The Bottleneck Principle in Business

The Narrow Neck or Bottleneck principle in business consulting refers to the weakest link in a company, which limits its growth and development. This bottleneck could be a lack of funding, errors in the operation of one of the employees or departments, limited access to markets, and much more.

Origin

The bottleneck principle stems from the Theory of Constraints, developed by American economist Eliyahu Goldratt. This topic is thoroughly explored in his books “The Goal” and “The Goal 2.0”.

How It Works

Imagine a network of roads with a flow of cars. This network includes wide highways and narrow alleys. Despite the size of the highways, the speed of traffic is determined by the narrow sections, such as intersections with limited passability. Thus, the capacity of the road system depends on its most limited sections. Similarly, in business, the weakest link determines the efficiency of the entire company.

Improving Your Company with the Bottleneck Principle

To ensure this principle isn’t just theory, a specific action plan is needed. Here’s how to use the bottleneck principle to enhance your company’s efficiency:

– Analyze the stages of the business process.
– Identify the least productive stage at the moment.
– Adjust and optimize that specific process.

For instance, if the problem is that production manufactures low-quality furniture, then no matter how stylish and well-designed the website is, sales won’t be high.

Important! It’s necessary to eliminate bottlenecks not with temporary methods but with permanent ones that won’t create future problems and will accumulate resources.

It’s also important to note that bottlenecks exist in all processes. Therefore, once one system is streamlined, it’s time to move on to identifying the next weakest link in the company.

Why This Method

The uniqueness of this principle is that it is applicable to almost any business process, from analyzing business strategy to writing a resume.