In my last post we discussed the balanced plant concept and why it is not the best way to set-up a continuous production line. We also learned about the synchronous management principle that tells us to not focus on balancing capacities, but rather we should focus on synchronizing flow. We also discussed why we should focus on the flow of work and not on the efficiency of individual tasks.
In today’s post we will discuss bottleneck and non-bottleneck resources and then how to differentiate the two.
Bottleneck and Non-Bottleneck Resources
In my last post, we demonstrated that resource capacities in a manufacturing plant should not be balanced. It follows that if they are not balanced, then they are unbalanced. Looking strictly at capacity, it follows that some resources may not have enough capacity to meet demand, while others have excess capacity. Resources with no excess capacity are referred to as bottleneck or constraint resources, while those with excess capacity are referred to as non-bottleneck or non-constraint resources. Traditional management approaches do not distinguish between these two types of resources. But rather the standard cost system methods assume that all resources are equal in terms of capacity and those with excess capacity should be eliminated (i.e. make them balanced).
One of the things we know is that if we manage these totally different resources using the standard cost system rules, we will see long lead times, excess work-in-process inventories, missed delivery dates and very unhappy customers. So let’s look deeper into the difference between bottleneck and non-bottleneck resources. In fact, let’s start with a definition of both of these:
- Bottleneck Resource: Any resource whose capacity is equal to or less than the market demand placed on it.
- Non-Bottleneck Resource: Any resource whose capacity is greater than the market demand placed on it.
To better understand the difference between these two types of resources, let’s look at an example. The figure below is a simple, four-step process with the processing times listed for each step. Let’s assume that the market demand is 35 seconds, so based upon the definitions just provided, which are non-bottleneck resources and which are bottleneck resources? By definition, we know that Steps R1, R2, and R4 all have capacities that exceed the market demand of 35 seconds, so they are all non-bottleneck resources. Step R3 exceeds the production rate required to meet the needs of the market demand and is therefore a bottleneck resource.
If you understand the difference between these two types of resources, then it’s important to recognize how time on each one should be spent. The available time can be used in different ways based upon the following definitions:
- Processing Time: The time required to process materials at a specific operation, not including setup time.
- Setup Time: The time required for a specific machine, resource, work center or line to complete the conversion from one product to another product including the testing and acceptance of the new product.
- Idle Time: Time not used for processing material or setting up a specific machine, resource, work center or line.
- Wasted Time: Time spent processing materials that cannot be realized as throughput. This time includes rework or scrap materials, work-in-process materials that are not scheduled or needed or finished goods above and beyond immediate demand.
It’s important to remember that bottleneck resources determine the throughput of the manufacturing facility. Because of this, any idle time or wasted time at the bottleneck operation has a direct impact on the plant because it translates directly into lost throughput. Contrast this with a non-bottleneck, meaning that non-bottleneck resources should not consume all of the available time. If they do, then they are using wasted time to create excess work-in-process materials that will clog the flow of needed materials through the process. Bottleneck and non-bottleneck resources are clearly different in terms of value and significance to the total operation. Unfortunately, the standard cost system does not recognize these differences and treats all resources as though they were the same.
In my next post, we will continue our discussion on bottleneck and non-bottleneck resources and how value each one of them. As always, if you have any questions or comments about any of my posts, leave me a message and I will respond.
Until next time,
 L. Srikanth and Michael Umble, Synchronous Management – Profit-Based Manufacturing for the 21st Century, Volume One – 1997, The Spectrum Publishing Company, Wallingford, CT
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