Today, we’ll explain the specific Kanban metrics & analytics that you should be using to monitor your team performance and your process efficiency and delivery times, as well as the red flags to watch for that signal trouble ahead.
You might have heard the saying “what gets measured gets managed”. Monitoring progress and measuring performance is a key component of the Kanban Method – both for tracking your projects and making your processes more efficient over time.
Let’s explore the main Kanban metrics and how to leverage them to improve your productivity.
Cycle Times
Cycle time is a key metric in Kanban and it measures how much time a task spends going through your process. Cycle time differs from lead time in that it is only measured from when your team starts working on the task.
Cycle time, then, is the metric that directly measures how long it takes your team to deliver a task. Low cycle times means your team is working efficiently, high cycle times indicate that something is stalling your process. Keeping your cycle times down keeps your lead times down, and leads to high customer satisfaction.
You can see how your cycle times evolve over time using a cycle time histogram and use them to predict future work delivery times. In the plot above we can see from the percentile lines that once your team starts working on a task, it has a 50% chance of being completed in less than 6 days and a 95% chance of being completed within 13 days.
Throughput
Whereas cycle time measures how long it takes an individual task to go through your process, the throughput metric in Kanban measures the total amount of work delivered in a certain time period. Throughput only measures completed work items – nothing that is still in progress gets counted.
The reason throughput is a key Kanban metric is that it can be used to measure your capacity to deliver results. Consider a Kanban team whose throughput for each of the past 5 weeks was 3, 7, 4, 5, and 6, giving an average throughput of 5 tasks per week. Without knowing anything about the tasks themselves, we can say that this team can deliver on average 5 tasks every week.
Throughput over time is used to track your team performance and is measured using the throughput histogram. This maps how frequently your team achieves a certain throughput over a period of time. From the chart below, we can see this team has a median output of 3 items per week over the past 6 months.
By tracking your throughput over time, you can directly see how your team’s overall performance is changing. Ideally, throughput should stay the same or increase – a decreasing throughput indicates that something is negatively affecting your team’s ability to deliver and needs additional attention.
Work In Progress
A key component of the Kanban Method is limiting Work In Progress (WIP) to improve your team’s efficiency. Think about it – do you get work faster when you split your attention between many tasks, or when you choose one to focus on?
The optimum WIP limit for your team will depend on several factors such as the size of your team, however a good place to start is setting the limit at around the number of people in your team – this way, everyone can focus on one task at a time.
Team Performance
The two Kanban metrics that best measure your team performance are cycle times (how fast work gets done) and throughput (how much work is delivered). These metrics are the ones to watch to make sure you are delivering results to your customers!
Cycle time, throughput, and WIP are connected by Little’s Law. This formula applies to any system which meets Little’s Law assumptions.
Cycle Time = WIP/Throughput
Little’s Law shows the relationship between the three basic flow metrics, and that changing one will have an effect on the other two. For example, for a reduction in cycle time, WIP must decrease.
Short cycle times and high levels of throughput are signs of good team performance, but another thing to look out for is consistency. From the cycle time histogram and throughput histogram, you can not only see the average value of your Kanban metrics but also how this data is distributed over a period of time. When your values are spread over a smaller range, your future predictions are naturally more accurate.
Cumulative Flow Diagram
The Kanban Method primarily deals with incremental evolutionary improvements. It is most powerful when applied over longer periods of time. We’ve already discussed how cycle time and throughput are tracked over time, however, the real star for examining process efficiency on a longer timescale is the cumulative flow diagram.
The cumulative flow diagram shows the distribution of tasks in each of the process states, accumulating over time. Each colored band indicates how many tasks are present in each state of the process at a given time. Approximate average cycle time can be calculated straight from the diagram, but the real benefit of the CFD is how quickly you can get a visual assessment of the stability of your process.
Changes in your team performance can be seen at a glance from how the gradients of the bands change over time. An increase in gradient for the “Done” band means your team is delivering work faster. On the other hand, a sharp increase in the gradient of the “In Progress” band indicates a bottleneck is beginning to develop.
Bottlenecks
The biggest red flag that your performance is about to suffer is the bottleneck – increasing work that is not being completed. The bottleneck signals that your team does not have the resource capacity to handle the amount of work assigned to them in a timely manner.
Using Kanban metrics you can spot bottlenecks as they occur: signs to watch out for increasing cycle times, decreasing throughput, and sharp increase in gradient in your cumulative flow diagram.
When you begin to see signs of a bottleneck, it’s time to take a close look at why this could be occurring – is an external requirement causing items to get stalled? Has your work in progress limit crept up without you realizing it? Do changes in the roles of your team mean tasks should be assigned differently? By taking action quickly, you should be able to eliminate bottlenecks before they become a problem.
Here is your action item: If you haven’t introduced Kanban metrics to your team just yet, do this first thing in the morning. Where do you start? Connect the Nave plugin to your management platform and analyze your data (it only takes a couple of minutes!). Use Nave during your daily meetings to track Cycle Time, Throughput and Work In Progress. This small tweak alone will help you identify areas for improvement and increase your performance!
What Kanban metrics & analytics do you use to track your team performance? What was the most important insight you learned from your data and how did you act on it? Tell us about your experience in the comments!
