Lead time calculator

Divide the work in process by the throughput: lead time = WIP ÷ throughput. With 1,200 units in the process and 200 units finished a day, lead time is 1,200 ÷ 200 = 6 working days. The result is in the same time unit as the throughput, so units per day give days.

Little's Law says that the average number of items in a system equals the average rate they leave it times the average time each spends inside. John Little published a proof in 1961. In a factory it links WIP, throughput and lead time, so knowing any two gives the third. It holds for long-run averages of a stable process, not for any single unit.

The value-added ratio, also called process cycle efficiency, is value-added time divided by lead time. With 36 minutes of value-added work in a lead time of 2,880 working minutes, it is 1.25%. A low ratio means units spend most of their lead time waiting, moving or being inspected rather than being worked on.

Use the average rate at which finished units leave the end of the process, counted in the same units as the WIP and over a period long enough to smooth out daily swings. Use what the process actually delivers, not its rated capacity or the customer's demand, or the lead time will look shorter than it is.

Little's Law gives two levers: hold less WIP at the same throughput, or raise throughput with the same WIP. Cutting WIP is usually the faster one, through smaller batches, pull signals such as kanban and limits on how much work can wait between steps. Halving the WIP in the example to 600 units would cut lead time from 6 days to 3.

Lead time is how long one unit takes to get through the whole process, including all the time it waits. Cycle time is how often a process or station finishes a unit, or the time spent working on one unit at a step. Lead time is usually much longer, because most of it is waiting between steps.