04/02/2015

**The question:**

Which of the following groups is overloaded with work, and which one can handle more work?

- A work group with 250 work orders
- A work group with 50 work orders

Which work group had better performance?

- A ten-person crew that completed 40 work orders
- A ten-person crew that completed 17 work orders

**The answer:**

It depends. One cannot gauge the workload facing a group by a simple count of work orders. Not all work orders are equal; each requires a different amount of effort and resources. Thus the mystery of the backlog.

The backlog calculation is the trick to unravelling this mystery.

**What is backlog?**

Backlog is a method of calculating the workload based on required resources and available resources.

The formula for calculating backlog is:

Backlog = Required Hours / Available Hours

Backlog is expressed in weeks of backlog

By itself, the backlog calculation means very little. But when we look at trends and targets, we can reach some very helpful conclusions.

**Total backlog calculation**

Suppose you manage a 10-person organization (8 mechanics and 2 electricians) and when you add up the required man-hours on all work orders, you arrive at 2000 hours total. To make the math simple, let’s suppose that everyone works 40 hours per week (in reality we would subtract lunch, breaks, training, etc.).

10 People X 40 Hours = 400 Available Hours per Week

2000 Hours / 400 Hours = 5 Weeks

Backlog = 5 Weeks

**Total backlog target**

So your next question is going to be, “So what?” What do you do with this backlog calculation? Let’s look at a couple of targets:

Total Backlog Target: 4-6 Weeks

My experience shows that you should strive to maintain 4-6 weeks of total backlog at all times. There are two factors driving this target:

- Having enough work identified to keep the workforce gainfully engaged.
- Moving work off of the backlog so that requestors see action being taken on their requests.

If the backlog is too large or too small, then you will not be able to satisfy both of these requirements.

**Making decisions based on total backlog**

As you can see from the example, the final backlog number can be affected by adjusting either of the two variables:

- Adjusting Required Hours
- Adjusting Available Hours

Given the two choices, adjusting the Available Hours component is always the better choice. This can be accomplished through overtime, contracted labor, and strategic changes in the staffing levels.

**Derivations of backlog**

The base formula provided for backlog calculation (Backlog = Required Hours / Available Hours) can be adjusted to measure different aspects of the organization. Take a look at the various permutations of backlog listed below. Each is derived by filtering out the Required Hours and Available Hours based on the requirements of the work order.

Derivations of the backlog calculation include:

- Total Backlog (calculated in our example)
- Mechanical Backlog
- Electrical Backlog
- PM Backlog
- PdM Backlog
- Corrective Backlog
- Outage/Turnaround Backlog
- Ready (WSCHED) Backlog

How would you adjust the base backlog formula to calculate for each of these derivations?

**Planners remain focused on future work and the ready backlog**

- Ready Backlog Target: Minimum 2 Weeks at All Times

I never like to miss an opportunity to make this point. The prime measure of the planner’s output is ready backlog – total amount of work that has been planned, parts obtained, and ready to be placed on the schedule.

When people ask me if it is ok for the planner to do x, y, z – my first answer is always “as long as we have 2 weeks of ready backlog, then maybe.” 2 weeks of ready backlog gives the scheduling team the data they need to project a schedule 1 week in advance. Of course, if we are attempting to project further into the future, then we will require even more ready backlog to pull this off.

If we believe that planners are focused on future work, then the ready backlog is a solid way to measure our execution on this belief.