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Mar 7th, 2017 Share: Share on Twitter Share on Facebook Share on LinkedIn

The Bottleneck Effect

In manufacturing there is something called “The Bottleneck Effect” (or more academic: Theory of Constraints). The idea is that you typically find a bottleneck somewhere in your supply/manufacturing chain — a machine which doesn’t keep up with the inputs, a delivery choke point, a laborious process slowing down the line…

When you find yourself in such a situation, it is your job to hunt down the bottleneck (or constraint), eliminate it and then be on the lookout for the next one (as they typically come in multitudes — once you fixed one, you find the next one). Keep doing this over and over and you will have a highly optimized system on your hands.

This has been beautifully described in the book “The Goal” (which I highly recommend for anyone who works in manufacturing and/or supply chains).

Now here is where this comes in handy for all of us: We often find ourselves in situations where we are overwhelmed with options of what to do next and have a hard time deciding what we should do next. Focus on fundraising or building the product? Marketing or infrastructure? Hiring or sales calls?

Determine what your critical path is (for example: If we don’t raise some funding within the next 6 weeks, we have to file for bankruptcy), look at the logical chain of events (first we need to create the deck, then test it with some folks, then reach out to investors) and identify your bottlenecks in the process. Now focus on getting these constrains removed so that your work can flow… Once you do this, focus on the next bottleneck.

Working with entrepreneurs over the years I find that this often helps clarify what is truly important and what can wait (a bit).

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