Line Balancing: A Must for Factory Efficiency in 2025

With National Insurance costs set to rise, manufacturers face yet another profitability squeeze. A 3.25% increase in direct wages could erode gross margins by up to a full percentage point—unless companies take action. But cutting headcount isn’t the answer. Instead, smart businesses are turning to line balancing to maximise efficiency without sacrificing output.

One of the most effective strategies to offset this cost increase is line balancing—a method that ensures every stage of production operates at the right capacity to eliminate bottlenecks and elevate the constraint. By doing so, manufacturers can maximise throughput while minimising labour cost per unit, all while maintaining quality and safety.

Why Line Balancing Matters Now More Than Ever

When costs rise, businesses often react by reducing headcount, but this short-sighted approach can reduce productivity and increase unit costs.

Take a box packing line with six staff packing bags into boxes, followed by a case sealing and palletising step. A typical cost-cutting approach might be to remove one packer, seemingly cutting labour costs by 12.5% (1 in 8 staff removed). However, this also reduces packing capacity by 17% (1 in 6 packers removed), leading to:

• 5% increase in cost per pack, as the case sealing and palletising resources are now underutilised, reducing profitability despite lower hourly labour costs.
• Reduced throughput, making it harder to recover overhead and limiting capacity.
• An artificial bottleneck, created by a lack of capacity in packing, disrupting flow and increasing inefficiencies elsewhere. If the case sealer could previously handle the original rate, it's now underutilised.

Instead of reacting with headcount cuts, applying the Theory of Constraints (TOC) and Line Balancing helps ensure maximum throughput at the lowest cost per unit.

How to Achieve Line Balance

1. Define the Goal

Before making any changes, clarify the objective:

1. Maximise throughput (items per unit time)
2. Minimise cost per unit (total labour cost / total units)
3. Maintain or improve quality and safety

Many organisations mistakenly approach line balancing as simply distributing workload evenly across all stations, assuming that keeping every workstation equally busy will optimise efficiency. However, true line balancing means aligning all operations to the system’s constraint. If workload is distributed evenly without considering the constraint, some stations will overproduce, leading to excess work-in-progress (WIP), while others may be idle or underutilised, reducing overall throughput. Instead, the focus should be on ensuring the constraint is fully utilised while preventing inefficiencies elsewhere, even if it means some stations must operate at different speeds or with built-in buffers.

2. Identify the Constraint

First, determine the process step that limits overall throughput. The constraint is the step in the system with the lowest maximum capacity and should be identified by:

• Checking the nameplate speed of all machinery and identifying the asset with the lowest.
• Analysing production data to pinpoint where work builds up.
• Measuring the utilisation of each stage to find where demand consistently exceeds capacity.

If the constraint is internal (e.g., a packaging machine or manual step), line balancing must ensure that it is fed optimally and never starved. If the constraint is external (e.g., demand is the limit, not capacity), the focus shifts to minimising cost per unit while maintaining responsiveness to orders.

3. Identify Throughput Bottlenecks

A bottleneck isn’t always the constraint—it can be a temporary blockage that reduces system efficiency, either starving or blocking the constraint (in the packing example, it was the packers, as the case sealer had spare capacity). To identify bottlenecks:

• Observe WIP accumulation – The workstation with the biggest queue before it is often the bottleneck.
• Analyse downtime data – If a machine frequently runs at max while others idle, it’s likely the constraint.

4. Elevate Bottlenecks

Once identified, bottlenecks should be addressed by:

• Reducing downtime through maintenance improvements and root cause problem-solving.
• Reducing waste especially if the bottleneck is after the constraint.
• Increasing speed where possible.
• Optimising resource allocation—adding labour where it’s a direct function of capacity, or looking at ergonomics to speed manual processes up.
• Adding accumulation or buffers to eliminate causal losses, prevent starvation or blocking.

5. Use WIP Buffers to Protect Flow

Unlike Lean, which aims to eliminate WIP entirely, TOC strategically places buffers to prevent starvation or blockages at critical steps.

• If the constraint is upstream, buffers prevent work stoppages when downstream processes halt.
• If the constraint is downstream, ensure WIP accumulation keeps it constantly fed.

6. Reallocate Labour to Minimise Cost

Rather than cutting headcount arbitrarily:

• Reassign underutilised staff to support the constraint or assist with quality checks.
• Cross-train workers for flexible redeployment.
• Balance labour across multiple lines where possible.

7. Test Scenarios & Model the Impact

Before making changes, model the effects:

• What happens if we add one operator at the constraint?
• What happens if we remove an underutilised role?
• How does adjusting WIP affect overall output?

Using real production data ensures improvements are evidence-based.

8. Continuously Monitor & Adjust

After implementing changes:

• Track throughput changes – Are we producing more per hour?
• Monitor cost per unit – Lowering cost per unit, not just hourly labour, is the real goal.
• Watch for new bottlenecks – continuous improvement is all about chasing the bottleneck through the system.

Beyond Efficiency: A Strategic Response to Rising Costs

As operating costs climb, leaders must be proactive. The best manufacturers don’t just cut costs—they optimise for maximum output at the lowest cost per unit. Line balancing isn’t just a defensive move against rising costs; it’s a long-term strategy to build a more competitive, profitable, and resilient operation in 2025 and beyond. At Majaco we often find that whilst this is simple in concept, it’s hard to execute - especially when you have a day job limiting the amount of time you have to think strategically about optimising flow. If you want to discuss how we could help you identify and deliver improvements that can make a material impact on your bottom line, please reach out - we’d be delighted to talk.