Does Leadtime affect Productivity? (Posting 2)

Yes, it does!

But how?

To understand how discrete production system "works" we need to go back some years in time.

John Little, already in 1961 explained Little´s formula: WIP = Deliveries * Leadtime.

All production engineers, logistic developers and especially managers should really understand
Little´s formula.

If you understand how your own production system "follows" and "behaves", you are able to take the right actions for improvements. You will also understand the negative impact that a too high WIP have on productivity.

Anders Segerstedt does in a really pedagogic way explain this in "The physics in the plant".

The curves below visualize Little formula.

As you can see in the left picture, Deliveries do not increase when a certain point of WIP is reached.
In real systems they may even have a tendency to decrease.