Welp MagazineRunning a business is an ambitious stride that of course, doesn’t come without challenges. Flaws may start to appear and cause setbacks to your enterprise’s performance. Bottlenecks, as they are called, are any form of inefficiency or disruptions that delay and negatively impact business operations. The term derives inspiration from the restrictive effect that the neck of a bottle has on the flow of its contents.
Although a generalized term, research highlights that bottlenecks mostly occur in marketing and project management. Regardless of where they are, a process overhaul may be appropriate to counteract bottlenecks. Whether it’s hiring an experienced manager with a relevant qualification such as a Kettering University online MS in Operations Management or similar to help transform operations, or adjusting a single phase within manufacturing, learning how to identify bottlenecks and solve them allows entrepreneurs to take necessary action and save their business from paying the price later on.
Identifying Bottlenecks
It’s not always easy to identify hidden bottlenecks within a business. Fortunately, several strategies exist that help make this initial step achievable.
Data Analysis
Key performance indicators present an overview of how well an organization is doing, and can be a useful tool for locating and identifying business bottlenecks. Managers may assess an enterprise’s performance both internally and externally to highlight areas where the current output isn’t aligning to their enforced targets. Whether it be longer wait times, lower unit output, or increased backlog, data collected and analyzed from an underperforming area can help reveal bottlenecks and their significance.
Process Mapping
Generating and laying out a visual representation of current operations is an effective strategy in identifying business bottlenecks. A process map of your entire operations is useful as it also helps you clearly point out where inefficiencies and delays may likely ensue. Process outlines such as flowcharts, for example, help break down even complicated processes and pinpoint a bottleneck cause.
Feedback
As simple as it sounds, feedback can also be useful to help locate and identify bottlenecks. A customer’s complaint about product flaws or a staff’s concern about issues within manufacturing are simple but key pointers that managers should consider when determining where inefficiencies are.
Examples of Bottlenecks
Bottlenecks can be categorized as either short term, where disruptions occur due to temporary factors and unanticipated events, or long term, where inefficiencies are more frequent and have greater impact. Below are a few examples of common bottlenecks in business.
Training and Development
Upskilling your employees is critical, especially when newer technology and software are being introduced. When staff are unable to conduct their roles due to their inexperience with newer processes, they may start to underperform and fall behind, creating long term bottlenecks for the business. This can lead to lower retention rates, reduced staff morale, and tension — all of which hinder growth.
Leadership
Leaders can also create bottlenecks. A lack of proper decision making and management expertise demonstrated by company and department heads can disrupt progress and create long term bottlenecks. For example, managers may fail to make adjustments to the business to adapt to changes in the industry and prefer to stick to older traditional means. This may lead to an organization’s loss in competency and reduced productivity. Poor leadership can also manifest conflict with employees whose morale may be impacted, increasing the risk of low retention rates.
Operational Processes
Inefficiencies within department pipelines and workflows are also potential long term bottlenecks that can negatively impact your business. For instance, outdated and inefficient methods may become unreliable or incompatible with new business practices . This might expose an organization to frequent delays and higher operating costs.
Capacity Overload
Growing demand and surges in volume orders can play the role of a short term business bottleneck as well, especially if the organization’s current capacity is unable to match them. High delivery volumes can create production bottlenecks if a company doesn’t have the resources and systems in place to keep up with demand.
How to Remove Bottlenecks
There are several methods that managers can use to help resolve business bottlenecks.
Process Redesign
Some larger-scale adjustments to the current workflow and procedures may be needed depending on a bottleneck’s severity. Re-organizing volume manufacturing processes or reallocating staff to other departments for instance, are generally not cheap or small tasks, but may be the right step to tackling a bottleneck.
Automation at the Bottleneck’s core
Advancements in technology mean automations have become more utilized everywhere as an improved method towards managing workflow and production. Removing the need of manual intervention in a particular segment where bottlenecks exist help save costs of labor and lessen wait times which in turn improves business output.
Capacity Planning
Doing research to forecast future trends can be helpful as you can also be prepared to adjust production workflows internally to avoid inefficiencies.
It’s clear by now that bottlenecks can be a frustrating matter, but ensuring effective strategies are in place to identify them and make necessary changes is a step towards removing barriers that prevent your business from reaching its true potential.
