All businesses have a flow of product or documents. All businesses also have a “pinch point” or bottleneck that slows the overall results.
In 1997, I read Eliyahu Goldratt’s book, The Goal. This is a wonderful business book that is written as a love story and can be gobbled up in a weekend. But in spite of the overarching simplicity of the book, it harbors important business principles.
In the book, the author takes a Boy Scout troop on a hike to base camp for the weekend. Of course, the line of boys attenuates and the author is stressed about keeping 25 boys together. The fit and ambitious boys are well ahead of the rest and the fat boy trails the pack. The fat boy is an allegory for the bottleneck. The author is an allegory for a business owner.
The slow pace of the fat boy means that everyone must stop and wait for the tail end to catch up. In terms of productivity, this is a killer to have people standing around doing nothing. The solution, to skip pages of the story, is to have the fat boy lead. Everyone moves, even at a slower pace. Now the author can focus on the bottleneck alone, lightening the fat boy’s load and choosing easier paths to the base camp.
You can relate this to a manufacturing environment really easily. But it has its relevance to administrative paper pushing. I have been in so many businesses where the invoicing is weeks behind. The impact of slow invoicing is slow cash flow. Businesses fail being owed millions but overdrawn at the bank.
The manufacturing solution is to take and release orders to the floor at the pace of the slowest step. Instead of 25 fires, there is only one place to pay attention. In 1997, I experienced this in a job shop where this paradigm revealed that the shear operator who cut giant sheets to the production size was an over producer, littering the shop floor with pallets of goods that would not be worked by the brake or punch press for weeks. Once slowed down, the clutter cleared up and the shear operator was re-deployed elsewhere.
Bottlenecks happened in the administration department, too. The solution there is to move the fat boy to the head of the queue and drive the pace of administrative rhythms at the pace of invoicing. By focusing the brains of the company on the bottleneck, it goes away – reappearing in another place, to be sure. But business owners find it easier to fight one battle for improvements than 25.
Read the book. Fascinating and it applies to your business.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.