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Lean Confusion…Still

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  • #52774

    newbie
    Participant

    Ok, I am still a bit confused by Littles Law explaining Lead Time.  For example:
    Building WIP in the form of supermarkets where single-piece flow is impossible is used to reduce Lead Time (ie the elapsed time it takes to move an order through the value stream), right?  So can’t you actually slow down process velocity (ie the elapsed time it takes to move a unit through the value stream) by increasing WIP to speed up lead time?
    Thanks!
     

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    #186074

    Jered Horn
    Participant

    If Little’s Law states…Lead Time = WIP (units) / ACR (units per time period)How do you get: “Building WIP…is used to reduce Lead
    Time”?There is a lot more that can be said here, but, since
    I don’t know the background behind your question, I
    will hold my tongue.

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    #186077

    newbie
    Participant

    I was thinking about the idea of pull systems and of controlling inventory levels using supermarkets.  In this case, arent you building additional inventories in the form of the supermarkets, with the result being you are able reduce the lead time it takes to fill a given order?
    And if this is the case, then isnt that contrary to Little’s Law?  I know I gotta be wrong on this, but I just cant sort it out…thanks!

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    #186078

    StuW
    Member

    Don’t confuse process velocity with Little’s Law, which is the lead time, as the latter is the denominator in the computation of Process Velocity.   In other words:
    Velocity = # Steps / Lead time = # Steps / (WIP/Completion rate)
    Reducing the WIP, decreases the overall denominator which is lead time, and that increases process velocity.  As an example, asssume 15 steps, with a WIP of 10 and completion rate of 2 per hour.   The lead time is 10/2=5, and overall Velocity is 15/5=3 moves per hour.  Now with a WIP of 6, the new lead time is 6/2=3, and overall Velocity is 15/3= 5 moves per hour.  
    Lower inventory is almost always preferable until it begins to starve a bottleneck operation than you need to back off.
     

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    #186080

    dlw bpex
    Participant

    The supermarket concept is a realistic compromise to attain
    acceptable RESPONSE times in some instances. It seems you may be confusing Lead Time with Customer Response
    time. They are not the same.DLW – BPEX

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    #186087

    newbie
    Participant

    Ok…that is making more sense. So you have lead time being a funcction of inventory and process velocity being a function of lead time with velocity measured as ‘moves per unit of time’.  So reducing inventory reduces lead time and increase process velocity.
    Then how is the added inventory of a supermarket pull system explained?  As a compromise (as contributed by the other poster – thanks!) in achieving a reduced customer response time / customer delivery window?  Thanks!

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    #186089

    StuW
    Member

    I think you are confusing what the multiple lanes provide in a supermarket.  These lanes are not inventory, the inventory is the customers waiting to be served, or processed through.   The additional lanes serve as ways to handle increased volume of customers.  The more lanes, the more options for the WIP to be handled.  
    Think of it as a single option only, one lane available.  In that situation, everyone has to wait to be served once there is a single customer in process.   The more lanes open, the more capability to address the WIP (# of customers ready for checkout).
     

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    #186090

    dlw bpex
    Participant

    You seem to be describing an ACTUAL supermarket operation. I
    believe the OP (newbie) is referring to “supermarket” as a Lean
    analogy. In that case, supermarkets certainly do represent inventory,
    just like the milk jugs in stainless chutes that (legend has it) inspired
    the term in the Lean world. In fact, that is their purpose.

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    #186094

    Szentannai
    Member

    Hi newbie,
    my two cents would be that a supermarket will allow you to control the WIP and thus through Littles Law the Lead Time as well.A supermarket will improve the LT by stabilizing the WIP (think of a situation without a supermarket, where every workstation just hoards WIP to make sure it will have work the next day, for instance). There is also the option to reduce the size of the supermarket and nudge the system in the direction of a one piece flow, if feasible.Regards
    Sandor

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    #186125

    Nilesh Pncholi
    Participant

    Hello Newbee
    I’ve been in your position and it can seem confusing and even totally against the grain to introduce a supermarket, however I found it to the the exact solution givin the circumstances I was facing. 
    The supermarket enabled me to create an inventory of all the items held within the supermarket.  The next step for me was idetifying which items were being pulled by the system.  With the use of the inventory, these items were easily found and pushed into the system. 
    In my example the lead team of special request items reduced from 5 days to 24 hours and the supermarket was a major contributor to this improvement.  I guess the key to success for my example was having a very accurate inventory of the items in the supermarket and then, identifying what was being pulled by the system.

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    #186128

    Szentannai
    Member

    To put it shortly, Standard Work comes before lead time reduction.Regards
    Sandor

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    #186130

    Craig
    Participant

    Process Lead Time = Wip / Exit Rate
    I get in a line at Disney of 50 people and the exit rate from the Ride is 2 people per minute. I have 25 minutes to wait to get on the ride. (thats my lead-time)
    If I am a can of baked beans and I am stuffed on the shelf behind 51 other cans…the WIP is now 52. I am not the best tasting type of bean and people buy them (exit rate) at a rate of 1 can per week. My lead time to see the daylight again is 52 weeks. (unless someone feels like they need to pull the cans from the back for some reason)
    If I am filling orders for a customer and my factory is capable of cranking out 5000 widgets per day (Exit rate)  and there are 50000 already in wip, I tell the customer it will take 10 days to ship the order.(lead time)
    Comments?
     

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    #186131

    Szentannai
    Member

    Hi,
    Just a small comment: in all the cases we suppose that the system is in steady state – so that the average rate is well defined, and also we suppose that the process is standardized – e.g they are using a FIFO or something. If you are allowed to just push your way into to the Ride ( which would be the equivalent of expediting in a manufacturing context ) all bets are off concerning the lead time of any individual passenger.Same for the beans, if they are in an unordered heap and customers can pick from the top or bottom, there is no telling how long a can will stay in the heap.This brings us back to the supermarket: this will provide a standard organized way of moving items through the process – and thus will enable Little’s Law to act.Regards
    Sandor

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    #186152

    newbie
    Participant

    So:
    Lets say I have two product variants in a given value stream – A & B,  a takt time of 2 minutes, and a production monument – acting as a bottleneck – that has an effective machine cycle time of 4 minutes.  By adding a supermarket pull system for A, B  – I have done the following:

    Enabled the value stream to produce to Takt
    Reduced the exit rate from 4 min to 2 min
    Increased WIP by 2x at the bottleneck
    Potentially altered Lead Time (increased WIP but reduced exit rate)
    Potentailly altered process velocity ( V = #  Steps / LT)
    Am I tracking? Comments?

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    #186164

    Szentannai
    Member

    Hi newbie,”Enabled the value stream to produce to Takt”
    “Reduced the exit rate from 4 min to 2 min”
    I guess not. Your monument is still working at the double of the Takt, the supermarket will not change that.”Increased WIP by 2x at the bottleneck”
    Nope, probably not. The question is of course how the line was controlled before the supermarket. If every other process step producet at max. capacity then you probably had a LOT of uncontrolled WIP before the monument.
    Now, you control the line through the supermarket, meaning that wehen the supermarket is full the OTHERS are not allowed to produce – so I would say you reduced the WIP very probably.”Potentially altered Lead Time (increased WIP but reduced exit rate)”
    Yes, but in another way – reduced WIP and constant exit rate.”Potentially altered process velocity ( V = # Steps / LT)”
    Yep, you very probably decreased the LT.Regards
    Sandor

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    #186166

    Severino
    Participant

    Put a nametag on your monument that reads “Herbie” and then put him on the biggest loser or make him walk longer than the rest of the pack.

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    #186168

    Mikel
    Member

    Agreed, the main point being the monument needs significant work
    or needs to be replaced or replicated.

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    #186171

    newbie
    Participant

    Thanks everybody!  Always appreciated.

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    #186182

    Szentannai
    Member

    Hey,
    another Goldratt fan! I am sure glad to see the good old TOC is not completely out of fashion.Regards
    Sandor

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