In operations, we often talk about backlog, handling time, and incoming flow.

These are actually connected by a relationship called Little’s Law:

Backlog = Arrival rate x Flow time

The name is from MIT Proffessor John Little, who developed the concept in 1954 and the math works regardless of how complex the operation is.

Now, the way to lower the backlog, is by either reducing the arrival rate or by reducing the flow time. Let us apply this for different operations and processes.

1. Manual intervention for stuck transactions in fintech

Backlog = Number of transactions requiring manual intervention at any given time

Arrival rate = Number of transactions that arrives for manual intervention, per unit time.

Flow time = Time required to manually handle the transaction.

Reducing arrival rate:

• Implementing a validation setup, that ensures upfront rejections of transactions, which has a potential to be stuck.
• Adjusting thresholds to minimise false positive flagging, for manual intervention.

Reducing flow time:

• Establish a unified dashboard, so that Agents do not have to toggle between multiple windows and screens for analysis and handling.
• Automating enrichment by APIs, where in the system fetches and populates data and the Agent time is better utilised for analysis rather than extracting and cleaning data.

1. A support function handling tickets

Backlog = Number of tickets in queue to be resolved

Arrival rate = Number of tickets arriving in the system in unit time.

Flow time = Time taken to have the ticket resolved

Reducing arrival rate:

• Build a robust FAQ, help center, or AI chatbot so that clients can get their queries resolved, without creating a ticket.