Process Velocity
The Velocity of the process represents the responsiveness or flexibility of the process to customer demand. A long lead time results in slow velocity.
Velocity = # of Value-added Steps / Lead Time
For example, if there are five value-added process steps in a purchasing process with a lead time of twenty hours, then the Velocity may be calculated as 5 divided by 20 equals 0.25 steps per hour.
Lead time is reduced, and velocity increased, when Work in Progress is reduced. The rationale is simple: new orders from customers cannot be started until work (or items) in process is completed. Thus, the activity on new items is stalled. An example from a service process is a physician waiting room. The patients are Work in Progress. New patients are not serviced by the doctor until those that arrived earlier are completed.