One of the fundamentals of agile processes like Kanban and Scrum is that they are about the flow of work. Where older project management approaches have tended to focus on the single batch (the project), processes influenced by the Lean movement (and Toyota's production philosophy) emphasise the flow of work within a project, and of multiple projects. So agilists need to be able to understand, capture data about and improve flow.
One problem in getting good communication between the many experts, teams and sources in this area is common and unambiguous terminology. Just one example from 2 books on my desk at present... how do you express Little's Law (i.e. the law explaining the influence of work in progress on flow):
- Throughput time = (flow units in process) * (cycle time)
- Delivery Rate = (work in progress) / (lead time)
We could redefine Lead Time to mean just the time in our system (which suffers from the "other authoritative sources" problem), or - better in my opinion - qualify the term whenever we use it in a formal context: for example System Lead Time; QA Lead Time; Development Lead Time. This means the term is unambiguous (provided the prefixes have been defined for the system) and it also means we can slice the system temporally to view the Little Law effects within subsets of the process.
Term 1 - Lead Time: the time taken for a unit of work to move from one point in the process to another. Used informally to mean either System Lead Time (i.e. the time for a unit to move from the start to end of the system under consideration) or Customer Lead Time (i.e. the time from customer order to customer delivery). Otherwise the term should be qualified to determine the start and end point of the measurement. (Measured in: days, hours, seconds, etc.)
Term 2 - Work In Progress: the number of units of work currently within a specified part of the system or the whole system. Prefer this term to flow units in process or similar.(Measured in: "units".)
Term 3 - Delivery Rate: the rate at which units of work pass through the system or part of the system. As with Lead Time the term may be qualified with a phrase that determines context - e.g. System Delivery Rate or Development Delivery Rate. (Measured in: "units" per day/hour/second.)
So we can now translate the two versions of Little's Law above to preferred terms:
- System Lead Time = (Work In Progress) / (System Delivery Rate)
- System Delivery Rate= (Work In Progress) / (System Lead Time)
Finally let's define value-adding time and the 2 efficiency terms for good measure. I'm indebted to Modig and Åhlström's excellent "This is Lean" for these definitions.
Term 5 - Resource Efficiency: a measure of the utilisation of a given resource, i.e. the ratio between the time working on adding value in the system to the total time available.
See also: What's the difference between Cycle Time and Lead Time... and why to just use Lead Time in Kanban.