In this chapter, David McMahon explains why some businesses operate smoothly while others struggle in constant chaos, pointing to operational bottlenecks and productivity constraints as the root cause. Well-run operations benefit from proactive management, accurate inventory, reliable financial reporting, strong customer service, and healthy cash flow. Poorly run operations, by contrast, are reactive, inefficient, and burdened by errors, stress, and rising costs.

McMahon defines bottlenecks as slowdowns caused by inefficient processes or ineffective use of resources, which disrupt workflow across the entire organization. Using real-world examples, he shows how issues in areas such as inventory control, IT systems, or warehouse procedures can cascade into sales losses, customer dissatisfaction, and wasted labor. He introduces the Theory of Constraints, emphasizing that the goal of management is not to cut costs, but to improve flow and make money.

The chapter outlines a practical framework for identifying and eliminating constraints, along with clear warning signs across sales, purchasing, merchandising, inventory, distribution, and accounting. McMahon concludes by stressing that there is no one-size-fits-all solution: businesses must focus on one improvement at a time, align the team around clear goals, measure progress, and commit to continuous improvement.