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Kanban Lead Time vs. Cycle Time

Instructor: Olga Bugajenko

Olga is a registered PRINCE2 Practitioner and has a master's degree in project management.

Why does it sometimes take you a day or two to reply to a short message from a friend? Why does it take a company a day or two to respond to an email when you have a problem? In this lesson, we will explore the difference between the lead time and the cycle time.

How Does Kanban Work?

Have you ever received a message from a friend, but waited a day or two to reply? Even though you truly care for your friend, you're sometimes simply too busy to reply right away, even if it only takes five minutes to do so. In this case, your lead time of replying to your friend is a day or two, while the cycle time is only five minutes. Let's take a closer look at these two terms in the context of Kanban.

Kanban is a Lean tool for eliminating waste and increasing efficiency in business processes. Though it originated in manufacturing back in the 1950's, it is now used in a variety of industries, including software development. Kanban is a pull system, which means that the production or delivery of the product starts only once the customer order or request has been received. Traditionally, the request was delivered in shape of a card, however, nowadays it can be electronic as well.

In manufacturing, Kanban dictates that the spare parts are delivered to the assembly line only after the previous batch has been used up. In IT sector, the support team starts working on a bug only when a ticket from a customer is received.

Lead Time vs. Cycle Time

Lead time is the time between receiving a request and delivering a product to the customer or the total time a customer must wait for his or her request to be fulfilled. In Kanban, it starts when the request is put in the backlog or 'to do' lane of the Kanban board. More often than not the team responsible for dealing with the request will be busy when the request is received - most likely dealing with an earlier request from a different customer. Therefore, they will not be able to start working on the new request right away. One of the features of Kanban is the work in progress limit (WIP), which sets limits on the total number of projects a team can work on at a time and prevents teams from taking on new projects if they are at their WIP limit.

Cycle time is the time between starting the work on a product and delivering a product to the customer. In Kanban, this is when the request is moved to the 'doing' or 'in progress' lane on the Kanban board and the team starts work on it. A product can be both physical, for example, an order in a restaurant, or electronic, perhaps an e-mail reply. Naturally, the lead time cannot be shorter than the cycle time.

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