Little's Law states that Lead Time of a process is equal to the amount of WIP in the process divided by the average completion rate (throughput) of the process. It offers a remarkably easy way to determine lead time and track improvement, simply by counting how many pieces are in the system and knowing the completion rate. "Sampling" can be used for very slow processes to determine lead time; count the number of pieces in the system at set intervals (e.g. every four hours) and use the average count and completion rate to determine the lead time.
Reducing WIP should always be the first approach to lead time improvement, though the detrimental effects of both utilization and cycle time variability must be kept at bay. In spite of the much higher cost of adding capacity by capital investment, many many businesses add machines or purchase multi-spindle machines to reduce lead time. What's worse, many of them add this additional capacity to operations that are not bottlenecks and thus have no impact on system capacity.
Little's Law can be used to calculate cycle time from throughput and WIP in instances when direct measurement is difficult or impossible.
We in Kisling Consultants are very good at quickly identifying the quickest and most economic approach to improving throughput or lead time (or both), and rely on Little's Law every day. Exploitation of Little's Law – not ancillary lean concepts like 5S – is what makes huge improvements possible.