Monday, November 04, 2013

Visual explanation of Kanban terms

David Lowe has produced a very nice video to explain commonly used terms in Kanban in his blog post, Kanban Terminology. Here it is:



The post provides one set of definitions for Lead Time, Cycle Time, Throughput and Takt Time, using commonly applied definitions. The video is helpful and neatly done so I recommend it. However I do have some observations...

Now some of you may remember I said I was resigning as the self-appointed conscience of users of Kanban terminology. People can use whatever terms they like, provided they provide a brief explanation of which definition of a term they happen to be using. In which case, why on earth am I writing this blog to comment on David's excellent video?

(Should I stop now? Ah well, I've started now, so...)

The first point is that the confusion arising over definitions of the term Cycle Time is not a Kanban-specific issue. There are two distinct definitions of what Cycle Time is in the literature of manufacturing. To disambiguate the 2 definitions, I have taken to using the abbreviations CT1 and CT2.

CT1 is the average time between items emerging from a specific point in the process (for example the time between 1 item emerging from that point, say the Collection Window and the next item emerging). This definition is used in the Toyota Production System and is explained in these books and on-line references:
  • Womack and Jones (1996, 2003) Lean Systems.
  • Chet Marchwinski et al Eds, 4th ed (2008) Lean Lexicon, a graphical glossary for Lean Thinkers
  • Mike Rother and John Shook (2003) Learning to See: Value Stream Mapping to Add Value and Eliminate MUDA 
  • Jeffrey K. Liker (2004) The Toyota Way.
  • Professor W. Bruce Chew's Harvard Business School Glossary of Terms (2004) [http://hbswk.hbs.edu/archive/1460.html] well explained in Fang Zhou's blog [http://www.isixsigma.com/methodology/lead-time-vs-cycle-time/]
CT2 on the other hand is the time taken by 1 item to pass between 2 points in a process, for example between the start and end points of the "Collection Process". This definition is used by these books and references:
  • Hopp, W. J. and M. L. Spearman (2000). Factory Physics: Foundations of Manufacturing Management, 2nd (ed.), Irwin McGraw Hill, New York, NY.
  • Donald G,  Reinertsen (2005) The Principles of Product Development Flow: Second Generation Lean Product Development
David Lowe's video uses the CT2 definition but, and here's another reason to be very cautious, unfortunately his example uses a situation where the WIP at each station (for example the "Collection Process") is one. Furthermore (check with Little's Law) when WIP = 1, CT1 = CT2! And this can result in people looking at the example and misinterpreting the definition.

Look at the Collection Process. The time between the start and end of the Collection Process in the video is 40 seconds. This is CT2, the definition for Cycle Time being used in the video. But if you were explaining this to someone who already knew about the CT1 definition, what would they think? The time between one item emerging and the next (CT1) is 40 seconds - no surprise there - so they carry on with their original assumption, and they would completely misinterpret the definition!

My recommendation for using an example to explain your definition of Cycle Time is to always ensure that the WIP does not equal one at any point, so this confusion does not arise. Say we said that the unit of work in this example, instead of being the order was the hamburger, and furthermore assumed that every car orders TWO hamburgers (WIP=2). In this case CT2 is exactly the same. Both hamburgers take 40 seconds from the start to the end of the process. However the average time between hamburgers emerging from this process, i.e. the average CT1, is 20 seconds! CT1 is not the same as CT2.

As David shows in the video, the time between items emerging from the final part of the process, or more accurately the time between items being demanded by customers (the target CT1) is known as Takt Time. Takt is a German word which can be loosely translated as... "Cycle" (aagghhh!). However it's a special cycle time - the target CT1 for the whole process, and thus also the target for each station. In this example, the griller of the patties should be finishing one hamburger every 20 seconds to avoid either under or over-production.

David and I were able to discuss this issue at the recent #lkuk13 conference (we sat together during Troy Magennis's Cycle Time Analytics keynote - yes I know "Cycle Time" again!).  Troy asked me during the presentation what I thought he should use instead of Cycle Time. I replied TIP, or Time In Process since I haven't yet found an ambiguous use of this term, of course realising that I can't change what people choose to use in their presentations - it's up to them. This confusion was pre-existing and no doubt will continue for a long time yet. I just want people to be aware of the nature of the ambiguity of this term. Removing the ambiguity can be quite hard since sometimes (as we've seen, when WIP=1) the two terms are equal, even though they are conceptually completely different.

Note the problem of defining Cycle Time in a context where WIP=1 appears to be common since very often in manufacturing a machine is processing only one part.

Postscript: Here's the diagram from the Lean Lexicon (referenced above) showing their definition of Cycle Time (CT1).

Cycle Time (CT1) From Lean Lexicon, a graphical glossary for Lean Thinkers

See also: Why I don't use Cycle Time in Kanban.

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