Business Transformation Logs

A bottleneck is usually understood to be a situation that slows down the process or activity from progressing at the same speed.

How often do we see typically in smaller organisations that all the processes are going at good speed and suddenly when the matter goes to the top – the business owner, he takes much longer time to decide on the matter. Not that he deliberately wants to slow down the pace of the process but because he is so overloaded with so many tasks on his plate that he has very limited time and attention to resolve everything that comes for his decision. In such companies, the owner is usually the bottleneck in his own business.

We can prominently witness bottlenecks in manufacturing units where various processes are lined up sequentially. Each process starts after the earlier one is complete. They are all linked to each other. They are dependent on each other. To produce a product, suppose there are three processes through which raw material has to pass. If the production capacity of each of the processes is different, the overall capacity of the manufacturing unit will be determined by the process that has the least capacity.

For example, the production capacity of the processes are :

  • Process A – Capacity of 100 tons per day
  • Process B – Capacity of 80 tons per day
  • Process C – Capacity of 110 tons per day

Business Transformation Logs

Process A produces at a speed of 100 tons per day. Thereafter, the material passes through Process B, which can process only 80 tons a day. Therefore, the extra 20 tons produced by Process A remains idle for a day as the same will be taken up for Process B the next day.

80 tons produced by Process B on day 1 passes through the Process C. Now, even if Process C has capacity to produce 110 tons per day, it does not get so much material to process. Process B cannot feed more than 80 tons a day to Process C, and therefore Process C cannot be utilised at its total capacity. It will remain underutilised to the extent of 30 tons per day.

Therefore, in the entire manufacturing process, the output will be restricted to 80 tons per day which is the capacity of a process that has the least capacity. Therefore, the bottleneck, in this case, is Process B.

This is very clearly visible in a manufacturing assembly line because it involves movement of physical materials. The processes are tangible and visible. In the services sector, while it also is prevalent, it is not easy to identify and spot the same unless it is prominent. This is mainly because the capacity of people to produce results keeps varying. It is neither consistent nor constant. Further, it is intangible and therefore not visible.

An entrepreneur needs to plan and design the structure of his organisation in a way that no bottlenecks exist in producing goods or delivering services that hampers the speed of progress of various activities. He must ensure enough ‘Managers’ for a certain number of ‘executors (doers).’ The balanced mix of managers and doers goes a long way in reducing the bottlenecks in service industry. It is also extremely important to delegate responsibilities and authority to the managers to be able to work freely and with accountability.

It is imperative to map skills of his people and put the right person in the right position. If one highly efficient and committed person is burdened with more work and is made to execute many tasks and take decisions, it is more than likely that he will one day become bottleneck in the company.

Most times, the business owner himself like to drive most actions in their company, they want to keep control over every activity and decide on every other matter in the company, they are just not willing to delegate any power and they are the biggest bottleneck in the company. For progressive mindset employees, this becomes a very suffocating situation. They get reluctant to take ownership of projects and get demotivated to work with higher efficiency. Sooner or later, they will quit such company. This is harmful and detrimental to the growth of the company.