Bottleneck
The operation or resource in a production process that limits overall system throughput because it has the lowest capacity or longest cycle time. Identifying and managing bottlenecks is critical because improving non-bottleneck operations does not increase total system output.
RELATED TERMS
Throughput
The rate at which a manufacturing system produces finished goods, typically measured as units per hour or per shift. Throughput is determined by the system's bottleneck operation and represents the actual productive output that generates revenue.
Cycle Time
The total elapsed time required to complete one unit or one cycle of a production process from start to finish. Cycle time includes processing time, wait time, and move time, and is a critical metric for capacity planning, scheduling, and identifying improvement opportunities.
Capacity Utilization
The percentage of available production capacity that is actually being used to produce goods. Capacity utilization helps managers understand how efficiently resources are being employed and whether additional capacity is needed or if existing capacity could handle more volume.
Work in Progress
Partially completed goods that are still in the production process, representing materials that have entered manufacturing but are not yet finished products. WIP is tracked as a current asset on the balance sheet and includes the costs of raw materials, labor, and overhead invested in unfinished items.
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