Planning around your bottlenecks

In every supply chain, bottlenecks are inevitable, defining the pace of throughput. In his Theory of Constraints (TOC), Dr. Eliyahu Goldratt emphasised the importance of identifying and managing these bottlenecks to enhance overall system output. When we control bottlenecks, we unlock new levels of efficiency, profitability, and customer satisfaction. Planning effectively around them means embracing a mindset of continuous evaluation and improvement through strategic adjustment.

The first step to better planning is identifying the bottleneck. Bottlenecks are frequently misidentified or missed entirely. Sometimes, they hide in plain sight, concealed by assumptions. TOC’s principle of "focusing" is essential here. Analyse each step in your supply chain, looking for areas where work queues pile up, or delays are frequent. This is more than a data exercise—talk to your team, observe processes in action, and scrutinise every stage. Often, the bottleneck isn’t a single machine or station but a combination of elements, such as inventory flow, labour allocation, or communication gaps, sometimes triggered by product mix combinations.

Once you’ve found the bottleneck, understand its impact. Quantify how it affects your entire system. The bottleneck is not an isolated issue—it sets the pace of your entire operation, dictating output and delivery. For example, if the bottleneck lies in your packing department due to a lack of workers, it doesn’t matter how efficiently goods are produced upstream; the output will still be restricted. Increasing production without addressing this bottleneck leads to waste and inefficiency. Assess the lost revenue, delayed shipments, and excess inventory costs caused by the bottleneck to ground your planning efforts in data and focus resources where they’re truly needed.

The next step is to exploit the bottleneck—make the most of it with your current resources. This isn’t about pushing harder but about maximising output by removing inefficiencies. Analyse shifts, breaks, maintenance priorities and idle times. Could shifts be reorganised or staff reallocated to improve flow? For example, if setup times are lengthy, could someone else handle setups to free up operators? Even small adjustments can lead to significant gains in throughput. The goal is not to eliminate the bottleneck (yet) but to optimise it within existing constraints. By leveraging every bit of potential, meaningful improvements in output often follow.

Then, subordinate everything else to the bottleneck. This is essential but often resisted. In TOC, the bottleneck is the "drum" that sets the beat for every other part of the supply chain. If other processes run faster than the bottleneck, effort is wasted, buildup increases, and chaos ensues. Imagine each department moving at its own pace without regard for the bottleneck’s capacity; production ramps up, materials pile up, and inventory management spirals out of control. Subordinating everything to the bottleneck’s rhythm aligns the entire chain, creating a smooth, manageable flow instead of a race to produce at every step.

Once you’ve optimised and subordinated, consider elevating the bottleneck. Increasing its capacity might mean adding resources, purchasing new equipment, or redesigning processes. However, TOC advises that elevation is only wise once the bottleneck is fully optimised and all other processes have aligned. If, for instance, limited equipment is the issue, adding another machine could increase capacity. If labour is short, automation might help. Remember that elevation usually requires significant investment. Ensure the return on investment is clear and that increased capacity will genuinely drive customer value and throughput.

Finally, TOC reminds us that this is an ongoing cycle. As your system adapts and grows, new bottlenecks will appear. Constant vigilance keeps your supply chain agile and ready to meet new challenges and changing customer demands. By approaching bottlenecks not as obstacles but as opportunities for focused improvement, you can create a supply chain that is not only more efficient but also more resilient and responsive.

Where is your next opportunity for improvement? Plan for it today.