Throughput
Throughput is the rate at which a system produces finished output. It measures actual productive capacity and is limited by the bottleneck of the process.
Throughput is the number of units (parts, orders, transactions) that a process completes per unit of time. It is the ultimate measure of productive capacity -- not how busy machines or people are, but how much finished output reaches the customer.
Throughput is governed by the bottleneck: The slowest step in the process determines the maximum throughput of the entire system. Improving non-bottleneck steps does not increase throughput -- it only creates more WIP in front of the constraint.
Little's Law connects throughput to lead time and WIP: Throughput = WIP / Lead Time. This means you can increase throughput either by adding capacity (more WIP at the same lead time) or by reducing lead time (same WIP flows faster).
In practice, throughput is often confused with output. Output includes rework and scrap; throughput counts only first-pass good units. A machine producing 100 parts/hour with 10% scrap has an output of 100 but a throughput of only 90 good parts/hour.
Formula
Throughput = Good Units Produced / Time Period (also: Throughput = WIP / Lead Time via Little's Law)
Practical Example
A welding cell produces 42 assemblies per hour. After eliminating the bottleneck (a jig alignment step taking 95 seconds reduced to 65 seconds), throughput rises to 55 assemblies per hour -- a 31% increase from fixing a single step. Monthly output increases by 2,860 assemblies without additional equipment or labor.
How Leanshift Helps
Leanshift calculates throughput from measured cycle times and tracks it over time. Combined with OEE data, teams can see exactly how much of their theoretical capacity is being converted into actual customer-ready output.
Frequently Asked Questions
How is throughput different from capacity?
Capacity is the theoretical maximum output. Throughput is the actual output of good parts. The gap between them represents losses from downtime, speed reductions, defects, and changeovers -- exactly what OEE measures.
How do you increase throughput?
Identify and improve the bottleneck. Only the constraint limits throughput. Common approaches: Reduce cycle time at the bottleneck, minimize downtime there, improve quality to reduce rework, or add parallel capacity.
What is throughput accounting?
A management accounting method from the Theory of Constraints. It evaluates decisions based on impact on throughput (revenue), inventory, and operating expense -- rather than traditional cost accounting which can lead to local optimizations.
Related Terms
Cycle Time
Cycle time measures how long a single process step actually takes -- from start to finished result. It is the foundation of every process analysis.
Lead Time
Lead time measures the total duration from order receipt to delivery -- including all waiting, storage, and transport times. It determines delivery capability.
Bottleneck Analysis
Bottleneck analysis identifies the process step that limits the throughput of the entire system. The bottleneck determines maximum output -- improving anything else first is waste.