“Ohm’s Law” for WIP — Little’s Law Explained in Russian | Holz Expert

Sourced through Scoop.it from: holzex.ru

Translated from Russian: “Every production manager knows that the amount of work in process (WIP) — stacks of parts lying between machines waiting for processing —  should be reduced. In contrast to the raw materials in the warehouse,  work has already been done on it, and its cost increased by the amount of value added. This makes it an illiquid asset – in contrast to raw materials and finished goods, it cannot be sold. In addition,  WIP costs extra space, heating, transportation and personnel. But, before reducing WIP, it is necessary to properly evaluate it…”

Michel Baudin‘s comments:

 Even though it has a German name meaning “Wood Expert,” Holz Expert is a consulting group based in Moscow and specialized in the furniture industry.

I had not heard of them before, but Oleg Novikov pointed out this article to me on Facebook. It is well done. If you can’t read Russian, check it out with Google translate. They explain all the assumptions needed for the formula to be applicable, and give examples from furniture manufacturing. They even include a smiling picture of John D.C. Little.

Working with Russian clients, I was surprised that they insisted on mathematical formulas in consulting reports. To them, it was essential to the credibility of the recommendations, a feeling that I have never encountered among their counterparts anywhere else.

 

See on Scoop.itlean manufacturing

One comment on ““Ohm’s Law” for WIP — Little’s Law Explained in Russian | Holz Expert

  1. Interesting they referred to Ohm’s law. While at Areva T&D, in the energy business with a lot of electrical engineers in the various management layers, I used Ohm’s law to explain basic Lean thinking:

    V: the potential can be thought of as the impetus for the flow from one point to another
    R: the resistance is the opposition to the flow, a combination of properties of the flowing quantity and the medium
    I: the current is the amount flowing per unit of time (the rate of the flow). It can be thought of as the result of the tug-of-war between the potential and the resistance

    I translated it as follows:

    V: The effort required to achieve a flow at a certain rate in our processes: capital and operating expenses
    R: The resistance is the opposition to flow due to the waste in our processes
    I: The current is the amount flowing per unit of time (the rate of the flow); our capacity for output and sales

    Goal therefore is — in these terms — to create a superconductor 😉

Please share your thoughts: