Throughput Analysis

Throughput is the number of deals that move through a stage per unit of time. If 20 deals enter Discovery per week and 14 advance to Proposal per week, the throughput is 14 deals per week and the drop rate is 30%. Throughput analysis applied across all stages simultaneously reveals the constraint — the stage with the lowest throughput relative to inflow is the bottleneck that limits total pipeline output.

1. Calculate Stage Throughput For each stage, measure: deals entering per week, deals exiting to the next stage per week, and deals exiting to closed-lost per week. Entering minus exiting (both directions) equals the net accumulation. A stage with positive net accumulation is a bottleneck — more deals enter than exit.
2. Identify the Constraint The Theory of Constraints says improving any stage that is not the bottleneck does not improve total output. If Proposal is the constraint and you improve Discovery throughput, you just push more deals into an already constrained Proposal stage. Identify the constraint first, improve it, and only then move to the next constraint.
3. Measure Constraint Impact Quantify what the constraint costs: if the Proposal stage passes 14 deals per week at a 60% downstream conversion and $50K average, it produces $420K per week in expected closed revenue. Increasing Proposal throughput from 14 to 18 deals per week — with the same downstream conversion — adds $120K per week. The constraint cost is the revenue gap between current and target throughput.