How do you find the bottleneck in your business?

Follow one job all the way from inquiry to payment and write down, for each stage, how long the work took and how long the job sat waiting. The bottleneck is wherever the queue is longest and whoever everyone is waiting on. First get more out of it without spending money. Only then buy, hire or automate.

Herbie sets the pace for the whole line

Eliyahu Goldratt wrote The Goal with Jeff Cox: a novel about a plant manager whose factory is facing closure. In one scene, the hero takes a troop of Boy Scouts on a hike. The line keeps stretching out: the fast ones race ahead, the gaps between the boys grow, and the troop still reaches its destination only when the slowest one, Herbie, does. The hero puts Herbie at the front and splits the contents of his backpack among the others. The troop walks faster and stops stretching out.

In the factory, Herbie’s role is played by two machine work centers. Jonah, the hero’s mentor, explains that the plant will produce only as much as its bottlenecks do, so every hour the bottleneck loses, the whole plant loses too. An hour saved anywhere else is an illusion. Automating a stage that isn’t the bottleneck usually just lengthens the queue in front of the bottleneck; more on this in the article on automating a mess.

In a small business, the bottleneck is rarely a machine. More often it is one person, quite often the owner, or a rule like “I approve every quote myself.”

Five steps and their order

Near the end of the book, the characters write down five steps, and in the next chapter they revise them:

• find the constraint;
• decide how to squeeze it, meaning how not to waste a single hour of its time;
• make everything else serve that decision;
• increase its capacity if that is still not enough;
• when the constraint moves, go back to the start, and don’t let rules set for the old constraint hold the business back.

Money only comes in at the fourth step. Jonah also lists the ways a bottleneck’s time gets wasted: it stands idle during breaks, it works on parts that are defective or that someone will ruin soon after, and it makes things nobody has ordered. Hence his advice to put quality control before the bottleneck, not after it.

How to find it in your business

In the book, the data from the system turned out to be inaccurate, so the characters asked the people who chase around the shop floor after missing parts where they usually end up looking. Then they went looking for the biggest pile of work in progress. In a service business, you can’t see the pile, so you have to count it:

1. Take your last completed job and break it into six to nine stages, from inquiry through quoting, preparation, the work itself and checking, to invoicing and payment.
2. For each stage, write down when the job reached it, when it left, and how much of that time someone actually worked on it.
3. Count how many jobs are waiting in front of each stage today, and how many days the oldest one has been sitting there.
4. Ask the two people who chase things up most often who or what they are waiting for.

Where at least two signals agree (the biggest queue, the oldest job and the answer “we’re waiting on…”), you have a candidate. With one signal, it is only a hypothesis; check it again in two weeks.

Example: an embroidery shop

The business is fictional. An embroidery shop with nine people embroiders logos on T-shirts and fleeces for companies. The owner is sure the shop is short of machine capacity and is already working out the lease payment on a second machine. Before signing the contract, the owner walks that path with the three most recent jobs.

The embroidery itself took about a day for each of them. The jobs sat longer earlier on, waiting for the logo file to be prepared for embroidery. One graphic designer does that. Nine jobs are waiting in the designer’s queue, the oldest for eight days. The designer also answers the phones, and one design in three comes back because the customer sent a poor-quality logo. On Mondays the machine stands idle, because there is nothing to embroider.

The moves follow Goldratt’s order. Someone else takes over the phones. Before accepting a job, the salesperson checks against a list that the logo is a vector file and that the colors and sizes are confirmed, so incomplete material never reaches the designer. Jobs with the nearest deadline go first. For a new customer, the salesperson sets the deadline based on the length of the designer’s queue. Only if that isn’t enough does the owner look for a second person to prepare files. The second machine can wait until the machine is what sets the pace.

When it doesn’t work

If inquiries are few and people have spare hours, the constraint is the market, and the work to do is on sales. The method works poorly where there are only a few jobs a year and each one looks different, because there is nothing to compare. It shows where work waits, but not why. Nor is it a tool for judging people. The bottleneck is a stage or a rule, even when one person does it.

For tomorrow

Take your last completed job and list the dates on which it moved from stage to stage. Mark the longest gap in which nobody worked on it.

Read next: three questions before you automate · how to make decisions without complete data

Business X-ray in 5 minutes

How this text was written: the research, the choice of sources and the final version are mine. AI helped me prepare a draft; I checked every fact, and I am responsible for this text. — Maciej Chmura

Sources

• Eliyahu M. Goldratt, Jeff Cox, The Goal, 3rd revised ed., ch. 15 (the hike with Herbie), ch. 18 and 19 (looking for the bottleneck, an hour lost at the bottleneck), ch. 28 (an hour saved elsewhere), ch. 36 and 37 (the five steps).