What do Lead Time, Cycle Time, System Lead Time, and Customer Lead Time really mean? These are frequently asked questions, and if I had a dollar for every time I’ve been asked, I could amass a fleet of drones to help fight russia.
To unpack these terms, let’s start with what I usually explain in the various classes I teach. Essentially, these terminologies are tools for gauging the time it takes for a working element to transition from one point (say point A, on the left) to another (point B, towards the right) within a Kanban system. These points, A and B, can vary, but measuring the time taken to move from one to another can yield valuable insights about the system’s properties, which can subsequently be used for continual improvements.
However, these terms aren’t universally agreed upon as their definitions can differ based on the work’s origin, authorship, and other factors. This lack of uniformity means that when you’re in a conversation about these concepts, you can’t be absolutely certain that your counterpart shares your understanding of the term. To mitigate misunderstandings, it may be wise to clarify exactly which points (A and B) you are referring to. Although it may not be the most convenient method, it’s universally applicable and useful.
Having said that, let’s delve into the most commonly used terms.
“Lead Time”, as defined by Kanban University (KU), and “Cycle Time”, as described by Daniel Vacanti (therefore Kanban Guide from ProKanban, The Kanban Guide for Scrum Teams from Scrum.org), are fundamentally the same – both measure effectively the time from when work starts on work element until it’s completed (effectively the same because there is no concept of “Commitment Point” in ProKanban).
“System Lead Time” is a term unique to KU, as far as I’m aware, and it denotes the time taken from the acceptance of a customer’s order until it reaches the first unlimited (∞) queue.
“Customer Lead Time” also appears to be exclusively used by KU, and it refers to the duration from when a customer’s order is placed until it’s completed. This term, therefore, includes the Backlog waiting time. To better understand these concepts, please refer to the attached illustration.
I hope this explanation proves useful, and I’m available to answer any questions you might have.
PS: These key terminologies are part of the curriculum in our KU TTT (Train the Trainer) classes. If you’re interested in participating, don’t hesitate to reach out to me.