Why Care About Lead Time

One aspect of the Kanban Method that needs to be well-understood before exploring our Body of Knowledge, is the underlying motivation to continuously improve. If there is no motivation to improve your current business practices, then attempting to adopt the Kanban Method will seem like a discouraging, wasteful endeavour.

Improvement Towards What?

In agreeing that we (a business) will be striving to improve, we need to understand what improvement will mean in a given context and to do that, we need something by which to test the fitness of our changes. This is where another motivation to use the Kanban Method comes into consideration; customer orientation and the desire to strive to meet our customers' needs.

Kanban systems have customers. Customers have needs and expectations. Kanban systems should be designed and improved such that our customers' needs are being met as often as possible.

Let's be honest, most teams or services are probably not meeting their customers' expectations and these services will need to make process changes, incrementally and continuously.

So with customers and a desire to improve towards meeting their needs, we have a motivation and outcome towards which to progress.

Lead Time

Lead Time is a key performance indicator (KPI) that captures the current observed time capability of a service or team to deliver a work request.

When Kanban Method practitioners include the concept of a customer and the need to describe their expectations, they can enhance the definition of lead time by adding to this definition.

Customer Lead Time is a key performance indicator (KPI) that captures the current observed time capability of a service or team to deliver a work request from the point of making a commitment with the customer and beginning delivery of a work request until the customer receives and accepts the completed work.

This measurement and the discrepancy with the customers' expectations can now be utilized as an important improvement driver for the kanban system.

A historical note...

Kanban University long ago decided to remove Cycle Time from our body of knowledge as it generally created confusion amongst practitioners. In our Body of Knowledge you will generally only find the term Lead Time but you should not be disheartened. Both terms allowed us to capture an elapsed time between two points in a kanban system and Kanban University simply choose to use one of those terms exclusively.

Continuous Improvement

This lead time improvement driver is the last piece of the puzzle that we require to fulfill our goal of improving our ability to satisfy our customers' needs.

With a well-understood description of our system's control points (commitment to done), our customers' lead time expectations between these two points, and the ability to measure and monitor the fulfillment of those expectations, we have now created an environment where we can continuously have "Let's do something about it" moments.

This is why lead time is a very important key performance indicator and improvement driver in kanban systems.

When Lead Time becomes a vanity metric...

It is important that we don't use lead time as a measuring stick against other teams, or strive to have the lowest lead time because we want to be able to brag about how low it is. When we use lead time for these purposes, then we are not improving in a customer-oriented direction and we may be wasting time and resources that we could use to improve other performance metrics such as throughput or on-time delivery.

Other Improvement Drivers

Lead Time is not the only improvement driver. It is usually just the easiest one to start to capture. Throughput or Delivery Rate, the amount of work that a team or service does in a given period, is another easy-to-capture key performance indicator that can be used to drive improvements. Other customer-oriented fitness criteria include Quality and On-Time Delivery rate.

This discussion of lead time was simplified and we may want to use the concept of elapsed time between any two points in a kanban system in other circumstances as well. We'll leave that for another article.