Bottlenecks in Your Business Systems are Sucking Profit!
I’m late! I’m late! My foot is pressing the gas pedal as I haul down the freeway five-miles-per-hour over the speed limit (OK, maybe ten). If everything goes well, I will hit the green lights in town and arrive just in time for my appointment…. Oh no, a flashing light! Traffic is slowing. I can see the lanes merging ahead. I’m dead!
I just encountered a traffic bottleneck that has slowed me to a crawl.
If a warning light flashed at every point in your business where things were slowed down or waiting around to be worked on, you might be surprise by the number of bottlenecks in your operation. From an overflowing in-basket, to a stalled pallet of work-in-process, to a database of sales leads waiting follow-up, you could have profit killing bottlenecks lurking everywhere.
What is a Bottleneck?
Let's take a closer look at this system "bad boy." A bottleneck is any step in a process whose capacity is equal to or less than the demand placed upon it; it’s not keeping up.
Bottlenecks are constraints that limit a system’s output. They can be physical and non-physical. For example, a physical constraint could be the capacity of a piece of equipment, limited space, or clutter. A non-physical constraint might include a company policy, negative attitudes of employees, or limited product demand.
What is Your Throughput?
Bottlenecks in your business determine the speed at which you get things done—the throughput. These system-busters set the pace for the whole company, and if not addressed, they will not only slow sales, cash flow and profit, but they can bring your business to its knees.
In my experience, insufficient sales are often the major constraint on the throughput of many small businesses. No matter how efficient the operation, without a steady flow of sales into the pipeline, the output is always disappointing.
Remember: The key is not just to eliminate the bottleneck step of a particular system, but to elevate the performance of any system in the operation that constrains the throughput of the entire business.
Can People Be Bottlenecks?
We all know a bottleneck when we encounter it. Ask any employee and they will quickly point them out. Sometimes we even feel frustrated with a person we think is a bottleneck. However, look for problems within the system before you blame people. More often than not, the person will perform better once YOU improve the business system. If the person is still not a good fit for the job, make a change.
What’s Holding You Back?
Now look at your goals. Then ask yourself, Why haven't I reached my goals? What specifically is holding me back? What are the obstacles or bottlenecks in my business systems? How can I increase sales throughput?
A little attention to eliminating bottlenecks can pay big dividends. Open your lanes of traffic and watch sales and profit hit the accelerator!
The best is yet to come. Let's get started...