From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Bottlenecks

Bottlenecks

From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Bottlenecks

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- The next area I want to talk about is the idea of bottlenecks, and the money that you spend on non bottlenecks being wasted. So let's imagine that you've got a process that just has three stages. And the first stage of your process, and this might be coping with orders coming in, or it might be cutting material, or it might be going out to see customers, whatever it is. The first stage of your process you can cope with, let's call it 10. This might be 10 people an hour, 10 people a week or whatever, I'll just call it 10 okay? The second stage can only cope with seven. And the third stage can cope with 12. So we've got 10, 7, 12. Now, how many people can you deal with per hour or per week? And the answer is, you're limited to the bottleneck, aren't you? You're limited to seven because the second part of your process can only cope with seven per week or per day, whatever we are measuring. So we're limited to only seven. Okay, that's the first thing to realize. So if you can work out…

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