# Binding constraint

> The one limiting factor that sets the ceiling on improvement everywhere else in the business, and must move before work elsewhere produces a return.

Source: https://barkingcat.ai/terms-of-trade/binding-constraint/

## Terms of Trade · Edition 4: The AI pitch, and Barking Cat’s own terms

Definition

The one limiting factor that sets the ceiling on improvement everywhere else in the business, and must move before work elsewhere produces a return. A modern retailer carries many problems at once, and several may need working in parallel; the binding constraint is the one among them that holds the ceiling, which is why it is named singly and sequenced first. Borrowed from Goldratt’s Theory of Constraints, where a system moves only as fast as its tightest point. Barking Cat applies it to a retail proposition and its operating model, finds it by walking both, and names it with the alternatives rejected and the reasons given.

Field note

The binding constraint is the thing no one is telling you, usually because the person who knows reports to the person who caused it.

Board question

If we could fix only one thing this year, which is it, and what is the evidence that fixing it moves the P&L?

Applied through

Every Barking Cat instrument resolves to it: [the Review](https://barkingcat.ai/review/) outside-in, [the AI Diagnostic](https://barkingcat.ai/the-barking-cat-ai-diagnostic/) inside-out, [the four investor reads](https://barkingcat.ai/investors/) at each stage of the hold.

Related terms
- [AI theatre](https://barkingcat.ai/terms-of-trade/ai-theatre/)
- [Replatform](https://barkingcat.ai/terms-of-trade/replatform/)
- [Contribution margin](https://barkingcat.ai/terms-of-trade/contribution-margin/)
- [The recognition point](https://barkingcat.ai/terms-of-trade/the-recognition-point/)

## Contact

steve@barkingcat.ai

Barking Cat Advisory Limited. Registered in England and Wales, company number 17338003.