When talking about production flow, “bottlenecking” refers to certain points where everything slows down compared to the activity that preceded it. A simple example would be a conveyor belt that delivers products down to where packers box and ship them. If the conveyor belt delivers more product than the packers can handle, the result is a bottleneck as everything slows down to match the speed of the packers. In terms of warehouse efficiency, bottlenecks are highly undesirable and impact productivity and morale.
Causes of Bottlenecks
A bottleneck happens whenever a given point on the chain can’t handle the volume flowing into it. This can happen for a variety of reasons, but there are some more common culprits that can be pointed to.
Manpower: Even as technology helps make supply chains more automated, they are still reliant on human involvement. If warehouse workers are improperly trained, inefficient, or don’t have easy access to the right tools, their parts of the shipping process will stall and slow down the entire operation.
Technology: As mentioned, technology is becoming a more integral part of the supply chain. This does not mean, however, that technology is faultless. System compatibility, speed, and downtime issues can all result in short- or long-term bottlenecks that negatively impact productivity across the line.
Organization and Layout: Warehouses have a great deal of inventory within them but not all items are equally accessible. If a warehouse is disorganized or has an inefficient layout, employees will end up wasting time and potentially creating delays in the process
Identifying and Solving Bottlenecks
The good news is that a bottleneck is not normally a hard thing to identify. By observing how orders are processed and filled, talking to employees, and looking for areas where traffic slows, you can find vulnerable points along the chain of activity. This requires a commitment to efficiency and a careful eye but, in most cases, should be something capable of being handled in house. Once your bottlenecks are identified, you can begin taking steps to remedy them.
Manpower: Improving training or altering procedures so that employees can operate more efficiently is one approach to solving bottlenecks. If special equipment is commonly employed, make sure it is readily on hand. Access to key areas or systems should be similarly easy. While security and safety should not be discounted, it is important to make a rational assessment of what is and is not required. Sometimes the problem is simply not having enough hands on deck. In that case, hiring more employees may be the best option.
Technology: If the bottleneck is found to involve parts of your system that can be accessed only by specific employees (like those with admin privileges), consider expanding the pool of applicable workers. Finding ways to improve speed, clarity, and communication between the used programs can also help cut down on wait times.
Organization and Layout: The most purchased products should be the most easily accessible. Shelves should also have some form of order to them so that items can be quickly found or placed. Lanes of traffic need to be kept clear and, if necessary, widened to allow for greater volumes. Think of the warehouse as a series of city streets and look for ways to keep the traffic flowing.
Effects of a Bottleneck in Warehousing
Failure in Production and Efficiency
A slowing in production and efficiency is perhaps one of the most devastating effects of bottlenecks. An example would be that if a receiving department isn’t well trained or is understaffed, distribution can be slowed dramatically. Slow movement at the receiving department leads to the processing department not being to access inventory. The result is that customers have to wait longer to receive their orders, which negatively impacts customer’s experience.
Failure in Inventory Management
There’s a lot that goes into inventory management. Something as simple as rearranging your warehouse set-up can have a significant impact on things like production time and pick-and-pack efficiency. Keeping complimentary items close together along with stocking products that are picked frequently in an accessible location are just a couple ways to prevent bottlenecks in inventory.
Impact on Supply Chain Management
It only takes one misstep in the supply chain to cause a bottleneck that holds up the preceding departments. Storage areas can quickly overflow with products being held up or needing completion while employees must stand by before being able to continue their work. These inefficiencies are particularly detrimental to companies with food or agricultural products that have short shelf lives.
Frustration in Employees
Unnecessary idle time for employees often leads to grumbling and frustration. Employees who are involved in the bottleneck worry about doing their jobs correctly. Other employees further down the line are upset their work has been delayed and begin questioning the capabilities of managers and the technology being used, especially if bottlenecks continue to happen frequently.
Impact on Profitability
A bottleneck means some part of the operational process has stalled. Out of all of the potential repercussions, the impact on profitability becomes one of the most harmful. Either of the effects mentioned can have a short-term impact on profitability because products aren’t being made, stored, or distributed efficiently. What’s worse is that bottlenecks disturb the relationship with your customer, which can lead to a negative long-term impact on profitability.
APS Fulfillment, Inc. is a Miami-based specialist in direct mail marketing and warehouse fulfillment. We’ve stored, sorted, and delivered products of all shapes and sizes for all kinds of companies. Contact us by phone at 954-582-7450 or by email at [email protected] to learn about more ways third-party warehousing and fulfillment services can support and grow your business.