Fast Cycle Production

Little’s Law was observed because the amount of WIP released was consistent with the required cycle time and output capability. If a company wants to increase their output, they don’t do it by increasing the amount released to the floor, when those output levels can’t be reached. They do it by finding ways of increasing the output of the slowest department. They find the bottleneck and work to increase its output. If they have done everything that they can and still can’t get their output to equal required levels, they may have to buy more equipment or hire more people. They don’t make promises that are right at the edge of their capabilities because they know that something bad will probably happen that may swing the momentum in the wrong direction. If there is to be growth, it must be accompanied with proper planning and execution. Little’s Law presents an equation on the surface, but says much more. It says that product cycle time is of prime importance. If you do anything to increase it you are probably making a mistake. If you reduce cycle time, you should do so by increasing your output capability, and adjusting the WIP to meet the demand. You do not reduce cycle time by simply lowering the amount of WIP on the floor.

Do not operate on the edge of your capabilities or accept orders that are at the edge of manufacturing’s capabilities. If you do, you are rolling dice that will eventually come up losers. There are times when releasing extra product to the floor would be advantageous, such as creating a temporary Strategic Kanban for equipment scheduled to go down for an extended period, but with the capability of catching up quickly, once up. This would allow the department behind them to work off the WIP in the Kanban while the equipment is being worked on, thus giving the appearance of no down time at all. The cycle time would go up, but the effect would be continuous output at required levels. Also, temporarily increasing the level of one or more buckets of a Dynaban because of a similar problem (You know what is coming, and you know how long the situation will exist) could also save you some pain. Proper management means preparing yourself for certain situations. Most importantly, you are following proper manufacturing values and observing the science of manufacturing. Many companies have strong product lines, and have buyers standing in line, but fail as manufacturers because they can’t meet the delivery dates. In racing to fill the demand, they resort to manufacturing values that only bring their capabilities down, instead of creating improvement. The orders exceed the capability of the factory, but they take them anyway. They are afraid that if they turn a customer away because they may lose them forever. They forget about, or fail to even care about, the science of manufacturing and start pressuring their employees to produce more than they are capable of producing. Management is under the gun to make more product and they pass that pressure on to the people that have to make miracles happen to save the company. Manufacturing gets the brunt of the pressure, and when you pressure your producers, you may get negatives that you didn’t bargain upon. Production Control and scheduling in most factories is operated as a stand-alone department. They usually have IE standards that guide them in their order acceptance criteria. Little’s Law means nothing to them, as it means nothing to Sales. Each of these departments base their operations on criteria created by other support departments, such as Engineering. If it were true that every department was marching to the same drummer in terms of understanding capabilities, there would be harmony between Sales, Production Control and Manufacturing. It is seldom true unless PC and Sales truly understand Manufacturing’s capabilities. For this to happen, the standards have to be created through historical TAKT data. TAKT scheduling is the only sure fire way of making sure that when a promise is made, there is a very high probability that the order will leave on time. It is the only way that the bottleneck issues will be addressed because the bottleneck is right out there for all to identify. You release according to the capabilities of the bottleneck, and if that isn’t enough to meet demand, you go out there and increase your capabilities.

When you have accomplished that and have demonstrated that the increased capability is not a fluke, you start releasing more. Little’s Law is never violated, and is used to calculate needs. Excess WIP doesn’t create new problems and pressure is put where it should be put - on fixing the problems. It is oriented towards increasing capabilities. So, what does the LL equation say? It says, quite simply that, in order to achieve an acceptable product cycle time, a company MUST balance the amount of product released to the floor with the capabilities of manufacturing. It says that if you increase the amount released, you must have an increase in the amount produced. If you don’t, it says that you will increase your product cycle time. If you increase cycle time you have probably made an error in judgment. If you decrease cycle time and increase output, you have something to be proud of. It is all so simple, yet so easy to overlook. Little’s Law has been around for a long time. For a few years, it was deemed important just to reduce the amount of WIP on the floor. A lot of people were promoted or given bonuses because they reduced inventory by thousands or millions of dollars. All they did was reduce the amount of WIP to a level that was consistent with their output, if they were lucky. If they weren’t, they took too much work off the floor. There is more than one part of the equation there are three, with Cycle time being the prime number.