Hello readers and welcome back to our Project Management series. In our last article, we started exploring bottlenecks in projects and we focused on their primary causes in project environments. As promised, in this article we will be talking about the effect of bottlenecks on projects and discuss ways of avoiding and handling them. Without wasting any more time, lets get to our activity for today.
Having understood what bottlenecks are and why they happen, it is important to understand its effect on projects and learn how to avoid them or what to do in situations where they already exist. Bottlenecks have no positive effect in project situations, but negative effects range from incurring extra cost to total project closure.
In a project environment, the following are the main effects of bottlenecks:
- Reduction in overall production efficiency
- Increased backlogs
- Increased cost of storage
- Constraint challenge
Reduction in overall production efficiency
Efficiency is the rate at which time, effort and cost is properly used. When a bottleneck is identified in a system, it reduces the efficiency of all other processes after it.
Still using our example of the cabinet-making factory in the previous article (link), a critical analysis lets us discover a bottleneck at the spindle machine, making it produce at 50% of its normal production rate. All other machines after it would be limited to processing just the output of the spindle machine. We will then realize that because of the bottleneck (spindle machine), the overall production efficiency would be reduced by 50%.
Often, it is not impossible to find more than one bottleneck in a project, which further reduces the overall system efficiency. In a scenario where bottlenecks become numerous, it might be more effective performing a comprehensive process reengineering rather that treating each bottleneck in isolation.
Increased backlogs of work
Using the same example above, if the circular machine has produced more than the spindle machine can process, then it is only logical that the remaining outputs would be processed at a later date. Reducing or stopping the output of the circular machine can be a temporary way to solve the increased number of backlogs; however, the cost of setting up and stopping a machine can sometimes be so expensive that it leads to an extra cost on the project.
As project managers, what we should strive for is process efficiency and optimization, not maximization.
Increased storage cost
This is very common in the manufacturing environment where goods are produced. A bottleneck in a production system as stated earlier would lead to an increased stock of the work in progress. The work in progress ties down your resources in an unusable state where returns cannot be generated from them. There would then be the need to store these resources, which would create the need for additional storage space.
Most production companies often overlook this, as many believe that work in progress is part of the production process. However, research both in academics and in practice has shown that there is an increasing cost of storage in most manufacturing organizations and this has even led to the development of production philosophies such as lean manufacturing and just in time production. Both aim at reducing waste and eliminating the need for storage and stock, and instead produce goods just when the customers need them.
The constrain challenge
We can all remember the three constraints of a project: time, cost and quality. While the presence of a bottleneck in a project might not lead to reduced quality, it is more likely to cause a delay in schedule and lead to cost overrun. By now we all know that any project that cannot be successfully completed within the project constraints is a failed project.
In the next phase of this article, we will focus on the various ways of avoiding and solving bottlenecks in project situations. Bottlenecks are not fixed in a project but it varies from among processes. Improving a particular process that creates a bottleneck might either solve the bottleneck or shift the bottleneck to another process.
As a project manager, it is important to note that the output of the bottleneck is the output of the overall process; therefore, to improve the overall system efficiency is to improve the efficiency of the bottleneck.
The following are the series of steps required in solving bottlenecks in a project environment:
- Problem Identification (Process analysis)
- Aim for overall process improvement not individual station efficiency
- “If it ain’t broke, don’t fix it”
- Schedule and maintenance
- Technological improvement
Problem Identification (Process analysis)
The first step in solving bottlenecks is to determine their cause. A problem cannot be solved effectively if the root cause is not identified, and it is our duty as a project manager to solve a problem permanently.
The easiest way to identify the root cause is to conduct a critical process analysis. It is important to mention that there are quick pointers that can help identify bottlenecks such as processes that take the most time, processes with the most rework, processes which the staff complains the most about, etc. While these signs do not confirm the existence of a bottleneck, they act as warning signs that should never be taken for granted.
The final aim of process analysis is process improvement. The systematic steps that are required in process analysis are:
Process definition: The aim of process definition is to identify the individual processes that make up the system, define their boundaries (input and output) and determine what activities are carried out in the process.
Process flow diagram: The process flow diagram is a simple tool used in showing the interrelationship between various processes in a system. It shows how the output of a process affects the input or output of another process and is a good visual tool for analyzing the effect of a process on other processes.
The bottleneck or most probable bottleneck is the process with the lowest capacity. While one of the processes would definitely have the lowest capacity, it does not automatically mean that it is a bottleneck. A process becomes a bottleneck if it produces below the required project or organizational output. The process with the lowest capacity, even though it’s not a bottleneck, will most likely become a bottleneck when the organization decides to improve its overall efficiency.
Critical analysis: A process consists of a series of activities. Once the bottleneck process has been identified, a more critical analysis would help identify the exact activity that causes the bottleneck. Bottlenecks can be caused by events as small as not assigning the right person to replace papers in a printer, or as big as total machine failure.
System improvement, not individual process improvement
Another way to prevent bottlenecks in project organization is to always aim for a holistic system improvement instead of a part or process improvement.
It is not uncommon for organizations to improve a part of a system such as delivery service, marketing or spraying as in the manufacturing example that we have been using. The challenge with individual process improvement is that while they often improve the particular process, they do not have an effect on the overall system.
Let’s not forget: the output or efficiency of a bottleneck would determine the output or efficiency of the overall system. This would lead us to our next solution.
If it ain’t broke, don’t fix it
Many of us are familiar with the saying, “if it ain’t broke, don’t fix it.” This quote applies to bottlenecks: if it is not a bottleneck, there’s no need to improve its efficiency. Doing so would only cause your organization to incur more expenses but will not improve output of the system.
Schedule and maintenance
In our previous article, we mentioned that lack of a proper maintenance schedule or wrong timing for maintenance can lead to a bottleneck. While this is true, proper scheduling and maintenance is one of the most effective ways of preventing bottlenecks in projects. Proper maintenance helps in preventing avoidable breakdowns and unforeseen challenges that could result from the lack thereof.
Sometimes the technology we have can no longer compete with the modern standard, automatically causing a bottleneck.
For example, it would be difficult for an architectural firm to meet with modern designs and deadlines if it still used manual drafting methods when the new technology in the industry is the use of computer aided designs. Similarly, it would be difficult for a manufacturing environment to meet its deadline if its processes are still manual while the general industry has moved to automation.
If it is just a process that requires technological improvement, then it is a bottleneck and can be treated in isolation, but if more than one process requires technological improvement, then it should be treated as a complete system improvement.
This is the concluding part of a two-part article that set out to explore the definition of a bottleneck, its causes and how it can be prevented in projects. While the last article focused on the causes, this article focused on the effects, and the ways of preventing bottlenecks in projects.
That’s all we have for today and once again thank you for reading. Do not forget to drop your thoughts and questions in the comments section.
Project management body of knowledge (PMBOK)
Adler, P. S., Mandelbaum, A., Nguyen, V., & Schwerer, E. (1995). From project to process management: an empirically-based framework for analyzing product development time. Management Science