However (this might be a personal opinion only) this system is just an optimized way to look at an assembly line. What I mean is that it is very well applicable when applied to develop projects that consist of large numbers of relatively similar actions (action being writing code in the case of software development) but it is less applicable in one-off projects like delivering a building or a space station.
On the other hand I might just be missing the essence.
I would agree that the implementation as applied to manufacturing is poorly suited to one-off projects, but would consider work in the fields of product dev and software (sometimes called Kanban) to be highly appropriate.
In the case of Kanban there are those that would argue that incremental and iterative approaches are not well suited to large scale projects, though I think that this due these processes still be relatively new to organisations capable of pulling off huge projects, rather than a deficiency in the methodology itself.