FACULTY OF COMMERCE

MIDLANDS STATE UNIVERSITY

PROGRAMME: BUSINESS
MANAGEMENT
QUESTION: The existence of bottleneck operations has
negative impact on productivity. Demonstrate the causes of
bottleneck operations in a fast moving consumer goods (FMCG)
organization of your choice. Suggest solutions of addressing these.
The existence of bottleneck operations has negative impact on productivity.
Demonstrate the causes of bottleneck operations in a fast moving consumer goods
(FMCG) organization of your choice. Suggest solutions of addressing these.
1.0 INTRODUCTION:
 Bottleneck operation is defined as a process or a step that limits an entire system’s capacity to
produce at its optimum level that results in choking productivity, profitability and growth.

 Cecil C. Bozarth & Robert B. Handfield, (2008) postulates that, bottlenecks can also be referred
to as challenges an organization maybe facing to achieve its intended set production output,
limiting and reducing the capacity of the whole chain.

 Thus a bottleneck is an obstacle/constrain in the process of manufacturing which restricts the

production. It can vary according to time and changes in production process
 Also Bottlenecks, in manufacturing have a wide range of implications that can affect different
areas of a company.

 The major impacts includes delays in deliveries, reduction in quality of products, low
productivity, poor strategic decision making, lack of strategic inventory management, increase
in internal conflicts, shorter inventory shelf life, dissatisfied customers only to mention a few.

 In the present world of competitive business, cost minimization and efficient management of
manufacturing units is not an easy task.

 Always in practice when one problem is solved there comes other new ones or may be old
problems will reoccur with the passage of time.

 All these problems that are constraints of business utilizing various resources in different forms
without adding any value in the system can be commonly called bottlenecks.
 Identifying and removing the bottleneck is critical to any business and it is an ongoing process
which needs to be carried throughout the year in order to utilize resources of production and
maximize a form’s profits

 There are short and long-term bottlenecks. Short-term bottlenecks are temporary and are not
normally a significant problem.

 An example of a short-term bottleneck would be a skilled employee taking a few days off.

 Long-term bottlenecks occur all the time and can cumulatively significantly slow down
production for example an inefficient bottling machine that results in failure to reach set
supply targets.

 Hence this write up serves to express the existence of bottleneck operations, their causes and
ways to ameliorate them with reference to Schweppes Zimbabwe Limited (SZL).
 At Schweppes Zimbabwe Limited (SZL) the key inputs are labor, capital, enterprise and the
transformation processes include materials, information and customer processing which lead
to the principal output of still water, juice drinks, Mazoe orange crush and syrups, can drinks
and jam.

 The transformation process explains an activity or activities that take place within an
organization where value is added to inputs through a production process to create outputs,
which can be specific products or services and there is an existence of bottleneck operations
within the transformation process which impact productivity negatively and this includes:
a. Erratic Key Raw Materials Supply
Owing to the foreign exchange constraints gaps in production, supply and availability of products
in the market are being anticipated and customers are encouraged to be patient with Schweppes as
there is work in progress which will enable Schweppes Zimbabwe Limited (SZL) banking
partners and local and external raw material suppliers to normalize supplies.
This is supported by Rees; D & Purichai; P (2021) that being unable to secure inputs, firms are
slowed or stopped in production, causing order backlogs and blowing out delivery times.
 To do away with erratic key raw material suAlso Mhlanga ; P. in the Business times (2019)
reported that the Coca -Cola company did cut-off supplies due to an estimated 10m debt from
Schweppes Zimbabwe Limited (SZL) thereby disturbing the production its flagship cordial
drink, of Mazoe Orange crush.

 To do away with erratic key raw material supply SZL engaged in: Backward integration

 This is when a company buys or merges with its key raw materials suppliers. This will bar
entrance from competitors and the company will have full control, also owning up on raw
materials payment contracts.

 This is a proactive strategy which guides SZL against price increases and failure of suppliers to
meet their obligation in the long run. For example SZL by Chikwati; E. (2019) articulates that
SZL entered into a Partnership with ARDA (Agricultural and Rural Development Authority)
processing plants were about 10 000 farmers from 62 districts in Mashonaland and
Matebeleland would benefit from the processing plants in Esigodini and Norton.
 The two plants would be processing mangoes, guavas, passion fruit for the local market thus
SZL. Apart from farmers being stuck with their fruits the deal sealed ensured that they have a
market and SZL have suppliers of its materials since the business heavily relies on agriculture.
Inadequate financing
 Production capacity can be highly affected by inadequate finance and this cause improper
flow of materials resulting reduction in overall production capacity and increasing lead time
eluded by SMC Focus, (2012).
 For example , Schweppes Zimbabwe Limited (SZL) in October 2018 could not fully exploit the
market opportunities arising from the limited availability of other beverages because of the
constraint of accessing foreign currency.
 The forex shortages from October 2018 led to a decline of sales in the quarter to March 2019
by 20%, reflecting the fall in aggregate demand due to rising inflation and loss of value of the
local currency.
 Financial Performance improved due to the turnaround performance of processing divisions
thereby being able to fund its operations in a business review (2019) the company expanded
its outreach into downstream agricultural activities through direct cultivation, processing of
fruits and tomatoes and community farming projects.

 It also partnered with funders to support the Sashe Citrus Out grower Scheme in Manicaland
Communal Lands, in Maramani, Beitbridge district where 200 families established a 90 ectare
orange plantation.
Lack of skilled labor
 There has been a high rate of labor turnover at Schweppes Zimbabwe Limited (SZL) because
employees are leaving for greener pastures.

 This has contributed to the bleeding of the company because of loss of key skills results in poor
decisions being made hence resulting in bottleneck operation.
 Recruitment process is not an easy task as it comes with a price and there will be lack of
experience. It is easy to deal with employees who already know the culture and systems of the
organization as compared to someone new. The impact of unskilled labor force leads to poor
strategic decision making.

 More so Schweppes Zimbabwe Limited (SZL) embarked on training and employee education
as a way of mitigating lack of skilled labor for example it trains its own apprentices.

 Since the manufacturing industries are constantly changing where better technologies are
being introduced.

 There is always new technology promising to make manufacturing floors more efficient than
ever.
a. Planning

 Planning is the function of management that involves setting objectives and determining a course of action for achieving those
objectives.

 According to Simbisa Brands’ 2022 annual report, Zimbabwe and Kenya are the organisation’s more developed markets.

 The two countries are focussed on increasing revenue streams through delivery channels and growing the market share through
new store openings.

 Their focus is in penetrating the market in areas that are underserviced such as small towns and high density areas.

 Presently, Simbisa Brands is implementing their plans as many Chicken Inn branches with Drive- thru are being operated and
some are still under construction around the country.

 In 2022, a strategic decision was made to transition Pizza Inn to deliver exclusively on the Dial-a-delivery platform in Kenya in
a way to continue dominating this market segment against competitors through the continued growth of Pizza Inn brand.
 Schweppes should invest in training and employee education as technological advancement is
always changing.

 The skills required for certain tasks and workers will require access to regular training to keep
up with more advanced specialist skills.

 This can only be done through planning to prevent production challenges thus bottlenecks.

Legal

 Legal may refer to actions or situations that are allowed or required by law.
Poor production scheduling

 Process constraints in manufacturing unit has been worsened by quality problems,

insufficient resources, poor plant layout and inflexible processes that are not able to
change according to time and meet demand in the market.

 As expressed by Small business tool kit, (2012), any kinds of problems affecting entire
output of the system are known as process constraints which include poor production
scheduling.

 The use of the Gantt chart production scheduling is a solution to the above cause.

 A Gantt chart production scheduling can also increase the visibility within Schweppes
Zimbabwe Limited (SZL) production operations.

 This chart allows manufacturers to see all of their resources on one screen and provides a
better understanding of how operations affect downstream operations.
 It can be noted that all other activities might be in place but without the support or input of the human resources management
the end product’s value maybe compromised.

 Simbisa Brands presently has a staff compliment of five thousand, five hundred and twenty-seven (5,527) employees.

 Within Simbisa Brands beliefs are “People” who also form their Human Resources, Simbisa Brands believes that it connects
with and employs people who embody the values of the company integrity and accountability.

 People who can be relied upon, people with the resilience to face a highly competitive market and who are passionate about the
Simbisa Brands vision.

 Their Human Resources Management is therefore left with no option but to ensure that the right workforce is recruited,
retained and trained appropriately to ensure that their end product is of value to the end user and greatly satisfies the market.

 Other than recruiting, training and retaining Simbisa Brands HRM’s responsibility lies in remuneration its workforce well and
accordingly to ensure that they remain happy to serve and comply with the organization’s objectives and goals which by and
large help them in the service delivery of an end product that is valuable and keeps them in business.
 Gantt H; L. (1919) believed on his solution a bar chart which showed how work was scheduled
overtime through to its completion.

 Which would enable management to see how well work was progressing and indicated when
and where action would be necessary to keep on time
Running With Obsolete Machinery

 Equipment for manufacturing should meet the current demand.

 Machines and equipment are not that flexible to expand in order to meet future demand
which is being affected by inappropriate planning, breakdown of machine, unavailability of
spare parts, improper maintenance, low level of infrastructure machines and equipment.

 This has become a constraint of Schweppes Zimbabwe Limited (SZL).

Acquisition of advanced Machinery and equipment
 eliminates running with obsolete machinery.

 There is need to buy and install state of the art machinery which will shake off competitors,
add value to existing products and gain significant market share since manufacturing is an
industry in which employees can only be as productive as their tools.

 While innovative machines that are advanced can be costly in terms of initial setup and
training, advanced equipment can have a positive long-term effect.

 Introduction and upgrade of machinery helped Schweppes stay competitive in the market.
For example Schweppes Zimbabwe launched a new production line, installed by German
firm Krones AG, which doubled beverages manufactures capacity as it processes 18 000
bottles an hour.
 This moved Schweppes to launch the new Minute Maid Pulpy Orange in Pet bottle, with
Zimbabwe becoming the only second country in Sub-Saharan Africa after ley Kenya to launch
the product expressed by board Chair Moyo ; S (2018) in the Herald Zimbabwe.

Power outages

 In Zimbabwe, the manufacturing industry has been hit hard by the power outages.

 The power cuts have seen many manufacturing companies lose millions of dollars in lost
production, Schweppes Zimbabwe Limited (SZL) being one of them.

 Load shedding has seen some parts of the country experiencing 12 hour blackouts, disrupting
economic activity from heavy industrial sites resulting in bottlenecks. Rees; D & iPurichai; P
(2021) also supports that when energy
 inventories are at record lows, it leads to blackouts and rationing.

 These, in turn, have weighed on production of raw materials and manufactured goods,
intensifying bottlenecks further

Investing in Maintenance
 helps mitigate power outages

 According to Ubalua (2007) there is a link between the costs associated with downtime and
the time and budget invested in preventive measures.

 While new equipment can boost productivity it also requires maintenance to ensure that it
continues working at an optimum level.

 For example Schweppes Zimbabwe Limited embarked on a 1MW solar plant installation on
the rooftop which is (9000sqm) of its Harare facility which was commissioned on the 29th of
November 2019.
 Lack of automation, equipment capacity and performance

Automation is the handling of repetitive processes via machinery or through software with no critical
input required.

 If too many processes are done manually, there is a danger of human error.

Lack of automation also makes key processes inefficient thereby affecting productivity leading to
dissatisfaction of customers since the quality of products will be affected.

 All these will result in bottlenecks at critical points in the chain. When deadlines become closer, some
managers try to push their machinery and equipment beyond capacity in an effort to meet deadlines.

 This leads to increased wear and tear on machinery which may result in breakdowns and bottlenecks.
 The solution is to Update Production Machine Processes, thus sharing current workflow
problems with production team so as to develop continuous improvement plans for the
manufacturing process.

 This could mean reassigning resources to different areas of the manufacturing floor, managing
budgets or becoming ISO-certified. There is need to systematically evaluate performance and
interpret any appropriate changes.
Low Employee Morale

 Since Schweppes Zimbabwe Limited is under producing because of obsolete machinery and
brain drain this has affected production of the company.

 This gives low morale to employees because it makes work difficult as there are breakdowns
experienced, low quality and failure to meet deadlines set.
 In the long run employees might feel that their work is threatened because low production
result in low sales, the end result being small profits or losses meaning there will be no room
for growth.

 The impact of low morale is that it results is an increase in internal conflicts which in turn
affects productivity.

 Encourage Teamwork since the production team is most productive when everyone works
together toward the same goal with as little waste and conflict as possible.

 While focusing on work is important, it is also crucial to ensure that each staff member feels
comfortable as part of a team.

 The better the members of your team can work together the more they will encourage a
productive workplace culture.
a. Stalls in Production
 When one machine slows down the entire production line is disrupted or leaves the other
machines unable to keep working which ends up affecting production in a negative way.
 This is usually as a result of limited capacity of the production chain due to a bottleneck
resulting in stalls in production, pressure from customers, supply overstock and low employee
morale.
 Examining the production workflow acts as a measure for stalls in production.
 The production department needs to identify pain points of the current workflow.
 Analyze the people, technology and processes required for production as well as the
procedures, communication tools and resources available across the company.
 Value mapping maybe used as a way of identifying and monitoring production projects for
continuous improvement hence eliminating bottlenecks.
 This also involves introducing continuous improvement so that they catch up with newly
installed machinery.
 This strategy enables managers to pinpoint issues and record how changes impact the overall
system.

Pressure from Customers

 Since the business operates in an open environment there are external factors which affect
the organization namely customers.

 These are individuals and groups who purchase the goods and are the most important
vulnerable, variable and difficult to understand.

 Opportunities and threats may arise depending on the number and size of customers, their
tastes and needs and success depends on the response to their needs.
 There is need for the organization to profile current and future customers to successfully plan
for their satisfaction.
The pull production system can be implemented which is made on the basis of
customer needs rather than demand forecasting. Information flows from
prevailing market to production.
As the pull system works on the basis of customer and helps a manufacturer to
maintain cost effective production of service or goods required by the end users.
Since customers are always looking for quality product. The proper
implementation of pull system plays a bridge between end customer and
manufacturer.
 With pull system of manufacturing production inventories are reduced, work in progress is not
exceeding the market demand.

 Pull system can be implemented in different forms one being Kanban card which is a
technique which helps to maintain quantity of goods manufactured or delivered in desired
level before the scarcity arises.

 Kanban card can have different colours depending upon the priority and its use ‘Kanban
system move and production cards are used, where move card represents goods moving from
one production unit to another; while production card guides to replace goods once they are
sold or used

 It provides flexibility in manufacturing to respond to customer needs along with the reduction
in manufacturing waste, But to implement these techniques, a proper forecasting and good
coordination between sales and manufacturing department is necessary Jack B. Revelle,
(2002).
Poor Forecasting
 The SZL sales team would manually track or reference customer history and cold drink
equipment (CDE) which was highly ineffective.

 This led to sub-optimal order fulfillment of customer orders and CDE asset utilization. Also
further optimization was required in complying with the stringent Coca cola Retail Execution
Daily (RED) and proved to be costly.

 Therefore SZL turned to MAC mobile to provide a solution, which began as a simple sale
automation tool and evolved over the years into a complete solution for managing the Sales
and Marketing execution from start to finish.

 SZL now leverages line of sight throughout the value chain, for enhance insight and
intelligence on all areas MACmobile (2023).

 Nevertheless every challenge is a new opportunity obviously, during the course of a business
operation there will be pitfalls and obstacles that will bring set back by a couple of miles.
 Adversity is part of the game and henece it is important not to let it tug the business down.

 Bottlenecks are a naturally occurring consequence of any ongoing process.

 The only thing that matters is how you recover from such incidents and this helps with the
teamwork of Schweppes Zimbabwe Limited and proper planning which can minimize the
possibility of the value addition process.

 The identification of bottlenecks and their elimination have a substantial impact on the
efficiency of the production system of the company.

 The proposed production process bottleneck identification logic allows an indicating limitation
of the system and gives guidelines on how to improve the direction of the production system.
REFERENCES
Cecil; C. Bozarth & Robert ; B. Handfield, (2008); Introduction to Operations and Supply chain
Management, published by Pearson Prentice Hall.

Chair Moyo ; s (2018). In an article Zimbabwe bid to harmonise tariffs: 21 August 2018’ www.
herald.co.zw

Elita Chikwati( 2019) ; Arda, Schweppes form Partnership; in an Agricultural report Harare;
Zimbabwe.www.herlad.co.zw

Gantt H; L (1952); The Gantt Chart: A working tool of Management. London, Pitman Publishing.
2019 Review of Operations: Schweppes Holldings Africa Limited ; 29 November.www.delta.co.zw

The manufacturing handbook of best practices, Jack B. Revelle, 2002, published by CRC
Press LCC.
The manufacturing handbook of best practices, Jack B. Revelle, 2002, published by CRC
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Mhlanga ; P. (2019); Schweppes Unit scales up fruit juice Production; Business times; December
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12 2019. businesstimes.co.zw
MACmobile (2023).Schweppes Zimbabwe optimizes Sales Force and customer relations with
macmobile. MACmobile. software

Rees; D & Purichai; P(2021), Bottleneck cause and micro economic implications; BIS (Banks of
International Settlements) bulletin no 48; 11 November 2021; (www.bis.org).
Mugano ;G(Herald)Windfall for Schweppes workers. www.herald.co.zw

Small business toolkit, 2012Available at :http://toolkit.smallbiz.nsw.gov.au/part/13/68/287

Accessed: 20 March 2023.

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