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Bottleneck

Definition: A bottleneck in production is a point where an operation meets or exceeds the capacity of the facility. In other words, the factory or department canít produce enough units fast enough to keep the rest of the production schedule or other daily operations flowing at the same rate. Similar to how a glass bottle tapers at one end, the production process funnels units from fast moving departments and processes to slower, more time consuming ones that slow down production.

Example

This is a common occurrence for products that require many different stages of manufacturing. Most of the time each stage does not require the same amount of time. For instance, stages 1 and 2 might only take five minutes of manufacturing time while stage 3 takes two hours of machine time. The units will fly through the first two stages and get stuck waiting at the third stage.

The third stage is the bottleneck in this process because the units being produced get stuck in the third stage. Managers must be aware of these production problems in order to make sure the manufacturing process keeps flowing smoothly without any reduction in speed.

To fix the bottleneck in our 3-stage example, management might consider increasing the resources in stage three. For instance, since the third stage takes two hours of machine time, we canít speed up the machining process. Management can however add extra machines, so two or three times as many units could be machined at the same time. This would cut the per batch machine time in half or a third.

Obviously, it would have to be worth it to the company to invest the capital into more machines, but these are the decisions that the management must consider when trying to reduce a bottleneck in the production process.

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