Kanban WIP - Work In Progress Limits Explained

How Kanban WIP limits help deliver more value

While it may sound counterintuitive, Kanban WIP limits are about delivering more value, faster. You can think of it as a framework for capacity that has been optimized to be as efficient as possible.

1. Keep workflow moving fast
Managing flow is one of Kanban’s six core practices and the process needs to be smooth, manageable, and measurable. Here are four benefits of setting and managing Kanban WIP limits:

2. Expose blockers, bottlenecks, and inefficiencies
To calculate Kanban WIP limits, you first need to break down a process into its main components and then determine where value is being added and where it isn’t. The other important variable is the size of the team. With this information, it becomes easier to identify areas of improvement.

3. Manage resources effectively

If team members are overworked, quality of work is affected — as is morale. The opposite scenario means that you’re losing money when team members are idle. Calculating Kanban WIP limits helps plan resources as you determine how much time is needed for each task, factoring in ‘non-value-added time’ between them. 

4. Focus on getting things done
This relates to culture as much as the process, a theme covered in Kanban’s core principles and practices. Kanban WIP limits help this by adding more structure and clarity and making it easier for team members to manage their workflow.

How to calculate and set Kanban WIP Limits

A formula is used to calculate Kanban WIP limits and you must start with two important assumptions.

• You’re likely to get your estimates wrong- This is expected and Kanban has mechanisms in place to continuously improve on them.
• Assume that one team member works on one item at a time - This is ideal but not always the case. Calculations become very difficult if team members work across multiple items during the same timeframe.

With this in mind, you’ll want to adjust your calculations so that they are as accurate as possible. Make sure you have a way to measure capacity and output and how resourcing relates to that.

Calculating Kanban WIP limits is a three-step process

Step 1: Map your value stream: These are the stages of your process, represented as columns on a Kanban board.

First, here’s a definition of Value Stream Mapping: "Value stream mapping (VSM) is a process used to identify and improve the flow of information and materials required to produce a finished product or service before it reaches the customer."

This not only describes the steps of the processes but also how long each takes and whether there are wait times between them. This is what we need to look at specifically for determining WIP limits.

Step 2: Calculate efficiency: What percentage of time is spent on work that adds value? The formula to determine efficiency is:

• Efficiency = VA / (VA + NVA)

Step 3: Determine WIP limits: A total limit is determined for all stages of the process. The formula for this takes into account how many people you have working on the project.

• Total Tasks = Team size / Efficiency

The result represents the total number of items the team should work on at a time.

Tracking and reviewing WIP limits

If you’re using a physical board for your project you can simply indicate the WIP limits near the headings for each column. You can also pin up a sheet with more detail, like the table above.

A similar solution can be achieved using online Kanban boards. The simplest way would be to include WIP limits as you name each stage.

Kanban WIP limits need to be reviewed on a regular basis. To accommodate changes to the process or team, but also to improve efficiencies and reduce waste.