Lead Time Distribution Charts

One of the really useful charts that I commonly use with Kanban implementations are lead time distribution charts. Given that lead time is one of the key metrics, at least from a customers perspective, understanding the nature of lead times for your Kanban system is a must for ensuring a more fit-for-purpose and customer focused approach. Understanding how to read these charts and take action to achieve that kind of outcome is an essential skill for any kanban practitioner.

One of the key points about lead time is hinted at in the above title – it’s a distribution, not a single number. If you take nothing else away from this article except this point, it will put you in good stead to start to make improvements. Too often, I hear about people talking about “when it will be done” and referring to a single number, like an average. This is inherently disadvantageous, because it denies the real nature of lead times, especially in knowledge work.

No doubt, you’ve seen before a lot of variation in the knowledge work you’re involved with. Items are not all the same size or complexity, plus you have to wait for others which causes delays which are often unpredictable. These kinds of things lead me to prefer to acknowledge the variation in lead times we see, rather than ignore them.

Here’s an example of a lead distribution chart (also known as a histogram):

Here is an explanation of what you’re seeing:

  • X-axis: Number of days from when something was committed to, to when it was completed (ie the Lead Time). Not that in the above they are recorded at 5 day increments. So, the value for 10, represents the number of items greater than the last measure (5) and 10.
  • Y-Axis: Count of the number of items that fall within that range. The number at the top of each column represents the total count for that item.

You can see from the above chart that a significant number of the overall items fall within the 5 & 10 day counts. 43 out of the 78 items (over half) fall within this range. Clearly the majority of work falls within this range, but would you feel confident giving a commitment based on just a 55% hit rate? Of course not, because as we can see, a large number of items are still counted up to 25 days. A little over 80% of items (for the purpose of this, we’ll round up to 85%) take up to 25 days. This is a little better, and you may feel comfortable in giving a commitment based on this, but keep in mind that its up to 2.5 times longer than our earlier sample. Had we given a commitment based on what we thought was more commonly occurring lead time (which is often where our biases may take us) we might be facing considerable customer disappointment and the consequences that go with that.

There’s also a section between 30-50 days, not a great deal of items, but you can see that there is a not insignificant chance that we might land an item this late (about 10% of items). Again, this is 5 times what our first sample told us. In other words, 1 in 10 customers would have to wait 50 days instead of the 10 days if we had promised that. How would you feel as that customer?

Lastly, there are our outliers from 70-85 days. Outliers are a normal part of your system – you shouldn’t dismiss them out of hand. In our case, they’re about 5% of the total, or 1 in 20 requests.

When I look at the actual data behind this chart, the average lead time is approximately 16 days. Perhaps instead of jumping straight to commitments of 10 days, or even 16 days, we might like to take the full distribution into account. Instead, how when discussing time commitments, perhaps acknowledge the distribution with something along the lines of:

“Over half our requests are finished in 10 days or less, the average being 16 days, with 95% of all requests being completed in 50 days.”

This is a better discussion and uncovers the real nature of the work and will lead you to start to make better commitments that are more reliable.

Future posts will cover how to use the Lead Time Distribution Chart for making improvements.

The lead time chart was produced by the freely available FocusedObjective spreadsheets downloadable from: http://bit.ly/SimResources

%d bloggers like this: