Being one of the Agile frameworks, Kanban offers a way for teams to organize and track project progress on a visual task board. Kanban board is the main, but contrary to what some believe, not the only tool used in Kanban. WIP limits, priority columns, as well as lead time and cycle time, aim to help and guide Kanban teams in the management process. While most are familiar with WIP and priority columns, more are still confused about the Kanban metrics – lead and cycle time.
Questions like – what do they measure, how do they differ, and how can I use them are too common. So to set the record straight or to simply remind you, here is an overview of the throughput metrics.
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What are lead and cycle times?
Let’s begin with the definitions of two Kanban metrics:
Kanban lead time
The average time it takes for the team to deliver a product to a client from the time it was requested (appeared in the Backlog).
Kanban cycle time
The average time it takes for the team to complete an item from the time they started working on it.
So, both of the Kanban metrics are averages calculated from the Kanban throughput. A separate lead and cycle time is calculated for every task. Then they are added up and divided by the total number of tasks. Depending on what type of a Kanban board team uses, this can be done manually (in the case of a physical task board) or calculated automatically (if an online Kanban board like Teamhood is used).
Teams can choose two ways to monitor the Kanban metrics – they could follow the overall average changes or compare averages from different time periods (for example iterations). If nothing else changes, an increase in either of the metrics could signal a new roadblock or issues in the later project phases. And a sudden decline could mean tasks are of a smaller size, or the process has become more effective.
The team has to constantly monitor the difference between cycle time and lead time to notice any changes and react with appropriate actions. Now that you know the difference between cycle time vs lead time, let’s see how you can utilize them.
How to use lead and cycle time?
No matter how you choose to calculate lead and cycle time, tracking it is important. By calculating the averages, lead time gives a good idea of the delivery speed and cycle time provides an indication of the team’s speed. Thus following both and noting down changes can give you valuable insight into what is happening with your projects now and might be happening in the future.
Lead time tracks the whole process from the initial request to the product delivery. This includes requirement gathering, analysis, and product shipment. Meaning you have a good idea of how long the production of an average item is going to take and can give clients a more accurate guess on delivery. For example, if your average product lead time is 2 weeks and you get a more complicated order, you can safely say the delivery will take longer. How much longer, that depends on your process, but at least you can manage client expectations right out of the gate.
Cycle time on the other hand focuses just on the production phase of the process. And thus has a bit of a different purpose. Instead of informing your clients on the expected delivery date, it aims to track and signal any issues in the production process. Focused only on manufacturing and testing, it can provide great insight into where your own process is lagging and could be improved. It can also signal that new roadblocks or issues have arisen.
Lastly, using a combination of both Kanban metrics, allows the team to react to changes and adapt more quickly. For example, if a team notices a sudden increase in cycle time, it is safe to assume that the lead time will also grow. However, for clients with sensitive delivery dates, the team can then take action to fast-track other processes outside manufacturing. Thus, still managing to deliver the end result in a timely manner. Moreover, such efforts could lead to finding and applying completely new ways of optimizing the process.
Evolution into actionable Agile metrics
Using both lead time and cycle time can give valuable insights into the team’s efforts and the overall process. However, in 2015 Daniel S. Vacanti proposed that cycle time could be further utilized to gain even better predictability on item completion. While his book called Actionable Agile metrics for predictability talk only about cycle time, no doubt the same approach could be taken to measure lead time in Kanban.
To sum up the idea, Mr. Vacanti proposed that just measuring the average does not give teams the full picture and ways to not only observe but also control the cycle time. Instead, he proposed to observe the cycle time for all tasks separately and then to calculate the 80th and 95th percentile. By doing this, the teams could know not only the average time it took to manufacture an item but also how long it will take to manufacture 80% or 95% of items.
This allowed to give more accurate predictions to clients, knowing that an item is going to be delivered with an 80% certainty is definitely better than 50% certainty right? Moreover, monitoring the numbers on the longest delivery dates, also gave the teams a chance to identify the reasons behind them and optimize the process. According to Mr. Vacanti, ideally, the difference between the 50th, 80th, and 95th percentile should be as small as possible, and observing these numbers allows teams to work on reducing them.
Learn more about actionable Agile project management metrics.
Lead and cycle time, as well as actionable Agile metrics, are a great way to take control of your Kanban projects. It gives teams a way to monitor what is happening in an otherwise dynamic and changing process. Lead and cycle time focus on the averages and give a way of understanding what clients can expect in terms of delivery dates and what a manager can expect in terms of production speed. While actionable Agile metrics aim to improve the predictability of the delivery date by taking a closer look into the cycle time and the main reasons why it is growing on decreasing.
All in all, these metrics are a great way of getting a deeper understanding of your Kanban projects and improving them when necessary.