(excerpted from The Pipeline)


“The system’s constraint is whatever limits the system’s overall capacity to do more of what it’s designed to do, to produce more of what its purpose is to produce.

“Do you understand?”

The dazed looks and silence said it all.

Finally, the CEO stood up, walked to the erasable board, wrote a single word, and underlined it for emphasis.


The CEO paused before he spoke:

“What I think she wants us to understand is that this world of systems in which we must operate – this world of systems in which our understanding of production management must exist – does not provide us with promises of unlimited capacity, resources, capital, and opportunities.

“Which means that our efforts to improve, to solve problems, to manage constraints have to be prioritized.

“It means that our efforts to improve have to be focused.  It means that solving some problems, eliminating some constraints, and exploiting some opportunities has to wait on solving more important problems, eliminating more important limitations, and exploiting better opportunities.

“It may appear that RB Builders has a lot of ‘problems’, and we can see all of the undesirable effects stemming from those problems”, he said.  “Likewise, it may appear that we have many so-called ‘limitations’.  However – not every problem and not every limitation we face is the one that determines the ability of RB Builders to achieve more of its purpose, nor is our ability to achieve our purpose determined by the sum of the capabilities and the capacities of individual teammates, departments, or any other parts of a whole.

“So what?  Here’s what.  Trying to improve most of the system will be counter-productive.  It will consume too many resources and produce too little improvement.”

“He’s right”, said the intrepid, results-based consultant.  “Systems are not a set of equally-important-but-independent, related-but-isolated measures.

“The way we improve a system’s performance – the way we improve productivity, improve operating performance, achieve desired business outcomes – is not by spending time and effort improving the outcome of each and every part.  We cannot improve everything, everywhere, at the same time.  Everything cannot be the root problem, everything cannot be the cause of the problem.  Every limited or constrained resource cannot be the system’s constraint.

“If we try to solve our problems this way, we will spend all of our time and effort treating the outward, visible symptoms of the problems, without ever resolving what caused it.

“If we try to manage constraints this way, we will spend all of our time and effort increasing the capacity of resources that do not limit the capacity of our production system, without ever identifying and effectively managing the constraint that does.”

“She’s exactly right”, said the VP of Construction.  “If we try to solve our problems and manage our constraints by dealing with things in isolation, we might improve performance in some areas and temporarily relieve a few of the symptoms and effects of the problems, but we will never solve the core problems, and we will never optimize the production capacity or maximize the productivity of the system.  We will almost certainly add capacity, but it won’t be capacity that makes a difference, capacity that increases Throughput.”

“I suppose it is better to be exactly right, than it is to be merely right”, said the intrepid, results-based consultant.


(The Pipeline: A Picture of Homebuilding Production is available on the publisher website (virtualbookworm.com), and the author website (thepipelinebook.com), as well as amazon.com and barnesandnoble.com)