In Theory of Constraints lingo, there is a subtle difference between a constraint and a bottleneck.
A bottleneck (resource) is a resource with capacity less or equal to demand while a constraint is a limiting factor to organization’s performance, an obstacle to the organization achieving its goal.
A constraint can be called bottleneck but a bottleneck is not always a constraint.
Let’s take an example of a plant with a subassembly workshop gathering resources A, B and C. The whole process needs another resource D and final assembly consisting of resources E and F. The capacity of each resource is displayed under their letter.
The demand is 100 units per day.
According to definitions we’ll find two bottlenecks: resource B limited to 80 units/day and resource E limited to 60 units/day. Each of these two have a capacity less than daily demand.
Resource B is handicap to resource C and for the whole subassembly workshop, but has little influence on the throughput of the plant. Plant’s throughput is limited by resource E, which is both a bottleneck and the constraint. It is primarily E which hinders the plant to deliver 100 units/day.
Imagine The subassembly is led by a foreman named Hector. Hector’s realm encompasses The resources A,B and C. The final assembly process is his customer.
Hector has significant experience within this company and is well aware B is a bottleneck. Even so Hector may not know anything about Theory of Constraints, his common sense made him discover some good rules to better exploit the bottleneck resource.
For example, Hector organized breaks so that B is never left unmanned and not running, manages to minimize changeovers.
If he knew about Theory of Constraints, he would probably squeeze more throughput from B, for instance placing the quality check before the bottleneck in order to insure only OK parts will be processed by the very limited B. Actually quality check is after C, which sometimes causes B to waste valuable time processing parts that will not pass the quality check, something that could be foreseen before B.
As it is the case in many companies, top management set local productivity objectives and is expecting Hector’s subassembly to run with best productivity. Logically Hector will complain about B’s limitations and keep asking for another investment in a second B. Waiting for this investment, Hector manages to produce daily around 80 units, the best subassembly can do.
In Hector’s eyes B is the constraint, which is true if we consider subassembly alone.
Production manager Isadora has to take care about the whole plant and thus considers the whole process. She doesn’t know either about Theory of Constraints, but her analytical skills and common sense focused her attention onto E, the bottleneck and constraint to the whole process.
Having limited means, she’ll explain Hector that working to increase the capacity of B would have little interest as long as E is the limiting factor for the whole system (the plant). What Isodora did not notice is that as long the daily limit is 60 units/day, some costs could be saved in subassembly if its daily production would be aligned to the capacity of E, for instance overtime and excess inventory carry over costs. But she’s blinded by local productivity objectives set by top management.
Nevertheless, Isadora came close to self-discover the five focusing steps of Theory of Constraints:
- Identify the constraint (E)
- Exploit the constraint
- Subordinate everything to the constraint (e.g. subassembly)
- Elevate the constraint
- Prevent inertia to become the constraint
If Isadora succeeds to elevate the constraint E, chances are that the B will be the next constraint!
Related: Schragenheim’s concise history of constraints