FOCUS ON THE BOTTLENECK (CORE PROBLEM)
author: Lee Buttolph
More explanation from the Process Improvement Loop blog post.
2. Focus on the Bottleneck (Core Problem)
- All decisions must be made in support of bottleneck
- 1 hour downtime at Bottleneck = 1 hour cost to run the entire company
- "if you do not deal directly with the core problem, don't expect significant improvement." - Eli Goldratt
The concept of the bottleneck in a manufacturing facility was best described by Eli Goldratt in "The Goal" (1). His story of a fictional manufacturing facility coming back to life after being put on a three month turnaround period was a defining moment in how I looked at a company.
Many managers want to start fixing EVERYTHING at a company, all at once. This is a mistake. While many areas need improvement, there are only a couple that are holding up the rest of the processes enough to warrant the attention.
Once you find those bottlenecks, every decision you make must be made in an effort to add capacity to the bottleneck. It should be noted that a bottleneck isn't necessarily a machine in the manufacturing line. It is more often than not a policy or procedure. Or the sales team. Or possibly an external factor that the company has little control over.
It is vitally important to run the bottleneck as long as possible every day. Every hour it is down is an hour you can't get back. Non-bottlenecks can always catch back up to the bottleneck (the definition of a non-bottleneck) but the bottleneck doesn't have that luxury.
What does this mean? Every hour of downtime at the bottleneck doesn't cost you just the manpower to run the machine and the electricity powering it. You must figure it costs you the cost of the ENTIRE COMPANY'S EXPENSES for the hour. Once you realize this it is easier to rationalize money spent to keep the bottleneck running full time.
*** Future blog posts will give some examples of bottlenecks and how to increase (or elevate using "The Goals" term) them.
(1) Goldratt, Eliyahu M., Jeff Cox, and David Whitford. The goal: a process of ongoing improvement. Vol. 3. Great Barrington^ eMA MA: North River Press, 2004.