The pursuit of speed and agility is constrained by bottlenecks.
Author of The Gauntlet
Bottlenecks arise as a consequence of striving for functional efficiency. The premise is that maximizing profit requires that we optimize the use of resources. Since people tend to be the most expensive resource, being efficient demands that everyone be kept busy all the time.
It’s easier to measure efficiency by focusing on narrow, functional processes, without regard to cross-functional work flow and resulting outcomes. In pursuit of efficiency, the amount of work flowing into the functional process on which people work is kept high, increasing the likelihood that every employee, of every skill type, will be fully utilized.
But every process has a constraint or two, and people can only work the process as fast as those constraints allow. The consequence is that the process slows down. When there is more work to do, it takes longer to complete any one job. Work in process (WIP) builds just ahead of each constraint and invested hours accumulate like inventory. So keeping everyone busy all the time does not produce efficiency, and the resulting bottlenecks hinder the drive to move faster.
The solution is to redefine efficiency. Rather than striving to keep everyone constantly busy working in their functional processes, the focus should shift to making the whole cross-functional production workflow more efficient. This should certainly begin with an analysis of each process in the total workflow, but to move faster, the major constraints in the entire work process must be identified, and either removed or never allowed to stop. Adapt the rest of the holistic workflow to ensure this result.
WIP will decrease and the cross-functional process will accelerate. Higher process velocity produces many benefits including higher throughput, better responsiveness, quicker order fulfillment, accelerated cash flow and greater open capacity. If you monitor the output per employee or equipment utilization numbers, you’ll notice that your redefined efficiency has improved by removing bottlenecks and accelerating workflow. And you will have strengthened your competitive advantage as well.
What are you doing to move faster?
How are you measuring efficiency?
