Increasing the productivity of your business: identify the bottleneck!
It may be that your business is already facing a phase of productive stagnation, but you are not sure why this is happening, after all, demand exists. Why does it happen? How to identify this problem? Or rather, how to handle it properly? Those who believe that only industrial processes can suffer situations of productive strangulation are mistaken. All sectors of the labor market may have to deal with this diminished flow of business performance, so learning about it is essential to implement improvements - including technological ones - in your business management.
After all, what is a bottleneck?
You may have heard the expression “bottleneck” at some point in your life, and in the business world we are not talking about a metaphorical representation of this fact: if in the bottle the speed at which the liquid comes out is limited by the bottleneck, in the company the demands exist, but the capacity to meet them is diminished. That said, the bottleneck is a stage in the production process that limits business performance of your activity, being closely linked to productivity. Every process has several steps or phases, correct? One of these will be the one corresponding to the productive limit of business activity, that is, it is that moment or process that has the least productive capacity and, thus, makes it impossible for the company to act sufficiently to meet its demand. Do you want to know an example of this? Okay, Clicksign tells you one that is very clear to understand this concept of chokehold: In times of social isolation, people still need to maintain communication and close deals, but remotely (including Remote work And the Remote selling are growing more and more every day!). Let's say that you work as a contract lawyer and, as is well known, the signature of the parties is a necessary requirement to enter into any legal transaction; but the problem stems from the fact that physical encounters are not allowed, or at least are avoided. Precisely the final phase of your action has a fart: there is demand, but you do not have the capacity to comply with it. Do you understand how this concept applies in practice?
How does the bottleneck impact your business?
This restriction on the execution of a production process (whatever it is, regardless of what phase it is in) negatively impacts your business, after all, it turns out to be a development limiter. If, as in the case above, you need to close a legal deal, complete a sale, or even have fluid and efficient logistics to have a better result, a restriction in any of these sectors will directly affect your ability to deliver what you promise. What remains, then, is to implement improvements at this stage of the process so that the whole process can proceed harmoniously.
Does a business need to be unrestricted to be successful?
It is neither feasible nor possible to make such a statement in general, nor to say that only companies that do not have any bottlenecks are successful in business. The neck doesn't always have to be a headache, believe me. Every process has restrictions and will always be restricted. Don't get caught up in this type of perfection. It will only be a real problem that requires solutions, when you have more demands than you are able to meet. Do you have more customers than you can handle at the moment? Perhaps the limit is precisely the need to hire employees or business process automation, for example.
How to identify the bottleneck in the production process?
In some cases, identifying an unplanned production limit is quite simple and even intuitive, as in the example given at the beginning of the text. You know what is “matching” the development of your top, middle, and bottom of the funnel production processes. In other cases, however, the analysis of the problem and the resulting determined solution are not so crystal clear. For these cases we have tips:
- evaluate your inputs and outputs: is your business producing in line with what it is making a profit? Is the amount of “hands” sufficient for the proper development of the activity? Are employees qualified? Are there business closings? And if there isn't, why?
- Map the value flow of your services: what activities, steps, or processes add to your business and which don't? This according to the internal (company) and external (consumer) point of view;
- Look for the specific cause of the problem: in the phase above you identified possible bottlenecks, but it is then necessary to better unravel each of them and identify which one is in fact a real problem;
- Draw up an action plan to resolve the bottleneck: the restriction has already been identified, so to resolve the limitation it is necessary to draw up strategies with clear objectives; after all, you want your company to return to optimized productivity it is for (tip: use the 5w2h and PDCA tools);
- implement key performance indicators: if what is not measured cannot be managed, then better than having to solve bottleneck after bottleneck, how about opting for a constant improvement in the value stream (KPI's)?
Theory of restrictions: 5 steps to improve the productive bottleneck
When it comes to the topic of bottlenecks, it is impossible not to also mention the theory of restrictions. Anything that impedes the full activity of a company or that restricts the movement of business activity towards pre-established objectives, is a bottleneck. Thus - and according to this philosophy -, there are 2 types of restrictions: physical and non-physical. The former are related to resources (machinery, equipment, facilities, systems, etc.), while the latter are related to product demands, corporate procedures, etc. If the objective is profit and this has not been achieved, it is obvious that there are limitations to it.Three performance indicators that make it possible to evaluate productive operations:
- business profitability;
- operating expenses;
- stocks;
Once the results of each indicator have been analyzed and annotated, the time has come for apply and implement the theory of constraints:
- identification of the restriction;
- calculation of business profitability;
- subordination of business stages to the bottleneck (before it: pulled control; after it: pushed control);
- break or increase the activity restriction;
- identify the new system restriction if the previous one has been broken.
All of this, if applied correctly and specifically for each business, will bring permanent results to the company, such as increasing profits, correcting faults and optimizing production capacity. Um ERP It would help a lot here, okay? And that exemplification at the beginning of the text, do you remember her? How to solve the limitation of physical signatures in contracts? The answer is simpler than you imagine: contracting the services of a secure, encrypted and virtual electronic signature platform. Contract closures will no longer be a problem, and so will profit. And if you seek legal validity in this act, learn about the digital signature by means of a digital certificate. It is worth reading about online real estate contract signatures: digital integration. Have you noticed how bottlenecks can also be present in activities that do not involve the industry? In any case, don't leave your company hanging in the past, without knowing how to develop improvements for your business: invest in the technologies of the future that Clicksign offers!
