Little's law was named after Mr. John Little who was a professor at MIT's Sloan School of Management. The law states that by reducing work in progress and maintaining a processes average completion rate the lead time will be reduced too. On the same note, according to little's law increasing the average completion rate while maintaining the same level of work in progress will reduce also reduce the lead time.
How to calculate?
Little's law can is expressed with the following equation:
- Lead time = Amount of work in progress / Average completion rate
The Apics dictionary 2015 defines logistics as:
Among the primary objectives of logistics are:
Because logistics plays such an important role all throughout the value stream there are enormous opportunities with reducing cycle times, improving "changeover of vehicles" and improving the overall flow of activities that fall within logistics.
The purpose of Lean Accounting is to support the lean enterprise as a business strategy. It seeks to move from traditional accounting methods to a system that measures and motivates excellent business practices in the lean enterprise. Applying Lean principles is part of this system.
The Vision for Lean Accounting
Ref: Wikepedia, Lean accounting
A lead time ladder is the timeline shown on the bottom of a value stream map. The lead time ladder is used to calculate the production lead time.