KEVOS® MAKEOS · Operations

WIP and Lead Time Check (Little’s Law, Flow Efficiency, WIP Limit for a Target Lead Time)

With this much work in progress and this output rate, how long does a job take to get through, how much of that time is actual work, and how far must WIP come down to hit my lead-time target?

Lead time through a production area or office process by Little’s law: average lead time from work in progress and throughput, in days and working hours, flow efficiency (value-added time as a share of lead time), and the work-in-progress limit that gives your target lead time at the same throughput, against that target.

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How this tool works

Inputs, units and where to find them

InputUnitTypical source
Work in progressunitsUnits (or jobs) started but not finished, counted across the whole area.
Throughput (completed per day)units/dayAverage units finished per working day over the same period.
Value-added time per unitminTotal hands-on processing time a unit actually receives.
Working hours per dayhHours the area works per day.
Target lead timedaysLead time you want to quote or achieve.

What each input means

Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.

What this means: Work in progress
Illustration: Work in progressA row of identical items being counted; Work in progress is how many there are.LExample: 600 unitsWork in progress
What it is
The number of units or jobs started but not yet finished anywhere in the area being studied, including those waiting between steps.
Units and format
Enter a number in units: a count of units. The form accepts 0.000001 units or more. Required: the tool does not calculate until every input is valid.
Example
The form opens with 600 units as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
Effect on the result
Lead time rises in proportion to the work in progress.
Get it right
Count everything inside the boundary at one time, including work queued at each machine.
What this means: Throughput (completed per day)
Illustration: Throughput (completed per day)Items moving past a point on a conveyor; Throughput (completed per day) is how many pass in each unit of time.count pointλExample: 120 units/dayThroughput (completed per day)
What it is
The average number of units or jobs completed per working day, measured over the same period as the work in progress.
Units and format
Enter a number in units/day: units/day. The form accepts 0.000001 units/day or more. Required: the tool does not calculate until every input is valid.
Example
The form opens with 120 units/day as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
Effect on the result
Higher throughput shortens the lead time and raises the WIP limit for the target.
Get it right
Use a long enough period, several weeks, to smooth out daily swings.
What this means: Value-added time per unit
Illustration: Value-added time per unitA timeline from a start mark to an end mark; Value-added time per unit is the time between them.startendtExample: 45 minValue-added time per unit
What it is
The total hands-on processing time a unit actually receives on its way through, the part of its lead time that adds value.
Units and format
Enter a number in min: minutes. The form accepts 0 min to 1000000 min. Required: the tool does not calculate until every input is valid.
Example
The form opens with 45 min as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
Effect on the result
Flow efficiency rises in proportion; the lead time does not change.
Get it right
Add the machining, assembly and test times only; waiting, moving and storage are not value-added.
What this means: Working hours per day
Illustration: Working hours per dayA timeline from a start mark to an end mark; Working hours per day is the time between them.startendtExample: 16 hWorking hours per day
What it is
The number of hours the area works each day, used to express lead time in working hours and to find flow efficiency.
Units and format
Enter a number in h: hours. The form accepts 0.000001 h to 24 h. Required: the tool does not calculate until every input is valid.
Example
The form opens with 16 h as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
Effect on the result
More hours per day raise the lead time in hours and lower the flow efficiency.
Get it right
For two eight-hour shifts enter 16.
What this means: Target lead time
Illustration: Target lead timeA timeline from a start mark to an end mark; Target lead time is the time between them.startendtExample: 6 daysTarget lead time
What it is
The average lead time you want to achieve or quote, compared with the calculated lead time.
Units and format
Enter a number in days: days. The form accepts 0.000001 days to 100000 days. Required: the tool does not calculate until every input is valid.
Example
The form opens with 6 days as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
Effect on the result
Only moves the pass or fail line and the WIP limit.
Get it right
Quote customers more than the average, because individual jobs vary around it.

Method and formulas

  1. Little’s law: average lead time = work in progress ÷ throughput (Little 1961), in working days.
  2. Flow efficiency = value-added time ÷ (lead time × working hours per day).
  3. WIP limit for a target = target lead time × throughput; reduction needed = WIP − limit.
  4. Example: lead time 5 days with 0.9375 % flow efficiency; a WIP of 720 meets 6 days.

Limitations

  • Long-run averages for a stable system: WIP and throughput must be measured over the same period, and a growing backlog breaks the law’s assumptions.
  • Average lead time only; individual jobs vary, so quoted lead times need a margin above the average.
  • Example values are illustrations. Replace them with values for your actual task.

Typical uses

  • Find why a job shop’s lead times are long
  • Set a WIP cap to hit a quoted delivery time
  • Show how much of a lead time is waiting

Who it is for

  • Operations and production managers
  • Lean and continuous improvement staff
  • Business owners

What you get

  • Average lead time in days and working hours
  • Flow efficiency
  • WIP limit for the target lead time

Interpreting the result

  • At a fixed throughput, lead time falls in direct proportion to WIP: releasing less work is usually the quickest way to shorten lead times.

References

  • Little J. D. C., A Proof for the Queuing Formula: L = λW, Operations Research 9 (3), 383–387 (1961).
  • Roser C., How Many Kanbans? – The Kanban Formula, Part 1, AllAboutLean (2014), Little’s law for lead time — https://www.allaboutlean.com/kanban-formula-part1/

Learn the Concepts Behind This Tool

These KEVOS® Library readings explain the method this tool uses, with worked examples.

KEVOS® tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.

Open the WIP and Lead Time Check (Little’s Law, Flow Efficiency, WIP Limit for a Target Lead Time) calculator