# Little's Law Lead Time and WIP Calculator

> Source: https://netray.co/tools/little-law-lead-time-wip-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Convert WIP and throughput into lead time, process cycle efficiency and the WIP cap needed for a target lead time.

## Category

manufacturing

## Audience

- Lean practitioner
- Production planner
- Operations manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Work in process

**Key:** wip

**Type:** number

**Default:** 240

**Min:** 0

**Step:** 10

**Unit:** units

**Help:** Average units in the process between start and finish.

#### Throughput

**Key:** throughput

**Type:** number

**Default:** 60

**Min:** 1

**Step:** 5

**Unit:** units/day

**Help:** Average completed units per working day.

#### Value-add touch time per unit

**Key:** va_hours

**Type:** number

**Default:** 1.5

**Min:** 0

**Step:** 0.1

**Unit:** hours

**Help:** Total hands-on processing time per unit across all steps.

#### Working hours per day

**Key:** hours_day

**Type:** number

**Default:** 8

**Min:** 1

**Step:** 0.5

**Unit:** hours

#### Target lead time

**Key:** target_days

**Type:** number

**Default:** 2

**Min:** 0.1

**Step:** 0.5

**Unit:** days

#### Value per unit

**Key:** cost_unit

**Type:** number

**Default:** 85

**Min:** 0

**Step:** 5

**Unit:** $

**Help:** Used to value inventory tied up.

**Outputs:**

#### Lead time

**Key:** lead_days

**Expr:** wip / throughput

**Format:** decimal

**Primary:** true

**Description:** Little's Law: lead time equals WIP divided by throughput.

#### Lead time in working hours

**Key:** lead_hours

**Expr:** lead_days * hours_day

**Format:** hours

#### Process cycle efficiency

**Key:** pce

**Expr:** va_hours / lead_hours * 100

**Format:** percent

**Description:** Share of lead time spent adding value.

#### WIP cap for target lead time

**Key:** target_wip

**Expr:** throughput * target_days

**Format:** integer

**Primary:** true

#### WIP reduction needed

**Key:** wip_cut

**Expr:** max(wip - target_wip, 0)

**Format:** integer

#### Inventory value released

**Key:** cash_freed

**Expr:** wip_cut * cost_unit

**Format:** currency

**Chart:**

#### Lead time (days) as WIP changes

**Type:** line

**X:** wip

**From:** 20

**To:** 400

**Steps:** 20

**Series:**

- lead_days

**Disclaimer:** Little's Law holds for a stable system with averages measured over a long period. Variation, batching and changing demand make real lead times differ from the average.

## Content

**Intro:** Little's Law says average lead time equals average work in process divided by average throughput. It is the quickest way to see why cutting WIP shortens lead time and how big a WIP cap you need.

**Sections:**

#### How to use the calculator

**Body:** Enter the average number of units in process, average completed units per working day, and the touch time per unit. The calculator returns lead time in days and hours, process cycle efficiency, the WIP cap that would deliver your target lead time at the same throughput, and the inventory value released if you reach that cap. The chart shows how lead time falls linearly as WIP is reduced, with the line reading directly at your throughput.

**Bullets:**

- Use averages over weeks, not a single day
- Count all WIP between release and completion
- Use finished-goods throughput for the same boundary

#### The formula and its assumptions

**Body:** Lead time = WIP / throughput. It holds for any stable process, whatever the order of service or variation, as long as the averages are measured over the same boundary and period. Process cycle efficiency is value-add time divided by lead time; values below 5 percent are common in batch shops, while well-run flow lines reach much higher. A WIP cap, as in CONWIP or kanban, is the practical lever: it stops new work entering until work leaves.

#### Reading the result and ERP notes

**Body:** If lead time is much longer than the quoted lead time in your ERP, the WIP count or throughput may be inconsistent or the planning parameters are out of date. Reducing WIP without raising throughput shortens lead time, but cutting too deep exposes variability and starves bottlenecks, so lower in steps and watch the constraint. Update ERP planned lead times only after the new level has held for several weeks.

**Cta:** Netray can pull WIP and throughput from your ERP to run this calculation by work center and compare it with the lead times in your item master.

**Faq:**

#### What is Little's Law?

**Answer:** It states that the long-run average number of items in a system equals the average arrival rate times the average time each item spends in the system. In manufacturing: WIP equals throughput times lead time, so lead time equals WIP divided by throughput.

#### Does it work with batches and variation?

**Answer:** Yes, for averages over a long period in a stable system. It does not predict the lead time of one order, and variation, batching and shifting demand mean individual orders can take much longer or shorter than the average.

#### What is a good process cycle efficiency?

**Answer:** It depends on the process. Many discrete shops see under 5 percent. Lean flow lines may reach 25 percent or more. The aim is to track the trend and find where the queue time is, not to hit a universal number.

#### How does it relate to kanban?

**Answer:** A kanban system sets a cap on WIP with cards. Little's Law then tells you the resulting lead time for the throughput you achieve. Fewer cards means a lower WIP cap and shorter lead time, until the process starves.

## Search terms

littles law calculator, lead time from wip calculator, little's law manufacturing, process cycle efficiency calculator, wip cap calculator, conwip calculator, lead time reduction wip, flow time throughput wip formula

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