# Bottleneck Improvement Throughput Gain Calculator

> Source: https://netray.co/tools/bottleneck-improvement-throughput-gain-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Find the real system throughput and annual value from improving the constraint, including when the next resource takes over.

## Category

mes-shop-floor

## Industry

Discrete Manufacturing

## Audience

- Plant manager
- Operations manager
- Industrial engineer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Bottleneck rate

**Key:** bn_rate

**Type:** number

**Default:** 48

**Min:** 0

**Step:** 1

**Unit:** units/hour

**Help:** Sustained good output per hour of the current constraint.

#### Next slowest resource rate

**Key:** next_rate

**Type:** number

**Default:** 55

**Min:** 0

**Step:** 1

**Unit:** units/hour

**Help:** The resource that becomes the constraint when the bottleneck improves.

#### Improvement on the bottleneck

**Key:** improve

**Type:** slider

**Default:** 10

**Min:** 0

**Max:** 60

**Step:** 1

**Unit:** %

#### Running hours per week

**Key:** hours_week

**Type:** number

**Default:** 100

**Min:** 0

**Step:** 5

**Unit:** hours

#### Production weeks per year

**Key:** weeks

**Type:** number

**Default:** 50

**Min:** 1

**Max:** 52

**Step:** 1

**Unit:** weeks

#### Throughput per unit

**Key:** tput_margin

**Type:** number

**Default:** 22

**Min:** 0

**Step:** 1

**Unit:** $/unit

**Help:** Selling price minus truly variable cost (materials, freight), as in throughput accounting.

**Outputs:**

#### Bottleneck rate after improvement

**Key:** new_bn

**Expr:** bn_rate * (1 + improve / 100)

**Format:** decimal

#### New system rate

**Key:** new_sys

**Expr:** min(new_bn, next_rate)

**Format:** decimal

**Description:** The line runs at its slowest resource.

#### Real gain

**Key:** gain_rate

**Expr:** new_sys - bn_rate

**Format:** decimal

**Primary:** true

**Description:** Units per hour.

#### Improvement wasted

**Key:** wasted

**Expr:** new_bn - new_sys

**Format:** decimal

**Description:** Capacity added at the old bottleneck that the next resource cannot absorb.

#### Extra units per year

**Key:** gain_units

**Expr:** gain_rate * hours_week * weeks

**Format:** integer

#### Extra throughput per year

**Key:** gain_value

**Expr:** gain_units * tput_margin

**Format:** currency

**Primary:** true

#### Improvement before the constraint moves

**Key:** headroom

**Expr:** max((next_rate / bn_rate - 1) * 100, 0)

**Format:** percent

**Chart:**

#### Annual throughput gain vs bottleneck improvement

**Type:** line

**X:** improve

**From:** 0

**To:** 40

**Steps:** 21

**Series:**

- gain_value

**Disclaimer:** Assumes demand exists for the extra output and that upstream supply and downstream capacity can feed the improved rate.

## Content

**Intro:** Improving a machine that is not the constraint adds cost, not output. Improving the real constraint helps only until the next resource becomes the limit. This calculator shows the true system rate after a bottleneck improvement, the part that is wasted, and how much improvement you can make before the constraint moves.

**Sections:**

#### How to use it

**Body:** Enter the sustained good output rate of the current bottleneck and the rate of the next slowest resource, for example the next work center on the routing. Set the improvement you expect from a project: a faster cycle, less downtime, or a second shift of support. Add running hours, weeks and the throughput per unit. The calculator reports the new system rate, the gain in units per hour, and the annual value. The headroom output tells you how far you can push before the constraint moves elsewhere.

**Bullets:**

- Use sustained rates that include downtime, not nameplate
- Identify the next resource from the actual routing
- Use throughput per unit, not full absorbed margin

#### Theory of constraints logic

**Body:** In a serial line the system rate is the minimum of the resource rates. Goldratt's five focusing steps say to identify, exploit, subordinate, elevate and then repeat once the constraint moves. This tool models the elevate step. New bottleneck rate is the old rate times one plus the improvement. The new system rate is the lower of that and the next resource rate. The gain is the difference from the old rate. Anything above the next resource rate is wasted until that resource is also improved.

#### Worked example

**Body:** The bottleneck runs at 48 units per hour and the next resource at 55. A 10 percent improvement lifts the bottleneck to 52.8, below 55, so the full 4.8 units per hour is real. Over 100 hours a week and 50 weeks that is 24,000 extra units, worth about 528,000 dollars at 22 dollars of throughput each. Try a 25 percent improvement: the bottleneck would reach 60, but the system is capped at 55, so 5 units per hour are wasted and the gain is 7. Headroom is about 14.6 percent.

#### Common mistakes

**Body:** Teams often improve the machine with the most visible problems instead of the one that limits output. Another error is using full margin per unit rather than throughput, which makes labor and overhead look variable. Also, a bottleneck can shift with product mix, so check the mix before assuming one constraint all year, and keep a buffer in front of the constraint to protect it from upstream variation.

**Bullets:**

- Confirm the bottleneck with queue and utilization data
- Check whether the constraint changes with product mix
- Protect the constraint with a time buffer

**Cta:** If routings, work centers and capacity live in your ERP, we can help build a read-only view that flags the current constraint and its next resource.

**Faq:**

#### How do I find my bottleneck?

**Answer:** Look for the resource with the highest utilization and the largest queue of work in front of it. Compare rates along the routing: the lowest sustained good output rate is usually the constraint.

#### Why does a bigger improvement add nothing?

**Answer:** Once the improved bottleneck runs faster than the next resource, the next resource limits the line. Extra capacity above that rate cannot be used until you improve the new constraint as well.

#### What is throughput accounting?

**Answer:** A TOC method where throughput equals sales minus truly variable costs, usually materials. Labor and overhead are treated as operating expense that does not change with small output changes.

#### Does this work for non-serial processes?

**Answer:** Not exactly. Assembly trees and parallel routes have several paths, so the minimum applies to each path. For quick estimates, apply the tool to the critical path only.

## Search terms

bottleneck throughput calculator, theory of constraints calculator, constraint capacity improvement, throughput gain bottleneck, bottleneck cost per hour, line balancing bottleneck, drum buffer rope calculator, system throughput min of resources

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