Bottlenecks

What is a Bottleneck?
Bottlenecks represent processes or operations that have limited capacity and
reduce the capacity of the entire production chain. They can cause delays in
production and may be costly for your company if they are not resolved.

The presence of bottlenecks can cause:

 Delays in production
 Low customer satisfaction
 Stress on employees
 Excess work-in-progress items

As these bottlenecks are presented, project managers are asking themselves

how they can possibly be able to manage them within their supply chain. Lean
management tools and techniques can help you identify and resolve the
problems caused by bottlenecks. 

What is a Bottleneck?
In the simplest definition, a process bottleneck is a work stage that gets
more work requests than it can process at its maximum throughput capacity.
That causes an interruption to the flow of work and delays across the
production process.
In other words, even if this work stage operates at its maximum capacity,
it still can’t process all of the work items quick enough to push them to the
next stages without causing a delay.
The workflow bottleneck can be a computer, a person, a department, or a
whole work stage. Typical examples of bottlenecks in knowledge work are
software testing and quality review processes.
Unfortunately, a bottleneck is often acknowledged only after it has caused a
blockage in the workflow.
There are simple yet effective analysis tools in Lean Management
and Kanban that can help you both prevent work congestion and spot an
existing bottleneck.

Managing Bottlenecks in Manufacturing

Since bottlenecks can limit capacity and inventory is being held back, it
is important to chart the points of production to readily identify the areas
where bottlenecks are present. As these bottlenecks are identified, there are a
variety of approaches that a production facility can take in order to manage
them:
Increase Resource Capacity - Is your bottleneck caused by an inefficient
machine? This can be mediated by performing some maintenance work to
improve its production rate or by replacing it altogether. For inexpensive
resources, you may want to consider increasing capacity by adding an extra
machine or hiring another operator.
Eliminate Non-Value Operations - By eliminating all of the operations that do
not add value to the production process, you can cut down the time required to
produce an item. This will in turn increase production as machines will be able
to perform more cycles as less time is wasted. Non-value activities can include
things like unnecessary transport or items through the plant or rework
required on defects.
Improve Flow of Operations - Improving the flow of operations can cut down
the time required to move work-in-progress items from one resource to
another. A redesign of the workflow and shop floor layout may be required to
avoid having unnecessary movements through the plant and cut down the
production time.
Sell Unused Capacity - If you have a resource that has a lot more capacity
than the other resources, it likely has unused capacity. You may want to
consider selling or subcontracting the excess capacity to another company.
This can increase the space available in your plant to add other machines to
increase the capacity of your bottleneck operation.
Re-allocate Capacity - If you have decided to sell unused machines due to
their excess capacity, you may end up having extra available operators and can
be allocated to the bottleneck operation to increase its overall capacity. 

How to Detect a Workflow Bottleneck?

If you see that your workflow is unpredictable and operates in rushes,
you have a bottleneck somewhere instead of a smooth flow.

The real issue lies in identifying it and setting an appropriate countermeasure.

In Lean Management, to detect a bottleneck, you can use several Kanban
bottleneck analysis tools.
Here is how to identify a bottleneck in 3 steps:
Visualize. 
Keeping track of your work in the form of task cards on a Kanban
board makes it very easy to see where work items pile up, which is a strong
sign of a problem, most likely a bottleneck.
Map Queues and Activities. 
 When we separate queues and activities and map them on the Kanban
board, we can see how much time our work sits waiting in a queue prior to a
certain activity. If this queue grows significantly faster than the activity stage
processes work, you have found your bottleneck.
Measure Cycle Time per Stage. 
Measuring cycle time at every stage lets you build a cycle time heat map
diagram. Just a glance at this diagram reveals the stages where cards spend
the most time. If these workflow stages are queues, too, those are probably
your bottlenecks.

What is a Bottleneck?
A bottleneck is something that limits the capacity of a system. Just like the smaller neck
of a bottle of wine prevents one from spilling all the bottle's contents in a few seconds
should it be knocked over by accident.

Let's look at this another way. You might have 4 steps in a process. In the next
example, step 3 is the bottleneck (with a capacity of only 70), as indicated by the
continuous red line. It constrains the whole process' capacity:

If you elevate its capacity to 90, the whole process output can go up to 90, and at that
point, there are 2 bottlenecks: step 1 and step 3 (see the dashed red line below). In
other words, by elevating that step's capacity by 29%, you boost the entire process'
capacity by 29%.

Using Lean Methods to Avoid Production Bottlenecks

Step 1: Find & identify bottlenecks in production
If the bottleneck is not the first operation in a series of operations, a lot
of inventory tends to be waiting before the bottleneck. For example, in one
study, the value stream map revealed that 30 days of stock were waiting before
CNC machining, and another 45 days were waiting before assembly: these were
the 2 bottlenecks in that factory.
A more scientific approach is to make a bar chart, as shown in the
previous section. It is one of the most common lean methods and tools used to
calculate how balanced (or imbalanced) a process is.
Bottlenecking Because of Customers
Customers can become bottlenecks in several ways. They can happen
with the customer changing engineering on you once the order is placed or, if
they direct parts, can be slow with part shipping. Your customer can also be
the bottleneck due to poor planning on their end. They send orders and,
throughout the period when you are supposed to produce, they make many
changes. These changes can make you change tooling, have the wrong
materials set up for the line, or create problems if the complexity of one
product is too great and you need a good mix to keep the line running
correctly.
In this case, managing your customer is essential. You can do the
planning for the month and fix up the planning to control the workflow. This is
often necessary. You will be fine by the end of the month, but you may not
meet the daily plan.

Bottlenecking Because of Equipment

Equipment maintenance is also important. Your most significant
bottleneck will come up when your machines are not operational when needed.
Preventative and predictive maintenance will be your most significant
help to keep your equipment running. Setting up these programs will be a
must. Having well-trained people to manage this is the most critical part of the
process. These people will be worth the extra pay. They will keep your factory
running and make sure that you stay working.

Bottlenecking Because of the Supply Chain

Your product may be made up of 20 different parts coming from 15 other
suppliers. If one of these suppliers can't deliver parts per your schedule, they
hold you back. 
Ideally, you'd have backup suppliers for each part. It is not tricky for
standard parts but much more time consuming for custom parts.
And it might not be feasible at all for you if you are in the same situation
as the typical car manufacturer (switching to 1 new factory for 1 part triggers
costly safety testing and approvals). In that case, a solid risk analysis upfront
is a must.
Step 2: Reduce the Impact of Bottlenecks in Production
Now that you see the bottlenecks, what should you do? Bottlenecks are not
necessarily evil, as explained by Eli Goldratt in The Goal. And they can't be
avoided (there will always be at least one bottleneck). But one has to plan
around the bottleneck(s).

3 Management Approaches to Address Capacity-based Bottlenecks:

1. Elevate the Capacity of Bottleneck Operations

There are several options to achieve this goal:

Process improvement 
For example, studying the OEE components for a piece of equipment and
improving the ratios.
Adding capacity
By increasing resource (workers, machines) is often done best with
inexpensive, low-tech, low-complexity equipment that will be done less
frequently than a complex, high-tech solution.
Adding capacity by automating the process further
We always advise carefully assessing the benefits of full automation and
going slowly in that direction (let your staff become familiar with automation
and how to maintain it).
Subcontract work to other companies when needed.
However, it may pose issues in terms of quality and confidentiality, but
you cannot neglect the economic benefits to your factory if your demand is
uneven/seasonal.

2. Sell the Extra, Unused Capacity of Other, Non-Bottlenecked Processes

For example, if you have 20 injection presses but only use 12 of them, you
might want to find other companies interested in subcontracting some injection
molding work. You will make money as long as you charge more than your
variable costs.

3. Downsize Unused Capacity

For example, you can sell the 8 injection presses that are unnecessary for its
operations and lay off / displace the operators and technicians taking care of
those 8 presses.

Final Thoughts on Managing Bottlenecks

The concept of bottlenecking was central to the Theory of Constraints. It
is paramount to Lean Manufacturing's Just-In-Time pillar but is not explicitly
mentioned as such. As noted above, a simple bar chart based on a work
breakdown sheet is usually the most adapted tool. A value stream map can
help too.