Bottleneck Analysis

Bottleneck Analysis | Meaning of Bottleneck

→ A bottleneck is a process having the lowest output from the whole chain of the process.

→ The Bottleneck_Process creates problems like supply overstock, pressure from customers, and low employee morale, etc...

→ Let we will understand this concept with the help of the example.

Bottleneck Analysis Example

→ We are assuming a Manufacturing Process “A” and we will take an example of Bottleneck_Analysis with the help of this manufacturing_process.

→ In Lean Manufacturing the concept of Bottleneck_Analysis is very popular and very much useful for improving plant efficiency by balancing the various operation steps.

Bottleneck Analysis in Manufacturing

→ We are assuming a Manufacturing Process“A” that has a capacity_of 125 Products per hour.

→ It means its ability to make something which will be good enough for making 125 final units.

→ Manufacturing Process“A” has four operations called Operation 1, 2, 3, and 4.

→ Refer to the below capacity_of different operations.

  1. The first operation has a capacity_of 125 units_per_hour
  2. The Second has 90 units_per_hour,
  3. The third has 100 units_per_hour,
  4. The Forth has 75 units_per_hour.

Manufacturing_Process steps

What is the Capacity of plants with the above processes in Units per day?

→ In a very simple method, we can say that the total output is the average of all operations but it not true.

→ For this, we need to understand the Concept of Bottleneck.

→ So the first_operation manufactures the first unit.

→ As soon as it manufactured the first unit & it gives to the second_operation which starts manufacturing it.

→ The second_operation manufacturing it. The first_operation has a higher speed than the second operation.

→ So the first_operation will produce more products. It will result in more inventory at the second_operation.

→ And when the unit is going to the third_operation the third_operation’s rate is higher than the second and fourth_operation.

→ So it will result in more inventory before process_four.

→ That means there is a capacity_problem in operation_2 and operation_4.

→ So, when we see higher inventory get in the built-up process in presence in front of process_4.

→ It indicates process_4 is Bottleneck and this process decides the actual_capacity of the plant.

→ Rest all processing units whatever they making we build up as inventory of the organization.

→ So the capacity of any plant is capacity the slowest processing step which is called a Bottleneck.

Inventory at Various Operation

What are the constraints in achieving this capacity in the actual process?

→ The ideal production rate is 75 units per hour but actually, if you see in reality we are not able to produce 75 units per hour. The reason behind this is Various Types of Losses.      

→ Now, let us see from a different perspective. That is OEE (Overall Equipment Effectiveness).

→ Let us assume that operation_1 has an OEE = 60%, Operation_2 has an OEE = 90%, Operation_3 has an OEE = 80%, and Operation_4 has and OEE = 99%. 

→ Now we will understand the capacity of the plant with the above processes in Unit per day with considering the OEE. That is the real plant_capacity.

Inventory Level with OEE

→ So from the above picture, we can easily understand the final_capacity of the process is calculated as below:

  • Operation 1's capacity = 125*60/100 = 75 units/hour
  • Operation 2's capacity = 90*70/100 = 63 units/hour
  • Operation 3's capacity = 100*80/100 = 80 units/hour
  • Operation 4's capacity = 75*99/100 = 75 units/hour

→ We see when we multiply the capacity with OEE the actual_capacity of the processes change and we see that our bottleneck shifts from Operation_4 to operation_2.

→ Therefore the bottleneck is not just the designed_capacity of the_process. But in reality, it is related to OEE (Overall Equipment Effectiveness) and It is a very good method of measuring and understanding of Bottleneck_process or operation through the entire_process.

How to identify Bottlenecks in the process?

→ Refer below three steps to identify bottlenecks in the process.

  1. Visualize the_process
  2. Map the activities or_process
  3. Measure the cycle time per stage or per_process

How to Manage Bottlenecks in Operations Management?

→ Don’t get tripped up by overproduction

→ Increase process_capacity by the elimination of various wasteful activities

→ Add resources at the bottleneck_operation if necessary.

→ Monitor the WIP in front of the bottleneck.

→ Examine your production schedule.

→ Increase the time the operation is working. 

→ Minimize downtime.

→ Avoid scheduled and unscheduled downtime

→ Perform process_improvement on the bottleneck_resource.

→ Make Standard Operation Procedure (SOPs)

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