What are the Core Metrics and Key Performance Indicators (KPIs) used in Kanban?

In Project Management, we have to create various workflows for multiple project activities. However, the project experts have to put more effort into measuring the efficiency of their workflow. Kanban, a popular Agile Methodology provides various indicators that help us to measure our Project Workflow in terms of efficiency so that we can assess our project execution. In this detailed article, we will explore the core metrics and indicators that tell us about the project execution.

What is Kanban?

Kanban originated from Japan and its meaning is ‘Visual signals.’ It was first used for the manufacturing industry but its efficiency made it popular in various sectors. It comes under the Agile Methodologies of Project Management. Its core principle is visualizing the workflow through an easy-to-manage Visual Board called Kaban Board. It emphasizes continuous delivery and flow, using a visual board with columns representing stages of a process and cards representing tasks. The system enables teams to visualize work, limit work in progress, and optimize overall efficiency and effectiveness.

1. The goal is to create a transparent and flexible system that helps teams manage work efficiently, identify bottlenecks, and optimize flow.
2. Kanban promotes continuous improvement by allowing teams to adapt their processes based on real-time feedback and demand.

What are Kanban Metrics?

Kanban metrics are key performance indicators (KPIs) used to measure and optimize the efficiency of a Kanban system in software development or project management.

1. Common metrics include cycle time (the time it takes for a task to move from start to finish), lead time (the total time taken from request to delivery), throughput (the number of tasks completed in a given time), and work in progress (WIP) limits adherence (ensuring tasks are within predefined WIP limits).
2. These metrics provide insights into workflow performance and help teams identify areas for improvement in their processes.

Why is the Kanban Metrics important for the Project?

Kanban metrics are essential for project professionals as they provide valuable insights into the performance and efficiency of a project workflow. Measuring various aspects, such as timeline management, task execution, issue resolution, and workflow flexibility, helps in understanding and optimizing project dynamics. Here’s a detailed exploration of the importance of Kanban metrics:

1. Fulfilling Stakeholder Expectations: Kanban metrics enable project teams to gauge their performance against stakeholder expectations and end-user requirements. Understanding how the project aligns with these expectations is crucial for success.
2. Maintaining Project Transparency: By measuring and sharing performance results, Kanban metrics contribute to project transparency. This transparency is valuable for all team members, stakeholders, and anyone involved in the project, fostering better collaboration and communication.
3. Enhancing Decision-Making: Project managers and stakeholders can make informed and strategic decisions based on the insights provided by Kanban metrics. Analyzing project reports allows for a deeper understanding of trends, bottlenecks, and areas for improvement, leading to more effective decision-making in business.
4. Prompt Issue Resolution: Core metrics in Kanban readily highlight immediate risks or issues within the project. This early detection allows teams to swiftly address and resolve problems, preventing potential setbacks and ensuring the project stays on track.

Core Metrics and Key Performance Indicators (KPIs) used in Kanban

1. Cycle Time

One of the important factors in a project’s success is the team’s ability to complete the assigned tasks. Kanban Board has a feature called Cycle Time that helps to evaluate this factor. It is the time between the start of the project tasks and its completion. Thus, you can easily know how much time is individually spent on each task. An important fact about this Kanban KPI is that Cycle Time starts only when the tasks are in the active phase. This indicates whether our team is working efficiently or not.

1. Also, we can easily adjust the timeline of the Kanban Workflow by analyzing the Cycle Time in Kanban.
2. This metric in Kanban helps us identify the bottlenecks. Also, knowing the completion time helps us predict the future task completion time.

2. Lead Time

When you add a new task to your Workflow, the duration from this point till the new task is marked as completed shows how ‘agile’ the team is in initiating the tasks. It is called Lead Time. It tells us about the lifecycle of the project from its creation to its completion. You might be confused with Cycle Time and Lead Time as they both cover the time duration till the completion of the task. The difference between the both is that Lead time shows the duration from the creation of the tasks while Cycle time shows the duration from when the task moved to the active phase. Both of these are the important timeline metrics for any Project.

1. In simple words, lead time gives us a high-level idea of the end-to-end project process.
2. This is because it includes the entire time when the task is created, how much time it spends in the queue, and how much time it takes to complete the work.

3. Throughput (Velocity Report)

Whenever you create multiple tasks in the Kanban workflow, the total time required to complete them also shows the efficiency of the project workflow. The number of tasks completed in a specific duration of time is called Throughout. This informs us about how many issues have been resolved. So, we determine whether the current speed of execution aligns with project requirements or not. Thus, we can easily identify at what rate we have to execute the task to meet the project deadlines.

1. It is also called the Velocity Report as the velocity is measured in the story points or task counts. Also, it can tell us about the future capacity. So, we can achieve the team’s stability while practicing the Agile Principles.
2. Thus, we can say that Throughput is the metric for measuring the team’s performance during the execution of the project plan.

4. Cumulative Flow Diagrams

The Cumulative Flow Diagram is similar to the Control Chart. However, the difference between these tools is that the Contol Chart covers the Cycle Time as the only performance metric. On the other hand, the Cumulative Flow Diagram presents Cycle Time, Lead Time, Work-In-Progress, and Throughput simultaneously in a layered view. It also shows the flow of the tasks in real time so that we can easily adjust the workflow and adapt the immediate changes or updates.

1. In CFD, the horizontal axis denotes the time and the vertical Y-axis denotes the tasks or issues.
2. Also, the color band represents the columns of the Kanban Board that show what tasks are executed at which stage.

5. Burnup Report and Sprint Burndown Chart

In this report, the total amount of completed work is compared with the original plan or scope of the project. Thus, it shows the completed work for the project. On the other hand, the Sprint Burndown Chart shows how much work is remaining for successful project completion. Both these are crucial for analyzing the time required to complete the sprint. These charts also tell us about the backlog list in terms of the upcoming tasks and completed tasks.

1. All this information is visualized as charts. Hence, reading these charts becomes easy for the Kanban Team.
2. By gathering information about the completed and planned tasks, we can frame the guidelines about the more enhanced practices to manage the project.

Frequently Asked Questions on Kanban Core Metrics and KPIs – FAQs

1. What is Cycle Time in Kanban?

Cycle time in Kanban refers to the duration it takes for a work item or task to move through the entire workflow, starting from the moment work begins on it until it is completed and delivered.

2. What is Lead Time in Kanban?

Lead time is the total duration from the initiation of a work item, such as a customer request or a task being added to the Kanban board, to its final delivery. It encompasses both the time the item spends in active work and any waiting time in queues.

3. How is Throughput measured in Kanban?

Throughput in Kanban is measured by the number of work items or tasks that are completed within a specific time frame, often calculated per week or iteration. It provides insights into the team’s overall productivity.

4. What are Work in Progress (WIP) Limits in Kanban?

WIP limits in Kanban are constraints set on the maximum number of work items allowed at each stage of the workflow. These limits prevent overloading and help maintain a smooth flow, enabling teams to focus on completing tasks rather than starting new ones.

5. How can Cumulative Flow Diagrams (CFDs) be useful in Kanban?

Cumulative Flow Diagrams in Kanban visually represent the flow of work items through different stages of the workflow over time. They provide insights into bottlenecks, process efficiency, and overall performance, aiding teams in identifying areas for improvement.

Conclusion

In conclusion, the efficiency of the Kanban Project workflow not only creates an impact on the stakeholders’ expectations but also on the end-user experience and market expectations. Metrics and The Key Performance Indicators in Kanban help us to easily asses the Kanban Workflow and assure efficient project delivery. Due to this, we can ensure that our Project aligns with all factors from the business requirements to the market dynamics. Now, you are aware of various performance indicators that you can use to measure Kanban Workflow.