What is Throughput?

Throughput is determined by the system's bottleneck—the slowest step in the process. No matter how fast other steps operate, total throughput cannot exceed the capacity of the bottleneck. This is why the Theory of Constraints focuses exclusively on identifying and improving the bottleneck to increase overall throughput.

Throughput should be distinguished from capacity (maximum possible output) and output (actual production including defective units). Effective throughput accounts for quality—if a machine produces 100 units per hour but 10% are defective, effective throughput is only 90 good units per hour.

In case interviews, throughput analysis is essential for operations cases. You might be asked to increase a factory's throughput by 20% or to evaluate whether a process redesign will improve throughput enough to justify the investment. Understanding Little's Law (Throughput = Work in Progress / Lead Time) provides a powerful analytical tool for relating throughput, inventory, and cycle time.