OPERATIONS RESEARCH (ONLINE FORUM COMMENTARY)
Vol. 59, No. 3, May–June 2011, online commentary
issn 0030-364X | eissn 1526-5463 | 11
INFORMS
Commentary on “Little’s Law as viewed on its 50th
Anniversary” by John D.C. Little
Timothy J. Lowe
Chester Phillips Professor of Operations Management
Tippie College of Business, University of Iowa
Iowa City, IA 52242
As Dilip Chhajed and I were planning our book, Building Intuition: Insights from Basic Operations Management Models and Principles, Springer, 2008, our first task was to carefully select the
various topics that would be covered in the book. The book was never intended to be a normal
course textbook, but instead was designed to provide motivation and intuition surrounding a few of
the most important operations management concepts. One of the first ”concepts” that we discussed
and concluded that needed to be in the book was Little’s Law. Since each of the concepts was to
be the subject of a separate chapter, we needed to identify an appropriate individual to prepare
the LL chapter. Naturally we hoped to convince John Little to do the writing. After a certain
amount of ”arm twisting” (see his Conclusions section) we were able to sign him up to prepare the
chapter in collaboration with Steve Graves. That chapter, and John Little’s paper “Little’s Law
as viewed on its 50th Anniversary,” are examples of solid and insightful exposition that illustrate
the usefulness of LL to manufacturing and service operations practice.
I teach a required MBA course in operations management and an elective course in supply
chain management and make extensive use of LL in both of these courses. In the OM course,
LL is one of the first fundamental principles that I teach. As I explain to the students, LL is a
message about averages and that we will study variation later in the course. To illustrate LL, I
use cases such as CRU Computer Rentals or Executive Shirt Company. (Both of these cases are
available from Harvard Business School Press.) Also, I illustrate LL via publically available financial
data by tracking, for a given company, the ratio (inventory/COGS) over a number of years. This
application of LL can be used to illustrate the changes (over time) in flow time of raw material,
WIP, and/or finished goods inventory at the company. This demonstration tends to ”perk up”
the many finance majors that are in the class. Our study of variation generally includes the use
of simple simulation exercises that I demonstrate in the classroom. Output from these simulation
models includes average flow time, and average number of entities in the system. I then show how
Little’s Law applies even when there is variation and thus the law is extremely robust and widely
applicable.
In addition to teaching in our ”regular” MBA program, I also teach the operations management
course in our Executive MBA program. Since the University of Iowa has a large teaching hospital,
we tend to get two or three physicians in each EMBA class. I have found that the MDs are particularly interested in learning how to apply the concepts we discuss to their work environments. Many
of these students have been forced into becoming ”business managers” in their work environment
in the hospital, but of course have not been formally trained to take on that task. One of the key
metrics that they need to keep track of (and reduce as much as possible) is patient flow time.
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: Commentary on Little’s Law
Operations Research (Online Forum Commentary) 59(3), 2011 INFORMS
Clearly Little’s Law can be of assistance to them as they grapple with the flow time problem.
As a part of my OM course, EMBA students are required to work on and report on projects in
their companies that make use of some of the principles discussed in the course. On more than
one occasion, the MD students have been able to successfully apply LL to a particular flow time
problem, and the student-directed project has resulted in tangible changes in the hospital.
It is also interesting to note that students continue to think about the concepts represented by
LL long after the course is over. More than a year after one of these MDs finished the program,
he sent me a copy of the article “Little’s Law: The Science Behind Proper Staffing”. John Little’s
paper tells more of the story about this article, and the MD author who makes use of LL in his
consulting practice.
Given the wide applicability of Little’s Law to business practice, there is no surprise in the fact
that it continues to have an active “life” at the ripe old age of 50. My guess is that it will continue
to be relevant and useful for many more years.