# Introducing Kanban: Managing Flow Instead of Utilisation

Author: Marin Niehues, Niehues Consulting · Published: 2023-10-19 · Delivery & Steering
Source: https://www.niehuesconsulting.de/en/blog/introducing-kanban-flow-over-utilisation/

Introduce Kanban by making the existing workflow visible, limiting the work in progress and managing the flow of work items. The lever is lead time: an organisation that wants work to move through faster reduces the amount of work started and deliberately leaves slack in utilisation. This article sets out the introduction in six steps, the calculation behind it and the questions an executive team can use to judge progress.

Most organisations manage teams by utilisation. A team counts as well run when every calendar is full and nobody waits. Kanban reverses the viewpoint and asks how long a work item takes from arrival to delivery and where it sits along the way. The method grew out of Taiichi Ohno's work at Toyota and was adapted to knowledge work by David J. Anderson, who described it in a book in 2010. It can be introduced without restructuring the organisation, because it starts from the workflow that already exists.

**Kanban shortens lead time by limiting the work that has been started. The free capacity this requires acts as an operating reserve, because work only flows when that reserve exists.**

## What is Kanban and what is it suited to?

Kanban is a method that makes a workflow visible and limits the number of items worked on at the same time, so that work moves through quickly and predictably. The Kanban Guide of 2020 describes three practices: defining and visualising the workflow, actively managing the items in it, and improving it. Four measures belong to these practices: the number of items started (work in progress, or WIP), cycle time, the age of an item still in progress, and throughput per unit of time. A service level expectation adds a statement of the form "85 per cent of our items are finished within twelve days".

Kanban suits work that arrives continuously and can be broken into items of similar size: operations and maintenance, support and request handling, marketing and sales processes, procurement and the further development of existing products. For an undertaking with a fixed delivery date and a goal that one team must reach in a short time, a sprint rhythm offers more structure. Where a team needs both, the methods can be combined. How Scrum looks in mid-sized companies after the first year is described in the article [Scrum in mid-sized companies: what is left after the first year](/en/blog/scrum-mid-sized-companies-after-first-year/).

## Why does high utilisation lengthen lead time?

High utilisation lengthens the waiting time of work items, because work that arrives irregularly forms queues when capacity is almost fully used. Queueing theory has described this since Kingman's approximation of 1961, for simple models, with one formula: the mean waiting time grows with the factor utilisation divided by (1 minus utilisation), measured in units of pure processing time. At 50 per cent utilisation the wait equals one processing time, at 80 per cent it equals four, at 90 per cent nine and at 95 per cent nineteen.

**Waiting time as a function of utilisation (example: two days of pure processing time)**
Utilisation | Factor | Mean waiting time | Total lead time
50 % | 1 | 2 days | 4 days
70 % | 2.3 | about 4.7 days | about 6.7 days
80 % | 4 | 8 days | 10 days
90 % | 9 | 18 days | 20 days
95 % | 19 | 38 days | 40 days

The model simplifies, since real workflows have priorities, outliers and several people processing work. The direction holds everywhere, though: the curve climbs steeply above 80 per cent. A team that lowers utilisation from 95 to 80 per cent cuts lead time in the example from 40 days to 10, a reduction of three quarters. For management this means that free capacity is a control variable. An organisation that wants responsiveness plans for it.

## How are work in progress, throughput and lead time related?

Mean lead time equals the mean number of items in progress divided by mean throughput. This relationship is known as Little's Law and was proved by John D. C. Little in 1961. It holds for any stable system and needs no assumption about the kind of work.

An example: a team has 40 items in progress at once and completes ten items a week on average. Mean lead time is then four weeks. If the team limits work in progress to 20 items and still completes ten a week, lead time falls to two weeks. Throughput stays the same in the example, because a team does not work faster merely because it has started more. In practice the gain comes from less switching between items and shorter waits, and the calculation holds only as long as throughput really stays stable.

A rule for practice follows: a WIP limit is one of the most direct levers for shortening lead time. Where time between idea and delivery is lost is described in the article [Shortening time to market](/en/blog/reduce-time-to-market/).

## How do you introduce Kanban in six steps?

The introduction follows six steps, which follow the core practices of the Kanban method according to Anderson and add the measurement of a baseline.

1. Make work visible: the team maps the real workflow as it is today, with the columns that items actually pass through, from request to delivery. The workflow is not improved before it is visible. Every item gets a card, including unplanned work and requests from operations.
2. Measure: lead time, throughput and work in progress are taken from the board, at first retrospectively from existing data. The result is the baseline against which every change is judged.
3. Set WIP limits: each column, or the workflow as a whole, receives an upper limit for items in progress. A first rule of thumb is the number of team members or fewer. Once the limit is reached, work is finished before new work begins.
4. Make the rules explicit: the team records in writing when an item moves to the next column, who prioritises new items and what happens when a limit is exceeded. The rules include a definition of "done".
5. Set up feedback: a daily meeting at the board clarifies what is blocked, and a regular review checks the measures. Items older than the service level expectation are discussed first.
6. Improve together: the team changes one variable at a time, such as the limit, the column layout or the prioritisation rule, and measures the effect on lead time and throughput.

**Questions for management**
- How long does an item take from arrival to delivery, on average and at the 85th percentile?
- How many items have been started at once, and how many of them are older than four weeks?
- Does every column have a WIP limit, and is it observed?
- Who decides which item starts next?
- Which items are waiting for other departments, and for how long?

## What mistakes occur during introduction?

The most frequent mistake is a board without limits. It makes work visible but changes no behaviour, because everything is still started at once. The board then serves as a status report. The second mistake is a limit set so high that it never takes effect. A limit works when it occasionally hurts, because only then does it force the team to resolve blockages.

The third mistake lies in leadership. An executive team that keeps asking about utilisation creates pressure to fill every free hour with new work, which devalues the limit. Kanban takes effect once the management measures change: from utilisation and project progress in per cent to lead time and throughput, together with the age of open items. The fourth mistake is introduction without an intake rule. An organisation that accepts every request without review fills the workflow faster than the team can empty it, and needs an explicit decision on what takes priority.

**Managing by utilisation and managing by flow**
Criterion | Managing by utilisation | Managing by flow | With Niehues Consulting
Guiding question | Is everyone fully occupied? | How long does an item take? | Which business outcome does shorter lead time improve?
Work in progress | High, everyone holds several items | Capped by a WIP limit | Limit agreed with the decision rights of senior management
Measure | Utilisation in per cent | Lead time, throughput, age | Baseline and target after 90 days
Response to urgent items | Displaces work in progress | Own rule with a capacity reserve | Reserve agreed within the workflow

## Introducing Kanban with Niehues Consulting

[Niehues Consulting](/en/) is a consultancy for AI management and organisation design from a delivery perspective, based in Düsseldorf. Founder Marin Niehues builds organisations that deliver, in projects ranging from VC-funded scale-ups to DAX 40 corporations and in more than 20 countries on six continents. In the field of delivery management he works as delivery manager, project manager or product owner and shapes the organisation so that work flows through.

The approach follows the Niehues Delivery Model. Three of its test questions matter for introducing Kanban: what is the baseline, and how do we measure success? Which roles, decision paths and interfaces does operation need? Which metric shows after 90 days that the solution has taken hold? The scope and terms of an engagement are discussed in the free initial consultation, which you can arrange through the [contact page](/en/#kontakt).

**Conclusion**
Kanban shortens lead time by limiting work in progress and keeping utilisation below the level at which queues grow. The introduction starts with the visible workflow and the baseline, sets WIP limits and ends with a management that asks about flow. Success is measured by lead time and throughput.

**Sources**
- Coleman, Vacanti: The Kanban Guide, 2020
- Anderson, David J.: Kanban: Successful Evolutionary Change for Your Technology Business, book, 2010
- Little, John D. C.: A Proof for the Queuing Formula L = λW, Operations Research, 1961
- Kingman, J. F. C.: The Single Server Queue in Heavy Traffic, Mathematical Proceedings of the Cambridge Philosophical Society, 1961

## Frequently asked questions

### How do you implement Kanban in a team?

Implement Kanban by mapping the current workflow on a board, measuring lead time and throughput, and setting a WIP limit. Add explicit rules for moving items, a daily check on blocked work and a regular review of the measures. Change one variable at a time and judge each change against the baseline.

### What is the difference between Kanban and Scrum?

Scrum works in sprints of fixed length with defined roles and a goal for each sprint, whereas Kanban works in continuous flow without prescribed roles. Scrum adds structure to a team, while Kanban starts from the existing workflow and limits the work started. The two can be combined, for example with a Kanban board inside a sprint.

### What is a WIP limit and how do you set one?

A WIP limit is an upper bound on the number of items in progress. A first limit sits at the number of team members or just below, and it is then adjusted against measured values. If lead time does not fall, the limit is too high; if the flow stalls because people have nothing to do, it is too low and the column layout needs review.

### What is Little's Law?

Little's Law states that mean lead time equals mean work in progress divided by mean throughput. With 40 items in progress and ten completions a week, an item takes four weeks on average. If the team halves the work in progress, lead time halves too at the same throughput.

### Which metrics should a Kanban board track?

Four metrics are enough: work in progress, cycle time, throughput and the age of items in progress. The distribution of cycle times yields the service level expectation, for example "85 per cent within twelve days". Item age acts as an early indicator of which work is about to fall out of the workflow.

### Does Kanban work outside IT?

Yes, Kanban suits any knowledge or service work with recurring items, such as procurement, human resources, sales or accounting. The precondition is a recognisable workflow with an arrival point and a delivery point. The method needs no software, and a board on the wall is enough to start.

### How long does it take to introduce Kanban?

A first board with baseline values takes a few days, and the effect of WIP limits shows in lead times once the first items have passed through the whole workflow under the limit. The timescale follows the length of the workflow and management's willingness to change its measures. A 90-day period with a fixed baseline and target has proved useful for evaluation.

### When is Kanban the wrong choice?

Kanban is the wrong choice when the work consists of one large undertaking with a fixed date that a team would first have to break into items. The same applies to a workflow that nobody owns, because limits then trigger no decision. In both cases the organisation first clarifies responsibility.