Glossary · Management

Bottleneck

The step in a process with the least capacity relative to demand. It limits the output of the whole process, so improvement elsewhere does not raise throughput.

Field: Management
Examined in: CBA-COM, CBA-FPA
Learning objectives: 2

Where the CBA Standards examine it

Operations ManagerCBA-COM

1.3Calculate process performance figures from mapped data, including cycle time, lead time, first-pass yield across sequential steps and the location of the bottleneck.Process Design and Improvement

FP&A ProfessionalCBA-FPA

1.3Sequence the activities of an annual planning calendar and a monthly close-forecast-report rhythm, identifying dependencies and common bottlenecks.FP&A Foundations and the Planning Cycle

In the specimen paper

CBA-COM · 06Capacity, Demand and Flow

At a Penang circuit-board assembler, reflow is the constraint and pulls 60 boards a minute. The buffer conveyor ahead of it holds 1,800 boards. The feeding step stopped for 50 minutes on Tuesday and for 20 minutes on Thursday; it runs 25 per cent faster than reflow pulls, so the buffer was full again before each event. Contribution is USD 3 a board. What did the two stoppages cost?

Answer

USD 3,600, from the 20 minutes that outran the buffer on Tuesday

Why that is the answer

Only time lost at the constraint is lost to the business; time lost upstream costs nothing until it outlasts the protection between the two. Convert the buffer into minutes of cover before doing anything else: 1,800 boards against a pull of 60 a minute is 30 minutes. Then test each event separately against that cover, because the buffer refills in between, so Tuesday's 50-minute stop starves reflow for 20 minutes at 1,200 boards and USD 3,600, while Thursday's 20 minutes is absorbed and costs nothing. Sizing buffers in minutes of constraint cover rather than in units is what makes this arithmetic obvious on the shop floor.

The CBA-COM specimen paper

CapacityManagement: The maximum output a process, resource or organisation can produce in a period under normal conditions.
ThroughputManagement: The rate at which a process produces finished output, set by its bottleneck.