Little’s Law: A Big Theory for Improved Customer Delivery Times and More Efficient Process Cycles

by admin

Little’s Law: A Big Theory for Improved Customer Delivery Times and More Efficient Process Cycles

by admin

by admin

Customer expectations are higher than they’ve ever been before. Having information at our fingertips and quick contact with companies has upped the stakes in every aspect of customer interaction from ordering to delivery. Without a tool to determine lead time predictability, you’re likely to end up with piles of paper or products sitting in queues in front of your workstations. And of course, more questions than you’d like from customers about when they’ll receive those items they’ve been waiting on.

The deployment of a work control system is the answer to getting things under control including Work In Process (tasks, orders, or items your team is working on) and inventory as well as improving lead time predictability.

Little’s Law: The Theory of Process Cycle Times

Let’s talk about a little thing called Little’s Law. Despite the name, this theory has a bigger impact on process cycle times than you’d think. Little’s Law says that process cycle time is directly proportional to the amount of work in the process flow.

In other words:

  • Process Cycle Time = Work In Process / Average Completion Rate

This equation connects lead time with Work in Process (WIP) and Average Completion Rate (ACR). As we all know, the essence of Lean lies in minimizing waste and increasing speed. In order to minimize waste, you must review the inventory and reduce excessive waste.

How Hitting Pause Can Reduce Lead Time

So, what does this all have to do with Little’s Law? Well, by reducing the WIP, you can maintain the same ACR and bring down your lead time. Or by increasing the ACR and keeping your WIP the same, you can drive down lead time.

Lead times slow down when too many “works” get clogged in the process cycle. Rising customer expectations often propel us to take on more and more tasks without thinking about how they’ll affect lead time overall. The trick, however counterintuitive it might sound, is to hit pause. Don’t put another project or order into your process cycle until one is completed. By doing so, you’re well on your way to creating a generic pull.

Here are some other steps to take in creating your generic pull:

  1. Set service levels based on capacity and customer needs.
  2. Identify your completion rate.
  3. Follow Little’s Law to identify your maximum WIP.
  4. Set your limit for maximum WIP based on the results.
  5. Prioritize which upcoming projects enter the process cycle after each completion of a WIP.

There are several benefits to having a work control system in place:

  • Reduced bottlenecks
  • Faster lead and cycle time
  • Reliable delivery times for customers
  • Lower inventory costs
  • Accessible feedback and insights for process improvement
  • The ability to move high-priority projects to the front of the process cycle if necessary

If you’re tired of shuffling orders around and hurrying to meet customer delivery agreements, maybe it’s time to implement a work control system like the one we outlined above. Learn how to put these steps into effect in your workplace in NWCPE’s upcoming course, BE816 Standardized Work and the Visual Workplace.