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Chapter 7: Problem 2

Is it possible for a line to have the same throughput with both high WIP with high cycle time and low WIP with low cycle time? Which would you rather have? Why?

Short Answer

Expert verified
Which of these situations is preferable and why? Answer: Yes, it is possible for a line to have the same throughput with both high WIP and high cycle time, and low WIP and low cycle time if the proportion between WIP and cycle time remains the same, according to Little's Law. However, the situation with low WIP and low cycle time is more preferable due to benefits, such as shorter lead times, cost efficiency, quality improvement, and improved agility.

Step by step solution

01

Understand Throughput, WIP, and Cycle Time

Throughput is the rate at which a system processes items or the output rate. WIP (Work In Progress) is the number of items being worked on in the system at a given time. Cycle time is the amount of time it takes to process one item through the system.
02

Determine if the same throughput is possible with high WIP and high cycle time, and low WIP and low cycle time

According to the Little's Law which states `Throughput = WIP / Cycle Time`, it is possible for a line to have the same throughput with both high WIP and high cycle time, and low WIP and low cycle time if the proportion between WIP and cycle time remains the same.
03

Compare both situations and decide which is preferable

Comparing both situations, a low WIP and low cycle time is more preferable. Here are some reasons: 1. Shorter Lead Times: A low cycle time means that items are processed quickly, which leads to shorter lead times and faster delivery to end customers. 2. Cost Efficiency: With low WIP, inventory costs are reduced, and cash flow is improved as less investment is tied up in work-in-progress inventory. 3. Quality Improvement: A lower number of simultaneous work items makes it easier to identify and fix problems, which helps improve the overall quality of the products being produced. 4. Agility: Having low WIP and low cycle time enables the organization to respond faster to market changes and customer demands, leading to improved adaptability. In conclusion, although it is possible for a line to have the same throughput with both high WIP and high cycle time, and low WIP and low cycle time, the latter situation is more preferable due to various advantages such as shorter lead times, cost efficiency, quality improvement, and improved agility.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Little's Law
Understanding throughput in industrial systems hinges on comprehending Little's Law. It is a fundamental theorem that connects three vital operational metrics: throughput, Work In Progress (WIP), and cycle time. In its most basic form, Little's Law is expressed as the equation \(\text{Throughput} = \frac{\text{WIP}}{\text{Cycle Time}}\). This means that the average number of items processed per unit of time (throughput) is equal to the number of items in progress (WIP) divided by the average time it takes to complete one item (cycle time).

Little's Law indicates how changes in WIP or cycle time can affect the overall performance of a production system. For instance, if the WIP increases but the cycle time doesn't decrease proportionately, the throughput will remain unchanged. Thus, Little's Law provides a clear framework to understand the relationship between production elements and is helpful in maintaining a balanced workflow.
Work In Progress (WIP)
Work In Progress (WIP) refers to the items that are currently being manufactured or in the process of being completed within a system. WIP is a snapshot of the process's capacity and efficiency - tending to vary in quantity. High levels of WIP can suggest overproduction and may tie up capital unnecessarily, while low levels of WIP can indicate a leaner, more efficient process.

However, the relationship between WIP and throughput is not straightforward. A high WIP does not always translate to high throughput, as inefficiencies, bottlenecks, and longer cycle times can negate the potential benefits. Conversely, lower WIP ideally leads to shorter lead times, reduced inventory costs, and overall greater responsiveness to customer demand.
Cycle Time
Cycle Time is the duration it takes to complete one item in a process from start to finish. This measure is crucial for identifying process efficiency and setting performance benchmarks. Shorter cycle times usually indicate a quicker and more efficient production line, capable of delivering products faster. This efficiency, in turn, influences the throughput of the system as per Little's Law.

Reducing cycle time can often be more challenging than managing WIP. It might involve improving or changing processes, investing in better equipment, or refining work methods. Despite the effort, the rewards include better customer satisfaction, fewer errors, and the capability to react swiftly to market changes. All these benefits underscore why organizations often strive for lower cycle times in their operations.

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Most popular questions from this chapter

For a given set of production line characteristics (i.e., raw process time \(T_{0}\) and bottleneck rate \(\left.r_{b}\right)\) and a given WIP level \(w,\) what is the best cycle time that can be achieved? What is the "worst"? What is the corresponding throughput for these two cases?

Can the critical WIP level \(W_{0}\) ever exceed the number of machines in the line?
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