Session Title : From Upstream to Portfolio Kanban, a Fresh look Session Overview: Portfolio Kanban plays a crucial role in balancing demand with capability at the highest level of the organization. Most Portfolio Kanban systems are shallow, as is the currently available guidance. It does not go much further than visualization and a cadence of conversations. At best there is a crude notion of limiting the amount of initiatives in progress. It is time to take the next step. In this presentation we build on our experiences with implementing Upstream Kanban and using systems dynamics to give insight and guidance on creating enterprise flow with Upstream and Portfolio Kanban. We start from Upstream Kanban where we address the problem of managing a fluctuating demand. We analyse the feedback loops and delays that are the source of oscillation and show how to turn oscillation into a (more) steady end-to-end flow. We discuss capacity constraints, liquidity problems and ways of organizing the marketplace that emerges when needs of diverse customers with possibly conflicting priorities need to be matched with a heterogenous capability. Finally, we discuss the role of triage in a portfolio with incommensurable choices.

1. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 1
From upstream to portfolio Kanban
July 2018
patrick.steyaert@okaloa.com
Going beyond the obvious

2. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 2
Business agility
More than agile development
Develop / DeliverBusiness / CustomerUser / Consumer

3. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 3
SUPPLY
DEMAND
Balance and flow
At all levels
CREATE &
SHAPE DEMAND
In order to make
better use of
(constrained)
delivery capability
IMPROVE
(DELIVERY)
CAPABILITY
In order to better
meet (fluctuating)
demand
satisfied needsuspected need

4. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 4
Fluctuating demand, variable capacity
Capacity
Demand
Excess capacity
(starvation)
Lack of capacity
(overburdening)

5. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 5
Feedforward and feedback
Knowledge discovery Across the value stream
Viability
Feasibility
Desirability
FEEDBACK
How does it impact users?
How can we solve the problem?
Discover
(tension)
Divergence Convergence
One of many
options
Design
(concept)
Convergence
One of few
options
Divergence
Convergence
Embedded
options
Develop
(product)
Divergence
What is the problem or opportunity?
business
Deliver
(solution)

6. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 6
Agile Portfolio management
A cornerstone of business agility
Image courtesy of

7. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 7
WIP Limit
Beyond the obvious
Incommensurable
demand
Team End-to-end Multi-team Multi-customer Portfolio
Conflicting
demand
Over-
burdening
Fluctuating
demand
Heterogenous
capability

8. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 8
Using System dynamics
Stock
Inflow Outflow
Population
Birth rate Death rate
R
Bigger population
-> more babies
B
Bigger population
-> more deaths
delay delay
Oscillation
stock
S-curve
stock
Exponential
stock
Goal-seeking
stock

9. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 9
Flow of work
Rate of starting work Rate of finishing work
S-curve
WIP
R
Exponential
WIP
Blocked
work
+
+
B
Goal-seeking
WIP
Pull
options
+
+
WIP*
c
WIP limit
*
Work in progress

10. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 10
End to end flow
Upstream – creating options
Downstream – exercising options
Inventory
System Kanban (system lead time)
Customer Kanban (customer lead time)
Upstream Kanban (upstream lead time)

11. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 11
Demand and supply
Ready
options
Free
capacity
Liquidity
DEMAND
SUPPLY
Exercise
options
Commit
capacity
and
O
O
delay
delaydelay
delay
DownstreamUpstream
Release
capacity
O
Too little capacity
O
Create
options
Too little options
or
Just enough options
Just enough capacity

12. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 12
Modeling end-to-end flow
Overburdening
(lack of supply)
+
+
Starvation
(lack of demand)
-
+
Rate of creating options Rate of exercising options
Options
inventory
upstream downstream
Oscillation
delay delay

13. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 13
boom and bust cycles
Inventory of
options Upstream batch size
Time
Upstream lead time
Exercise
Delay
Exercise

14. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 14
Order points
Avoiding starvation
Order point
Upstream batch size
Upstream lead time
Time
Inventory of
options

15. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 15
Order points
Adding safety stock
Order point
Safety stock
Upstream batch size
Upstream lead time
Time
Inventory of
options

16. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 16
Example
Ready to
commit
Upstream Downstream
>= 12
Order point
(incl. 2 items safety stock)
Ready to
execute
Downstream
delivers 5
items per
week
Upstream lead time
is 2 weeks

17. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 17
WIP Limit
Order point
Beyond the obvious
Incommensurable
demand
Team End-to-end Multi-team Multi-customer Portfolio
Conflicting
demand
Over-
burdening
Fluctuating
demand
Heterogenous
capability

18. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 18
Heterogenous capabilities

19. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 19
S-curve
WIP
Team
level
S-curve
RIP
Cross-team
level
The whole is more than the sum of parts
”Work-in-progress under control”
”Request-in-progress not under control”
S-curveWIP S-curve
WIP

20. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 20
CAP TOKENS
REPRESENTING CAPACITY
Finish request
Start request
Starting work requires
the right set of CAP
tokens
B
Y
R
B
CAP tokens are returned
when work is finished

21. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 21
Matching
Demand must be matched
with available capacity to get
executed.
Team blue
Team red
Team yellow
Upstream Downstream
Ready to
commit
Ready to
execute
Demand must be matched
with available capacity to get
executed.

22. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 22
Reservation
Ready to
commit
Selected
CAP tokens are moved upstream
to reserve capacity for an
important upcoming demand
Team blue
Team red
Team yellow
Upstream Downstream

23. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 23
MULTIPLE CUSTOMERS
Ready to
commit
Selected
Customer X
Customer Y
Customer Z
Conflicting demand
(total 3 blues required,
while only 2 are available)
Team blue
Team red
Team yellow
Upstream Downstream

24. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 24
Market place
Ready to
commit
Selected
Customer X
Customer Y
Customer Z
Team blue
Team red
Team yellow
Upstream Downstream
Communal sharing
Authority ranking
Equality matching
Market pricing
Alan Page Fiske, Structures of Social Life

25. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 25
WIP Limit
Order point
CAP Token
Market place
Beyond the obvious
Incommensurable
demand
Team End-to-end Multi-team Multi-customer Portfolio
Conflicting
demand
Over-
burdening
Fluctuating
demand
Heterogenous
capability

26. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 26
Incommensurability
not able to be judged by the same standards; having no common
standard of measurement
?
!
A
B
C
A and C are
incommensurable they
cannot be easily
compared (nor ordered)
A and B are
commensurable, they
can be (easily)
compared (and ordered)
!

27. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 27
Not all should be treated alike
Viability
Feasibility
Desirability
FEEDBACK
What is the problem or opportunity?
How does it impact users?
Can we solve the problem?
Discover
(tension)
Divergence Convergence
One of many
options
Design
(concept)
Convergence
One of few
options
Divergence
Convergence
Embedded
options
Develop
(product)
Divergence
Deliver
(solution)
Minimum Viable Product (MVP)
Test / Experiment
Spike

28. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 28
SUPPLY
DEMAND
Under pressure
DEMAND in most
case exceeds
capacity by far. It is
easier to come up
with an idea than to
realize it.
To protect SUPPLY,
we need to select
demand. This
requires that we can
compare different
demands.
In circumstances when demand is incommensurable, this is
impossible. In circumstances where demand is commensurable
it creates upstream delay that leads to oscillation.
1
2
3

29. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 29
Triage
Routing patients under time pressure
Ambulant – “walking wounded”; will be treated when
practical
Observation – stable for the moment but requires
watching by trained persons and frequent re-triage
Immediate – "cannot wait" but are likely to survive with
immediate treatment
Expectant – so severely injured that they are unlikely to
survive given the care available
TAG - TRIAGE
Expectant
TAG - TRIAGE
Observation
TAG - TRIAGE
Immediate
TAG - TRIAGE
Ambulant

30. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 30
More
than
prio-
ritization

31. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 31
Triage
Routing demand under time pressure
Pull (on demand) – The demand will be treated when
practical; start when capacity allows
Pre-empt (to avoid expediting) – Examine the demand
pro-actively; keep ahead of events
Expedite (for immediate action) – All hands on deck; the
demand needs immediate action; swarm if needed
Escalate (for decision making) – Validity of the demand
is questioned
TAG - TRIAGE
Escalate
TAG - TRIAGE
Pre-empt
TAG - TRIAGE
Expedite
TAG - TRIAGE
Pull

32. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 32
Routing
Develop
(product)
Deliver
(solution)
Viability
Feasibility
Desirability
FEEDBACK
Discover
(tension)
Design
(concept)
Demand
Challenged demand Unchallenged demand
(taking the long route) (taking the short route)

33. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 33
Ready to
commit
S/A in
Progress
Synthesis/Analysis
Portfolio Kanban
Discovery Approval
Ready for
S/A
Approval in
progress
Approved
Capture
>= 1
>= 5
Order
points
Low risk / friction
items skip discovery
Triage
Order
points
>= 3
Minimal
options
Reserved
capacity

34. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 34
WIP Limit
Order point
CAP Token
Market place
Triage
Agile portfolio management
Incommensurable
demand
Team End-to-end Multi-team Multi-customer Portfolio
Conflicting
demand
Over-
burdening
Fluctuating
demand
Heterogenous
capability
Beyond the obvious

35. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 35
Thank you@PatrickSteyaert @OkaloaFlowlab
More info about Okaloa Flowlab at www.okaloa.com/flowlab
Or join our Business Agility training at www.okaloa.com/business-agility-training

36. From Upstream to Portfolio Kanban© Patrick Steyaert, 2018 36
CONTACT DETAILS t +32 473 56 50 98
t +32 477 79 12 98
arlette.vercammen@okaloa.com
patrick.steyaert@okaloa.com
@OkaloaFlowlab
@PatrickSteyaert