At many board meetings, I can be counted upon to ask, “Where’s the bottleneck this month?” Senior management is usually prepared with an answer, and a good discussion of resource availability and application follows. Sometimes, the bottleneck is not so visible to the CEO. In those instances, I follow with: “Do you notice people waiting at your door, telling you that they were waiting for your response or decision, even if you were unaware of this?”
And occasionally, this questioning leads the CEO to realize that he or she is the bottleneck through having created a hub-and-spoke decision process, with the CEO at the center of each process. Once the bottleneck is identified, the solution often comes quickly, requiring little if any board action as management focuses resources on the bottleneck to remove the latest impediment to efficiency.
[Email readers continue here…] There is a great book, “The Goal – The Process of Ongoing Improvement” by Eliyahu Goldratt. The book was written to describe in simple terms the use of statistical analysis to remove bottlenecks in a manufacturing environment. I have used that book’s lessons to teach process improvement to many types of businesses, including software development, supply chain management and retail fulfillment. I recommend that you drop everything and buy this book, read it, and if you find it as powerful as I did, purchase copies for your management team, followed by planned discussions among team members about removing bottlenecks and improving efficiency throughout the organization.
Think of the literal definition of a bottleneck in the business environment. Every resource behind the bottleneck is slowed from its most efficient pace until the resource ahead of it works its way through the constraint. In a manufacturing or production environment, that means people are stuck at their positions with completed work waiting for the process to move on. Or worse yet, more and more production is completed behind the bottleneck, only to sit as work in process, un-billable inventory of parts or services.
Behind or after the bottleneck point are people with too little to do, just like those in front of the bottleneck. But these people or machines have nothing to show for it, no way to accumulate inventory during the wait, just lost time waiting for the next process to squeeze out of the bottleneck. It is the worst form of lost opportunity within a production environment, all cost and no output.
Then there is the bottleneck itself, usually operating at maximum efficiency given the present resource size and ability to perform. If the resource is a machine and operator, would a second machine and operator remove the bottleneck and provide for a smooth flow? Add second shift at that station only? Add faster machine or faster operator? Allow fewer rejects from that point in the process? Attack the bottleneck from all angles to remove it.
The amazing thing about this process is the large amount of gain from focusing resources upon a comparatively small point of constriction – small based upon cost and time to fix. Work this question into you next management meeting and see if you are surprised by the results.