Bottlenecks in the manufacturing process are almost inevitable from time to time, and rather than being an issue themselves, they are a symptom or red flag to a deeper problem at hand. Therefore, to try and solve a bottleneck, it is important to identify it, work backwards to ascertain what is causing it and then to come up with a creative solution to the problem. It is then important to go back and monitor the bottleneck to see if the solution fits the problem. Bottlenecks that are not rectified can drastically inhibit a company’s growth.
How to identify a bottleneck
A bottleneck occurs when, as one could imagine, there is a slowing down of the inventory or manufacturing flow to such a degree that it is very noticeable and causes issues. Once this has been noted, if one considered the part of the process directly before the slow-flowing inventory, one might expect to see the accumulation of products or items. This is a bottleneck and requires immediate attention to ensure the effects of it are mitigated.
If you are struggling to identify a bottleneck, there is a relatively simple and foolproof test you can conduct. Set up a buffer area or reservoir if you will. This is an intermediate place where items must be put in between two steps. If the reservoir fills up, then the bottleneck is most likely downstream. However, if the reservoir empties, then the bottleneck is most likely upstream. In essence, a bottleneck is the cause of inhibited manufacturing flow through the warehouse where it is not uniform and consistent when supply and demand are in balance.
Causes of bottlenecks and how to fix them to maintain company growth
The beginning of a product’s journey through the warehouse begins with receipting and so it is vital to get this process done right. First of all, a robust and reproducible system must be set up where a clear method exists for receiving items as they arrive, checking their volumes and specifications against a purchase order, conducting structured quality checks to verify the quality of the entire shipment and finally moving them to an organised and predetermined ‘home’ in the warehouse.
Item storage is paramount to ensuring efficiency in picking and use in manufacture. It is not as simple as placing an item on a shelf where there is a gap and hoping the next person to pick it has their eyes peeled and an inkling as to where you may have housed it.
It is essential to instigate order and rationale in the warehouse so that items with short shelf-lives for example, are stored where they are most likely to be used first, or items with faster turnover times are placed near the entrance where they are easily obtainable. Thoughtfulness also applies to the way in which items are stocked. There should be well-labelled areas or boxes, where items are colour-coded or identified quickly and easily to make retrieving them a straightforward endeavour. Creating this efficiency will ward against any potential bottlenecks.
Production too slow for demand
A lack of automation and too much handling in production can create bottlenecks. It is important to find a balance between having a finger on the pulse so-to-speak and caring about detail, with looking for any way possible to automate processes to reduce time and increase production. Areas to look at might be the physical process of manufacturing or they could be managerial processes that are too labour-intensive.
An example of this may be utilising inventory management software with technology such as barcode scanning or RFID tracking to monitor items’ movements through the process; or perhaps using software and compiled data for detailed forecasting. Looking for smarter ways to save time and improve accuracy will certainly dramatically reduce bottlenecks and restore flow once again.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.