These two concepts are popular in Kanban and are known in other agile methods. Let`s find out about their difference in Kanban.
(Local) Cycle time of a ticket – is how much time a work item spends in a specific activity or a defined sequence of activities. In other words, it is a time during which the item is being working on in some stages. For example, local cycle time for a test is the time a work item spends in the Testing column.
Cycle time may help to analyze the efficiency of the team. If the cycle times are low – your team`s performance is good. High cycle times may reflect the existence of bottlenecks and blockers. Low cycle time make lead time low too, which may result in a good delivery rates and satisfied clients.
Lead time – is the time you need to deliver the service / to fulfill the request. We calculate it from one commitment point (the point of accepting the order/request) to another commitment point that means the item is available for delivery or acceptance.
Analyzing a lead time of tickets gives us an understanding of the lead time of our process/board.
Lead time types:
- System Lead Time – the lead time from the first commitment point to the first unbounded queue (to the first queue that is not limited by WIP)
- Customer Lead time – we start counting customer lead time from the point when a customer can legitimately expect us to work on an item until we can legitimately expect the customer to take delivery. Any additional waiting time on the delivery end is not counted. In a high maturity Kanban implementation just plain lead time means customer lead time.
Find more about the Lead Time in the article: Five Things You Need to Know about Lead Time.
Learn more about Kanban studies in Kanban Maturity Model book or get access to full book content online using kmm.plus. Download Lead Time Poster here.
Attend training at the David J Anderson School of Management to learn more about advanced Kanban studies and how they can help your business, or find your local trainer at Kanban University to start your Kanban journey.
Thank you for this great explanation! In a Cumulative Flow Diagram (CFD) this means the horizontal distance between the top line (arrival rate) and bottom line (departure rate) is the System Lead Time, while the horizontal distance between any two consecutive lines (framing a single colour) is the Cycle Time for this specific stage in the process. The time spend before and after all the stages represented in the CFD is not accounted for because it is outside of the system we are currently observing, therefore the Customer Lead Time is not recorded on the CFD.
Thank you for your comment, Pierre. Regarding its first part, in a Cumulative Flow Diagram horizontal line is approximate average lead time of the items in the system. While the vertical line is approximate average work in progress in the system.
If you measure start and end date of each cycle time within the system and you reflect it on CFD, then you will be able to see not only system lead time or customer lead time (depending what you measure, what to indicate as start date and what is your maturity level), but also cycle times of specific activities.
It is also important to note that both cycle time and lead time are analyzed as a distribution. While one ticket has a lead time of X days/hours, the lead time of the service is measured as a range (up to Y days/hours with Z% confidence delivering on-time).
Thank you for your comment, George. That`s right! Here is another article that may be interesting for you – “How to Read Lead Time Distribution: https://mauvisoft.com/2020/10/08/how-to-read-lead-time-distribution/