# 311-school

## 311-school

Little’s Law
Session 5

1

Last Class
Flexibility and Variety
Calculating capacity when you have
– Multiple products
– Yield issues
– Machine Breakdown

Colruyt Coffee Processing case

2

Objectives: Little’s Law
Relationship among
– Flow (Throughput) Time
– Flow (Throughput) Rate
– WIP

Called Little’s Law
– A general rule that links various performance
measures
– Links flow time and flow rate with work in process
3

Little’s Law
Flow Time = WIP / Flow Rate
time
You

distance

speed
WIP = 6

Now
1 min later
2 min later

Flow rate

2

Flow time

3

Time
4

Little’s Law
Flow Time = WIP / Flow Rate
Inputs
(customers
and/or
materials)

Transformation Process
(components)

Outputs
(goods
and
services)

Little’s Law holds for any stable systems.

5

Little’s Law
Example: Bank Teller

(Average) WIP: 6 customers
(Average) Flow rate: 12 customers per hour
(Average) Flow time: 6/12 = 0.5
A customer spends (on average) 0.5 hours in the bank

Does this mean each customer spends 0.5 hour in the bank?
– No because it is an average, it does not dictate that every person is
in the bank for 30 minutes

6

Implications of Little’s Law
Which one is (usually) difficult to measure ?
– Flow Rate
• Increase the flow rate and it will decrease the flow time

– WIP
• Does not have an impact, independent

– Flow time
• If we reduce the flow time we are going to increase the flow rate overall

Keeping WIP fixed, reducing Flow Time results in a higher Flow
Rate.
7

Implications of Little’s Law: Example
Average number of customers in a restaurant: 50
Average number of customers arriving (and leaving) per
hour: 30 flow rate
What is the flow time?
– 50/30 = 1.66 hrs
– A customer spends (on average) 1hr and 40 mins.

How can we increase the revenue?
Revenue is proportional to Flow Rate = WIP / Flow Time
Increase WIP: