The Capacity Dam (Machine Bottlenecks)
The Capacity Dam (Machine Bottlenecks)
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How a $50,000 Asset Holds $500,000 of Inventory Hostage
How a $50,000 Asset Holds $500,000 of Inventory Hostage
The Throughput Ceiling
The Theory of Constraints (TOC), popularized by Eliyahu M. Goldratt is applicable on the factory floor. The average speed of all machines in a factory does not determine the throughput of that factory.
One, not all machines are used in producing specific products. Each product has its specific production sequence
Two, in any production sequence, it is the speed of the slowest machine that determines the throughput
Upstream machines, i.e. machines that come before the slowest machine, will have to wait for this “bottleneck“ machine to finish its current run. Only then can they hand over their own output to it for further processing.
Downstream machines, i.e. machines that come after the bottleneck, will have to stop their runs and wait for inputs from this slow machine.
The speed of the slow bottleneck machine is what determines the throughput of the production sequence. It acts as a kind of “dam“ that holds up the flow.
Case Study: The Bamboo “Hot-Press” Dam
Case Study: The Bamboo “Hot-Press” Dam
A factory produces curved bamboo spoons. The process involves cutting and spliting the raw bamboo logs, carving out spoon-shaped “blanks“ from the split plares, pressing the blanks to convert them into curved “spoons“ and finishing the pressed pieces to make them usable with food.
The cutting and sanding machines are high-speed, capable of 500 units per hour. However, the Hot-Press machine—which sets the curve—takes two minutes per cycle and can only handle 50 units per hour.
Management, wanting to keep labor “busy,” runs the cutting machines at full capacity. By Tuesday afternoon, 2,000 spoon blanks are sitting in bins waiting for the Hot-Press. The $50,000 Hot-Press is now holding $500,000 worth of raw material, labor, and overhead hostage. The factory has paid for the material and labor, but they cannot bill the customer until the product passes thourgh the “Dam.”
The Mechanical Failure: The “Pulse-Flow” Trap
The Mechanical Failure: The “Pulse-Flow” Trap
The failure here is the belief that high utilization on every machine equals high productivity. When non-bottleneck machines run at 100%, they simply create massive piles of Work-in-Progress (WIP). This creates “Pulse-Flow,” where material moves in fits and starts, creating a Velocity Gap in production operations.
The Forensic Diagnostic: The “Pile-Up” Audit
The Forensic Diagnostic: The “Pile-Up” Audit
To identify the Dam, look for the largest concentration of “Dusty” inventory.
The Check: Inventory the floor. The machine with the largest physical queue in front of it and the smallest queue behind it is the Dam.
The Metric: Buffer-to-Throughput Ratio. If a machine processes 100 units an hour but has 1,000 units waiting, you have a 10-hour “Velocity Void at a single point.
Conclusion
Conclusion
Take a walk along the shopfloor. Look for accumulated Work-in-progress and dusty piles. You could get invaluable insights into why your profits are below their true potential. Review whether an investment to remedy the bottleneck could increase profits.
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