Kanban Lead and Cycle Time - Why So Important?

originally written by Gareth Evans

Our summary and key takeaways

When building software for your business partners, you certainly want to be able to let them know when to expect what and at what cost. It's a matter of businesses stability, and of mutual respect, also – more often than not – a necessity.

What is lead time and what is cycle time?

How to predict when will the Development Team deliver the requested feature? Kanban's Lead & Cycle Time metric provides knowledge of how long it takes for an item to go from order to delivery (lead time), and allows measuring the length of specific steps of the process (as in the actual time the developers worked on a feature). By focusing on improvement of the Lead & Cycle time, you're allowing the company to increase throughput and raise the quality of the software you deliver.

Why making the Lead & Cycle Times shorter is necessary?

According to Little's Law, the Cycle Time can be calculated by relation of the average amount of Work In Progress to the average throughput. By WIP here we understand all items, on which the work has been started, but not yet finished, and throughput is the rate at which the items are being processed.

Other reasons why you should aim for decreasing the Lead&Cycle is that the longer it takes for the items to be finished, the less value they have to the customer. The requirements get outdated, testing becomes more difficult, defects are harder to remove etc. There is also the added problem of context switching and mental set-up time, before work can be started on a project. Shortening the lead time works towards making this kind of waste minimum. Maintaining a high WIP limit is very much like putting a great number of cars on the motorway in hope this will help everyone reach their destination faster.

How to do it?

Allow for late-in-process decisions, as they allow for the product to stay fresh, innovative and valuable to the customer.
Reduce the queue size, as this will inevitably decrease the delays. Continuous delivery is what any Lean development team would benefit from.
Reduce variability, as this will promote on-time delivery, rather than constant alteration to answer to varied demand.
Reduce the batch size, as this has got to reduce the Cycle Time.
Apply WIP limits, as they are bound to promote focus and therefore effectiveness of working on the chosen items.
Provide constant feedback, as this will ensure that the team is still working on the right thing and in the desired manner. Leaving it too late generates waste.

Conclusion

To cite from Taichi Ohno, the creator of Toyota Production Systems (the original industrial Kanban), summing up the Lead & Cycle Time metric: “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes”. Nothing more, nothing less. By improving the Cycle Times you're directing your business in the right direction. Good luck!