When we look it up in the dictionary, flow means to move in a continuous and smooth way. We normally use flow to denote the movement of things or people through a stream or system. Are they flowing smoothly? Are there impediments that block the flow of things?
In terms of work, flow denotes the manner by which items, information, or people go through business processes and systems. Although it is expected that things won’t always flow smoothly in business operations, organizations strive to make things flow as efficiently as possible. This is because a stable flow of work enables businesses to deliver faster and in good quality to its customers. In order to achieve this, there must first be a way for teams to visualize their current state processes. This is so that they become aware of interruptions or bottlenecks in their processes and can better assess if they are operating at an optimal capacity.
This is where Kanban comes to play.
Measure Your Flow with Kanban Metrics
With a Kanban system, it is easier for teams to visualize their work and assess their flow. With the aid of a Kanban board, teams have better visibility as to the manner by which work flows through their value stream. But visualizing your workflow is not enough for an effective Kanban practice. There must be a way for teams to measure how effectively their processes are working for them.
Why measure your flow?
In Kanban, there are metrics that serve as information radiators for the team to measure how effective their current system is working. Knowing these Kanban metrics will help teams assess if they are progressing towards delivering better value to their customers.
For example, a team’s goal is to deliver their products faster. Without knowing how much time it currently takes them to do this, how would they be able to prove that their delivery time has decreased? Without knowing where they’re coming from, they won’t be able to state how far they’ve come to improve their processes.
Measuring your flow is also an essential input to managing your flow. Having metrics and data available enable teams to decide on improvement actions and process changes. It is through data that teams can make sound improvement recommendations and execute experiments on improving their processes. Instead of relying on gut feel all the time, teams are more confident in launching process improvement initiatives because they have data to back their solutions.
Measuring flow also enables teams to track their performance and gauge their responsiveness to customer needs. The faster the delivery, the more you are able to produce – the more satisfied your employees and customers become.
Let’s get to know how to measure kanban performance and what are the Kanban metrics that teams can use for their practice:
Lead Time and Cycle Time
These two Kanban metrics are often used interchangeably but are ultimately different things. Lead Time refers to the period your customer sends a request up to the time your customer receives your end product. Lead Time is seen to be from the point of view of the customer. On the other hand in the kanban control chart, Cycle Time is the period by which the customer request enters your process and successfully goes out of your process ready to be shipped to your customer. As teams improve their Cycle Time, so does the Lead Time also improve.
In terms of your Kanban Board, only when a card enters the In Progress states will you start your Cycle Time clock and end it once the card is transferred to the Done state. Virtual Kanban boards usually have built-in reports that track your Cycle Time. For example, in Kanban Zone, you can generate Cycle Time reports that allow you to analyze how long it takes for your teams to process cards per month. If you have more than a month’s worth of work, your Cycle Time report will show a graphical representation of your performance through time. You will then know if you’ve improved towards reducing your Cycle Time or the opposite.
The Kanban Zone Cycle Time report will also show you the average Cycle Time per type of work that you do. This will depend on how you classify your card, on in terms of Kanban Zone, the labels that you use.
Let’s take a software development Kanban board for example. A development team classifies their cards according to the type of work being done. They would classify cards by Feature Request, Production Issue, Regression Bug, or UI Change. When they generate a Cycle Time report in Kanban Zone, the report will show the average Cycle Time for processing Feature Requests, Production Issues, Regression Bugs, and UI Change cards on top of the average Cycle Time for ALL cards. This helps teams to further drill down on improvement initiatives. If the report says that resolving Production Issues take most of the time, then the team would focus on finding ways to address Production Issues faster or even better, they would work to actually prevent Production Issues from happening in the first place.
When you’re working with a virtual Kanban board, it becomes easy to track these as the reports are built into the product. However, if you’re using a physical Kanban board then you must make an effort to track these metrics manually.
Throughput is the number of items completed per unit of time. In a software development process, for example, the number of feature items a development team churns out per week is throughput. In a customer help desk process, on the other hand, throughput can be the number of customer support tickets resolved per day. Throughput would depend on the nature of work of the team and their desired tracking period.
If you’re working on uniform products where the level of effort for each item is the same, throughput can then be a reliable metric to use when estimating a team’s capacity to deliver in a given period of time. This would be true for tangible products where the item is defined with the exact procedures and steps to create them.
In knowledge work such as software development projects however, items are usually varied and complex. A certain feature might require a longer time and more effort to build compared to some. This can then make throughput less reliable when making decisions that can impact long-term operations or future projects. Teams must then endeavor to make their tasks as small as possible in such a way that the level of effort is nearly equal from one task to another. If this seems difficult, teams are recommended to combine throughput with other Kanban metrics such as cycle time in their analysis to make the data more consistent.
Virtual Kanban boards also usually come built-in with functionalities to measure a team’s throughput within a period of time. With Kanban Zone, you can easily generate a Throughput report and analyze your performance with your team.
As described in the previous example, teams should take into account the context by which they measure throughput. The report might show that they were able to churn out lesser items this month compared to the previous month. The team should reflect on why this has happened and not jump to conclusions and introduce changes right away. It could be due to new members coming in, or the requirements being more complex. Data coupled with the right context will enable teams to make better decisions for their process.
Kanban Cumulative Flow Diagram
A Cumulative Flow Diagram (CFD) is a powerful tool that allows teams to gain a better understanding of their flow. Online Kanban tools, like Kanban Zone, are created with built-in CFD reports that teams can readily generate. The CFD is a graphical representation of the team’s work as they flow through the value stream. The graph is divided into different colored bands with each color representing a state in the workflow.
The topmost band represents the To Do state or the stage you use to indicate items that have not been worked on by your team, while the bottom band represents the Done state. In between these bands are your In Progress states. Through the CFD, the team can know how many items have moved from one state to another in a given period of time. Teams can also know their Lead Time, Cycle Time, and work in progress (WiP) items at a given point in time.
When teams analyze their CFD, they should keep an eye out for the following:
- Narrowing bands – these indicate that WiP items are decreasing, which means items are being completed faster than they come. This can signal that there is more capacity in this state compared to what’s needed. The team can probably assess if resources can be reallocated to balance out the flow.
- Widening bands – these indicate that WiP items are increasing, which means that the entry rate of items into this state is higher than its exit rate. This denotes a bottleneck in the process and the team must analyze why items are being held up in this state.
- To Do band is wider than your Done band – This means that the pace you are creating the work is faster than your team is able to process it. You must look into your In Progress states and analyze what is keeping your team from working on these items much faster.
- Slope going down – as the Cumulative Flow Diagram is a historical graph of the accumulated items that the team worked on through time, data should not be removed or disappear. The slope should always be increasing. Therefore, if you notice a downward slope then something is wrong with your graph.
Reviewing Kanban Metrics Regularly
In order for teams to manage their flow consistently, it is important to track and regularly measure their performance through the Kanban metrics discussed. Working with virtual Kanban boards makes it easy for teams to achieve this, as data is stored and tracked within the platform, and built-in reports make it easy for them to generate analytics in a few clicks.
But generating these data are not enough. It is important that teams collaboratively discuss what the data is telling them. Before making any decisions to alter processes, add capacity, or to introduce any kind of change through process improvement, teams should agree collectively on the steps they will take. The data is just a starting point to much bigger discussions that the team will have.
When you build and track your process through Kanban Zone, you will be equipped with the tools and reports you need in order to measure your performance and manage your flow more effectively. Start using Kanban Zone today and power up your team discussions with rich analytics and insights.
Learn more from our blogs…
- Kanban Metrics to Track Performance (Throughput) and Responsiveness (Cycle Time)
- 5 Lean Metrics You Should Track to Improve Your Flow
- A Step by Step Guide to the Kanban System