Bottleneck Theory in Operations Management

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When you pour wine out of its bottle, a thin stream of liquid comes out of the spout, and it takes some time for the bottle to be emptied. But if you poured the same amount of wine out of a bucket, the bucket would be empty in a matter of seconds, and the liquid would come out more like a waterfall.

The neck of the wine bottle constrains and slows the flow of the liquid, but the bucket has no such constraints. This analogy can be applied to operations management to explain why some projects or processes prove inefficient. Using the bottleneck theory in operations management helps to identify problems and create solutions so that operations can be as streamlined as best as possible.

Other Bottleneck Examples

To put it another way, a bottleneck occurs because the supply flow reaches a point at which a back-up occurs. Think about two-lane traffic that has to merge into one lane. When there are few cars on the road, they can accomplish the merge without causing a traffic jam. But when you add more cars (too much "supply"), then everyone has to slow down to merge safely, and traffic can get backed up for miles.

Or imagine the life of a new celebrity who suddenly gets a lot of fan mail. Opening a few letters a day could be managed by the celeb, but when hundreds of letters arrive each day, it would take hours to read them all. Instead, the star has to hire a team of people to read those letters to make the process more efficient.

Any time the supply production outpaces even just one step in the overall processing operation, a bottleneck occurs. It can happen in factories, in email inboxes or when the line for an ice cream shop goes out the door and around the corner on a hot day. However, bottlenecks are commonly discussed in terms of a factory setting, because when the production process is not deliberately monitored to look for bottlenecks, they can have a heavy impact on production value.

Bottlenecks in Factory Settings: Machine Downtime

To get an idea of just how important it is to quickly address bottlenecks in a factory environment or to avoid them altogether, visualize this common type of bottleneck: machine downtime. When one machine malfunctions, the entire production process grinds to a halt.

In order to avoid a surplus of material that can not be used right away, the machines earlier in the process may be shut down as well. A factory only earns ROI when its machines are actually up and running, so this downtime is considered wasted money.

Then take into account the employees at the factory, who are still on the clock despite the machine's malfunction. They still need to be paid for their time, even though the products that pay their wages are not being made. Machine maintenance is such an important aspect of factory work because long-lasting bottlenecks end up costing quite a bit of money.

A Bottleneck in Management

The machine maintenance crew bears only part of the burden of keeping bottlenecks to a minimum in a factory setting. The operations manager also plays a key role. It is the manager's job to make sure the machines are set up and timed appropriately for maximum production value.

Otherwise, another type of bottleneck called accumulation can occur. If one machine takes 10 minutes to produce 1,000 pieces of material, and another machine takes 20 minutes to mold that same 1,000 pieces of material, the second machine is going to spit out its product at a slower rate. That means the third machine in line needs to be timed accordingly, or perhaps another "second" machine is required in order to bring everything up to speed.

If the first machine is capable of producing 2,000 pieces of material in 10 minutes, it would not necessarily be wise to ramp up the production of this machine if the other machines cannot keep up. This is how an accumulation of supply occurs, and it is wasteful because the end result is the same: The final machine churns out the same amount of product in the same amount of time whether the first machine produces 1,000 or 2,000 pieces of material. The manager has full control over this bottleneck.

The Slowest Operation Is Typically the Bottleneck

Generally speaking, the slowest operation represents the bottleneck in a production setting. The other machines either need to be slowed down to send a steady supply of parts or materials to that machine without creating an accumulation bottleneck, or the slow machine needs to be replaced with a faster one.

Alternatively, the supply can be split in two and sent to two machines that, although they each operate slowly, double the production output and can increase the overall speed of that stage of the operation.

However, bottlenecks are not always easy to identify. The entire production line needs to be evaluated in order to determine where the problem is truly coming from and to identify the most cost-effective solution. A second machine may sound lovely and seem like the obvious solution, but does the company have the money to invest in it? Possibly, if the ROI proves promising. All of these factors require consideration.

Solving One Bottleneck Operation Might Create Another

One scenario to watch out for when identifying and fixing a bottleneck operation is the creation of another bottleneck down the line. If possible, run some simulations on your solution to a bottleneck to help bring potential problems to light. That way, when you fix the bottleneck, you can simultaneously fix other potential bottlenecks that may have occurred as a result.

Once again, the manager ultimately is responsible for bottlenecks that crop up due to rushed fixes. Unlike a machine malfunction that cannot be prevented, these operational bottlenecks can indeed be prevented by foresight and proper operations management.

Difference Between Bottlenecks and Constraints

As you continue to learn more about bottlenecks, you may also come across the term "manufacturing constraint". At first, it may seem like the words constraint and bottleneck should be interchangeable. After all, a bottleneck constrains the flow of production, right?

But in terms of manufacturing, a constraint specifically refers to a factor outside of the operation manager's control. A machine working at full capacity represents a manufacturing constraint. The rate of reaction between chemicals can be a constraint, because there may not be a way to speed up that reaction. It just has to run its course. Even an employee shortage can be a constraint, such as when the flu wipes out a critical number of staff members.

On the other hand, "bottleneck" is used in operations management to refer to something that is temporary. With a few smart adjustments, bottlenecks can be eliminated. And if they can not be eliminated, they are actually constraints.

Learning and Applying Bottleneck Theory

You certainly can and should study resources to fully understand bottleneck theory and how to apply it as an operations manager, but expect to learn the most through hands-on trial and error. If you create a bottleneck after fixing another, use your mistake as a great learning opportunity. The more experience you have as an operations manager, the more efficient you will become. And it is not the textbook-perfect projects that will get you there, but the ones that bring the theory to life and challenge you.