What is Lead Time?

When you start practicing the Kanban method in software development, there are two important metrics to be measured, Lead Time and Cycle Time. In the simplest term, Lead Time corresponds to the total time it takes from receiving a demand to realizing or delivering that demand, while Cycle Time corresponds to the period from the beginning to the end of that work. In other words, Lead Time starts as soon as the demand comes. Then a certain period of time passes, and that work begins to be processed. From that moment on, Cycle Time is considered to have started and Cycle Time measures how long that work takes. Cycle Time and Lead Time ends when the work is completed.

Lead Time examples:

• The total time it takes from the placement of an order by a customer until the delivery of the same to the customer,
• The total time which starts when a requirement is determined by the customer until the delivery of a software in order to meet that requirement,
• The total time it takes from discovering a fault to eliminating that fault and putting it into the live system.

Note that the Lead Time should not start from the moment the customer has an idea, but only when the decision is made.

Lead Time is a time that is more about the customer, while Cycle Time represents a time that concerns the person doing the job.

As a matter of course, Lead Time is always longer than Cycle Time (or equal in the best-case scenario). Cycle Time can be relatively much shorter than Lead Time when the job has waited for too long.

One of the targets in Kanban is to reduce the Lead Time and thus be able to get back to the customer faster and enter the market fast.