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Little’s Law – The ONE thing you can do to improve process performance

Overview

Little’s Law is a very simple concept that will help you gain control over your system. Mastering this concept will arm you with ONE thing that will improve your process and it doesn’t cost a dime.

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Is your system in chaos? Hi, I’m Mark Woeppel and I’m going to tell you the one thing you can to help get control of your system.

Is your system in chaos? This can include
Priority Battles
Resources multitasking
Constant expediting
Long Lead Times
Work in Process too high
Significant amounts of rework

Little’s Law is a very simple concept that will help you gain control over your system. Mastering this concept will arm you with ONE thing that will improve your process and it doesn’t cost a dime.

Why do we care?

Little’s Law teaches us when we introduce work into the system faster than the current throughput, the queue times increase. Aside from the wasted investment in idle work, queue times are important because they are most significant to customers. Customers do not like waiting!

Not only does it affect customers, it affects the people in the process. When there’s too much workload, the work priority system breaks down, resulting in extra work sorting and re-sorting work. Managers spend all their time in meetings figuring out what the right work is and then where it is. Resources, those who are responsible for carrying out the work, must stop doing one task to move on to a more urgent task, and then switch back. We call this multitasking. It feels (and is) chaotic. Both employees and managers are frustrated.

This chaos, this increase in management complexity, results in missing deliveries, losing customers and losing market share, ultimately it results in losing money.

The most common problem we see is that processes have too much work in the system. We see the symptoms every day, but most people don’t recognize them as symptoms.
• Frequent expediting – not feeling in control;
• Widespread multitasking,
• Missed deliveries,
• Unhappy customers, and
• Unhappy employees.
It just takes too long to get work through the system.

Little’s law states that in a stable process, there are only three important characteristics that govern process behavior – and there is a relationship between these three process characteristics. If you change one, it will affect the others.

Those characteristics are:
1. Inventory or work in the system
2. Queue or waiting time
3. Throughput

We can summarize Little’s Law by saying that the average inventory is approximately equal to throughput multiplied by average queue time. Or, the average queue time is approximately equal to the amount of work in the system divided by the Throughput.

First, a few definitions:
Average inventory is how many flow units are inside the process boundary
Average queue time is the time an average flow unit spends in that process boundary
Throughput is the rate at which flow units leave the process boundary

Here is an example. Take an airport security checkpoint. The average queue size is 17.5 passengers. Throughput is 600 an hour, meaning 10 passengers per minute pass the checkpoint. To determine how long a typical passenger spends in the checkpoint queue, we can use Little’s Law. So we take the average queue size, 17.5, and divide that by the rate, 10 passengers per minute, so that means the average time a passenger will spend in the queue is 1.75 minutes. (Wouldn’t that be great?)

Little’s Law shows us that we only need to change one of the characteristics to have an influence over the others, and thus, the whole processes. If you have a stable process where throughput is essentially stable, and you wanted to reduce queue time, you only need to reduce inventory. If you want to reduce inventory, you only need to reduce queue time.

Here is another example. You have a hamburger restaurant and you are processing an average of 5,000 kilograms of hamburgers a week. Now, the typical inventory of raw meat in cold storage is 2,500 kilograms. The process in this case is the restaurant and the flow unit is a kilogram of meat.

So, knowing just two process characteristics, we can determine how long does a kilogram of meat spend in the process (average queue time). So, we take our average inventory of 2,500 and we divide it by our throughput per week. It’s 2,500 divided by 5,000 is half a week. So, that means an average kilogram of meat will spend about half of a week in cold storage.

If you are the process owner and you are unhappy with the performance of your process, you have three dimensions that you can address that will impact your whole process…
Inventory
Queue time
Throughput
Alter one dimension, and you affect the performance of your process.

How do you reduce chaos in the system? You reduce inventory and of course, as an effect, you get shorter queue times.

The simplest solution is to reduce the rate of work you release into the system and then control that release to equal the throughput of the constraint resource. Little’s Law helps us find the relationship and implies we have a control mechanism.

To start, try cutting your current queue size in half. Simply stop introducing work into the system for a period equal to half your queue time. If that sounds like too much, cut it by one third and then continue to revise it down as you observe the queues. Then, continue with an introduction of work at the rate your constraint or bottleneck resource can consume it.

So the ONE THING you can do to eliminate chaos is cut your queues. You, as the process owner, have complete control over the critical dimensions of process performance. This is the essence of Little’s Law.
• How much inventory is in the system?
• What is your queue time or lead time?
• What is the throughput rate?
Change any one of them and you will have a dramatic impact on your process performance.

I encourage you to learn more about how to help your system by reading some of our ebooks or watching more of our videos. Particularly, our 7 Lesson’s Learned ebook includes some very practical ways you can achieve top performance from your system.

Improving systems is our business, so if you are looking to transform your system, let’s talk.

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