Anyone who is focused on continuous improvement and operational excellence must be aware that inventory level, lead time and throughput rate play a huge role in striving to this goal. Fortunately for us, MIT professor John D.C. Little proved the relationship between above mentioned variables, which is today known as “Little’s Law”.
Little’s Law in his original form: L = λW is an important part of queueing theory. Little’s Law in his original form: L = λW, is an important part of queueing theory. It’s important to say that Little’s Law applies to any system in a stable state.
In lean we use different variable names to those of original Little’s Law:
WIP – Work in Process – number of items being worked on in the system;
TP – Throughput – average number of items completed in given time (can be used because of stable system assumption);
LT – Lead time – the time it takes an item to pass completely through the system.
By understanding Little’s Law, you’ll be well aware of the influence that a way inventory is managed has on the overall efficiency of your processes.
Today’s featured video brings an explanation of Little’s Law by presenting 3 calculation examples.