What is Bottleneck Analysis? How to Use Bottleneck Analysis to Improve Your Business

What is bottleneck analysis?

Bottlenecks refer to operations that constrain a site’s ability to meet production demand within a planned schedule. They are also notoriously difficult to pinpoint. It’s easy to make assumptions about where constraints are taking place – or even what’s causing them – but unfortunately, speculations often lead to wasted time, money, and effort. While merely locating a constraint can bring about positive impact, conducting thorough bottleneck analysis has far-reaching implications within organizations, leading to higher efficiency, lower costs, and reduced waste.

Bottleneck analysis automatically identifies top constraint priorities on your factory site, allowing you to uncover opportunities to dramatically increase efficiency. The goal is to pinpoint your top few issues easily and automatically—so that you can systematically surface critical root causes and fix them permanently.

Bottleneck analysis can instigate a paradigm shift across your factories by helping you:

• Systematically identify top constraints: Knowing your most impactful issues – and where to keep a sharp focus – is key to achieving factory efficiency. Qualitative or gut-level assessments might lead to issues that appear to be the most pressing due to proximity or timeliness, however, those signals can be misleading. By prioritizing and understanding the most critical bottlenecks, manufacturers can gain accurate, real-time insights on whether the issue is tied to downtime, product mix, quality, or cycle time, enabling rapid improvement and increased throughput.

• Manage the dynamic nature of competing bottlenecks: It is important to understand the evolutionary nature of bottlenecks – a primary bottleneck might turn into a secondary one in the span of a couple of hours. To make sure the focus remains on the most critical issue, manufacturers must stay light on their feet, knowing they might need to pivot their efforts at the drop of a dime. By implementing bottleneck analysis, manufacturers have a better understanding of when and why they need to shift focus, dramatically increasing throughput in just weeks.

• Improve factory site efficiency by 5 to 20%: By leveraging bottleneck analysis alongside performance analysis, users have been able to consistently identify asset bottlenecks and unlock increased site efficiency in weeks, resulting in millions of dollars in impact. This boost in efficiency can lead to reduced operating costs, increased revenue, and real, tangible financial impact.

How to conduct bottleneck analysis?

To identify a bottleneck, you must look at the entire manufacturing process, paying special attention to changeovers and other transitory stages. It is also important to analyze aspects of production you might not have hard data on, such as labor and training. PTC’s bottleneck analysis tool automates the bottleneck identification process, which might otherwise be a time-intensive, manual project. By consolidating the analysis around a single unit of measurement, such as time, the results can be universally understood and implemented on a company-wide basis.

What are the benefits of bottleneck analysis?

By implementing bottleneck analysis, you’re doing more than just identifying your top constraints. The effects of bottleneck analysis reach many aspects of the organization and can make a significant financial impact.

• Helps eliminate several types of loss

Bottleneck analysis can reduce waste by helping create a more seamless and efficient manufacturing environment. It can help rein in the additional time, money, and effort spent on the process due to the constraint in the first place.

• Increase knowledge amongst managers

Bottleneck analysis gives teams across the organizations visibility into the manufacturing process. By understanding the root causes of a bottleneck, teams can work on existing bottlenecks while also bettering their production processes moving forward.

• Prevents recurring long-term bottlenecks

Making a quick fix on a bottleneck might temporarily solve the problem, but there’s a high chance it’ll repeat sooner rather than later. Instead of using a band-aid solution, teams can dig deeper to get to the bottom of their manufacturing constraints. The better teams understand the root causes of their bottlenecks, the more they can do to prevent them in the future – saving them time and money in the process.

Examples of production bottlenecks

Production bottlenecks come in many shapes and sizes and can change by the day. A pressing bottleneck can quickly shift into a less urgent constraint in a matter of minutes. It’s important to remember the evolutionary nature of bottlenecks once you set out to analyze them.

• Training

A lack of skilled workers can bring production processes to a halt. Providing frontline workers with thorough training can help ensure they have all the skills they need to perform their jobs effectively. Educating workers on key topics such as quality control, digital transformation, and machine operation are all ways to ensure the skill level of workers themselves is not your primary bottleneck.

• Manual production monitoring

Monitoring production on your manufacturing floor by hand can be a labor- and time-intensive process. Human error, inadequate training, an aging workforce, and other priorities can lead to bottlenecks while assessing production. Real-time visibility into how your products, processes, and people function is key to improving safety, efficiency, service, compliance, and downtime. Using real-time data to resolve bottlenecks and optimize workflows can result in:

• Up to 48% fewer safety incidents

• Up to 75% less time spent on-site

• Up to 30% less unscheduled downtime

• Up to 50% improvement in OEE

• Manual change orders

Manual change orders are often a time-consuming process. The changes implemented might have a staggered arrival at machines, causing delays and confusion among workers. Standardizing the production process can further integrate workers and alleviate bottlenecks due to change order implementation.

• Preventative maintenance

Preventative maintenance occurs at regular intervals based on the machine’s lifecycle, regardless of usage, to ensure that no issues emerge. For preventative maintenance, the only variable used to predict failure is the span of time since maintenance was previously conducted. Since this model does not factor in any conditions unique to your specific piece of machinery – such as how long it has been in use and previous system failures – it can often act as a bottleneck. Preventative maintenance, and all the associated costs and downtime that come with it, happen whether a machine needs it or not (and still might miss the mark when it comes to predicting system failure).

Tools and strategies for bottleneck analysis

Theory of Constraints (TOC)

The TOC – a methodology commonly used for identifying and working to eliminate a bottleneck – can often unlock increased efficiency and profitability for organizations. The TOC is made up of five steps:

1. Identify the constraint: Pinpoint the part of the process that hinders your goal from being achieved.
2. Exploit the constraint: Examine the bottleneck to ensure you are using it to its fullest extent. Are there any quick fixes you can implement to make the most of what you have?
3. Subordinate the constraint: Evaluate all the other aspects of the process to make sure they are running efficiently and supporting the needs of the bottleneck.
4. Elevate the constraint’s performance: If these initial steps haven’t alleviated the constraint, it may be time to incorporate additional people and resources in the analysis process.
5. Repeat the process: Once your primary constraint has been resolved, it’s time to repeat the process on the next one. Bottlenecks are fluid and can change from day to day, so it’s important to understand where to focus your organization’s time and effort. 

Define, Manage, Analyze, Improve, Control (DMAIC)

DMAIC, one of the core tools used to drive Six Sigma projects, helps optimize business processes. It is broken down into the following components:

1. Define the problem and project goals. Creating a problem statement with clearly defined factors can be helpful in achieving your goal.
2. Measure your performance by determining the data you should collect, how much variation to expect, and how to best collect the information.
3. Analyze the process to pinpoint root causes. Jumping to conclusions is easy, but building solutions off assumptions often leads to wasted time and effort.
4. Improve the process by addressing the root causes. Well-planned efforts should lead to measurable improvements.
5. Control future process performance by understanding your pain points and how to solve them. Crafting a plan to track your success is a reliable way to stay on top of performance. 

Root-cause analysis

Root-cause analysis, the process of determining the underlying causes of bottlenecks to identify the most effective solutions, can bring about a first-time fix rate of over 90%. Remote root-cause analysis ensures technicians will arrive onsite with the correct tools and parts to solve customer problems in a single visit.

5S Framework

The 5S framework prioritizes a clean and safe workplace to boost efficiency and reduce waste. The methodology is dependent on five pillars:

1. Sort: Remove all items from the workplace except for those that are directly tied to production operations.
2. Set in Order: Keep necessary items nearby and in their place for easy access.
3. Shine: Once the workplace has been de-cluttered, it’s time to meticulously clean the area, paying close attention to potential equipment malfunctions such as leaks or cracks.
4. Standardize: Repeat the first three steps on a regular basis, keeping a consistent routine.
5. Sustain: Changing old customs can be difficult, but sustaining this framework is the most important step. Reinforcing these steps until they become second nature might require various forms of reminders, such as posters or checkpoints. 

Value stream mapping

Value stream mapping, often used in lean manufacturing, is the practice of making a visual guide of all the information and materials necessary to complete the manufacturing process. It can help teams further optimize their process by visualizing where bottlenecks take place. Value stream mapping helps eliminate bottlenecks and waste and paves the way for continuous improvement by focusing on future advancements.

Takt time

Takt time is the rate at which a manufacturer must assemble a product to meet customer demand. This is calculated by dividing the available production time by customer demand. Understanding takt time can help align your manufacturing process with customer demand by optimizing the pace of production. Teams that implement takt time often identify their bottlenecks with ease, since areas with slower production can be pinpointed quickly. It can also simplify capacity planning and support value stream mapping efforts.

Bottleneck analysis case study: Northrop Grumman

Global aerospace and defense leader  implemented PTC’s ThingWorx Digital Performance Management (DPM) due to the volume and velocity of change in modern manufacturing, such as customer requirements, new regulations, and supply chain struggles. Manufacturing teams at Northrop Grumman were struggling to identify and activate capacity opportunities. While operating efficiencies often hover between 40 and 60%, best-in-class practices can approach nearly 85%. With DPM, Northrop Grumman discovered their operational availability was between 90 and 100%, representing a sea of opportunity. By looking at every bottleneck as an opportunity with real monetary value and a chance to improve OEE, the organization was able to pinpoint how and where productivity was being impeded.

Mastering bottleneck analysis with DPM

DPM Bottleneck Analysis enables you to automatically identify top priority constraints in your factory while simultaneously pinpointing root causes. By understanding which constraints should be top of mind and take priority, you can better understand the root causes and work to eliminate them. Further, bottleneck analysis can ensure you are up to date on the most current crucial constraint. Since bottlenecks can evolve, it’s important to understand when and why a shift in focus is needed.

Putting DPM into action to eliminate bottlenecks in your organization

It can be confusing to sift through all the data collected on the manufacturing floor. ThingWorx DPM can help transform your high-level data for precise and real-time insights. It allows manufacturers to:

• Understand hidden issues and bottlenecks: Rapidly identify the highest impact performance issues that demand focus to drive throughput and increase OEE as well as other mission critical performance metrics.

• Identify root causes of constraints: Give visibility to root cause analysis and determine potential remedies with advanced analytics by connecting manual and automated data, providing visibility and insights, and tracking the results.

• Communicate an action plan: Transparent, organizational improvement plans can empower frontline workers to take corrective action and communicate those actions throughout the organization.

• Create investment accountability: Measure results with performance-led data to ensure manufacturers achieve their desired goals.