If making money is your goal, throughput is your obsession

In a for-profit organization making money is the goal and the limitation to making more money is called a constraint.

Conversely, a constraint is a limiting factor to get more out of the system. There is only one constraint which is the most limiting factor restricting the Throughput.

Throughput is the rate at which the organization is making money.

If the constraint is limiting Throughput, it means the constraint controls all the money-making.

From this point, making the maximum money given the constraint, there are two (cumulative) options:

  • Elevate the constraint, which means get over the limitation of the constraint to allow more Throughput.
  • Keep Throughput at its maximum by avoiding anything limiting it more.

Elevating the constraint might be difficult or even impossible to do, simply because if it wouldn’t, chances are it would already have been done. More seriously a constraint can be something very difficult to get or to change, like a very expensive equipment, something very rare or something very difficult to influence/change like regulation or policy.

Keeping Throughput at maximum in the given conditions is called exploiting the constraint. It requires constant attention to prevent anything to choke the Throughput.

That’s why once the constraint is identified, it becomes the center of all attention. If the constraint is a resource, like a machine, an equipment, a department or some talented person, this resource deserves a special treatment to protect it against anything limiting its Throughput further.

As the constraint controls all the money-making, it is a good spot where to literally sit and constantly monitor the Throughput. Every decision should be made with regards to its influence to the Throughput:

  • if it is reducing the Throughput, it must be challenged
  • If it is increasing or a least securing the Throughput without adding more Operational Expenses (Net Profit = Throughput – Operational Expenses), it must be considered.

Therefore, if making money is your goal, Throughput is your obsession.


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