Bottleneck Analysis Calculator
Free Theory of Constraints & Production Optimization Tool
Identify process constraints limiting throughput, analyze capacity gaps, and optimize production flow using Theory of Constraints (TOC) and Lean principles.
Process Workstations
Financial Parameters
Desired daily production target
Revenue per unit sold
Material and direct labor costs per unit
🎯 Bottleneck Identified
Capacity: 34 units/day
Cycle Time: 12 min | Utilization: 85%
System Performance
Station Capacity Analysis
Financial Impact
Lost opportunity due to bottleneck: 1,966 units Ă— RÂ 300/unit
Annual impact: RÂ 147Â 450Â 000 (250 working days)
Improvement Potential
Scenario: Improve bottleneck capacity by 20%
+7 units increase
7 additional units Ă— RÂ 300/unit
Potential yearly gain from bottleneck improvement
TOC Improvement Steps
- IDENTIFY the constraint: Station B - Machining (DONE âś“)
- EXPLOIT the constraint: Run Station B - Machining at 100% during available time. Eliminate all downtime and defects at this station.
- SUBORDINATE everything else: Schedule all other stations to support the bottleneck. Don't overproduce—this creates excess WIP.
- ELEVATE the constraint: Add capacity at Station B - Machining (equipment, shifts, automation, process improvement).
- REPEAT: Once resolved, identify the next constraint and start again. Continuous improvement never ends.
Understanding Bottleneck Analysis: Complete Guide
What is Bottleneck Analysis?
Bottleneck analysis is the process of identifying the constraint that limits the throughputof an entire production system. A bottleneck is the workstation, process, or resource with the lowest capacity relative to demand—it determines the maximum output of the entire system, regardless of how fast other stations operate.
The concept is foundational to Theory of Constraints (TOC), developed by Dr. Eliyahu Goldratt. The key insight: In any system, there is always ONE constraint (bottleneck) that governs throughput. Improving non-constraint resources wastes money—only improvements at the bottleneck increase system output. This focuses improvement efforts where they matter most.
Critical Principle:
"A system's throughput is only as strong as its weakest link." The bottleneck determines the pace of production. Non-bottleneck resources running faster just create excess inventory (WIP), not more finished goods.
Theory of Constraints (TOC): The Five Focusing Steps
TOC provides a systematic methodology to maximize throughput by managing constraints. The process is iterative and continuous—once you break one constraint, another emerges.
Step 1: IDENTIFY the System's Constraint
Find the bottleneck—the resource with the lowest capacity relative to demand. This is the station where work piles up (WIP accumulates), and it determines system throughput.
How to identify:
- Capacity analysis: Calculate capacity (Available Time Ă· Cycle Time) for each station. Lowest capacity = bottleneck.
- WIP observation: Where does inventory accumulate? Queue before the bottleneck, starvation after.
- Utilization: Bottleneck typically runs at highest utilization (close to 100%), while non-bottlenecks have idle time.
- Scheduling conflicts: Bottleneck is the station everyone fights over for schedule priority.
Example: If Cutting = 96 units/day, Machining = 34 units/day, Assembly = 54 units/day → Machining is the bottleneck. System throughput = 34 units/day regardless of other stations' speed.
Step 2: EXPLOIT the Constraint
Get maximum output from the bottleneck without major investment. Squeeze every bit of capacity from the existing constraint before spending money to add capacity.
Exploitation tactics:
- Eliminate downtime: Never let the bottleneck sit idle. Preventive maintenance during non-production hours only.
- Zero defects at bottleneck: Every defect = lost system capacity. Inspect upstream to prevent bad parts reaching bottleneck.
- Eliminate changeovers: Batch similar products to minimize setup time. Use SMED to reduce setup when changeovers are necessary.
- Optimize cycle time: Improve methods, better tooling, faster feeds/speeds (within limits).
- Eliminate breaks at bottleneck: Stagger operator breaks so the bottleneck always runs. Use relief operators.
- Perfect quality upstream: Never feed defective parts to the bottleneck—you waste its precious capacity.
Impact: Exploitation often yields 10-30% capacity increase at zero cost. This should ALWAYS be done before investing in new equipment.
Step 3: SUBORDINATE Everything Else
Align all non-bottleneck resources to support the bottleneck. Don't let them run at full speed—this creates excess WIP that clogs the system. The bottleneck sets the pace for everyone.
Subordination principles:
- Don't overproduce: Upstream stations should only produce what the bottleneck can consume. More = wasted WIP.
- Buffer the bottleneck: Maintain a small queue of work before the bottleneck so it never starves.
- Drum-Buffer-Rope: Bottleneck is the "drum" (sets pace), buffer protects it, "rope" pulls work from upstream.
- Reduce batch sizes: Smaller batches = faster flow, less WIP, better flexibility (except at bottleneck).
- It's OK to have idle capacity: Non-bottlenecks should have 20-40% idle time. They're waiting for the bottleneck, and that's correct!
Mindset shift: "Local efficiency" (running every machine at 100%) destroys flow. "System throughput" (bottleneck utilization) is what matters. Non-bottleneck idle time is not waste—it's proper flow.
Step 4: ELEVATE the Constraint
Add capacity at the bottleneck—but ONLY after fully exploiting and subordinating. This requires capital investment, so do it last.
Elevation strategies:
- Add shifts: Run bottleneck 16 or 24 hours vs. 8 hours (cheapest capacity increase).
- Add machines: Purchase duplicate equipment for the bottleneck process.
- Outsource: Send overflow work to contract manufacturers (temporary capacity).
- Automation: Automate the bottleneck to reduce cycle time.
- Process redesign: Fundamentally change the process (e.g., cellular manufacturing).
- Cross-train: Add labor capacity through multi-skilled operators.
ROI Note: Every additional unit of bottleneck capacity = one more unit of system throughput = full throughput profit (price - variable cost). Calculate ROI before investing.
Step 5: Go Back to Step 1 (Don't Let Inertia Set In)
Once you break a constraint, a NEW constraint emerges. The system is now limited by a different bottleneck. Start the cycle again—continuous improvement never ends.
Why this step matters:
- Constraints shift: After improving Station B, maybe Station C becomes the bottleneck.
- Avoid complacency: Organizations stop improving once "the problem" is fixed. TOC demands continuous focus.
- Policies become constraints: Sometimes the constraint isn't physical equipment but company policies, procedures, or mindsets.
- Market constraints: Eventually, your constraint might be market demand (you can produce more than you can sell)— then focus shifts to sales/marketing.
Goldratt's Warning: "Inertia is the enemy of progress." Organizations tend to keep doing what worked in the past even after the constraint has shifted. Stay vigilant.
Key Concepts & Formulas
Station Capacity
Capacity = (Available Time Ă— Utilization Rate) Ă· Cycle TimeWhat it measures: Maximum units a station can produce per day.
Example: (480 min Ă— 0.85) Ă· 12 min/unit = 34 units/day
Note: Use effective time (available Ă— utilization), not gross time, to account for downtime.
System Throughput
System Throughput = MIN(All Station Capacities)What it measures: Actual output of the entire production line, limited by the bottleneck.
Example: If stations have capacities of 96, 34, 54, 120, 80 → System throughput = 34 units/day
Key insight: Improving non-bottleneck stations doesn't increase throughput—only the bottleneck matters.
Throughput (TOC Definition)
Throughput = Selling Price - Totally Variable CostsWhat it measures: Money generated by selling one additional unit (contribution margin).
Example: Selling Price = R500, Variable Cost = R200 → Throughput = R300/unit
Use case: Every additional unit of bottleneck capacity = one more unit sold = R300 additional profit.
Drum-Buffer-Rope
Drum: The bottleneck sets the production pace (like a drummer sets tempo for a marching band).
Buffer: Small queue of work before the bottleneck ensures it never starves (typically 1-2 hours of work).
Rope: Communication mechanism that pulls work into the system at the bottleneck's pace (prevents overproduction).
Result: Minimizes WIP, maximizes flow, eliminates overproduction waste.
Example Calculation (Using Default Values)
Scenario: 5-Station Production Line
Step 1: Calculate Each Station's Capacity
- Station A (Cutting): (480 Ă— 0.90) Ă· 5 = 86.4 units/day
- Station B (Machining): (480 × 0.85) ÷ 12 = 34.0 units/day ⚠️ BOTTLENECK
- Station C (Assembly): (480 Ă— 0.88) Ă· 8 = 52.8 units/day
- Station D (Inspection): (480 Ă— 0.92) Ă· 4 = 110.4 units/day
- Station E (Packaging): (480 Ă— 0.90) Ă· 6 = 72.0 units/day
Step 2: Identify System Throughput
System Throughput = MIN(86.4, 34.0, 52.8, 110.4, 72.0) = 34 units/day
Station B (Machining) limits the entire system.
Step 3: Calculate Financial Impact
Target: 2,000 units/day (customer demand)
Actual: 34 units/day (system capacity)
Gap: 1,966 units/day short!
Throughput per Unit: R500 - R200 = R300
Lost Daily Throughput: 1,966 Ă— R300 = R589,800/day
Lost Annual Throughput: R589,800 Ă— 250 = R147.5 million/year
Step 4: Improvement Analysis
Scenario: Improve Station B capacity by 20%
New Capacity: 34 Ă— 1.20 = 40.8 units/day
Additional Throughput: (40.8 - 34) Ă— R300 = R2,040/day
Annual Benefit: R2,040 Ă— 250 = R510,000/year
Key Insights:
- Station B (Machining) is the constraint—all improvement efforts should focus here first
- Stations A, C, D, E have excess capacity—running them faster won't help
- The system is severely capacity-constrained (34 actual vs. 2,000 target)
- Even a 20% improvement at the bottleneck adds R510K annually
- Station D has 3× the required capacity (110 vs 34)—this is acceptable idle time
Strategies to Break Bottlenecks
1. Exploit (Zero Cost)
- Eliminate all downtime at bottleneck
- Run bottleneck during breaks (relief operators)
- Perfect quality—no defects waste capacity
- Optimize process (faster cycle time)
- Batch similar products (minimize setup)
2. Offload Work
- Move tasks to upstream/downstream stations
- Outsource bottleneck work to contractors
- Use alternative routing (if available)
- Pre-process or post-process offline
- Cross-train operators from non-bottlenecks
3. Add Capacity (Invest)
- Add shifts (16 or 24-hour operation)
- Purchase duplicate equipment
- Automate the bottleneck process
- Upgrade to faster machines
- Parallel processing (split work)
4. Reduce Demand on Bottleneck
- Redesign product to eliminate bottleneck step
- Change material/process to reduce cycle time
- Standardize products (fewer changeovers)
- Eliminate low-margin SKUs using bottleneck
- Sub-assembly offline instead of inline
5. Improve Quality Upstream
- 100% inspection before bottleneck
- Poka-yoke to prevent defects reaching bottleneck
- SPC on upstream processes
- Train operators on quality importance
- Supplier quality improvements
6. Protect the Bottleneck
- Maintain buffer inventory before bottleneck
- Preventive maintenance during off-hours
- Dedicated tooling/fixtures ready
- Priority for materials and support
- Best operators assigned to bottleneck
Frequently Asked Questions
Can a production line have more than one bottleneck?
No—by definition, only ONE resource can be the constraint at any given time. The bottleneck is the station with the LOWEST capacity. However, bottlenecks can shift over time or by product mix. Example: Station A is the bottleneck for Product X, but Station B becomes the bottleneck for Product Y. Also, you might have "near-bottlenecks" (stations close in capacity to the bottleneck), but only one truly limits system throughput. Sometimes organizations have a "floating bottleneck" that changes daily based on which products are running—this indicates poor flow and requires capacity balancing or flexible resources.
Should I try to balance capacity across all stations?
No! Perfect balance is impossible and undesirable. Variation exists—machines break, operators vary, demand fluctuates. If you balance perfectly, every station becomes a potential bottleneck, and the system is fragile. Better approach:Deliberately design extra capacity (20-40%) at non-bottleneck stations. This creates protective capacity to absorb variation and keep the bottleneck fed. TOC says: "Non-bottleneck idle time is healthy—it means proper subordination." Focus on maximizing bottleneck utilization (95%+), not balancing all stations. The exception: if demand increases such that a non-bottleneck becomes the new bottleneck, then rebalance.
What's the difference between a bottleneck and a constraint?
Often used interchangeably, but subtle difference: Bottleneck = physical resource with lowest capacity (machine, workstation). Constraint = anything that limits system throughput (can be physical or policy-based). Types of constraints: (1) Resource constraint: Physical bottleneck (machine, labor, space). (2)Material constraint: Shortage of key materials. (3) Market constraint: Demand is less than production capacity (you can make more than you can sell). (4) Policy constraint: Company rules, procedures, or mindsets that limit throughput (e.g., "never run overtime," "batch sizes must be 1000"). In TOC, breaking policy constraints often yields bigger gains than physical constraints.
How much buffer inventory should I keep before the bottleneck?
Enough to ensure the bottleneck never starves, but not so much that you create excess WIP. Rule of thumb: 1-2 hours of work for stable processes, 4-8 hours for unstable upstream processes. Calculate: Buffer = Bottleneck Cycle Time × Number of Units × Safety Factor. Example: Bottleneck takes 12 minutes/unit, you want 2-hour buffer → (120 min ÷ 12 min) × 1.2 safety factor = 12 units in buffer. Monitor buffer levels: If buffer never depletes, it's too large (excess WIP). If bottleneck starves frequently, buffer is too small. Use statistical data (variation in upstream supply) to size correctly. Remember: WIP = cash tied up in inventory. Minimize buffer while protecting bottleneck.
Why does TOC say it's okay for non-bottleneck resources to be idle?
Traditional thinking: "Maximize local efficiency—run every machine at 100%." Result: Overproduction, excess WIP, long lead times, cash tied up in inventory. TOC insight: Non-bottleneck utilization beyond bottleneck pace creates waste, not value. If the bottleneck produces 34 units/day, upstream stations running faster just build WIP piles. That WIP doesn't generate revenue—only finished goods sold do. Better metric: Focus on bottleneck utilization (should be 95%+) and system throughput (units shipped), not individual machine utilization. Non-bottleneck idle time means proper flow. Forcing 100% utilization everywhere destroys flow and increases cost (WIP inventory, handling, obsolescence). Accept that non-bottlenecks will be underutilized—that's efficient system design.
How do I calculate the ROI of breaking a bottleneck?
Every unit of bottleneck capacity increase = one additional finished unit = full throughput profit. Formula:ROI = (Additional Throughput - Investment Cost) ÷ Investment Cost. Example: Bottleneck currently produces 34 units/day. Adding a second machine increases to 68 units/day. Additional units = 34/day × 250 days = 8,500/year. Throughput per unit = R300. Additional annual throughput = 8,500 × R300 = R2.55M. Machine cost = R1M. ROI = (R2.55M - R1M) ÷ R1M = 155% first year! Payback = 4.7 months. Key point: Unlike other investments, bottleneck improvements have guaranteed ROI because demand exceeds capacity. You're not hoping to sell more—you already have orders you can't fill. Breaking the bottleneck directly increases revenue.
What happens after I break the bottleneck?
A new bottleneck emerges! You've shifted the constraint to a different resource. Process: (1) Improve Station B from 34 to 68 units/day. (2) Now Station C (capacity: 52.8) becomes the new bottleneck. (3) System throughput increases from 34 to 52.8 units/day (55% gain). (4) Apply TOC's Five Focusing Steps to Station C. (5) Eventually, you may reach market constraint (you can produce 200 units/day but only have demand for 100)—then shift focus to sales/marketing.Important: Don't add capacity everywhere at once. Find bottleneck → exploit → subordinate → elevate → repeat. Sequential improvements are more cost-effective than simultaneous upgrades. Theory of Constraints is a continuous improvement philosophy, not a one-time fix.
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