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Customer Lead Time

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What to Know About Lead Time and Why We Have Evolved Our Definition of Customer Lead Time

Lead time is a valuable tool when considering several avenues for how to improve the bottom line of your organization. Lead time is simple. It is the time from an identified point “A” until a later point “B” in the workflow.

Here’s a quick example. A team starts a task on a Monday and finishes it on a Friday, which means they spent five days on that task. The number of days is the lead time in this case. You could have measured this in hours, minutes, or seconds. You could also say it takes four days instead of five depending on how you count the difference. Either way, being consistent is key when using lead times.

The term “lead time” by itself does not provide clarity about what points “A” and “B” are. That is why it is always critical to qualify what you mean when you use lead time. The important thing about lead time is that once we understand the history of our lead time, we can make valuable decisions about things like service level expectations or about opportunities for improvement.

Let’s consider two coffee shops on opposite corners of the road. One manager, Sal, has focused on time from order to delivery to be quick and predictable for the customer. In this case, point “A” is at the order taker, and point “B” is the delivery of the order.

In the other coffee shop, the manager, Rosie, has studied the customers and discovered that most hate standing in an order queue and are much more tolerant of waiting for their order to be fulfilled while sitting at their table. This manager has decided that she wants to measure the time from the arrival in the queue (point “A”) until the order is requested (point “B”).

Lead Time

Goal

Start

End
Sal’s lead time Quick and predictable The order taker Delivery of the order to the customer
Rosie’s lead time Avoid creating a queue Arrival in line to request an order When the order is requested

Each of these lead times are valid and can be measured. In fact, someone might be interested in both lead times as well as other measures of the workflow. So what are some examples of how lead time can improve the bottom line for your organization?

Making Commitments to Customers That You Can Keep

The first step with lead time is to track it consistently so that you can better understand the current performance of your service delivery.  If you have historically had lead times ranging from 2 days to 10 days with 85% of the lead times less than 8 days, you could confidently set a service level expectation of 8 days with an 85% confidence level.

Saving Money By Getting Work Delivered Faster

Long lead times can result in excess work in progress, increased holding costs of work that is yet to be delivered to customers, and potentially reduced cash flow. By reducing lead time, you can improve operational efficiency by reducing the amount of work in progress and its’ holding costs; thus, increasing cash flow.

Being More Fit Than Your Competition

By reducing lead time, you can gain a competitive advantage over your competitors. Customers are more likely to choose a business that can fulfill their orders quickly and efficiently.

If you want to know about how to use lead time to be more fit than your competition, we recommend you or one of your colleagues take a Fit for Purpose class.

What We Have Learned at Kanban University

Over the past 10 years, we’ve collaborated with great minds around lead time. We have found value in defining two common measurements of lead time which we call Customer Lead Time and System Lead Time.

Customer Lead Time

How We Have Evolved

As Kanban University has been training students for over 10 years, we’ve received feedback that the definition we introduce in Kanban System Design of customer lead time (from commitment point to delivery) was creating confusion due to other established definitions of customer lead time.

Many of the people indicated that their definition of customer lead time was from the point when the customer has made a request until they’ve received it. This is much like the earlier coffee shop example where one manager decides to measure from the point of when an order is requested until the point when an order is fulfilled.

We also reviewed publications from our community and discovered incongruent explanations of what we called customer lead time.

What We Found In Our Own Materials

When we reviewed or own materials, we found the following incongruent definitions.

Our Kanban System Design course, initially developed in 2011, defined customer lead time as the time from the point of commitment where the customer’s order is accepted by the service delivery group until the order is delivered to the customer.

Essential Kanban Condensed by Andy Carmichael and David J. Anderson defines customer lead time as “The time a customer waits for a work item. Typically, this is measured from the request for a service to the receipt of the service.” This is from page 49 of the book that was published in 2016.

Through our online reference, KMM.plus, which was released in 2019, we found customer lead time to be defined as “the time between receiving the customer’s request and delivering on it.”

What We Found On the Internet

When we reviewed customer lead time definitions online, we found the most commonly referenced and used definition was from Investopedia, which defines customer lead time as “the amount of time between when a customer places an order and when the customer receives the product.”

What We Have Decided To Do With Our Definition of Customer Lead Time

We further reflected on customer lead time and what it meant from the customer perspective. We decided that it was time to evolve our definition of customer lead time to match what is in common use today.

Customer lead time is the time between receiving the customer’s request and delivering on it.
System Lead Time

We have not changed our definition of system lead time as this has not conflicted with other established definitions.

System lead time is the time it takes for a work item to move from a point of commitment to the first column on its Kanban board that is unbounded or has no work in progress limit. 

This measurement is useful as we want to know how we can improve the time it takes for work to be delivered internally within our organization.

Measure What Matters

While we have provided the Kanban University definitions for Customer Lead Time and System Lead time, it’s worth noting that what really matters is the context of the system you are attempting to understand.

Like in the two coffee shop examples we provided above, the context of the system and what you are attempting to understand can be very different. As a result, you may choose to measure a range of lead time that differs form what we’ve defined as System Lead Time and Customer Lead time because that is more important to the context in which you operate.

We encourage you to measure what matters in terms of lead time so that you can lead your business in the right direction.

March News & Views from the Kanban Community

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March News & Views from the Kanban Community

In This Issue

Kanban Summer is Coming to Austria and California

New to Kanban? Get the Official Guide to the Kanban Method – Now in Danish, Bulgarian, Dutch and Armenian

How to Revitalize Your Kanban Implementation

A Tale of Pandemic and Me

Kanban Coaching Exchange: This is Jeopardy! with David Spinks and Glaudia Califano

Optimizing Legal Project Management: Can You Do the Kanban?

Neural Network Racing Cars Around a Track

Agile Software Development: Using Kanban Effectively and Avoiding Pitfalls (German)

Kanban Summer is Coming to Austria and California

March is here and we are one month closer to a summer of Kanban, from Kanban Leadership Retreat in Europe to the Kanban Global Summit and Kanban Leadership Retreat in the U.S. It’s been too long since we have seen your faces in person!

We’re thrilled to be back together with a renewed sense of community and to welcome new practitioners who have adopted Kanban during the past two years. Whether you hop in Rosie’s convertible under the San Diego sun or strap on your boots to hike in the mountains of Mayrhofen, you are sure to have an unforgettable experience at these upcoming events.

Learn More and Register

New to Kanban? Get the Official Guide to the Kanban Method – Now in Danish, Bulgarian, Dutch and Armenian

The Official Guide to the Kanban Method from Kanban University is targeted at people new to Kanban and interested in learning about the basics of the Kanban Method. Get your free copy today for an easy entry into the vast Kanban body of knowledge. Follow the link below and select Additional Languages on the left tab to find these new translations and more!

Download Your Free Copy

How to Revitalize Your Kanban Implementation

Despite Kanban’s gradual – evolutionary – process of change – or perhaps because of it, as also because of its non-prescriptive nature, sometimes teams tend to feel a bit lost about what to do to “continue to implement” Kanban – to continue to implement a method which aims to improve their outcomes. Not knowing exactly what to do next can also cause stress. Mahesh Singh outlines a process that reinvigorates a Kanban implementation and provides a greater sense of purpose and achievement.

Read More from Mahesh Singh

A Tale of Pandemic and Me

Have you thought about sharing your love of Kanban by teaching the Kanban University curriculum to others? One of our Accredited Kanban Trainers started his journey as the pandemic hit and writes about his experiences.

Read More from Shahin Sheidaei

Kanban Coaching Exchange: This is Jeopardy! with David Spinks and Glaudia Califano

This is Jeopardy! Entering the Kanban Coaching Exchange are this month’s contestants… you! David and Glaudia are back at the Kanban Coaching Exchange to put your knowledge of Kanban and beyond to the test in an interactive gameshow! You will take part in teams, and there are prizes to be won! So come on down to the Kanban Coaching Exchange on Thursday, March 10!

Register to Attend Online

Neural Network Racing Cars Around a Track

Observe managed evolutionary change through feedback loops and learning in this demonstration of getting cars to drive around a path. In this case, the path represents the environment, and the cars adapt to the environment. See the similarities with Kanban, the Kanban Maturity Model and Fit for Purpose.

Read More from Rodrigo Yoshima

Agile Software Development: Using Kanban Effectively and Avoiding Pitfalls (German)

Recently David J Anderson gave an interview to a popular German online magazine, Heise Online, and covered these topics:

✔ What would David change in the blue book if he wrote it today?
✔ What are the most common misunderstandings about Kanban?
✔ How will Kanban develop in the future?

Read More from Heise Online

Announcing the new KCP Credential

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Today, we are announcing our new intermediate level professional management credential, the Kanban Coaching Professional (KCP).
At Kanban University, we are dedicated to improving the way modern 21st Century businesses are managed. We believe that modern, professional services, knowledge worker businesses dealing in intangible goods, can dramatically improve their effectiveness and agility by adopting the Kanban Method for evolutionary change and improved service delivery.
We believe that the most effective means to improve the performance of modern businesses is to educate managers to make better decisions and take appropriate actions in an informed manner, based on pragmatic, actionable, evidence-based guidance. Our primary means of enabling these improvements is management training. We deliver our guidance through our hierarchical curricula of ever-increasing depth and breath. The higher the level of training, the more powerful and effective, the techniques transferred to the student.
Our entry level management credential has been the Kanban Management Professional (KMP). Today, we are introducing the next level, the Kanban Coaching Professional (KCP) credential. The KCP credential will be awarded to existing KMPs who complete the Kanban Maturity Model and our new 2-day Kanban Coaching Practices training classes.

Kanban Maturity Model

In May 2019, we introduced the Kanban Maturity Model 1.0, after a 2-year community preview, beta test and second beta test period. The Kanban Maturity Model codifies 12 years of experience of coaching the adoption and rollout of the Kanban Method is medium and large-scale enterprises. It codifies over 150 practices against 7 levels of organizational maturity. The Kanban Maturity Model is the primary coaching tool designed to eliminate the two popular failure modes in pursuit of business agility using kanban: the over-reaching problem – too much, too soon, leads to resistance and the corporate antibodies spit it out; and, the false summit plateau problem where there is the belief that “we’ve done Kanban, and it helped, so what is next?” The Kanban Maturity Model greatly improves the chances of large-scale success using the Kanban Method to pursue business agility. The Kanban Maturity Model democratizes elite Kanban coaching knowledge into a playbook that can be used at scale.

Kanban Coaching Practices

The Kanban Maturity Model Extension for Coaching Practices (known as “KMMX Coaching Practices”) is a collection of popular and effective methods adopted, adapted, and evolved by the Accredited Kanban Consulting (AKC) community over the past decade. These have now been codified and mapped for appropriateness of application across organizational maturity levels. This knowledge is now available neatly packaged into a 2-day training class that augments the Kanban Maturity Model (3-day) class. Together the KMM and KMMX Coaching Practices provides a powerful set of tools, practices and pragmatic, actionable, evidence-based guidance intended to make the practitioner fully competent to implement Kanban at scale.

Large Scale Business Agility

Our goal is to take organizations to a full Kanban implementation with end-to-end pull. We do this because we see the huge improvements in service delivery, customer satisfaction and service delivery that result from achieving this depth of Kanban: typically, organizations that implement the method fully, with a pull system and work-in-progress limits, see lead times drop by 90%, productivity rise by 200-300% and customer satisfaction jump to close to 100%. At this level a professional services organization is truly fit-for-purpose. In the Kanban Maturity Model, we describe this as Maturity Level 3. For large-scale business agility firms must aspire to at least Maturity Level 3.
Our goal with the Kanban Coaching Professional credential is to indicate those who have achieved a level of education and knowledge that enables them to coach an organization of 150-600 people to achieving Maturity Level 3, and a full, end-to-end pull, implementation of Kanban across an entire network of services that make up several product units aggregating into a single business unit.
The Kanban Coaching Professional credential is your indication that its holder has the knowledge and capability to enable truly large-scale business agility and outstanding economic improvements that come from 200-300% increases in productivity and 90% reductions in delivery times.

Another Step Forward on our Mission

Kanban University is dedicated to improving the performance of modern 21st Century businesses, and the effectiveness of managers in professional services, knowledge worker organizations. The democratization of our coaching practices and implementation knowledge in the Kanban Maturity Model moves us another step forward on our mission to bring our pragmatic, actionable, evidence-based guidance, to a broad audience world-wide. Since 2007, the Kanban Method has offered, “the alternative path to agility.” With the arrival of the Kanban Maturity Model, and our Kanban Coaching Practices codification, we’ve made following that path to agility more predictable and less risky. Our new Kanban Coaching Professional (KCP) credential is your guarantee that you have the skills, knowledge and expertise to achieve your business agility aspirations and your organizational goals and objectives.

About Kanban University

Kanban University is a management training company based in Seattle, United States. Led by David J. Anderson, the originator of the Kanban Method, it is the authority on training and professional development using Kanban. Kanban University offers certified training classes through a global network of accredited trainers (AKTs).
For more information visit https://kanban.university/ or email kcp@kanban.university

For a current list of Kanban Maturity Model (KMM) and Kanban Coaching Practices (KCP) training classes visit the David J Anderson School of Management http://djaa.com/

Introducing the New AKC Credential

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We are making changes at Kanban University in order to make our training path and our credentials more easily understood both by those who might take training and obtain a credential and for those who might employ people with these credentials. As part of this program we’re announcing a significant change to our highest level of achievement, our elite consulting credential for experts in the Kanban Method. Since 2012, the most proficient exponents of the Kanban Method, have been known as Kanban Coaching Professionals (KCPs). At the same time, trainers have been known as Accredited Kanban Trainers (AKTs). Today, we are acting to correct the confusion with the names. From today, existing KCPs will be know as Accredited Kanban Consultants (AKCs) and we are launching our new AKC program and associated training class.

Accredited Kanban Professionals

Since 2012, Kanban University has had two programs to develop trainers and consultants. While the path to accreditation has been different, the common theme, is that both credentials have been marked by peer review and approval. Accredited Kanban Trainers must audition before their peers and fellow trainees as well as at least two AKT-trainers. Over a 5-day period, their knowledge of the Kanban Method and our training curriculum is examined and critiqued. They are auditioned for their ability to teach the material, their ability to tell stories, and their ability to illustrate the effectiveness of the method using case study evidence. Consultants have had a different path: Having completed the KCP Masterclass, 5 days of intensive training, in advanced Kanban practices, change leadership and sociology, they must complete at least 6 months field experience leading an Agile transition using the Kanban Method, write up their experience in an essay; apply to the program; undergo a period of mentoring from an existing accredited professional; and then appear before a panel interview of at least 3 existing accredited consultants. Once accredited the successful applicant is awarded the white Kanban University lanyard. This is an indication of their status in our community and their professional qualification. When attending our events globally, you can be assured that those wearing a white lanyard have progressed through a peer-review process and that Kanban University vouches for their level of knowledge and experience. It only made sense that we simplify the naming of these credentials. And hence, from today, we have

  • Accredited Kanban Trainer (AKT) – with a license to teach one or more of our certified training classes
  • Accredited Kanban Consultant (AKC) with the skills and experience to lead large scale Agile transitions using the Kanban Method

The AKC becomes our highest-level credential with the hardest path to achievement

Change Leadership Masterclass

The educational requirement for AKC is that they have completed the intensive 5-day Change Leadership Masterclass. This class replaces the KCP Masterclass. The oldest class in our catalog, the KCP Masterclass was first offered in October 2009. It is retired after almost 10 years. The replacement class is based on the 6th generation of the existing curriculum. Effectively the 7th generation of the class, all of the Kanban content has been removed. This is now offered though the KMP, KMM and Kanban Coaching Practices classes. Instead the Change Leadership class focuses more time on case study review, interactive classroom workgroup sessions, and illustrative movies demonstrating the collection of models and frameworks that help us understand why people resist change, and how to motivate them to get on-board your Agile transition initiative.

The focus is very much on sociology and social psychology and the adaptation of evolutionary theory, and advanced physics such as the laws of thermodynamics and quantum mechanics to social situations. The outcome is that participants learn to see the world around them differently. They see people and workplace situations differently. They learn how to predict where resistance will appear and the forms it will take. They learn to act to enable change in ways that don’t invoke resistance and when it does, they learn an escalating set of techniques to move people to supporting the changes. The Masterclass is the “queen” of our training catalog. It is the ultimate curriculum. It changes people forever. It is rightly the class required for those aspiring to the highest level of professional credential offered by Kanban University.

The KCP credential isn’t going away

The Kanban Coaching Professional (KCP) credential will not disappear. Instead, it will become much more common. By codifying our community’s coaching practices knowledge into the Kanban Maturity Model, we are democratizing adoption of the Kanban Method and successful implementation. The bar for awarding a KCP credential was always the question: is this candidate capable of leading an organization of at least 150 people to a full Kanban implementation with end-to-end pull? It is now possible to achieve this with the Kanban Maturity Model (KMM) and the Kanban Maturity Model Extension for Coaching Practices (KMMX Coaching Practices). Look out for a full announcement about the new KCP credential tomorrow, August 2nd.

What will continue to differentiate the Accredited Kanban Consultants (AKCs) is their ability to work off-the-script and beyond the playbook. They will continue to be the consultants to tackle the difficult challenges, and the domains we haven’t yet seen before, to explore the bleeding edge of Kanbanland, to settle new territories and extend the state-of-the-art. The existing AKC community have collectively helped to define what makes the Kanban Method and the KMM what they are today. For this reason, the white lanyard, is rightly a indicator of the highest achievement, most experience, greatest knowledge, and most energetic contribution to our movement and our mission of improving management in 21st Century organizations.

Another Step Forward on our Mission

Kanban University is dedicated to improving the performance of modern 21st Century businesses, and the effectiveness of managers in professional services, knowledge worker organizations. By clarifying our professional credential program and making it easier to understand, we move another step forward. It is now easier to understand the value of working with a Kanban University Accredited Professional, an AKT or an AKC. When you need the best Kanban training available, your hire an AKT. When you need the best Agile consultants conversant in achieving large-scale business agility through the alternative path offered by the Kanban Method, then you hire an AKC.

About Kanban University

Kanban University is a management training company based in Seattle, United States. Led by David J. Anderson, the originator of the Kanban Method, it is the authority on training and professional development using Kanban. Kanban University offers certified training classes through a global network of accredited trainers (AKTs). For more information visit https://kanban.university/ or email akc@kanban.university

For a current list of Change Leadership masterclasses visit the David J Anderson School of Management  https://djaa.com

Kanban – The Alternative Path to Agility

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The Kanban Method was conceived as an alternative path to agility – as a means to improve responsiveness and adaptability without any significant revolution or reorganization in your way or working or political structure of your business. Lean Kanban University has recently introduced a series of training classes developed and evolved from older, tried and tested curriculum to ease adoption of Kanban and communicate the full scope and scale of what is possible when you fully embrace Kanban as a way to manage your modern professional services business.

This table shows The Kanban Method and the alternative path to agility is a single graphic. From left to right you progress from basic introductory shallow kanban boards to full enterprise scale, Enterprise Services Planning.

kanbaninatable

In September our new training facility, the Anderson School of Management opens in Seattle conveniently located near Seattle Center at 200 First Avenue West. We will be offering the full suite of Kanban and Enterprise Services Planning classes every month. Browse our schedule via our training listings. Email our sales team for summer offers and promotions if you register before August 10th, 2015.

Team Kanban Practitioner

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Lean Kanban University is introducing a new entry level Kanban class for Team Kanban together with a certification and professional credential, TKP, Team Kanban Practitioner. This new class becomes the entry level on the “alternative path to agility” and reflects the market reality that most Kanban starts shallow and at the team level.

Team Kanban Practitioner (TKP) classes are just 1 day and can be taken at our new training facility in Seattle, The Anderson School of Management, located at 200 First Avenue West, Seattle WA 98119 close to Seattle Center, Key Arena and the Space Needle. Check our listings for available classes Training

Team Kanban Practitioner class participants will receive a certificate and the professional credential TKP. This is the first step on the “alternative path to agility.” Completing two 2-day classes on Kanban Systems Design and the Kanban Method implemented through the Kanban Candences, earns participants the higher level Kanban Management Professional, KMP, credential.

The Kanban Coaching Professional and Accredited Kanban Trainer credentials are unaffected by this announcement.

Class Agenda

1st session (90 minutes)

Introduction and survey of existing Kanban experience

3 Agendas (focus on Sustainability)

Principles & Practices

Meanings of kanban

Basic kanban concepts

     – visual board

     – local cycle time metric

     – WIP

     – delivery rate & Little’s Law

Discussion of Cartoon

Feedback loops – standup & replenishment

Morning Break

2nd session (90 minutes)

Game – getKanban in Quickplay mode or Klaus Leopolds’ boats game depending on trainer preference

Game debrief

Lunch Break

3rd session (90 minutes)

Board designs (including personal kanban)

WIP limits

Risks (e.g. Tactical|operational|strategic|sustaining, cost of delay Expedite|Fixed Date|Standard|Intangible)

Design-a-board exercise

Afternoon Break

4th session (90 minutes)

What next…

Explanation of service delivery workflow kanban

Revisit 3 Agendas – next focus on Service-orientation

Proto-kanban versus full kanban system

Benefits of extending kanban up/down workflow – improved service delivery – overview of STATIK and outside-in customer focus – upsell to 2-day class

Closing exercise – reflect on what have you learned and what next, what will you do differently next tomorrow?

Who should attend?

Any team member in a professional services organization where the team or its members suffer from over-burdening and would benefit from better visibility into their work and relief from over-burdening through the use of work-in-progress limits. Anyone who has seen others benefiting from the use of Kanban Boards and would like to learn how to do it for their team.

Learning Outcomes

Attendees will learn about various styles of team kanban board and how to choose the correct style for their current way of working. They will learn how to behave and collaborate when practicing Kanban at the team level. They will be able to go back to their office and implement a Team Kanban Board (some form of proto-kanban) and get started. They will also have a fuller appreciation of service delivery workflow kanban pull systems and why advancing to the next stage of Kanban Management Professional is an important and valuable step on their journey along the “alternative path to agility.”