Inhouse Bottleneck Busters!

by Dave Garwood

When you have ghosts, who do you call? The Ghost Busters! So, who do you call when you have bottlenecks? The Bottleneck Busters, of course! But who are they? Answer: The people on your own plant floor.

First of all, what is a bottleneck? Simply stated, it is a condition in any cell or work center where the Required Capacity exceeds the Demonstrated Capacity. Bottlenecks are not stationary constraints. They move all the time. Every time the product mix changes or the master schedule changes, the Required Capacity changes. When new products are introduced, a few new people are hired, equipment ages or processes are improved, the Demonstrated Capacity changes. The system should discover and identify bottlenecks. The Bottleneck Buster's role is to find a way to increase the Demonstrated Capacity and eliminate the bottleneck. (See the archives for a previous article that defined and discussed Demonstrated Capacity).

Bottlenecks cause havoc in a manufacturing company. The symptoms are clear. Lead times become longer, work-in-process inventory increases and schedules are missed. Inevitably, expediting becomes rampant, causing poor quality, more rework, increased scrap and higher costs -- and usually causes an even lower Demonstrated Capacity.

With the informal system, bottlenecks are discovered after work piles up on the shop floor. When the plant floor managers plead "Just release the work, get it out on the plant floor and we'll get it out," that's a dead giveaway that the informal system has taken over! This is an "after the fact solution." They are depending on visually spotting physical piles of work to discover the bottlenecks. Sometimes the visual signal for a bottleneck might be a pile of kanban signals. Unfortunately, in either case the work gets behind schedule before the bottleneck is discovered and can be reduced. It's an expensive solution!

A formal system anticipates bottlenecks by calculating the Required Capacity before the work (or kanbans) physically piles up on the plant floor and comparing it to the Demonstrated Capacity. Required Capacity is the work to be done to meet the master schedule. It can be calculated with simple techniques such as Capacity Requirements Planning and Resource Requirements Planning. Visibility can extend out as far as the SOP supply plan or master schedule planning horizon.

Historical Demonstrated Capacity is simply a measurement of work actually done in the past. Future Demonstrated Capacity is a prediction of future capability of the cell or work center. Demonstrated Capacity is a function of how many hours are worked and the effectiveness of those hours. Better methods, better tooling, overtime, subcontracting, and hiring more people are a few ways to increase Demonstrated Capacity. The only limits to increasing Demonstrated Capacity in the future are time and money. The Bottleneck Busters are experts at finding ways to increase Demonstrated Capacity -- just look at the end-of-the-quarter miracles!

Two important principles should be considered when overcoming bottlenecks:

First: Beware of automated, automatic solutions to overcome bottlenecks. People, not the computer, must be accountable for overcoming the bottlenecks. Did you ever notice that they still put windows around the cockpit of planes in spite of the sophisticated automatic pilot electronics? When flying, I like the idea of a person, not a compute, being accountable for uneventful takeoffs and landings. The same holds true for bottleneck accountability. If a formula or algorithm programmed in the computer is used to solve the problem, people on the shop floor have a built-in excuse if the solutions don't work. They claim with glee, "The computer did it!"

Second: The logic of the system must be transparent. Computer programs should give people data to help them decide how they will overcome the bottlenecks. But if the information is calculated by mysterious formulas and complex logic that the Bottleneck Busters don't understand, they have only two options; blind faith or ignore the software data. The first alternative can be a disaster! The second alternative means that the company invests in a formal system, but continues to use the informal system to run the business.

Bottlenecks on the shop floor can be avoided. We have experts all over our factory floors who know how to eliminate bottlenecks. Give them a credible prediction of the Required Capacity and I'll bet they know exactly how to avoid the bottlenecks! Try this in your own company. And send us an email about your experiences!