Improving Flow Efficiency

One goal in improving flow is to improve the efficiency of how value flows. Key here is understanding the focus is on the flow of work and the identification of where work is not flowing (i.e., is in a waiting state). Sometimes there can be a confusion about focusing on where people on the team are waiting versus where work is waiting. If one goes to Gemba, it’s very likely that they will observe the team is keeping busy. What is not easy to see is where work is waiting since, unlike in a factory setting where this can be observed by looking over the factory and seeing pileups of inventory and work slowing down, the pileups of work in the creative processes of IT is invisible.

Improving flow efficiency then focuses on identifying the wait states where work is not flowing. However, one must be careful not to confuse improving the efficiency of flow with improving the Flow Efficiency measure. This may sound illogical but consider the following case.

Assume that for a given flow item (e.g., features) there is an average Flow Time of 20 days and a Flow Efficiency of 40% which means there are 8 days of active time and 12 days of wait time. Further assume that as part of performing continuous improvement, there is a practice improvement to do more automated testing. This proves to be successful and reduces the active time to 7 days on average and Flow Time to 19 days. The resulting Flow Efficiency is then reduced to 37%. If one is simply focused on Flow Efficiency as a goal or OKR, this can be deemed to be seen as something going amiss when actually it’s exactly the opposite. So, care has to be taken not to focus simply on a single measure without seeing the entire impact on the system (i.e., the First Way of the Phoenix Project). 

From a customer perspective, the key flow metrics are Flow Time (time to market) and Flow Velocity (quantity of what is being delivered that has value to the customer). Flow Load is a leading indicator of where these 2 measures may go in that increasing WIP will drive Flow Time up and Flow Velocity down. Flow Distribution is not a measure of flow but is used to ensure that there is a balance across the 4 Flow Items and reflects prioritization and investment decisions that are being made working with Product Management. Flow Efficiency is a supporting measure that may help provide context to the other Flow Metrics. As such, one should be wary of focusing too much on this measure because in the end, a customer doesn’t really care about the efficiency of the operation as much as how much and how fast value is being produced. If you take my car to the repair shop, you don’t want to hear about how they have improved the efficiency of their operations if your car is not ready when they promised it would be. So yes, a focus on efficiency is a key lean concept but the focus should be on improving efficiency to do more in less time for the customer of the product value stream. See this blog for more information.