Bottlenecks can occur in any business. Finding where they are occurring and
setting them as a priority to fix can be tricky.
What exactly is a bottleneck? A bottleneck is defined as a point of congestion in a production system, such as an assembly line, that occurs when workloads arrive too quickly for the production process to handle. The inefficiencies caused by the bottleneck often create delays and higher production costs. Simply stated, “Your business is only as fast as your slowest moving part.”
Below is a scenario of a bottleneck in a company:
A factory that has a manufacturing process which requires a machine to make one unit per minute with administrative control will maintain a constant total, despite the amount of material you have in stock, this factory will never increase production output. Your production growth is limited, however, it does not have to be a permanent deficiency.
At XL Pro Consulting we observe a variety of different work environments. We suggest a few solutions such as buying a second machine, hiring more staff, or even upgrading company equipment. Realizing these mistakes can be significant for your business and is therefore important to strategize all processes of business production.
Note from the author:
“Be aware that you can gain high production rates, but, if you have not adjusted the price of your product then the new equipment and controls could be costing the company money.”
Companies can become engrossed in finding the next sale, and it can even become easy to overlook the internal bottlenecks. This could potentially constrain the company’s ability to maximize the customer demand, as we have seen in the scenario above.
Finding and unblocking bottlenecks in your business should be a daily activity that will only increase profits while minimizing lost revenue. It is important to have discussions with your team about maintaining the most of your revenue, implementing preventative measures on bottlenecks, and how to become more aware in the future. Otherwise your business may be in trouble!
There are many factors that can potentially lead to bottlenecking. Let us work together to help deliver a smooth experience for your work environment and check out more of XL Pro Consulting Blogs where we have more tips, work hacks, and guides to better business models: