Lead time and cycle time are widely used terms in the world of Kanban. However, very often people get confused when trying to understand the difference between the two of them and their importance. By the end of this reading, you will be able to distinguish the terms easily and to use them properly.
What Is Lead Time?
The business environment is dynamic and it produces new customer demands constantly. These demands come to your company in the form of work requests.
Lead Time Definition:
Lead time is the period between a new task’s appearance in your workflow and its final departure from the system.
However, lead time is better to be measured from the moment when a team member is committed to the new request. This way the average lead time in a Kanban system will be much more accurate. Otherwise, new tasks can spend months in a waiting queue before somebody has the capacity to start them and the lead time increases dramatically.
What Is Cycle Time?
When a new assignment appears on your Kanban board, it usually needs to be reviewed and discussed before it goes to the execution process. Naturally, the new task spends some time in a waiting queue, before a member of your team has the capacity to start working on it.
Cycle Time Definition:
Cycle time begins at the moment when the new arrival enters “in progress” stage and somebody is actually working on it.
Professor John Little (Institute Professor at MIT) concluded after various researches that the more work we have in progress the greater the cycle time.
The equation became famous as the Little’s law and the cycle time formula looks like this:
Cycle Time = Work in Progress / Throughput
How Can You Measure Kanban Lead and Cycle Time?
In order to make the most of this valuable information, you will need Kanban software that collects historical data for your workflow automatically. For example, Kanbanize is a powerful software solution equipped with powerful analytics panel that can offer you all this information.
One of the most convenient tools for measuring lead time and cycle time is the cumulative flow diagram. This chart tracks the total amount of your work items that enter your workflow and accumulates completed tasks over time.
- In order to measure lead time, you need to customize your CFD to measure the data from the moment when new tasks enter a “Requested” column (waiting column).
- In order to measure cycle time, you need to customize your CFD to measure the data from the moment when new tasks enter an “In Progress” column (activity column).
The cumulative flow diagram gives you an opportunity for a quick overview of average Lead time and Cycle time for a predetermined period.
How to Shorten the Gap Between Lead Time and Cycle Time?
Sometimes, a task can spend a lot of time in a waiting column before a teammate has the capacity to start working on it. This causes a greater gap between lead time and cycle time. Thus, assignments reach completion stage slower.
In order to find where this problem comes from, you can use two of the most relevant analytic tools for that purpose (both part of Kanbanize analytics panel): Cycle time scatter plot and Heat map.
The first one gives you detailed information about the cycle time of all tasks for a predetermined period of time. This way, you can locate tasks that took a greater amount of time to be completed.
The second one shows you data for the total amount of time that tasks spent in the different stages of your workflow. It helps you understand where tasks spend most time while progressing through your workflow.
Both tools will help you locate problematic parts of your work process and take actions to eliminate them. You need to remember that work is an ongoing process and it changes constantly.
Therefore, you have to monitor your workflow on a regular basis and use the appropriate analytic tools. They help you to adjust your workflow and improve team efficiency.