How to estimate the impact of removing bottlenecks in Excel
Originally published: 27/12/2019 12:39
Publication number: ELQ-46093-1
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How to estimate the impact of removing bottlenecks in Excel

I will show you how to estimate the impact of removing the bottlenecks on profits. We will explore 3 different ways.

Description
In many cases you can improve the capacity of a process by removing bottlenecks, improving the usage of the machine (OEE – Overall Equipment Efficiency) and increasing production per 1 hours. In this Excel you will see how you can analyze what makes more sense and what will be the impact on Profits, given that sometimes you have to invest additional money into tools, people, machines. In this Excel we consider a production process that consist of 3 stages. Every product has to go through each and every state.

We start by looking at what can be produced currently (current capacity). We produce 432 tons of products and the bottleneck is in Stage 1.

In Scenario 2 we consider increasing the usage of the machines in Stage 1 (where the bottleneck is)

In Scenario 3 we consider increasing productivity per 1 hour again for Stage 1

In Scenario 4 we consider increasing number of shifts for Stage 1.

In Scenario 5 we consider implementing all changes.
Some of them changes require money (Capex and Opex). You will see how the production will change and what will be the impact on the Profit of the firm. I will also show you how you can present the growth in capacity on charts

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  • Terrence Lewis(last updated: 16/03/2020 19:28)
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