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BIZ2121-04: Productions and Operations ManagementProfessor Sung Joo Bae
TEAM PHAROSConnie Chung
Ren VangJae Kwan JungLian Yun Shi
Yong Seok Kim
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TABLE OF CONTENTS
INTRODUCTION 3
SWOT ANALYSIS 5
PROBLEMS & MUSSELMAN’S SOLUTIONS 8
RECOMMENDATIONS 10
CONCLUSION 13
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INTRODUCTION
Company Background
Founded in 1949, Knouse Foods is a cooperation of 1,500 men and women working
together to provide the highest quality fruit products for their customers, opportunities for their
employees, and services to their community. Knouse Foods operates seven processing plants in
three states. Their brands include Musselman’s, Lucky Leaf, Apple Time, Lincoln, and Speas
Farm. Over the past 50 years, Knouse Foods has become one of the largest suppliers of
processed fruit products in the industry.
Their goal is to offer customers healthy, convenient, appetizing products that are sure to
please every member of their family. From apple sauce and apple juice to vinegar and ready-to-
use pie fillings and so much more, they offer a wide variety of fruit products to diversify
consumers’ meal planning, enhance their cooking and baking, and brighten their life with their
highest quality processed foods.
The Process
First, leaves attached on apples are removed while the apples go through a conveyor. They are then sent to an inspection area, where a special camera takes a picture of the apples’ insides to check the status and quality.
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Apples that had came through the inspection area reaches washing area, in which the apples’ surfaces are washed with brushes and water jets.
After being washed, the apples are graded and classified. Employees stand along the conveyor and look for any defected, decayed apples and remaining leaves. Apples classified as inappropriate for applesauce are removed to a bin for later use to make apple juice or thrown away.
Next, machines are used to peel the satisfactory apples. The machine not only peels, but also removes the core of apples. Peeled apples are then sent to another area to be chopped.
Chopped apples go through the cooker where they are softened by high-pressure steam. The resulting product is then mixed well. In the next process, waste is disposed, which might be formed during former processes. Then, the applesauce is complete.
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The applesauce is transferred to another set of machines, which inject it to aluminum containers. The machine put the same amount of applesauce into each container.
Containers with applesauce are sealed and are assigned special codes, which are invented to designate each product so that the company can recall all the products they sold. It also makes it easier to identify defected products.
SWOT ANALYSIS
Strengths
Knouse Foods operate six processing plants in two states, covering nearly 2.4 million
square feet on close to 300,000 acres. Every inch of every plant is devoted to producing the
finest and freshest fruit products for their valued customers. Their unwavering commitment to
the highest quality standards and absolute customer satisfaction has made them one of the largest
apple processors in the world.
From a spoonful of delicious applesauce to millions of jars, bottles and cans of quality
processed fruit products earned Knouse Foods a stellar reputation as one of the most trusted
names in the industry. Their brands (Musselman's, Lucky Leaf, Apple Time, Lincoln, and Speas
Farm) have been family favorite for more than 50 years. Being one of the largest suppliers of
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processed fruit products in the industry with a cooperative network of quality growers, assures
customers fruit products that feature consistent texture, natural flavor, and great taste.
Being such an established brand is one of Musselman’s biggest strengths. Known for its
great tasting and healthy products, the company produces a wide variety and options of
applesauce including applesauce blended with other fruits and lite applesauces for those who are
counting calories. Musselman’s has also made many great achievements such as producing the
first applesauce in single serving cups, applesauce in 48 and 24 ounce plastic jars, as well as
being the first company to produce applesauce sweetened with Splenda.
With such a notable reputation, Musselman’s were able to build a loyal customer base.
The company is known to be a family favorite for over a hundred of years and continues to be
one of the leading applesauce producers. Having such a strong reputation along with high
achievements gives Musselman’s a competitive advantage against its competitors.
Weaknesses
When observing the video, it can be noted that Musselman’s produces its applesauce with
heavy automation. Using heavy automation to product applesauce can cause some problems to
the system. For example, utilizing only machines for the process eliminates human labor, which
can be an issue if the machine were to break down. If a machine is unable to operate, the whole
system will have to come to a halt and the company is forced to pay a high cost and an immense
amount of money to fix the machine and continue their process.
With a high use of machinery, it is important for a company to have fast and efficient
machines to process in a timely manner. Unfortunately, Musselman’s machinery does not satisfy
those conditions. Their machines are not only large, but slow and inefficient as well. For
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instance, during the process in which the apples go through a conveyor that de-leaves the apples,
it can be noticed that many of the apples still had leaves remaining. Another example is during
the sealing process. The machines that place the lids on the top of the cups filled with applesauce
operate at a slow rate. With this, it can be concluded that the machines used in the Musselman’s
factories are not as efficient and fast as they can be.
Opportunities
In terms of opportunities, Musselman’s is able to maintain its success in the market because
of the stable demand for applesauce. This can be evident with the fact that the company has been
in the business for over a hundred years now. Additionally, the demand for healthy food like
applesauce is increasing. Nowadays, more and more people are beginning to be concerned about
their health. Thus, they want to have a healthy snack like applesauce to satisfy their cravings and
their taste buds without harming their health. The stable demand for snacks like applesauce gives
Musselman’s reassurance and security about their success and longevity of the company.
Threats
Even though Musselman’s is a well-known brand with a long list of achievements, the
company still experiences the pressure of competition. Mott’s Company is also a popular brand
that produces applesauce, as well as other products like juice and fruit snacks. Tough competitors
such as Mott’s Company pushes Musselman’s to maintain their top spot in the industry.
Another threat to Musselman’s is the threat of substitution. Because applesauce is a
standardized product rather than a customized product, any merging or current company can
easily imitate the product. Since applesauce is easily imitable, it is crucial that Musselman’s gain
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a competitive advantage through their analysis of competitive priorities to stay profitable in the
market. If not, the company will lose revenue, which may result in company failure forcing
Musselman’s to shut down their business.
PROBLEMS & MUSSELMAN’S SOLUTIONS
Problem I: Storing Apples
For the production of applesauce, keeping harvested apples fresh or in good quality for year
round is quite difficult. Since it takes about a year apples to grow, they are harvested only in the
fall for production. One important aspect about apples is that they continue to ripe or take in
oxygen even after they are harvested. This means that apples do not have a long shelf life
because they can rot or over ripe easily. For companies like Musselman’s, it is important to have
enough quality apples in stock to produce applesauce or other products to meet demands
regardless of the current season. Hence, if apples are not stored properly, the company can lose
much of its inventory to make their applesauce; thus, are unable to meet customer demands. As a
result, the company may lose sales and customer satisfaction. Additionally, its operation costs
may increase as well due to lower volume of production. Therefore, it is crucial to address the
storage of apples for the production of applesauce.
Musselman’s Solution: CA Rooms
To solve the issues of properly storing apples, Knouse Foods introduced a storage facility
with Controlled Atmosphere (CA) rooms located in Peach Glen, PA. These rooms allow for
regulations of “temperature and humidity, as well as oxygen and carbon dioxide content.” The
purpose of these rooms is to stop the apples’ from taking in oxygen and putting them “sleep.”
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This enables the apples to “retain the crisp, juicy, flavorful attributes” for about a year from the
time they were harvested. Musselman’s utilizes such facilities to store its apples in cold storage
at 34 degrees and 2% oxygen to keep their apples from aging. This allows them to produce
applesauce year round and keep the product on the grocery shelves as fresh as possible.
Problem II: Environmental Impact
Though the production of applesauce is important, one must also consider the impact that
production has on the environment. For instance, with massive and heavy machines like the ones
shown in the video clip of Musselman’s applesauce, a large amount of fuel is needed because
energy consumptions by those machines are tremendous. Furthermore, emissions from
transporting materials and running the manufacturing plant as well as the packaging materials,
plastic containers, bins, and other production materials can have a negative impact on the
environment. For example, packaging materials or toxic wastes may end up in nearby lakes or
rivers, threatening the home of animals as well as their safety. Thus, it is crucial to address the
environmental impact of producing applesauce.
Musselman’s Solution: Sustainable Practices
To address the environmental concerns of applesauce production, Musselman’s
implemented sustainable practices to minimize pollution and other negative impacts on the
environment. One of the sustainable methods that Musselman’s used was to collect water from
processing operations and use it to “irrigate grass fields”. In addition, the Peach Glen facility,
which is one of the Musselman’s factories, uses 14,000 solar panels. Apart from that, the trucks
used for transporting apples to the factory runs on bio-diesel fuel. Moreover, Musselman’s took
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the initiative to reconstruct their “packaging to reduce waste and to remove “wasteful packaging
lines completely.” Most importantly, the company utilizes every part of the apples from the peels
to the cores. For instance, the peel and the core of apples are used for producing apple juice, and
the “pressed apple” flesh from making the juice are used to feed the cattle. Such sustainable
practices as these can ensure that the company is efficiently utilizing its resources and supplies
for maximum production and lower operation cost as well as reducing its environmental
footprint.
RECOMMENDATIONS
Improve Automation
Musselman’s process has been proven successful and working properly when it comes to
preparing apples and transforming them into Musselman’s infamous applesauce. However, the
machines carrying the process are not necessarily shining to its best potential. The machinery
that Musselman’s utilizes can be improved for maximum potential. Improving automation will
allow Musselman’s to have faster machines and a more efficient process.
In the video, it demonstrates how apples are renovated into applesauce. The process is
shown to be decent and able to fulfill the mission of making applesauce in a sufficient way. At
one point of the video, it shows the realigning of the apple so that the cavity can be removed then
prepared to be peeled. The process seems to be rather slow as it deals with only a certain amount
of apples rather than a mass amount. In addition, Musselman’s branch of producing personal size
applesauce cups also encounters another type of issue dealing with a slow process. The video
shows one man refilling cups into the machine constantly so that the process can be continued at
a steady yet fast rate. Using human power to do something that require a continuous action can
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slow down the process as humans feel exhaustion after working hard.
Due to these issues, it is critical for Musselman’s to invest in better and faster machines.
This will allow the company to complete the jobs faster and more efficiently. Musselman’s
should have a machine that will be able to align the apples to the desired position at a mass and
carry on with the process smoothly without any issues. Addressing the issue of refilling the cups
by hand, Musselman’s should have a machine that will automatically refill the cups into the
machine to prevent the possibility of having a delay. This will also save on labor costs and
unnecessary energy of the worker. Musselman’s investing in better machines and tackling these
issues will allow the company to be more capable of meeting demand promptly and increase
capacity in shorter period.
With better machines, Musselman’s also needs to focus on achieving a more efficient
process. In the video, the process begins with the apples being transported on a conveyor belt
with the apples being rotated to separate out the leaves. As the apples rotate on the conveyor belt,
the leaves would fall down through the gaps in the belt. Most leaves are taken out, but a decent
amount is still caught between the apples as they move on to the next step of the process, which
may cause delay. The process continues with the apples being moved and put through an area
where jets spray water to clean the apples. Sanitation of the apples is important as they are
consumed. Musselman’s current jet system does not operate as well as it could. The video show
only a few jets spraying the mass amount of apples that pass by on the conveyor belt at a
relatively fast pace. This means that not all of the apples are fully cleansed. Although the process
seems to be acceptable and suitable, Musselman’s can improve automation to have a more
efficient process to bring the company to its highest capability.
As the apples are being transported on the conveyor belt to separate the leaves,
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Musselman’s can incorporate a blower into the process to blast away the leaves that did not go
through the gaps. This will save time during the inspection area and does not require much
money or change in the factory. Musselman’s can also change the jets that are used to wash the
apples to wider-range jets to clean the apples better and at a mass. The company can also have
multiple jets installed at different levels so the apples can be cleaned multiple times, reassuring
that the jets reached all the apples and cleaned them properly.
Considering these automation improvements will greatly benefit Musselman’s. This is
because having these changes will speed up the process and create efficiency. Having such speed
and efficiency will generate more revenue for the company as it is able to deliver better and
faster than before when they did not improve automation.
Conduct Monthly Inspections
With a process that relies on automation, it is also important for Musselman’s to conduct
monthly inspections to check if their machinery is working properly. This will reduce the
possibility for defects and prevent major problems from occurring. Having monthly inspections
are useful for reporting issues that are found early on in the process. Discovering possible
problems with the machines early on will save Musselman’s time and money because they would
be able to fix the problem before producing a large amount of inventory that may be flawed due
to the error. Identifying the problems during the beginning of the process will also prevent more
severe and serious problems from developing later on in the process, which would put the whole
inventory in jeopardy. Reducing the chances of production failure through these monthly
inspections will save Musselman’s a tremendous amount of money, which can be allocated to
other areas within the company for improvement and advancement.
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CONCLUSION
So far, it is possible to say that Musselman’s applesauce has been successful even though
there was a minor problem about imperfect containers in June 2009. As the company
immediately recalled all the products that were reported to have a problem, the accident ended
with no or little effect on their reputation. Many people love Musselman’s applesauce because of
their excellent taste and quality.
However, success so far does not guarantee further success. Problems with the process
have been identified. This means that there are some possibilities of Musselman’s applesauce
being in trouble or even wiped out unless Knouse Foods take steps in toward the right direction
to solve these problems. It is much easier to lose brand reputation Musselman’s has gained than
to win some.
Supply chain management is a continuous, endless job, not a one-time task. Even a
company or a brand with a good image among customers would try to improve its process
efficiency and quality to remain successful and maintain their competitive advantage.
Musselman’s applesauce, too, need to be continuously managing and solving current problems
by staying focused on its process to prevent further problems and improve.
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