At ThroughPut, we define operational bottlenecks as any situation on the factory floor that diminishes productivity. It is time to eliminate this $10 trillion waste from the global economy using the power of AI-driven analytics.
When was the last time your team delivered a product or service on time? And this would mean without a delay or any overtime effort from certain members.
Today, all industrial companies want to increase uptime, reduce operational costs, and boost productivity and throughput. However, operational bottlenecks are one of the primary reasons why your projects get delayed, budgets burst from the added cost of delays and the whole process becomes unpredictable.
Nearly 40% of industrial output is wasted even before it reaches your customers. Untimely operational bottlenecks cause a $12 trillion dent on the global production market and contribute to a major share of this waste. This waste can keep you far away from achieving your operational targets and deeply impact your logistics and supply chain planning strategy.
From overstocking inventory and supplies to a lag in operational timelines, bottleneck activities always result in reduced performance for manufacturers of all sizes. It is also a fact that bottleneck operations exist regardless of how well your factory workers and machinery are working. That is why it is important for manufacturers to know how to accurately identify bottleneck operations in production so that they can take the necessary measures to avoid the costliest ones whenever and wherever they occur.
We feel your pain & want to work with you in achieving your full potential. Join us on this global mission to seed in the all-around operational supply chain efficiency by eliminating bottleneck operations from the plant floor.
What is the Bottleneck Operation?
Bottleneck Operation is a process or a step that limits an entire system’s capacity to produce at its optimum level that results in clogging productivity, profitability, and growth. This is also called “throughput.”
Just like the slim neck of a wine bottle that restricts the flow of contents from the bottle at any point in time, an operational bottleneck
So in the context of a factory floor, an operational bottleneck is a work stage that requires more work requests than it can actually process at its maximum throughput capacity. This results in an interruption to the steady flow of production and delays the overall production process.
Bottlenecks go further deeper in impairing operational efficiencies as even if this work stage operates at its maximum capacity planning, it still can’t process all of the work items fast enough to push them to the next stages without causing a delay.
Why does the bottleneck operation occur on the plant floor?
Bottlenecks tend to have different causes and usually have more severe implications in the process industries. In parts manufacturing and assembly, the workers tend to be the rate-limiting factor across various steps, and therefore managing bottleneck operations is often a matter of managing people – by appropriate staffing and task leveling. In process plants, the throughput in most operational steps is limited by equipment capability and not necessarily by labor. And with equipment rather than operating labor being the bottleneck, throughput limitations can’t be resolved by bringing in additional labor or by scheduling overtime.
Listed below are few things to be kept in mind to understand the causes:
- Most often the root cause is generally in the equipment capacity and performance, not labor staffing.
- Outdated equipment, unscheduled downtime, and inaccurate supply chain forecasting are also to be blamed as factors.
- Root causes also include yield losses, reliability problems, and the inherent capacity.
- Sometimes, non-bottlenecks can become bottlenecks owing to variability in OEE factors.
- Bottlenecks can vary with the product mix.
- At times, bottlenecks may not be obvious as the resulting inventory or waste is frequently hidden from sight.
Key challenges in overcoming the bottleneck operation
Plant managers are most impacted by bottlenecks as they not only affect the day to day operational flow of manufacturing processes but also sharply increase the time and expense of production and affect the logistics and smart supply chain management strategy.
1. Root-cause ambiguity
The problem does not simply end in knowing that there is a bottleneck somewhere. The bigger challenge lies in understanding where it exists and the severity of the bottleneck itself. For example, plant managers may not know that the cost per hour on a bottleneck = the loss of one hour for an entire supply chain and also the loss of the throughput of an entire supply chain.
2. Manual grunt work
Dependency on out-dated manual approaches that diminish productivity Vs smart automated AI-driven data analytics which can speed up operations and time-to-insight.
3. No real-time visibility
Sometimes, plant managers may not be aware of what goes on at each stage of a process, or they themselves might be a bottleneck due to the lack of end-to-end visibility of the operations cycle and across the logistics management and supply chain value stream.
4. Data silos
Plant managers very often deal with the problem of data siloed or scattered across the factory floor which makes it impossible to predict accurate operational outcomes.
5. Absence of data-driven decisions
Many times plant managers are unable to leverage existing data to drive fast and accurate decisions which results in opaque and ineffective manufacturing operations management.
Symptoms of bottleneck operation on the plant floor
A checklist: Look out for these signs
- Long wait times– Is your work getting delayed because you’re waiting for a product, a report, or more information?
- Delayed movement- Are materials moving slowly from one step to another?
- Backlogged work– Is there a lot of work being piled up continuously at one end of a process, and not enough at the other end?
- Missing delivery schedules- Are you constantly missing expected delivery schedules resulting in dissatisfied customers?
- Irregular maintenance frequency- Are you unable to keep a tab on the equipment maintenance frequencies due to unexpected breakdowns?
- Lead-time unpredictability- Are you facing challenges in accurately estimating production lead times?
How can plant managers effectively manage bottleneck operation?
It is simple- If bottlenecks are not recognized early enough, plant managers will miss a chance to increase overall throughput.
If increasing the capacity of a bottleneck operation incurs 0.1% of the total cost, the rest 99.9% can be diverted to increase throughput without incurring extra cost.
In fact, there have been many instances where energy is used for a small cost cut, and a chance for large cash flow is missed due to a lack of recognition of bottleneck operations. It is therefore imperative to identify and eliminate bottlenecks at the right time.
1. Avoid bottlenecks itself
Undoubtedly, the best and the simplest way to manage bottleneck operation is to avoid them in the first place. By eliminating wasteful practices and continually working towards increasing the efficiency of data-driven manufacturing processes by employing improvement tools such as value stream maps, plant managers can correct existing bottlenecks as well as take steps to avoid future ones from occurring.
2. Optimize performance
Managing the bottleneck is all about optimizing the performance of the bottleneck resource itself. This means protecting the bottleneck from upstream and downstream problems and optimizing bottleneck scheduling.
3. Increase process capacity
Increasing the capacity of an overall process relies on increasing the capacity of the bottleneck. If plant managers improve any bottleneck resource, they may move the bottleneck to another resource. At this point, it is important that they continually monitor the effects of process changes to identify when the bottleneck does indeed change.
4. Examine production schedules
If a process is used to make several different products that use varying amounts of the bottleneck’s time, then a bottleneck analysis of the production schedule can create a product mix that minimizes overall demand on the bottleneck in manufacturing and warehouse management.
5. Minimize downtime
If the bottleneck equipment suffers a breakdown during scheduled operations, it is important to arrange for repairs immediately to get the bottleneck operations up and running. This involves keeping replacement parts on hand and performing preventive maintenance on equipment. Also, plant managers need to reduce changeover times from one product to the next, because this time takes away from actual production time.
Bottleneck Operation Elimination Strategy and Roadmap
AI-driven data analytics are changing the way bottlenecks are being handled across the globe. By 2020, 50% of global supply chains will utilize AI-powered advanced analytics.
With real-time visibility to production status and performance indicators, plant managers can flag bottlenecks early so they can be resolved with minimal impact. Using powerful AI-driven supply chain technologies, plant managers can eliminate the ever-shifting bottlenecks and benefit in multiple ways:
- Slash down inventory costs
- Cut down lead time predictability
- Reduce maintenance frequency
- Accelerate time to insight
ThroughPut’s ELI – Supply chain management software helps plant managers breakthrough the stubborn bottlenecks that limit unprecedented output, productivity, and growth. All of this using existing equipment data.
ELI has optimized 26132 process steps worldwide for leading global corporations. If you would like to join this bottleneck elimination revolution for your plant floor schedule a demo today.