When Chinese factories struggle to fulfill customer orders on time, we see many of them consider investing in increasing capacity, without analyzing what actually keeps their products from reaching customers properly in the first place.
Problems could lie in something as simple as a job station, machine, testing, or even a supplier. You might also find that you own planning, finance systems, warehouses and customers can affect production and delivery.
How do you analyze the actual vs. potential capacity of your processes? How do you find out what needs to be fixed? By identifying bottlenecks and managing them. In this article we’ll explain how to do that.
What is a bottleneck in production?
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 elevate 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 inventory 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, and is used for calculating how balanced (or imbalanced) a process is.
|Note: Make sure to calculate the capacity per process step, not per person or per machine (since there might be more than one person/machine as part of a process step). And break the process down in steps that make sense. Junior industrial engineers know how to do this, and it is really not complicated.|
Customers as Production Bottlenecks
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 properly.
In this case, managing your customer is important. You can do the planning for the month and fix up the planning so that you can 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.
Equipment as Production Bottlenecks
Equipment maintenance is also important. We have discussed maintenance many times in our articles, but your greatest bottleneck will come up when your machines are not operational when needed.
Preventative and predictive maintenance will be your greatest help to keep your equipment running. Setting up these programs will be a must. Having well-trained people to manage this is the most important 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.
Supply Chain as Bottleneck
Your product may be made up of 20 different parts coming from 15 different suppliers. If one of these suppliers can't deliver parts as per your schedule, they are holding you back.
Ideally, you'd have backup suppliers for each part. It is not difficult 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 very expensive safety testing & 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 Common Approaches to Address Capacity-based Bottlenecks:
1. Elevate the Capacity of the Current Bottleneck(s).
There are several options to achieve this goal:
- Process improvement – for example studying the components of the OEE for a piece of equipment and working on improving the ratios.
- Adding capacity by increasing resources (men, machines…) – this is often done best with inexpensive, low-tech, low-complexity equipment that will be down less often than a complex, high-tech solution.
- Adding capacity by automating the process further – we always advise to carefully assess the benefits of full automation and to go slowly in that direction (let your staff become familiar with automation and with the way to maintain it).
- Subcontract work to other companies when needed – obviously it may pose issues in terms of quality and confidentiality, but the economic benefits to your factory cannot be neglected if your demand is uneven/seasonal.
2. Sell the extra, unused capacity of other (non-bottleneck) process steps
For example, if you have 20 injection presses but you only use 12 of them, you might want to find other companies that are 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, it can sell the 8 injection presses that are not necessary for its own operations, and lay off / displace the operators and technicians that were taking care of those 8 presses.
The concept of bottleneck was central to the Theory of Constraints. It is actually central 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.
And you, have you worked on your operations’ bottlenecks? Have you met success? Maybe you can share some observations to our community in the comments below?