Bottleneck Analysis and the Theory of Constraints

The goal of the capacity analysis is to identify a system's overall capacity as well as the throughput capacity of each workstation in the system. The role of a constraint or bottleneck is a key concept in capacity analysis. An operation that is the limitation or constraint is referred to as a bottleneck. The term bottleneck is the same as the neck of a bottle that limits the flow of water. A bottleneck is the work stage which has the lowest effective capacity in the system and thus limits the system’s output.

Theory of Constraints

The theory of constraints (TOC) analyses anything that restricts or limits an organization's capacity to accomplish its objectives. Constraints can be physical or nonphysical dimensions of a process. According to the Theory of constraints (TOC), these limitations can be managed through a five-step process:

STEP 1: Identify the constraints.

STEP 2: Develop a plan for overcoming the identified constraints.

STEP 3: Focus resources on accomplishing Step 2.

STEP 4: By delegating tasks or increasing capacity, reduce the effects of the constraints.

STEP 5: Continue the cycle of identifying and managing constraints.

Bottleneck Management

Four principles of bottleneck management are

1. Release work orders into the system at the rate dictated by the capacity of the bottleneck.

2. The capacity of the entire system is lost during the lost time at the bottleneck: According to this theory, the bottleneck should always be kept active.

3. A non-bottleneck station's capacity expansion is a mirage because it has no effect on the system's total capacity.

4. Capacity of the entire system is increased by increasing the bottleneck's capacity: The bottleneck should be the focus of managers' improvement initiatives. Offloading some of the bottleneck operations to another workstation is one method for increasing bottleneck capacity.