berkus_ventures_300ppi copy

Berkonomics

Manage your bottlenecks!

As a manager, you have a number of critical tasks that are general to your position as opposed to specific to your industry.  These include ensuring the continued health of the organization, setting the moral compass for your stakeholders, providing for succession by training and documenting, leading the effort in compliance of regulations and safety needs, and … elimination of all possible bottlenecks that impede the efficiency of your organization.

The definition of a bottleneck in your business is one that constricts the flow of work from one area to another in the flow of product or service through your organization.

[Email readers, continue here…]  A bottleneck in your organization’s flow of product or service can happen, shift, or disappear quickly.  Common to all bottlenecks are three factors:

  1. All product, labor, and cost before the bottleneck are impeded from creating maximum efficiency by being forced to slow output or build inventories. This is a costly loss for any business and one that should be a focus for your management as soon as identified.
  2. The bottleneck itself strains to keep up with demand, often to the point of reducing its own efficiency in the process of attempting to keep up with demand.
  3. All processes after the bottleneck are slowed for lack of flow into their zone of control and waste time, money, space and output, always resulting in reduced revenues and profits.

You can be the bottleneck.  If people are waiting for you to respond to a question or make a decision about design, process, spending for a core need, or any of tens of critical decisions, you are creating a Protectingslowing or stoppage of work before you and idle resources behind you.  If this describes you at any moment in your day, you should consider removing yourself from the bottleneck list by delegation, reduction of your non-critical workflow, or (heaven forbid) increasing your hours of production.

If failing to hire a critical employee is the cause of reduced efficiency, you must act quickly to either make an effective hire or alter the environment that creates the urgent need, all to remove that bottleneck.

And if an inefficient or undersized machine or department or process is creating a backup of critical path work flow, you must address this as an urgent matter whose cost is much more than the cost of the machine or person needed, but the amplified cost of the lost output it affects.

You, as a successful manager, must be attuned to and responsible for elimination of all forms of bottlenecks within your span of control.  Watch for, and stamp out, all those you identify as soon as you find them.  The effect of your action is magnified several-fold at the output stage of your business, leading to increased customer satisfaction and increased profits.

  • I thank you Dave for a very enlightening message on the “negative power” of bottlenecks within an organization. We all need to pause, review, report and eliminate where possible all organizational bottlenecks. I shared your message with our management team this morning. I then pointed out several bottlenecks which we successfully cleared today at our meeting. I agree your message was timely, and very important.

    Rick

  • Michael O'Daniel

    A very timely and important post. It’s easy to fall into the trap of focusing only on the revenues and expenses that appear on the ledger, and not taking into account the hidden or indirect costs such as those Dave has pointed out that directly affect revenues (along with workforce morale).

Leave a Reply

Your email address will not be published. Required fields are marked *

Share

Sign up for
Dave's weekly emails

Most Recent Posts

Category