馃攳
Little's Law - How to Calculate WIP, Lead Time and Throughput Rate | Rowtons Training - YouTube
Channel: unknown
[0]
Just a moment ago, we mentioned Little's Law.聽聽
[5]
Little's Law is a formula that helps us calculate聽
the minimum possible level of work in progress,聽聽
[12]
given the throughput rate, the quantity of stuff聽
done per time period and the throughput time or聽聽
[19]
the wait time by which I mean the time it takes聽
for something to go through our manufacturing聽聽
[25]
system either products or services of course.聽
We said that the formula L equals lambda W聽聽
[34]
stands for L, the level of work in progress聽
the quantity of inventory multiplied by lambda聽聽
[41]
which is the throughput rate the quantity of聽
stuff we are making per time period multiplied by聽聽
[49]
W the throughput time. So, question time get your聽
pen and paper we've got a little math question if聽聽
[57]
you want to play. My factory makes 1000 widgets聽
per day and we have a throughput time of 5 days,聽聽
[66]
what is the minimum quantity of work in progress聽
we must have right now in order to be functioning?聽聽
[74]
Okay did you want to work along? Pause the video聽
now if you want to do the equation yourself.聽聽
[80]
Okay did you get it? Let's find out! L equals聽
lambda W. L the level of work in progress聽聽
[88]
equals lambda the throughput rate聽
that's our 1000 items per day聽聽
[95]
multiplied by our throughput time that in our聽
case was five days, one thousand per day times聽聽
[102]
five days equals five thousand. There is a minimum聽
there must be a minimum of five thousand widgets聽聽
[111]
in our system at any one time for this system to聽
be working. That doesn't necessarily mean it's聽聽
[116]
good, if I'm the boss's boss of this factory and聽
I think that this level of inventory is excessive,聽聽
[124]
it could be improved but it would mean聽
that we have to do one of two things.聽聽
[130]
Either we have to reduce the amount of stuff聽
we make per day, that's probably not a popular聽聽
[136]
option or we have to reduce the time it takes to聽
get through our system. Does it need to spend five聽聽
[143]
days from start to finish? How could we get聽
it down to three days from start to finish?聽聽
[150]
Probably most of the time inside our factory聽
is actually waiting to start the various sub聽聽
[155]
processes but now we're digressing somewhat.聽
Let's do a second example with Little's Law聽聽
[163]
because this formula is really powerful. Now,聽
this time you're going to have to rearrange聽聽
[168]
the formula just a little bit. So here we go, I聽
have a telephone call center and on average we聽聽
[175]
have about 500 customers we're working with at any聽
one moment in time, these are our work in progress聽聽
[183]
now we can process about 1000 customers per聽
hour, I want to know what is the average time聽聽
[191]
a customer spends inside our process including聽
their waiting time and the time we deal with them?聽聽
[198]
Pause the video now, rearrange that formula and聽
see if you can get the answer yourself. Okay did聽聽
[205]
we do it? To do this we first have to rearrange聽
our formula W equals L divided by lambda,聽聽
[214]
W our time is what we want to find聽
out L is our level of work in progress聽聽
[220]
or in our case the 500 customers we have on聽
average in our system at any moment in time and聽聽
[227]
lambda is the throughput rate, the rate we're able聽
to process them which we said is 1000 per hour.聽聽
[235]
W equals L over lambda W equals 500 over 1000 W聽
equals half an hour so what does this tell us?聽聽
[245]
Well let's imagine in this situation聽
what we'd really like to do is reduce聽聽
[249]
the throughput time of our average customer,聽
remember this time includes in this example the聽聽
[255]
waiting time on the telephone line to be answered聽
and the time actually spent talking to them.聽聽
[261]
Well there's two things this formula says聽
we can do, the first reduce L the level of聽聽
[268]
work in progress we have in our system we could聽
just disconnect half of the people on the lines聽聽
[274]
that would immediately half the average time that聽
the people in our system spend. Secondly, we would聽聽
[283]
have to increase lambda, increase our throughput聽
rate our ability to deal with the orders.
[291]
So Little's Law, an incredibly versatile聽
formula that lets us work out the level聽聽
[298]
of work in progress inventory given聽
the throughput rate and the lead time.
Most Recent Videos:
You can go back to the homepage right here: Homepage