I’m moving away from traditional project metrics and want to use Lean KPIs. Besides Lead Time and Cycle Time, what other metrics should I be tracking to ensure my project is actually becoming more efficient and that we are delivering maximum value to the customer?
3 answers
You definitely need to look at "Throughput" and "Work Profile." Throughput tells you how many items your team is completing in a set period, which is great for forecasting. However, the most important Lean metric for me is "Flow Efficiency." This is the ratio of active work time versus total lead time. If your flow efficiency is only 10%, it means your project is spent 90% of the time just waiting for something to happen. Improving that ratio is the fastest way to increase productivity without actually making the team "work harder" or put in more hours.
How do you explain the difference between Lead Time and Cycle Time to clients who only care about the final delivery date and don't understand internal process metrics?
Don't forget to track "Escaped Defects." If you are moving fast but the quality is dropping, you aren't being Lean—you're just being sloppy. Quality is a core Lean pillar.
Great point, Donna. If the work has to be redone, it's the ultimate form of waste. Speed should never come at the expense of doing it right the first time.
Edward, I explain it as "Restaurant Time." Lead Time is from the moment the customer sits down to when the food arrives. Cycle Time is just how long it took the chef to cook it. Clients care about Lead Time because that's their total experience. We track Cycle Time internally to see if our "chefs" are efficient.