The funnel model describes the behavior of a production capacity with respect to the processing of production orders in the form of an analogy model of a water funnel.
Each capacity hopper has a maximum capacity. If more order volume (measured in hours) flows in per time unit than can be processed per time unit, the order backlog in the hopper increases. The higher order backlog in the hopper results in a longer queue of order content, which in turn leads to longer lead time. The length of the lead time is calculated by dividing the order backlog in hours by the output in hours per operating calendar day.
From the funnel model it follows that lead time and capacity utilization cannot be set independently of each other and that the decisive control variable for balancing the two variables against each other is the mean weighted order backlog in funnels.
The decisive control variable for correctly adjusting lead time and capacity utilization at the production capacity in a workshop production is not the time of order release, but the circulating stock in the capacity funnel, measured in working hours. In practice, this circulating stock can usually only be kept constant by adjusting the output of the production capacity; rarely by controlling the inflow of new orders.