Cycle Time is the time it takes to actually do a piece of work. Lead time is the time it takes from the request being raised and the work being completed. Lead Time and Cycle Time are measures common in Lean implementations. Lead Time = Cycle Time + Queue Time.
How long does it take to do work? Why does it take so long?
As mentioned in Lean Principles, the most effective way of understanding a value stream is to directly examine it, to literally go and see the activities that take place throughout the organization, the hand overs between teams and the products produced. Similarly, the most effective way to identify waste is to simply ask team members in the organization what they think, since they work in these processes day to day, they are well qualified to identify which are useful and which are wasteful.
Sometimes a process may appear wasteful from a local perspective but may be meaningful and valuable from a systemic perspective. In this case the value of the wider process requires better communication so that local teams can understand its purpose, which in turn will improve motivation and productivity. We recommend that an organization is open to challenge from individuals and actively encourages people to identify areas of potential improvement. Whether their proposed changes end up being successfully implemented or not is less important than encouraging individuals to continuously improve the organization.
Measurement and Mapping
Lead and Cycle time are useful measures for understanding a value stream and mapping it.
Cycle Time = the time it takes to actually do something
Lead Time = the time taken from the initial request to it finally being done
Lead time can only ever be equal to the cycle time or longer since a request can't be done quicker than the amount of time taken to do the task. Lead time includes cycle time. Most tasks in a complex organization (e.g. provisioning a new Continuous Integration Server) typically take far longer to achieve (the Lead Time) than the time to actually implement the request (set up a new virtual server, install software, integrate into network etc.). Measuring the amount of time involved in "doing" vs. "waiting" is the purpose behind Lead and Cycle Time.
Measuring activities in this way often leads to an understanding of the amount of time a request is in a queue, waiting to be triaged, on a person's task list before work starts on it. This waiting time is all potential waste and is often inherent in any hand over of an activity between people, teams, departments or businesses.As a result, flow and efficiency can be simply improved by reducing the number of handovers.
There are many reasons for large "queue time" including over-demand and under-resourcing. However, there are frequently less justifiable reasons for delays including measurement driven behavior that results in teams protecting their Service Level Agreements (SLAs) and/or Key Performance Indicators (KPIs) by "buffering" work to introduce some slack for when things go wrong or to deal with variance. In traditional Project Management this deliberate introduction of waste is called "contingency planning" and is considered a positive practice. Unfortunately, it is especially prevalent when there is a contractual boundary between teams that is focused on SLAs.
These delays, regardless of their root causes can have significant effects when looking at the system as a whole. If we examine a chain of activities as part of a value stream, measuring each in terms of lead and cycle time we can draw a picture of a sequential value stream:
In the example above we have 26 days of actual work spread over an elapsed 60 days (12 weeks) which equals about 60% waste. This work could have been done in less than half the time it actually took!
Often planners will look to put some activities in parallel, to reduce contingency by overlapping activities (accepting some risk). Even with these optimizations, if waste inherent in each activity is not addressed there will still be a lot of waste in the system.
By visualizing a value stream in this fashion we can immediately identify waste in the system, in the example above, despite some broad optimizations we can still see it's mostly red. In many cases planners aren’t willing to accept the risks inherent in overlapping activities as shown here, or aren’t even aware that they can be overlapped, leading to the more sequential path shown previously. The result is a minimum time that it takes a request to get done, based on the impedance of the current value chain of, in this example, 38 days before we even start thinking about actually doing any work. This is a large amount of waste.
What is the baseline impedance in your organization?