Bottleneck: a critical point in the supply chain.
The supply chain is the connection point between the factory and the end customer and is the direct connection, which gives the Supply Chain importance of great dimension. So that everything goes smoothly we must try by all possible means, away from the dreaded supply chain bottlenecks.
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What is meant by bottleneck?
The bottleneck is one of the risks to which the entire supply chain can ever face. It is understood bottleneck to those processes that slow down the total supply chain. To understand this better let’s see an example. From the production plant to the end customer, the cast consists of two phases: A and B. The phase distribution A can deliver 100 units per hour, while phase B can do the same but only throwing the cast 50 units per hour. If A is maximum performance, B can never absorb the production of A, so that between these two points will originate what is called a bottleneck.
The bottleneck can occur by several factors may be divided into two groups: human factors and mechanical factors. In the case of human factors, poor preparation or poor workers know how the processes by employees can cause problems in the supply chain, reaching to slow down the entire operation of this. Meanwhile, on the mechanical side, the machines can also affect the development of the supply chain. Stoppages and unexpected equipment failure due to lack of maintenance can make production and distribution to get stuck until these problems are solved.
A bottleneck is not located and treated early can mean major losses for the company. On the one hand, costs can be increased because, storage costs from one phase to another will rise as the bottleneck is larger. Moreover, the ability to deliver orders would be diminished, making the waiting time to receive the product increase, Finally, if it is not located in time the focus of the bottleneck will be wasting the production capacity that phase or phases in which the whole process fincione correctly.
How to combat the bottleneck?
The first rule to combat the bottleneck in solving Supply Chain is to go one on one possible sources of problems that lead to failures that cause bottlenecks.
The first step is to locate at what point in the supply chain failures originate and see why occur these problems, put another way, see what kind of restriction, whether personal or machinery, affects the proper conduct of the Supply Chain .
Once you locate the source of the problem two alternatives arise:
- The first one is to make the rest of the supply chain from being made subject to such failure. That is, it could lower the level of distribution and / or production of all phases, so that supplies flow continuously without causing clogging. This solution implies a lower direct cost to the company, because it is not invested in solving the problem, but involves a more indirect cost because is not working to full capacity could work with consequent monetary losses.
- The other alternative is to act on the ruling until it clicks solved. Well investing in improved staff skills or replacing other machinery to work based on business needs supply. With this, direct investment will be higher because you have to make a prior financial outlay, but on the other hand, the return on investment will be faster because you can work at full capacity without jams through.
Once solved this problem, the ideal is retesting the supply chain to see that everything goes as planned and repeat this process for each bottleneck that may arise along the supply chain.