Theory of Manufacturing Constraints
                     Manufacturing  Bottleneck  Management  101:
Based on
THEORY OF CONSTRAINTS
Arnold Labares
15 May 2015
INTRODUCTORY WISDOM:
 “the goal of any manufacturing organization is to make 
money.” 
  Driving mechanisms (among others):
 Cost-effective purchasing
 employing good people
 high technology
 producing quality products
 selling quality products
 capturing market share
 Communications
 customer satisfaction
 “any action that contributes to making money is productive”
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DEFINITIONS:
 BALANCED PLANT – a plant where the capacity of each & every 
resource is balanced exactly with market demand
 BOTTLENECK – any resource whose capacity is equal to or less 
than the demand placed upon it
 THROUGHPUT – the rate at which the system generates money 
thru Sales
 INVENTORY – All the money that the system has invested in 
purchasing things which it intends to sell
 OPERATIONAL EXPENSE – All the money that the system spends 
in order to turn INVENTORY into THROUGHPUT
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THE GOAL (IN A NUTSHELL):
“Increase the THROUGHPUT (“Incoming money”)
while simultaneously reducing
both INVENTORY (“money still stuck inside”)
and OPERATING EXPENSE (“money going out”).” 
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OPTIMIZING BOTTLENECKS:
 Offload bottleneck workload to other processes if possible (i.e. other 
internal modules, subcons)
 Ensure ONLY good quality materials input on bottlenecks (i.e. high 
inspection rate of upstream process)
 “If you scrap a part before it reaches the bottleneck, all you have lost is 
a scrapped part.  If you scrap the part after it’s passed the bottleneck 
you have lost time that cannot be recovered.”
 Ensure process controls on bottleneck parts are very good, so these parts 
don’t become defective in later processing (i.e. use of “express lanes” [i.e. 
color-code prioritization] for bottleneck parts)
 Communicate to everybody in the plant which parts are critical
 Maximize utilization of bottleneck processes (i.e. machines running even 
during operators breaks)
 Find enough capacity for the bottlenecks to become more equal to demand 
(i.e. re-commission obsolete machines for bottleneck parts, subcons)
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OPTIMIZING BOTTLENECKS (Continued):
 Put best human resource on bottleneck processes
 ‘Stealing’ people from non-bottleneck to bottleneck process is fine for 
as long as overall plant flow is maintained
 Typical ways a bottleneck time is wasted:
1. Bottleneck process sitting idle during breaks.
2. Processing parts which are already defective.
3. Working on parts that are not on current demand.
 How excess inventory (see THE GOAL Rule # 2) is typically generated 
(example):
Non-bottleneck process (i.e. Bottleneck process (i.e. flow-
more capacity) determining capacity)
 “When you make a non-bottleneck do more work than the bottleneck, you 
are not increasing productivity but the exact opposite – making excess 
inventory”
 How to better control/prevent excess inventory (see THE GOAL Rule # 2) 
(example):
 There’s wisdom on designing bottlenecks (if identified early) at upstream 
processes
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OPTIMIZING BOTTLENECKS (Continued):
 Find ways to release material at which bottlenecks need them – and only 
strictly at that rate . . . typically achieved by:
 Minimizing feed batch sizes
 Timing feed batch issuances
 Utilizing & Activating a resource are not synonymous.
 “Utilizing” means making use of the resource in a way that moves the 
system toward the goal
 “Activating” a resource is like pressing the ON switch of a machine; it 
runs whether or not there is any benefit to be derived from the work 
it’s done
 WISDOM: “Activating non-bottlenecks to their maximum operating 
capacities is an act of maximum stupidity”
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OPTIMIZING BOTTLENECKS (Continued):
 Time characteristics a material spends inside a plant:
1. Setup time – time the parts spends waiting for a resource, while 
the resource is preparing itself to work on the part (i.e. typical for 
machine shops)
2. Process time – the amount of time the part spends being 
modified into a new, more valuable form
3. Queue time – time part spends in line for a resource while the 
resource is busy working on something else ahead of it
4. Wait time – time the part waits, not for a resource, but for 
another part so they can be assembled together
 Setup time & Process time are a small portion of total elapsed time 
for any part
 Queue time & Wait time often consume large amounts of time
 Queue time is the dominant portion for parts going thru bottlenecks
 Wait time is dominant portion for parts going thru non-bottlenecks
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OPTIMIZING BOTTLENECKS (Continued):
Clash of objectives/measurements:
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WISDOMS ON BOTTLENECKS:
 “The key is to make the flow through the bottleneck equal to or 
slightly less than demand from the market.” 
 “Bottlenecks are not necessarily bad – or good.  They simply are a 
reality.” 
 “Adjust capacity so the bottleneck is at the front of production.” 
 The capacity of any plant is equal to the capacity of its bottlenecks.
 “To increase capacity of the plant is to increase the capacity of only 
the bottlenecks.” 
 “Lost time on bottlenecks is lost throughput (mortal sin).”
 Lost time on non-bottleneck processes do not hurt
 More idle time actually are expected on non-bottlenecks
 “Entire bottleneck concept is not geared to decrease operating 
expense; it’s focused on increasing throughput.” 
 “Every organization should be viewed as a chain.  Since the strength 
of the chain is determined by the weakest link, then the first step to 
improve an organization must be to identify the weakest link; or 
links.” 
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THE OGROYA OL MF CEOTHNOSTDROALIONGTSY:
1. IDENTIFY the system’s cbonttslternaeinctk((ss))
2. Decide how to EXPLOIT the cboonttslternaienctk(s(s))
3. SUBORDINATE everything else to the above 
decision
4. ELEVATE the system’s cbonttslternaeinctk((ss))
5. WARNING! If, in a previous step, a bottleneck 
hcaosn sbteraeinn tbroken go back to step 1.
           But do not allow INERTIA to cause a  
___system’s constraint.
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GENERAL DAY-TO-DAY WISDOMS:
 “Common sense is not common at all.”  – Mark Twain
 “We refer to something as common sense only if it’s 
in line with our intuition.” 
 “There is so often a need for an external trigger 
to help us realize something that we already 
know intuitively.” 
 “These intuitive conclusions are masked 
by something else, not common sense but, 
typically common practice.” 
 “Rome was not built in one day.” 
 for some companies THE GOAL improvement process 
takes at least 6 months.
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Q & A / OPEN FORUM:
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Arnold Labares
[email protected] 
[email protected]
arnielabs
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