Friday, July 17, 2015

Postscript on Throughput and Delivery Rate

Most people use Throughput and Delivery Rate in Kanban systems as synonyms - including myself up to this point. I've changed my view however.

The canonical form of Little's Law in Kanban is as follows:
Delivery Rate = WiP / Lead Time    [ande] 
even though these days I more frequently express it this way:
Throughput = WiP / TiP 
Surely these two ways of writing the equation are entirely equivalent aren't they? Well maybe not.
Note: All these terms are defined in my Glossary Proposal (which has recently been updated to include the definition of Throughput). Feedback, comments and references to publications using the terms defined are welcomed and encouraged.
Throughput is the term +Daniel Vacanti uses (among many others), particularly in his excellent new book Actionable Agile Metrics [vaca], and it got me thinking about one of the problems with using Delivery Rate: what about the items which are not delivered but are discarded? If there are a significant number of these Little's Law as expressed in the first equation will not apply, unless we exclude discarded items from calculations of the historical averages for WiP and TiP. All very well except the WiP limits - a crucial control for Kanban systems necessarily contain items that may be discarded in the future.

Without trying to solve this problem, but rather clarify the terminology we use to describe it, I think it is useful to have differing definitions for the 2 terms:
Delivery Rate is the rate at which work items exit the system in a "complete" state (i.e. just delivered items)
Throughput is the rate at which work items exit the system whether discarded (this includes those which move back in the process to a state prior to the system under consideration) or completed (i.e. both delivered and discarded items)
Let me know if you find this distinction useful. Your feedback is essential in honing the Glossary Proposal to one that everyone finds helpful and acceptable.

References

  • [ande] Anderson, David J. Kanban, Blue Hole Press. (2010)
  • [vaca] Vacanti, Daniel S. "Actionable Agile Metrics for Predictability: An Introduction". LeanPub. (2015)
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