise during such variations in the weather, and how can management best respond to such fluctuations?

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