Reviewed by Aug 27, 2020| Updated on
A bottleneck is that situation, where congestion occurs in a production system. A bottleneck causes production delays and increases production costs. A bottleneck in any system or process refers to the literal adaptation of the word meaning a bottle’s neck which is narrow and the most likely place where congestion can occur. A bottleneck slows down the smooth flow of production processes.
Companies often face bottlenecks during the production of a new product or while bringing in significant production changes. Bottlenecks may be flaws or issues in the production process, which need to be fixed. Companies need to identify the action points and make changes for uninterrupted flow.
An illustration of a bottleneck is a textile manufacturing unit making curtains. In any case, if the manufacturer is unable to source a sufficient amount of raw material, it makes the machines idle and workers underproductive. All resources cannot be put to optimum use. The cost of production increases with incremental time spent on production. There is also a loss of a sale or timely dispatch to the distributors.
Bottlenecks hamper accomplishing a target level of production capacity. Any variance in the target is the difference between the target level of production and actual production. The reasons for the difference may be high labour costs, which could be due to wasted hours or production bottlenecks. Streamlining the production process, by removing the bottlenecks, helps meet the target production costs.
Bottlenecks or increased production costs can also occur when raw materials go waste. Raw materials may get spoilt or damaged in the absence of sufficient production capacity. An increase in capacity utilisation, sub-contracting jobs, and automating processes can help reduce raw material wastages.
Bottlenecks also arise due to a sudden surge in demand beyond the production capacity of the manufacturer. Timely removal of bottlenecks and sufficient planning of production processes enable smooth flow of raw materials, optimum use of labour, and production resources. A streamlined process can achieve production efficiencies.