Growth and the Bottleneck Effect
Make sure each area of your business is in sync
By Aaron Cargas
Date Published: 4/1/2017

Imagine each area of your company as a throughput machine, churning through work at a certain rate. Each area doesn’t or shouldn’t stand alone. They all interact and provide information to each other so they can each keep going. Certain departments depend on other departments and when the throughput isn’t balanced it causes problems. Yet in a growing company, the throughput is almost never balanced. There’s always a bottleneck in one or more departments and it constantly moves around. The question is how severe that bottleneck is and what do you do about it.

As an example, let’s say the wizards on your marketing team just figured something out. Maybe a very well placed marketing campaign happened at the right time and produced a large batch of new leads. All those leads went to the sales team who was already busy and understaffed by one person due to some turnover. The sales team was temporarily overwhelmed, but they love good leads and they love to beat their sales targets so their leader painted her face like Mel Gibson and called a Braveheart meeting in the cafeteria to rally the troops to work harder. They all left the meeting yelling FREEDOM, which didn’t really make sense, but then they closed a whole bunch of new sales.

The orders were layered onto the production schedule at a time when they had already been running at close to 90% capacity. When the product manager found out how many specific dates were promised to customers, he inadvertently crushed his Styrofoam cup in his hand and spilled lukewarm coffee all over his khakis. Now they are at 110% capacity and paying overtime to get the work done. 

Simultaneously the orders hit the purchasing department who scrambled like crazy to get the raw materials in. The purchasing manager quickly got the purchase orders sent out, but then got so frustrated by back orders, she kicked in the metal trashcan in the corner of her office. After wrangling up some rush shipping and cajoling her vendors, she finally got what she needed.

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