In business, the constraint is often referred to as a bottleneck. You can always spot the bottleneck in any business because it is the business component backed up with work, causing those processes downstream to wait.
The key to making more money is always to be eliminating the number one constraint of the business.
A constraint is a limitation or restriction. In 1984, Eliyahu M. Goldratt, in his book, “The Goal,” introduced a management philosophy built around the Theory of Constraints (TOC). His argument for mastering the TOC is grounded in the reality that there will always be issues to resolve in any business.
In business, the constraint is often referred to as a bottleneck. You can always spot the bottleneck in any business because it is the component of the business that is backed up with work, causing those processes downstream from it to wait. In helping a business make more money, the fastest and most efficient way to do this is to identify the most critical limiting factor, the constraint that stands in the way of achieving higher profits, and then systematically improve that constraint until it is no longer the limiting factor.
Your ability to remove constraints is proportionate to management’s ability to identify, quantify, and fix problematic issues in the business. And having employees recognize that attacking the constraints of a business is the key to unlocking higher profits and, ultimately, earning the rewards of higher compensation. Getting both management and employees working to eliminate business constraints is the key to quickly unlocking higher profits and superior cash flow.
See Step 4—Stop the Losses that Keep Your Business at Risk from the BusinessCPR™ Management System to learn how to eliminate the constraints that cost you money, time, and peace of mind.