Process Analysis

1
Important topics under
process analysis

1. Mapping a Process
2. Calculating Capacity and
Identifying Bottlenecks
3. Load Balancing
4. Setup Times and Batches
5. Little’s Law

2
 1. Mapping a process
• To manage or improve a process, it is important first to understand it.
• Almost always, the first step of any process analysis should be to map or draw
out the existing process.
• Process mapping or process-flow diagramming is a visual tool that helps achieve
this.
RM
3 3
100 Step 2:
Step 1: Cutting
Sewing (Base)

FGI 15 3
Step 4: Pack Step 3:
and Ship Sewing (extra)

3
Shirt production process
4
 1. Mapping a process
(one torso, two Stitched
2
sleeves, one
Fabric

sleeves
collar and one and 1
shirt pocket) pocked
Step 2: Sewing to torso
Step 1: Cutting
(Base)

Stitched
collar, 2
company
Complete Shirt logo, 6
ready to me Step 4: Pack and button Step 3: Sewing
picked by a parcel Ship (extra)
carrier

5
Shirt production process
Commonly used Symbols used in Process mapping
Symbol Application

Solid arrow shows the flow of the product through the process

Inverted tringle depicts inventory between steps

Rectangular shows a process

An oval represents a start of end of a process

A parallelogram represents input or output

Delay in process

Stored data

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Table 1
Types of Inventory
1. Raw materials: Materials that have not yet started production are
referred to as raw materials. For example, the rolls of fabric, logo
patches, and shipping boxes used in the shirt production process.
2. Work in process (WIP): Any items that are currently in process, either
at a process step or between steps, are referred to as work-in-process
inventory or WIP. Often, WIP either will build up naturally between steps
or be strategically placed there in order to decouple steps in a process.
The area where WIP inventory is stored is often referred to as the
buffer.
3. Finished goods inventory (FGI): Items that have been completely
processed are referred to as finished goods inventory.

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Calculating Capacity and Identifying Bottlenecks

• Important questions to be answered:

1) How much can the existing process produce?

2) How many customers can the existing process service?

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Time study results

Step Description Run Time

(Minutes/shirt)

1 Cutting 12.5

2 Sewing (base) 10

3 Sewing (extras) 15

4 Pack/ship 5

 Run time: The time it takes to process an item at a process step

 It is independent of setup time
 It can be computed for a batch of items (e.g., the run time for a batch of shirts being processed all at once)

9
Table 2
Capacity
• It can be defined as the maximum number of items that can be processed
by a resource in a given time period.
 Workers, production equipment, testing equipment, and computers are all
examples of resources.
 Capacity provides us with an upper bound on the amount of units we can produce
or customers we can serve per unit of time.
Knowing the capacity of a process helps to determine the extent to which demand
can be met.
 Consider the run time given in table (e.g., 12.5 min/shirt) calculate the
capacity of cutting operation. Also,
 Assume
o 1 worker per step; and Capacity =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑇𝑖𝑚𝑒
o Operations run 8 hours per day, 𝑇𝑖𝑚𝑒 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑎 𝑢𝑛𝑖𝑡 (𝑜𝑟 𝐵𝑎𝑡𝑐ℎ)

o 5 day per week

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 𝑑𝑎𝑦𝑠 ℎ𝑜𝑢𝑟𝑠 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠
5 ×8 × 60 2400 𝑆ℎ𝑖𝑟𝑡𝑠
𝑤𝑒𝑒𝑘 𝑑𝑎𝑦 ℎ𝑜𝑢𝑟𝑠 𝑤𝑒𝑒𝑘
Capacity = 𝑚𝑖𝑛𝑠 = 𝑚𝑖𝑛𝑠
= 192
12.5 12.5 𝑤𝑒𝑒𝑘
𝑠ℎ𝑖𝑟𝑡𝑠 𝑠ℎ𝑖𝑟𝑡
Calculate the capacity of other process:

Step Description Run Time Capacity

(Minutes/shirt) (Shirts/Week)

1 Cutting 12.5 192

2 Sewing (base) 10 240

3 Sewing (extras) 15 160

4 Pack/ship 5 480

 It is important to remember that the capacity calculations above are average values meant to be used as a guide for
decision-making.
 For any given week and any given step, a resource may be capable of producing more or less than its average
capacity. Some steps may exhibit considerable variability in their run times. Although working with averages ignores
11
this variability, it provides us with a straightforward way in which to begin analyzing a process.
 𝑇𝑜𝑡𝑎𝑙 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑇𝑖𝑚𝑒
Ways to increase capacity Capacity =
𝑇𝑖𝑚𝑒 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑎 𝑢𝑛𝑖𝑡 (𝑜𝑟 𝐵𝑎𝑡𝑐ℎ)

The numerator (total available time) or decrease/shrink the denominator

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Bottleneck
• The capacity of a process is the capacity of its limiting resource.

• Therefore, to determine capacity, we need to find the limiting resource or slowest step, known as the
bottleneck.
• Bottleneck: : The resource that limits the production or service delivery of
a process.

• Can you find the bottleneck in the shirt company case?

• Yes, step 3 is the bottleneck.

o Because step 3 can produce at most only 160 shirts per week, the overall process capacity is also limited to producing 160 shirts
per week. The process as a whole cannot operate at a faster rate than that of step 3, even though every other step in the process has
the capacity to operate at a faster rate.

o We emphasize that this does not necessarily mean that the process will produce 160 shirts per week; it simply means that it can
produce that many shirts per week. The number of actual shirts produced per week will be determined by demand and customer
orders. 13
Bottleneck
• We have identified the bottleneck as step 3; however, we have not stated the
actual resource that is constrained.
• In the current process, both the sewer and the sewing machine at step 3
would be considered the bottleneck since there is a one-to-one relationship
between the two, but this is not always the case.
• Resources are often shared in a process. For example, imagine an extreme
case in which a single sewing machine is shared between steps 2 and 3.
• Although the sewers would still have capacities of 240 shirts per week (step
2) and 160 shirts per week (step 3), the single shared sewing machine would
have a much lower capacity than either of these steps.
• A single sewing machine, available for 5 days a week, 8 hours a day, can
perform steps 2 and 3 in 25 minutes per shirt resulting in a capacity of:
14
Now can you combine step 2 and 3 and recalculate the shared resource
capacity?

RM
3 3
100 Step 2:
Step 1: Cutting
Sewing (Base)

FGI 15 3
Step 4: Pack Step 3:
and Ship Sewing (extra)

𝑑𝑎𝑦𝑠 ℎ𝑜𝑢𝑟𝑠 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠

5 ×8 × 60 2400 𝑆ℎ𝑖𝑟𝑡𝑠
𝑤𝑒𝑒𝑘 𝑑𝑎𝑦 ℎ𝑜𝑢𝑟𝑠 𝑤𝑒𝑒𝑘
Capacity = 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠 = 𝑚𝑖𝑛𝑠
= 96
10 +15 25 𝑤𝑒𝑒𝑘
𝑠ℎ𝑖𝑟𝑡𝑠 𝑠ℎ𝑖𝑟𝑡𝑠 𝑠ℎ𝑖𝑟𝑡 15
Bottleneck
• In this case, the shared resource (i.e., the single sewing machine)
would be the bottleneck of the process, and the new process capacity
would then be 96 shirts per week.
• Given the capacity of the process, we can then measure the extent to
which the assets and resources are utilized.

• Capacity utilization: The ratio of the amount of a resource used (e.g.,

demand) to the amount available (e.g., capacity) in that time period.

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Capacity utilization
• Capacity utilization provides us with a measure of how much of the
capacity of an operation is used.
• Suppose that the shirt process is operating at capacity (i.e.,
producing 160 shirts per week).
• Recalling the step 1 capacity (192 shirts per week), Can you
calculate the capacity utilization at step 1:
𝑆ℎ𝑖𝑟𝑡𝑠
160
𝑤𝑒𝑒𝑘
Capacity utilizations = 𝑆ℎ𝑖𝑟𝑡𝑠 = 83%
192
𝑊𝑒𝑒𝑘
Similarly, calculate the capacity of step 2, 3 and 4.

 It should be 66.6% for step 2, 100% for step 3 and 33.3% for step 4

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Note: capacity is a rate and always measured in units per time.
Capacity
• Cycle time: The average amount of time that elapses between
completing successive items at a stage, assuming that the process is
operating at capacity.
• The cycle time at a process step is defined as the inverse of the capacity
at that step.
1
Cycle time =
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
 Can you calculate the capacity of each step of shirt making process?

1 𝑚𝑖𝑛𝑠
Cycle time = 𝑠ℎ𝑖𝑟𝑡𝑠 or 12.5
192 𝑠ℎ𝑖𝑟𝑡
𝑤𝑒𝑒𝑘

 We would find that it match exactly with the original run times.
 This is because we have not included any setup times at any of the individual steps.
 Given the cycle times for each step in the process, the cycle time of the overall process is then 15 minutes per
18
shirt (i.e., the cycle time of the bottleneck step).
 • Let us revisit the process design for an Alternate Process:

• Why steps 2 and 3 in the given process is being performed sequentially (with
two sewers splitting the tasks for sewing a shirt).

• Why not we combine the two steps, where each sewer sews (with cycle time
of 25 min./shirt) a complete shirt? (adding the run times for steps 2 and 3).

• Can you calculate the capacity for the combined steps 2 and 3 (with two
sewers)?

𝑑𝑎𝑦𝑠 ℎ𝑜𝑢𝑟𝑠 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠 𝑆ℎ𝑖𝑟𝑡𝑠

2 𝑠𝑒𝑤𝑒𝑟𝑠(5 ×8 × 60 ) 4800 = 192
𝑤𝑒𝑒𝑘 𝑑𝑎𝑦 ℎ𝑜𝑢𝑟𝑠 𝑤𝑒𝑒𝑘
Capacity = 𝑚𝑖𝑛𝑠
= 𝑚𝑖𝑛𝑠 𝑤𝑒𝑒𝑘
25 25
𝑠ℎ𝑖𝑟𝑡𝑠 𝑠ℎ𝑖𝑟𝑡 19
 Note
• Now the two sewers are available for 2 × 2,400 minutes/week to sew complete
shirts.
• The capacity of 192 shirts/week for the combined steps 2 and 3 is higher than
our previously calculated capacity of 160 shirts/week for step 3 (the bottleneck
step).
• By combining steps 2 and 3, we eliminate idle time that the sewer at step 2
incurs in the original process configuration (since he or she can only process as
fast as the rate of step 3).
• The overall capacity for the new process configuration is 192 shirts/week, which
is equal to the capacity of both step 1 and the new combined steps 2 and 3.
• Given this, important questions arises:
• Why do we split the tasks at steps 2 and 3 between sewers (as shown in Figure 1)?
• Why not always have the workers in a process perform all steps—for example, sewing
a complete shirt or making an entire sandwich at a sub-sandwich counter?
• What are the advantages of separating tasks between workers? 20
Load Balancing
• The first step is to determine how much time per shirt we can spend at each step in the process.
We refer this as Takt time:
𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒
Takt time=
𝑈𝑛𝑖𝑡𝑠 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑡𝑖𝑚𝑒

• Takt time refers to the target time per unit as derived from customer demand.
• Whereas, the cycle time refers to the actual time per unit that can be achieved on the
production floor.
• Takt time provides a metric for evaluating and improving cycle times.
• If the cycle time for any step of a process exceeds the Takt time, then the
process cannot fully meet demand and that cycle time must be reduced.
Otherwise, the step will not be able to keep pace with demand. 21
Takt Time
• Assume that the demand for shirts is 172 shirts per week. The process
runs 8 hours a day, 5 days a week.
• Use the given formula and calculate Takt time
𝑚𝑖𝑛𝑠
2400 𝑚𝑖𝑛𝑠
𝑤𝑒𝑒𝑘
Takt time= 𝑠ℎ𝑖𝑟𝑡𝑠 = 13.96
172 𝑠ℎ𝑖𝑟𝑡
𝑤𝑒𝑒𝑘

• Therefore, for the existing process to meet demand, no step can have a
cycle time greater than 13.96 minutes per shirt.
• To think about this another way, if we were to stand at the end of the
production line, we would need to see a shirt come off the line every 13.96
minutes (or less), on average, to ensure the process is fully meeting
demand. 22
 Is not only a bottleneck, but
its cycle time also exceeds the
Operator Loading Chart Takt time.

Process – loading Chart

16 15
Takt Time =13.96 min./shirt
14 12.5

12
10
10
Min./Unit

8
6 5

4
2
0
Cutting Sewing (base) Sewing (Extras) Pack and Ship
Process

23
• Therefore, meeting a demand of 172 shirts per week is not possible
with the current process configuration.
• What we can do to increase the capacity of the process?
 First:
 We can increase the time available at the sewing (extras) step by either adding
a second sewing machine and operator
or
 We can increasing the number of hours the current sewer works.

 Second:
 We can reduce the time required to process a unit at this step by either
i. Eliminating unnecessary tasks,
ii. Improving the time for specific tasks, or
iii. Rebalancing tasks between steps

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Sharing the operations
• What can be best sharing options?

Step 1 & 3;

Step 3 & 4;

Step 2 & 3

Probably the best way is to share the step 2 and step 3 as both
deals with sewing.

25
 Figure: Detailed operator-loading chart

16

14
Takt Time = 13.96 min/shirt
5
12 Buttons
10

2
8
Pocket 3 Sleeve logo

6 12.5 4
3
Collar logo
4 Sleeve
5
2 4 4 Collar
Sleeve
0

Cutting Sewing (base) Sewing (Extras) Pack and Ship

26
  The goal is to reduce the cycle time
of step 3 below the Takt time of
13.96 min. per shirt by balancing
the workload between steps 2 and
3.

 How many ways we can do this?

 There are in fact multiple ways to rearrange tasks between steps 2 and 3.
 As shown in above Figure, sewing the pocket onto the torso takes 2 minutes per shirt (step 2), whereas sewing
the collar onto the torso takes 4 minutes per shirt (step 3).
 If we exchanging these two tasks what would be their cycle time?
 The cycle time for the bottleneck step, sewing (extras), would be 13 minutes per shirt.
27
Balanced operator-loading chart

Takt Time = 13.96 min/shirt

14

12 2 Pocket

10 4
Collar
5 Buttons
8
Min./unit

12.5 4
6
Sleeve
3 Sleeve
4
Logo
5
2 4
Sleeve 3
Collar
Logo
0

Cutting Sewing (base) Sewing (Extras) Pack and Ship

28
 Capacity calculation for updated-1
process
• Can the updated process meet demand?
• For that we need to recalculate its capacity.
• Can you recalculate the capacity of updated process?
Step Description Run Time Capacity Updated Run Time Updated Capacity
(Minutes/shirt) (Shirts/Week) (Minutes/shirt) (Shirts/Week)

1 Cutting 12.5 192 12.5 192

2 Sewing (base) 10 240 12 200

3 Sewing (extras) 15 160 13 184.6

4 Pack/ship 5 480 5 480

29
Table 4
 Capacity calculation for updated process
• The capacity at step 2 reduces to 200 shirts per week (from 240
shirts per week), while the capacity at step 3 increases to 184.6 or
approximately 185 shirts per week (from 160 shirts per week).

• Although the capacity at step 2 has decreased, realize that this is

secondary since
o Step 2 is not the bottleneck, and
o The overall process capacity has increased from 160 shirts per week to 185
shirts per week. 30
 Capacity calculation for updated process
 Is there any alternate way switching the task between step 2 and
3?
• For example, switching the task of sewing the sleeve logo (3
minutes per shirt) to step 2.
• Shift the Sleeve logo to Step 2 and re-calculate the capacity.

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Updated -2 operator-loading chart
14
Takt Time = 13.96 min/shirt

12 2
Pocket
10 4 Collar
4 Sleeve
8

6 12.5
5
4 Button
4
Sleeve

2
5
3 3
Sleeve logo Collar Logo
0

Cutting Sewing (base) Sewing (Extras) Pack and Ship

32
Capacity calculation of Updated-2 process

Step Description Run Time Capacity Updated Run Time Updated Capacity Updated Run Updated Capacity
(Minutes/shirt) (Shirts/Week) (Minutes/shirt) (Shirts/Week) Time (Shirts/Week)
(Minutes/shirt)

1 Cutting 12.5 192 12.5 192 12.5 192

2 Sewing 10 240 12 200 13 184.6

(base)
3 Sewing 15 160 13 184.6 11 218.18
(extras)
4 Pack/ship 5 480 5 480 5 480

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Table 5
Operator-loading charts
• The operator-loading charts can be used not only to examine ways to rebalance tasks between

steps, but also to look for ways to reduce the number of resources required in a process.

• For example, consider a sub-sandwich restaurant where the tasks involved in making a

sandwich are shared among multiple workers. An operator- loading chart can be used to

determine the minimum number of workers required on the sandwich-making line in order to

meet customer demand.

• Operator-loading charts allow us to visualize opportunities for improvement and easily

identify bottlenecks. Based on the improvements derived from an operator-loading chart, the
34
design of a process can be revisited, and resources and tasks can be reallocated when
Setup time and Batches
• So far, we have assumed that shirts are being processed at each step one at a time.

• In addition, we have ignored the potential setup time required for the steps in the
process in Figure 1. Let us introduce the concepts of batch processing and setup
times.

• Batch: A group of items or orders that is processed all at one time. The batch size is
then the number of items or orders that are processed as a batch.

Suppose: a batch of five shirts traverse the process together in a tote.

• Each shirt being processed at a step before the tote (and all five shirts) moves on to
the next step. 35
Setup time and Batches
• Often in a production process, successive batches will be different from one another.

• For example, in the shirt process, batches may be differentiated by fabric type. Note
that we will assume shirts are processed as batches throughout the process, and the
run times remain the same.

• But sometimes items may be batched together only in certain stages of a process.
Also, cases can occur in which batching makes the task for successive items in a batch
easier due to repetition.
• Setup time: The amount of time it takes to set up or prepare before
processing an item or batch of items at a process step.
36
• Assume that in shirt making process there is a setup time of 22
minutes per batch for step 1. This setup time represents the time to
select and lay out the fabric as well as calibrate the necessary tools
for cutting.
• Can you calculate the capacity of cutting after adding setup time?

𝑑𝑎𝑦𝑠 ℎ𝑜𝑢𝑟𝑠 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠

5
𝑤𝑒𝑒𝑘
×8
𝑑𝑎𝑦
× 60
ℎ𝑜𝑢𝑟𝑠
2400 𝑏𝑎𝑡𝑐ℎ𝑒𝑠
𝑤𝑒𝑒𝑘 = 28.4
Capacity = 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠 = 𝑚𝑖𝑛𝑠 𝑤𝑒𝑒𝑘
22 +(5 X12.5 ) 84.5
𝑏𝑎𝑡𝑐ℎ 𝑏𝑎𝑡𝑐ℎ 𝑠ℎ𝑖𝑟𝑡 𝑏𝑎𝑡𝑐ℎ

The cycle time for a batch of five shirts at step 1 is 84.5 minutes per batch, which includes
62.5 minutes per batch of run time and 22 minutes per batch of setup time.
 Convert the batches per week to shirts per week,
𝑠ℎ𝑖𝑟𝑡𝑠
we find capacity for step 1 is = 142
𝑤𝑒𝑒𝑘
37
• This represents a decrease from the original step 1 capacity of 192
shirts per week.
• Why did capacity decrease?
• It decreased because there is now additional time during the
production process that must be dedicated to setting up the cutting
step for each batch.
• This setup time takes away from the time available and thus
decreases the capacity for step 1.
• Can you calculate update cycle time?

1 1 𝑚𝑖𝑛𝑠 𝑚𝑖𝑛𝑠
Cycle time = = 𝑠ℎ𝑖𝑟𝑡𝑠 × 2400 = 16.9
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 142 𝑤𝑒𝑒𝑘 𝑠ℎ𝑖𝑟𝑡
𝑤𝑒𝑒𝑘

Now calculate the updated capacity of rest of the steps?

38
Updated capacity and cycle time
Step Description Updated Run Time Setup time Updated Run Time Cycle time
(Minutes/shirt) Mins./batch (Minutes/shirt) (mins./shirt)

1 Cutting 12.5 22 142 16.9

2 Sewing (base) 12 0 200 12
3 Sewing (extras) 13 0 185 13
4 Pack/ship 5 0 480 5

Table 6

 The bottleneck of the process has now shifted from step 3 to step 1.
 Furthermore, notice that the run time and cycle time for step 1 are no longer the same.
 Recall that the cycle time represents the inverse of capacity. Therefore, since the capacity
calculation now incorporates a setup time for each batch, the cycle time has increased for step
1.
 This new cycle time allocates the setup time across each unit of the batch. This is why, as
previously stated in section 2, run time does not necessarily always equal cycle time. 39
• For steps 2 through 4, the capacity and cycle times did not change. Although
shirts are being processed in batches instead of one at a time, the run time
for processing five shirts one at a time is the same as the run time for
processing a batch of five shirts.
• The choice of batch size can have a surprisingly large impact on the
capacity of a process. An interesting question to consider is how does
changing the batch size impact the shirt process?
• For example, in the shirt process, if the batch size were increased, would
this increase or decrease capacity?
• What are the potential benefits and risks of having a larger or smaller batch
size?
40
Little’s Law
• Up to this point, we have focused on the question:
“How much can the process produce?”
• Now let use answer our next question:
“How long does it take the process to produce an item?”
 In order to answer this question we need to understand two
important terms:
1. Throughput rate: The rate at which units flow through a process.
It represents the actual rate at which a process or system
generates its products or serves its customers. The unit of
measure for throughput rate is units per time (e.g., shirts per week
or cars per month).
41
• Note: there is a natural relationship between capacity and
throughput rate.
• In our example (shirt manufacturing case), the capacity was
calculated as 185 shirts per week (Table 4).
• This represents the maximum number of shirts we can produce per
week; however, this is not necessarily how much we will produce.
We may not (and likely will not) operate at capacity all the time.
Instead, depending on demand, we may produce fewer than 185
shirts per week. The actual rate of production is the throughput rate.
• In this regard, capacity represents a ceiling or upper limit for
throughput rate.
 Our goal is to align the throughput rate with demand to ensure that customer
needs are met and to prevent us from overproducing (more than demand).

42
• The second term is:
• Throughput time: The time it takes for a specific item, job, or order
to go through the entire process. In manufacturing settings,
throughput time is also known as manufacturing lead time.
Throughput time is measured in units of time (e.g., seconds,
minutes, and so forth).
• Example: Imagine we were at step 1 (cutting) in the shirt process
(Figure 1), and we started a stopwatch when the next shirt began
processing.
• If we followed that shirt throughout the process and stopped the
stopwatch when it completed step 4 (Pack and Ship), we would find
that the time it took the shirt to traverse the entire process
represents the throughput time.
• Throughput time= Run time + Setup time + Waiting time
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Little’s Law
• For a system in equilibrium, Little’s Law governs the relationship
between the average rate of flow through a system (i.e., average
throughput rate), the average amount of inventory in the system,
and the average amount of time that a unit spends in the system
(i.e., average throughput time). For a system with defined
boundaries that is in equilibrium, let:
 I = Average amount of inventory (i.e., the average number of units) within the system
 R = Average throughput rate through the system
 T = Average throughput time for a unit to pass through the system

• Little’s Law states that the relationship among I, R, and T is given by following
Equation:
𝐼=𝑅×𝑇
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• Example: Let is think of customers in a single line at a grocery store
checkout. Customers are processed at an average throughput rate
of R = 32 customers per hour. On average, there are I (inventory) =
4 customers in line (including in service).

• Therefore, the average throughput time is T = I/R = 4 customers/32

customers per hr. = 0.125 hr. or 7.5 min.

• This means that a customer arriving in the line should expect to

wait, on average, 7.5 minutes to be processed and out the door.

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• Example: suppose you were taking a trip and you wanted to
determine how far you could drive over the next three hours.
• If you were to drive 60 miles per hour for 3 hours, you would travel
180 miles.
• From this simple calculation, we can recognize the three elements
of Little’s Law.
• The inventory is 180 miles; the throughput rate is 60 miles per hour;
and the throughput time is 3 hours.
• Hence, applying I = R × T, we find 180 miles = 60 miles per hr. × 3
hr.
• The units of measure for throughput time and throughput rate are
then hours and miles per hour—two very distinct and different units
of measure.

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• In the shirt example, assume that the average throughput rate is R =
120 shirts per week and that there is one unit of inventory in
process, on average, at each step of the process and three units of
inventory between each of the successive processes.

3 Step 2: 3
Step 1:
Sewing
Cutting (1)
(Base) (1)

3 Step 3:
Step 4: Pack
Sewing
and Ship (1)
(extra) (1)

Work In Inventory (WIP) (I) = 1 + 3 + 1 + 3 + 1 + 3 + 1 = 13

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• Applying little’s law, we find:
𝐼 13 𝑠ℎ𝑖𝑟𝑡𝑠
T=𝑅= 𝑠ℎ𝑖𝑟𝑡𝑠 0.11 𝑤𝑒𝑒𝑘𝑠 𝑜𝑟 4.3 ℎ𝑜𝑢𝑟𝑠
120
𝑤𝑒𝑒𝑘𝑠

• This means that the next shirt to start production should be completed in
4.3 hours (on average).
• Notice that 4.3 hours is much longer than if we were to add just the
cycle times of each step in the process.
• This is because using Little’s Law to calculate T takes into account the
amount of inventory in the system (I=13) and the rate at which items are
being processed (120 ) through the system.
𝑠ℎ𝑖𝑟𝑡𝑠
𝑤𝑒𝑒𝑘𝑠

• A shirt ready to start production must wait for all the inventory ahead of it
in line to be processed before it can be processed.
• In addition, although a step such as pack and ship can complete 480
shirts per week, it will not because the overall system is constrained by
the rate of demand (i.e., the throughput rate).
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• Little’s Law also can be used to determine the average amount of
inventory in the system.

• For example, assume that the inventory values shown in previous Figure
are not known. Instead, sample data has been collected and the average
throughput time, T, for the process from the start of step 1 to the end of
step 4 was found to be 20 hours or 0.5 weeks.

• Based on this, we can calculate I = R × T = 120 shirts per week × 0.5

weeks = 60 shirts.

• Thus, on average, we would expect to find 60 shirts in process at any one

time (and between the start of step 1 and the end of step 4).
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