lead time: what we know about it
TRANSCRIPT
Lead Time:What We Know About It
And How It Can Help Forecast Your Projects
Alexei ZheglovLean Kanban Asia-Pacific
Bangalore, December 2014
Kanban System Lead Time
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Lead Time
The FirstCommitment
Point
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Discarded
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Ask Not
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Lead Time
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Not “how long will it take?”
Do Ask
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Lead Time
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When should we start?
When do we need it?
Decide
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Lead Time
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One eventprecedes (leads) another one
by this much
One eventprecedes (leads) another one
by this much
Why?
DeliveredIdeas AnalysisInputQueue
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Lead Time
The FirstCommitment
PointAB
C
Discarded
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Includes the time the work item spent as
an option
Depends on the transaction costs (external to the
system)
Measures the true delivery capability
Customer Lead Time
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Output Buffer
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Activity 2 Activity 3
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Customer Lead Time
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Kanban system(s) lead time+
time spent in the unlimited buffer(s)
C
Discarded
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(Local) Cycle Time
DeliveredIdeas Activity 1InputQueue
Output Buffer
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Activity 2 Activity 3
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AB
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Discarded
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Cycle time is always localAlways qualify where
it is from and to
Often depends mainly on the size of the local effort
Discussion 1: Gaming Metrics
• Given the goal to reduce the lead time (as we
have just defined it), what would you do?
• What would happen, good and bad?
• How can you game the local cycle time metric?
• Bonus question: if your delivery time metric
included the time before commitment, what
would you be motivated to do?
Readyto Test
Flow Efficiency
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Customer Lead Time
Wait Wait WorkWork
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Work WaitWork
Official training material, used with permission
Readyto Test
Flow Efficiency
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Customer Lead Time
Wait Wait WorkWork
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5IP
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UATReady toDeliver
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Work WaitWork
Official training material, used with permission
Work is waiting
Work is still waiting!Multitasking creates
hidden queues!
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Flow Efficiency
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Customer Lead Time
Wait Wait WorkWork
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Work WaitWork
Official training material, used with permission
%100time elapsedtime touch
efficiencyflow
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Measuring Flow Efficiency
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P1
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Customer Lead Time
Wait Wait WorkWork
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UATReady toDeliver
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Work WaitWork
Official training material, used with permission
Timesheets arenot necessary!
Rough approximations (±5%) are often sufficient
In Aggregate
Sampling
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Measuring Flow Efficiency
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Customer Lead Time
Wait Wait WorkWork
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UATReady toDeliver
∞ ∞
Work WaitWork
The results are often between 1% and 5%*
*-Zsolt Fabok, Lean Agile Scotland 2012, LKFR12; Hakan Forss, LKFR13
The result is not limited to the number!What did you decide to do?
If the Flow Efficiency Is 5%...
If... Before After Improvement
Hire 10x engineers 100 95.5 +4.7%
The task is three times bigger 100 110 -9.1%
The task is three times smaller 100 96.7 +3.4%
Reduce delays by half 100 52.5 +90%
Discussion 2:
Consequences of Low Flow Efficiency
(all positives, really)
• Why is lead time is hard to fudge?
• Why does lead time improve mostly due to
system-level improvements?
• How likely are the lead time data from your
previous projects to help you plan a new one?
Measuring the delivery timecannot be separated fromunderstanding commitment.
Goodhart’s Law’s Corollary
Discussion 3: Measuring Lead Time
• Do you already collect lead time data?
• If not, do you already have these data available
somewhere, waiting for you to discover them?
• If not, would it be difficult or easy to start?
• What would you do differently in your company
with respect to lead time data after this
presentation?
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0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 95-99 100-104
Example
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0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 95-99 100-104
Example
Best-fit distribution:Weibull with
shape parameter k=1.62
Heterogeneous Demand
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Demand placed upon our system is differentiated
by type of work and risk
Drill down by project type
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Mixed data from different types of
projects
4 types, 4 different distributions
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...
...
Delivery Expectations
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Shape Average In 98%
1.62
1.23
1.65
3.22
In 85% of cases
30 d
35 d
40 d
56 d
<51
<63
<68
<78
<83
<112*
<110*
<99
Delivery Expectations
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10
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5-9
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25
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0-4
5-9
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-64
65
-69
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75
-79
80
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10
0-1
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Shape Average In 98%
1.62
1.23
1.65
3.22
In 85% of cases
30 d
35 d
40 d
56 d
<51
<63
<68
<78
<83
<112*
<110*
<99
The averages are insufficientto specify delivery capabilities!
The average says nothing about variability! Needed:
the average and a high percentile (usually 80-99%)
Another Example
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0-2.5 2.5-5 5-7.5 7.5-10 10-12.5 12.5-15 15-17.5 25-27.5
Development
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0-3 3-6 6-9 9-12 12-15 15-18
Support
Shape: 1.16 Shape: 0.71
Weibull DistributionsOccur Frequently
Operations, support (k<1)New product development(k>1)
The unique signature of your process
The unique signature of your process
Mode: how we rememberthe “typical” delivered work item.Trouble: it’s a very low percentile.
18-28% common.
High percentiles (80th-99th):critical to defining
service-level expectations
High percentiles (80th-99th):critical to defining
service-level expectations
Discussion 4:
Probabilistic or Deterministic?
• Would you describe the prevailing approach in
your organization as probabilistic or
deterministic?
• Is the expected answer to “how long will it take?”
a single number?
• Can you instead ask, “when do we need it?” and
“when should we start?”
• Can you make decisions given distributions of
probabilities?
TestReady
S
RQ
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ON
F
A Few Words About Projects…
E
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M
DevReady
5Ongoing
Development Testing
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UATReleaseReady
∞ ∞
ProjectScope
Official training material, used with permission
Delivery Rate
Lead Time
WIP=
Applying Little’s Law
From observed capability
Treat as a fixed variable
Targetto
achieve plan
Calculated based on known lead time
capability & required delivery rate
Determines staffing level
Official training material, used with permission
Delivery Rate
Lead Time
WIP=
Applying Little’s Law
From observed capability
Treat as a fixed variable
Targetto
achieve plan
Calculated based on known lead time
capability & required delivery rate
Determines staffing level
Complicating factors here:Dark matter
“Z-curve effect”Scope creep
Complicating factors here:Variety of work item types and risks
TestReady
S
RQ
P
ON
F
A Few Words About Projects…
E
I
G
D
M
DevReady
5Ongoing
Development Testing
Done
3 35
UATReleaseReady
∞ ∞
ProjectScope
Lead time data andobserved/measured delivery capability
at the feature/user story levelare critical to forecasting projects
The project initiation phase is a great time to builda forecasting model and
feedback loops
Discussion 5: What Now?
• What new ideas have your learned in this
session today?
• What will you do differently when you return to
your office tomorrow?