Presents an overview of the _Kanban Litmus Test_, a series of four questions that go to the heart of an organisation's use of Kanban. Essential knowledge for coaches, managers and practitioners alike to ensure you realise all of Kanban's promised benefits. Kanban starts with the processes, roles and policies you're using now. This means you can be using the Kanban Method but not yet have a process that effectively limits work in progress, let alone brings all the expected benefits of Kanban such as improved lead times, throughput and quality. How then do you know if you are really applying Kanban well? The answer is the _Litmus Test_ a series of 4 questions (and supplementaries) that drills into the way your organisation is using Kanban. This presentation will explain what the Litmus Test is and how it can guide adopters of the method to move step by step through the elements. The Litmus Test links many aspects of Kanban together, such as the nature of true kanban systems, the reasons and business benefits of deferred commitment, the opportunities for increasing customer satisfaction through effective forecasting and classes of service, and the new business models opened up by deep Kanban implementations. This talk highlights one of the lesser known aspects of Kanban, described in *Essential Kanban Condensed*, the French edition of which became available in the week of the conference - see http://leankanban.com/frguide

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Are you using Kanban?
The Acid Test
Andy Carmichael PHD FBCS
@andycarmich
Twitter: #LKFR16
@andycarmich

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Visit leankanban.com/guide
for free download.

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“Litmus Test”
A simple test of acidity
(alkalinity)

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The Kanban Litmus Test – purpose
• to help organizations assess
their progress with Kanban
• suggest areas that may yield
effective improvements
• to provoke and challenge
shallow interpretations of the
Kanban Method
https://en.wikipedia.org/wiki/Kanban_board
Anderson, David J. 2014. "Kanban litmus test." July 23.
http://www.djaa.com/kanban-litmus-test

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Introducing Kanban to organizations
A tweetable summary…

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Introducing Kanban to organizations
A tweetable summary…

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Introducing Kanban to organizations
A tweetable summary…

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Introducing Kanban to organizations
A tweetable summary…

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The Litmus Test – 4 questions…
1. Has management behaviour changed
to enable Kanban?
2. Has the customer interface changed,
in line with Kanban?
3. Has the customer contract changed,
informed by Kanban?
4. Has the service delivery business model changed
to exploit Kanban?

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1. Has management behaviour
changed to enable Kanban?
• Kanban succeeds where managers
• respect kanban system policies,
• embrace customer focus as a value,
and
• manage work in line with the service
delivery principles
Ask these supplementary
questions . . .

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(1.1) Is management behaviour consistent with
Kanban’s deferred commitment, pull system approach?

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(1.2) Are WiP limits respected at the system
level, not just per-person WiP limits?
Aggregated personal kanban board Per-person-WIP-limit kanban board
Protokanban: David J Anderson

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Several benefits of protokanban
implementations
• Transparency
• Relief from overburdening
• Reduced multi-tasking
• Improved quality
• Greater collaboration
• Greater empathy
• Improving levels of social capital

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Team kanban board
• Motivation is relief from an
over-burdened environment
• WiP is limited within the
system
• Next step is to focus on
improving end-to-end
service delivery.

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Aggregated Team kanban board
• Aggregation of a chain
of Team kanban boards
• Unconstrained queue
between the teams
may result in
unpredictable wait
times
• Service delivery
compromised by poor
queuing

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(1.3) Is customer focus always an
understood reason for change?
• Change viewpoint to managing work – on
behalf of customers – rather than workers.
• Just as Lean has often been interpreted as a
cost-saving by reducing headcount, Kanban
sometimes seen as controlling employees
• Focus on value for customers

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2. Has the customer interface changed,
in line with Kanban?
• The services in the organization need
• true kanban systems with deferred
commitment
• a replenishment strategy to schedule,
sequence, and select work.
• This focuses the customer interface on
• maximizing the flow of value
• exploiting current constraints
Ask these supplementary questions . . .
Customer

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2.1 Is the approach to scheduling and selecting
customer requests based on a pull system with
limited work in progress?
Requests Selected Development Acceptance Complete
Discarded
Commitment
Ongoing Ready
4 6 4
Delivery
Released

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2.2 Are the commitment and delivery points
clearly defined and are records of Lead Times and
Delivery Rates available?
Requests Selected Development Acceptance Complete
Discarded
Commitment
Ongoing Ready
4 6 4
Delivery
Released
System Lead Time
Delivery Rate

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Flow Metrics
The minimum set (metrics):
• Lead Time
• Delivery Rate
• WiP
• Team size (Effort / Cost)
The minimum set (charts):
• Scatterplot (Lead Time)
• Run Chart (LT, DR, WiP)
• Cumulative Flow Diagram

21. Requests Selected Development Acceptance Complete
Discarded
Commitment
Ongoing Ready
4 6 4
Delivery
System Lead Time
Importance of Customer Lead Time
Released
Receipt
Customer Lead Time
Request

22. Requests Selected Development Acceptance Complete
Item per time
period
Discarded
Commitment
Ongoing Ready
4 6 4
System Lead Time
Released
Receipt
Customer Lead Time
Accepted
Request Delivery
Regular cadence
Sync’d System and Customer Lead Time

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Sushi Restaurant versus Staff Service Restaurant
Importance of deferred
commitment with
visible Qs, predictable
Customer Lead Time

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2.3 Is there a regular Replenishment
Meeting?
Example implementation of
the 7 Cadences

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3. Has the customer contract changed,
informed by Kanban?
• The customer contract may be
• a formal service level agreement or
• an understood service level expectation
• Should be based on measured
performance of the service, especially
• Lead Times and
• Delivery Rates.
Ask these supplementary questions . . .
Customer
f4p

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3.1 Are commitments based on the agreed or
understood service levels?
•explicit service level agreements or
•service level expectations? f4p

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3.2 Are these levels based on probabilistic
forecasting using the kanban system’s observed
Lead Times and Delivery Rates?

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4. Has the service delivery business model
changed to exploit Kanban?
• In services with established kanban
systems provide opportunity to
manage value and risk
• classes of service
• capacity allocation / reservation
• demand shaping and differential pricing.
• Ask these supplementary questions . . .

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4.1 Does the service delivery business model
use classes of service appropriately
• based on an understanding of business risks (for example, the cost of
delay) to facilitate selection decisions and inspire queuing discipline
policies for work items?
• Are you understanding customer expectations and how they cluster
into similar groups? Are you probing for possible new classes of
service to improve the flow of value to the customer?

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Classes of Service – for example based on
Cost of Delay Profiles
• Expedite: Very high urgency – no end point in sight
• Fixed Date: One off impact on fixed date
• Standard: Regular urgency; may tail off as value is lost
• Intangible: Low urgency, may be followed by high urgency
DelayCost/Impact($)
Delay (time)
Intangible
DelayCost/Impact($)
Delay (time)
Standard
DelayCost/Impact($)
Delay (time)
Fixed Date
DelayCost/Impact($)
Delay (time)
Expedite

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4.2 Is there capacity in the
system to hedge risks from
different sources of demand
and different types of work?
• For example, can resources be
diverted to priority tasks
during high-demand periods?

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4.3 Are interdependent services aggregated
and coordinated
1. Chains of
Services
2. Hierarchies of
Services
3. Networks of
Services
…to increase system liquidity and enable system levelling in light of risks and variability?

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Demand-focused approaches to variability
• WiP Limits
• Block entry
• Complete work when limits reduced (or “de-select” items in progress)
• Classes of Service
• E.g. allow high cost of delay items to overtake other WiP
• Constant WiP (CONWIP)
• Push new item into system when item completed, or
• Replenish to expected capacity on a fixed cadence (e.g. Scrum)
• Purge WiP
• Don’t take on any new work until all WiP completed (e.g. end of a
project)
• Redefine End Point
• Declare victory before “backlog” completed

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Supply-focused approaches to variability
• Resource pulling
• Move resources to service requests with a higher cost
of delay
• Ensure some “intangible” work is always selected in
normal periods
• Don’t full load services with planned work
• T-shaped people
• Flexibility provided by cross-training and cross-assigning
• Skill overlap
• Identify skill shortages
• Never assign “the only person who can do this” on their own
• Flexible experts
• Never assign the most flexible resources at all!
• Use them as coaches, reviewers, improvement thinkers… and only
very occasionally “firefighters”

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Summary: The Litmus Test – 4 questions…
1. Has management behaviour changed
to enable Kanban?
2. Has the customer interface changed,
in line with Kanban?
3. Has the customer contract changed,
informed by Kanban?
4. Has the service delivery business model changed
to exploit Kanban?

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References
Anderson, David J. 2010. Kanban: Successful
Evolutionary Change for Your Technology Business.
United States: Blue Hole Press.
Anderson, David J. 2012. "Thoughts on the value of
liquidity as a metric." November 27. LKU Blog.
http://www.djaa.com/thoughts-value-liquidity-
metric
Anderson, David J. 2014. "Kanban litmus test." July
23. LKU Blog. http://www.djaa.com/kanban-litmus-
test
Anderson, David J. 2015. Enterprise services
planning scaling the benefits of Kanban.
http://2015.agileworld.de/system/files/vortrag/15-
06-29%20EnterpriseServicesPlanning_david%20
anderson_0.pdf
Anderson, David J., and Andy Carmichael. 2016.
Essential Kanban Condensed. United States: Lean
Kanban University. http://leankanban.com/guide
(now available in French)
Maccherone, Larry. 2015. "Probabilistic Decision
Making." November 6. SlideShare.
http://www.slideshare.net/.../larry-maccherone-
probabilistic-decision-making
Matts, Chris. 2013. "Introducing staff liquidity (1 of
n)." November 24.IT Risk Manager.
https://theitriskmanager.wordpress.com/
2013/11/24/introducing-staff-liquidity-1-of-n/
(March 1, 2016).
Reinertsen, Donald G. 2009. The principles of
product development flow: second generation lean
product development. Redondo Beach, CA:
Celeritas Publishing.
Wikipedia. Kanban board.
https://en.wikipedia.org/wiki/Kanban_board

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Questions and
Discussion

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Maintenant en français!
leankanban.com/frguide