Little’s law is part of one of the most important aspects of Lean Six Sigma, namely the law of the waiting time. This law was first introduced by John Little and is still used when talking about management and logistics. Even in your daily life, the law is applicable.
For example, Imagine yourself being a hairdresser. The last thing you would want is your customers to wait before getting a haircut, because there is a chance they will go to another hairdresser, your competitor. To prevent this, make sure you know the ins and outs of your process, especially regarding waiting time and stock. Little’s law might help you achieving this.
After reading this article, you will know the grasp of Little’s law and how to utilise the law in a Lean Six Sigma Project.
Little proved a law which can be applied in situation including waiting time. The law considers three variables which tell you much about a process:
- Stock (I)
- Lead Time (T)
- Throughput Rate (R)
If two of these variables are considered known, you can use Little’s law to compute the third variable.
Little’s law can be visualised as follows:
Stock (I) = (Throughput Rate (R) * LeadTime (T))
The formula can be paraphrased, after which the following two equation arise:
Throughput Rate (R) = (Stock(I) / LeadTime (T))
LeadTime (T) = (Stock (I) / Throughput Rate (R))
Before giving some examples, it might be helpful to understand what these variables actually mean.
This can also be called “Work In Process” (WIP). The term covers all products or customers that are involved with the process. In other words, it covers customers who are waiting or products who are being operated at that time. You could compare it to a line in a shop. The WIP is five, if the line itself contains four waiting customers. The person actually paying belongs to the WIP as well.
This entails the time between ordering a product and delivering it. Sometimes, it is called the Process Lead Time (PLT) as well. To calculate the leap time, keep in mind you should use the time of delivery instead of time of order. When holding onto the hairdresser example, it might become clearer. If it took the hairdresser fifteen minutes to start cutting your hair, which took thirty minutes, your PLT was eventually forty five minutes.
This includes the flow of the number of products per unit of time. Take for example a hairdresser who is able to help one of his customers per half hour, then the throughput rate would be two per hour.
Little’s law applied to Lean Six Sigma
Lean Six Sigma focuses on creating as much value as possible for its customers and in addition eliminating activities which do not have a value for its customers. These non-added values are also called “muda” which is a synonym to “waste”.
Imagine yourself working at a company which produces four candles per week. In the same week, thirty orders are placed. This means the Lead time can be calculated:
LeadTime (T) = (Stock (I) / Throughput Rate (R))= (30 / 4) = 7.5 weeks
As shown above, the Lead Time entails seven and a half weeks according to Little’s law. You might find this rather long! By using Lean Six Sigma you improved the processes within your company. After a few weeks, your decide to check upon that. Fifteen orders have been placed, but in a week, five of these have been fulfilled. This means the following improvement has taken place:
LeadTime (T) = (Stock (I) / Throughput Rate (R))= (15 / 5)= 3 weeks
Little’s law hands you the opportunity to calculate the impact your improvement has (had). It enables you to trace back a few rules as will. Thus retaining stock during your process leads to an increase in the Lead Time; which you obviously want to prevent.