As an SMB manufacturer or small job shop owner few aspects of your day are more important than throughput or, in other words, your ability to move your jobs and their tasks through your shop effectively as to meet your delivery due dates.
So, what happens when your delivery due dates are threatened by delays as a result of bottlenecks?
You are an SMB manufacturer or small job shop owner. Among the plethora of tasks and thoughts which take up your working day one major priority seems to always remain front and center in your mind.
Throughput: it is critical that your customers receive their orders on time. Without consistent and timely deliveries your customers will lose faith and patience; an outcome which can ultimately put you at risk to lose them as customers. Therefore, for you as a job shop owner it is essential to have full transparency over the schedule and the planned throughput. Only by having a clear view over the sequence of how the tasks of your jobs proceed and their corresponding runtimes along with planned delivery dates, will you be able to efficiently manage your business.
Bearing this priority in mind this post will take a dive into what happens when throughput is no longer optimized and specifically, try to understand a major culprit which can cause our throughput to fall out of an optimized rhythm, namely bottlenecks.
A quick google search on bottlenecks will take you to Wikipedia where you will find the following definition: Bottleneck (n): one process in a chain of processes, such that its limited capacity reduces the capacity of the whole chain.
Image Credit: Pyramid Solutions
That’s a good start but not complete. You are not only concerned about the capacity available in your shop but about the demanded capacity as well. These two factors together establish your throughput.
Now, both supply and demand concern you as a small job shop owner because they both relate to your major priority of time or throughput optimization. Now the question is how to incorporate these to produce a more wholesome definition of a bottleneck.
Considering this an expanded definition from Wikipedia might look like:
Bottleneck (n): one process in a chain of processes, such that its limited capacity reduces the capacity of the whole chain at a certain time due to an overhang of capacity demand.
So, what changed? Through the addition of the element of time bottlenecks can and will fluctuate and therefore can also change and move over time. In reality both available capacity of a job shop (total number of machines and resources able to do work) and the demanded capacity of a job shop (total number of jobs needing be completed at a given time) are not constant. Both are influenced by factors such as those listed above and are liable to change at any time.
Now that the stage is set for understanding how bottlenecks theoretically occur you should consider how to identify them in reality.
So, what would an imbalance look like where demanded capacity exceeds available capacity?
In its simplest form, a queue.
As a manager, planner, or employee the easiest way to discover a bottleneck is to actually find it out on the shop floor in the form of a line or queue.
This means looking for the areas or work stations where jobs have begun to queue. This will tip you off that you’ve found an area where demanded capacity is exceeding available capacity and is therefore reducing the capacity of the whole chain.
Now, a queue may not necessarily be a bad thing. It means your machines are being used and as long as there are no delays you can be happy about your full machine utilization and your great order intake.
However, this only remains true as long as there are no delays. Delays mean late customer orders, failure to meet promised delivery dates, unsatisfied or lost customers, and in the worst-case contractual penalties.
Bottlenecks are themselves not the problem but the source of what eventually can become a serious issue for your business.
So, a bottleneck in your production has reared its ugly head and is now causing delays. It’s good that you are catching this now before it goes too far but you need to be sure to resolve this as soon as possible. What are your options?
This reactive resolution will not actually solve your initial delay but will allow you to keep your schedule unchanged. That is because the approach here is to effectively discuss with your customers influenced by the delay in production (those who will receive their orders later than scheduled) and come to an agreement as to whether a later delivery date would be acceptable.
Beyond this, transparency throughout your shop is essential for effective communication. This means having the ability quickly and clearly see which jobs are affected due to delays and what the delay means in terms of now realistic delivery dates.
As you have seen above bottlenecks and more importantly delays can happen suddenly; often due to external influences outside of your control.
This is when a temporary increase in machine or resource capacity can quite literally save you from drowning in too much demanded capacity and too little available. Here, for example, you can give your resources either extended hours during the week or add temporary shifts onto the weekend if need be.
While this may be on of the most effective methods for quickly dealing with a bottleneck causing delays, it is certainly not a long term solution and can have negative side-effects on employee morale among other things if applied long-term.
Essential here is to understand exactly where the delay is occurring and how much additional capacity will be necessary to resolve delays. This again will be achievable only with transparency throughout your shop and processes.
Depending on the type of bottleneck you are experiencing a more long-term approach may need to be employed. An observation of a bottleneck which is not temporary but reoccurring to the point of normality is such a case.
Such as case will require more than a temporary raise in current available capacity (as in Option 2) as a long-term raise would most likely do more harm than good. Therefore a longer term solution would be to permanently increase your available capacity via the acquisition of machines to deal with the permanent increase in demanded capacity.
Establishing whether this is the best approach to dealing with ongoing delays requires careful observation of the problem area and long-term expenditure budgeting.
So, the ability here to simulate that addition of more machines and plan out what-if scenarios can allow you to bring this option closer to reality more quickly if need be.
When there is no option to internally raise capacity an alternative could be to look externally for relief. Yes, this means outsourcing but only outsourcing that which you must and not more.
This assumes figuring out which tasks you can effectively outsource and which you can keep in-house.
Strategically outsourcing, meaning you are only outsourcing the tasks which affect only late jobs, can be an effective way to manage your bottlenecks causing delays while not sacrificing your own resource utilization.
Here again you need transparency as well as flexibility to see which tasks can effectively be offloaded to bring you into optimization of our top priority of order delivery time.
This post has covered the most important factor affecting the daily life of a small job shop or SMB owner: throughput optimization.
You learned what a bottleneck is and how it can cause delays.
The bottom line is this: delays as a result of bottlenecks can and will happen to job shops with a sufficient order situation. However the methods in dealing with them will vary greatly depending on your ability to effectively and flexibly view and adapt your schedule.
While the theory behind production delays and how to fight them was thoroughly investigated in this post, less was said about applicable tools to help you better combat bottlenecks and delays. We know you need
to best take actionable steps to optimize the timing and throughput of your shop. The questions is what will give you these things? just plan it can help you here.
just plan it empowers SMB make-to-order companies and job shops to increase delivery time commitments while optimizing resource utilization. It is a visual scheduling application built just for production planners and SMB business owners which combines state-of-the-art scheduling techniques with advanced visual scheduling concepts allowing agility to deal with the unknown and unexpected every day. Why not giving it a try?
Bottleneck and Non-bottleneck Resources - Manufacturing Breakthrough Blog