Cycle time?

In Part 1 we examined Work in Process and Story Escape Rate.  These two metrics are powerful but are not sufficient to provide a full picture of the flow of value through a process.  We continue with four more metrics to complete the pallet.
Cycle time (CT) has two competing definitions.  In the more typical definition, CT is defined as the amount of elapsed time that a work item spends as WIP. Cycle time is a direct reflection of the calendar, which is the one element every customer understands. Cycle time (also called lead time or flow time even though there might be slight differences in the definition) includes ALL of the calendar time between starting and completing.  The second and perhaps more important definition of CT includes lead time in the equation.  This version of cycle answers the question of how long does it take for a piece of work to be imagined (put on the backlog) and then to be delivered.

Formula 1:

CT = Date Item Is Completed – Date Item is Started

Average CT = Sum (Date Item Is Completed – Date Item is Started)/number of Items

Formula 2:

CT = Date Item Is Completed – Date Item Is Put On The Backlog (use original item for stories that are broken down)

Average CT = Sum (Date Item Is Completed – Date Item Is Put On The Backlog)/number of Items

Review at retrospective and publish to other teams.

Notes:

  • Increasing cycle time metrics are a sign of demand outstripping capacity and/or process bottlenecks.   (Tests assumption 4 noted in Part 1)

Throughput (TP) is a measure of the number of items that transverse the process in any given period. Throughput can be thought of as departure rate, i.e. how many work items complete and leave the process for a given period.

Formula:

TP = Number of Items Completed Per Sprint

Review at retrospective and publish to other teams.

Notes:

  • Throughput is a tool to predict how much work a team can accept.  Throughput compared to arrival rate provides input on the stability of the process (higher arrival rate will negatively impact cycle time and throughput).   (Tests assumption 1 and 4 noted in Part 1)

Velocity (V) is the average number of story points a team delivers in an iteration. Velocity is affected by changes to the team’s capacity . 

Formula:

V = Sum (Story Points Completed)/Number of Sprints in Sample

Review at retrospective and publish to other teams.

Notes:

  •         Velocity is an adjunct to the throughput metrics and is used as a tool to predict how much work a team can accept.

A bit of lagniappe (a little extra):

Flow efficiency is the ratio of total elapsed time that an item is actively worked on compared to the to the total time it takes for something to be completed.  This metric is similar to burden rate (the ratio of non-engineering time / total time to develop and deliver).

We measure to ask the right questions.  The information gleaned from every one the metrics noted above provides input and feedback into the process of managing the flow of value.  Metrics alone are rarely sufficient; we still need a mind (or minds) to weigh context before making decisions.  The six (if we don’t consider flow efficacy) metrics provide a powerful set of tools to generate information about the flow of value.  Delivering value is the only reason Agile teams exist.