Little’s Law

Um…not Chicken Little. That’s totally different.

**WARNING – MATH AHEAD**

Play around with Lean long enough, and it is bound to happen.  Someone will ask you to do math.  It’s ok.  You can handle it, I promise.

Lean is about reducing waste, increasing speed and efficiency.  The end result should be faster completion of tasks.  How do you know if it is working?  Well, you measure it, of course.  In the manufacturing world, you can grab a stopwatch, walk the line, and see how long it took to produce a particular widget.  Excellent.  The transactional world is a bit different, though.  That’s where Little’s Law can help.  Here’s the formula…

Amount of WIP (Work In Process)

Lead Time =  ———————————————–

Average Completion Rate

Let’s break that down, shall we?

Lead Time

The answer to the “how long does it take?” question.  This is the metric we want to drive down.  You may also see this called “Takt Time.”  It tells your client how long they should expect to wait between submission and fulfillment.

Amount of WIP (Work In Process)

The number of items on which you are working.  Any task you have touched is WIP.  (You can read more about WIP here.)

Average Completion Rate

How many of these tasks did you complete in a day/week/month/year.  A simple counting exercise.  You may not know how long it really takes you to complete a talent development session, but you probably know how many you did last week.

Nothing too scary here, right?  So what does it mean?  First, if gives you a solid foundation on which you can start to calculate how long those tasks actually take.  Second, it tells us that to improve your cycle time, you have to either increase the completion rate or reduce the WIP.  If we go way back to our discussion on the Process Equation, you’ll recall that we aren’t likely to change the completion rate (the Y in this case) without changing something about the steps in the work (the set of Xs).  That takes time.  But the WIP is totally in our control, as we have discussed.

It’s worth noting that your cycle time starts when any given request enters WIP.  Work in the holding queue isn’t WIP, so the clock starts when you touch the request.  Some of you may be crying foul at this idea.  If I don’t count the time a request waits for me to work on it, of course I’ll finish it in less time.  Yup.  And you’ll do it in such a way that you free up the time you spent trying stay organized, and you can focus on production.  That time adds up to more work completed, which also drives down cycle time.

This will require you to create a baseline cycle time based on your WIP capacity.  Otherwise, you will be comparing an unlimited WIP to a limited one, which are not the same thing.  Don’t get caught up in that.  Lean Accounting goes through the same thing when first starting.  You are changing your measurement system and your work system.  You can’t compare the old system to the new one with metrics that only apply to one of them.  Try, and you’ll get some messy, misleading data.

You have to change your way of thinking, and start measuring differently.  I promise you though, you’ll see a difference as you use the WIP queue and measure your cycle time consistently.  Get your quick wins here, then start pulling apart the Xs of your Average Completion Rate.  This is a great tool to help you understand your workload and get it under control.  And remember, measuring your cycle time isn’t just a good idea.

It’s the law.

 

Lean HR is using WP-Gravatar

%d bloggers like this: