From the course: Constraint and Bottleneck Management

Difference between constraints and bottlenecks

From the course: Constraint and Bottleneck Management

Difference between constraints and bottlenecks

- Bottleneck and constraints are terms commonly used to describe something that restricts or limits the output of a system of processes. The terms bottleneck and constraints are often used interchangeably. There is no official dictionary definition in the context of operations management. The expression bottleneck comes from describing the shape of a bottle of wine or water. When you turn it upside down and you want to empty it as fast as possible, maximum output rate, it is restricted by the narrow neck of the bottle. Commonly either term gets used to describe something that can cause delay, restriction, a limit or slowing of a process flow, action, or system. However, for those who are keen to be extra precise with their language, there is an important difference. According to the Association for Supply Chain Management, a constraint is any element or factor that prevents a system from achieving a higher level of performance with respect to its goals. Constraints can be physical such as a machine center or a lack of material, but they can also be managerial such as a policy or procedure. The resource with the highest utilization is typically the constraints. Whereas a bottleneck is defined as a facility, function, department or resource whose capacity is less than the demand placed upon it. These definitions also fundamentally agree with the definitions from the management methodology, the theory of constraints, TOC. By these definitions, there is always at least one constraint, but not necessarily any bottlenecks. It's nice to have the definitions. In reality, both are used interchangeably so much that even amongst operations managers, it's best not to get hung up on it. But to be precise, we will look at a few different situations. In this situation, whilst there is a clear constraint, all of the individual processes have a capacity greater than the market demand, and therefore there are no bottlenecks. This system or company is sales constrained rather than operations capacity constrained, and so it should focus on increasing sales rather than capacity. If in fact, the market demand was much higher, the same system with the same process capabilities could now have all four processes as bottlenecks. If market demand was greater than the capacity of all four individual processes. Under a different level of market demand, it would be possible for the same system with the same process capabilities to have three processes with sufficient capacity to meet market demand, and so have one bottleneck which is also the single constraint. Looking at a new system now with new process capacities, we have two processes here with identical capacities. In this case, we have two joint constraints, which is a bigger problem. We can improve the capacity of process A, but it won't make a difference to the overall system capacity unless we improve both the capacity of processes A and C. With the market demand level here, we have two joint constraints and three bottlenecks. To make these assessments, we need to know the level of demand and the capacity capability of each individual process. Not exactly but enough to identify the constraint and other processes that might become the constraint in the near future. So bottlenecks and constraints, you can feel a little smug that you know the official difference, but be forgiving to the majority who will continue to use either interchangeably.

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