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Implementing Process Of On Going Improvement (POOGI) Part 2 - Introduction to Bottleneck

At the first part of Implementing POOGI , I described that in order to balance a system, market demand should not be matched to resource capacity because of the relationship of two phenomenons: Dependent Events and Statistical Fluctuation. However, you should balance the capacity of the production "flow" to market demand. In this case, some resources may have idle time and some may turn into system constraint. In fact, the capacity of the flow should be little bit less than the demand, so if demand goes down you do not loose money.

In balancing the flow, you may realize that some resource have less capacity than market demand and are impacting the entire flow. These resources are bottlenecks or to put it in a better term,system constraints. So, bottleneck is a resource whose capacity is equal to or less than demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it.

Here are couple of facts on bottleneck / Constraint:

  • Bottleneck or system constraint is not necessary bad or good. It is just the reality of the system. How you deal with constraint and how do you use a bottleneck to control the flow through the system and into the mark is important. So if a person happened to be a constraint or bottleneck, that dose not mean that such a person is bad or he/she is good! 
  • Because bottleneck controls the flow, an hour lost at a bottleneck is an hours lost for the entire system. Therefore, the real cost of bottleneck is equal to total expenses of the system divided by the number of hours the bottleneck produces. So, the more hours bottleneck produces the less expensive it becomes!
  •  As a general rule, make sure bottleneck works on today's throughput and not months from now.
  • One of the most effective ways of increasing the capacity of a constraint or bottle neck is to take some of the load of the bottleneck and give it to non-bottleneck.
  • In order to optimize the use of bottleneck, you first need to make sure the bottleneck/constraint's time is NOT wasted by sitting idle, working on items that you really do not need, by working on defected items.
Summary:
  • Balance the flow of work against market demand and NOT capacity.
  • Bottleneck is not bad or good, it is a reality of the system, what do you do with bottleneck is important.
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