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LKCE18 Márcio Sete - Flow efficiency - the most powerful improvement driver

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Flow Efficiency is an incredibly powerful improvement driver. It shows you how efficient the work is flowing through your value stream. The status quo is still around maximising the resource allocation and efficiency. Organisations are too focused on that and they forget to look to the work. The formula to find the flow efficiency is simple: touch time, divided by lead-time, times 100%. It shows you the proportion of time you spend adding value to a piece of work in comparison with the lead time. The commonly observed flow efficiency in traditional organisations is around 15%, which means that, on average, 85% of the time every piece of work is actually idling in queues, accumulating waiting time. That’s shocking!

Most of the time, organisations are trying to increase efficiency on the value added time, forgetting that the waiting time, is where we have the biggest room for improvements. This talk will show you how to increase your flow efficiency by identifying and fixing common sources of waiting time.

Published in: Leadership & Management
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LKCE18 Márcio Sete - Flow efficiency - the most powerful improvement driver

  1. 1. Flow Efficiency The most powerful improvement driver Principal Consultant & Head of Technology Services marcio.sete@elabor8.com.au Marcio Sete @marciosete
  2. 2. What Flow Efficiency is and why to bother How you can improve itHow you can measure it @marciosete 1 2 3
  3. 3. #1 – WHAT FLOW EFFICIENCY IS AND WHY TO BOTHER
  4. 4. Given my bank account is in credit, and I made no withdrawals recently, When I attempt to withdraw an amount less than my card's limit, Then the withdrawal should complete without errors or warnings Given my bank account is in credit, and I made no withdrawals recently, When I attempt to withdraw an amount less than my card's limit, Then the withdrawal should complete without errors or warnings Given my bank account is in credit, and I made no withdrawals recently, When I attempt to withdraw an amount less than my card's limit, Then the withdrawal should complete without errors or warnings Given my bank account is in credit, and I made no withdrawals recently, When I attempt to withdraw an amount less than my card's limit, Then the withdrawal should complete without errors or warnings Lead time Commitment date Delivery date Waiting time Touch Time @marciosete
  5. 5. 40% 20% 100% 15% 40% 30% 75% 75% Work item 1 Work item 2 Work item 3 Work item 4 Work item 5 Work item 6 Work item 7 Work item 8
  6. 6. Touch time X 100% Lead time Touch time: 2 . Lead time: 20 10% Value added time 90% Waiting Time The flow efficiency formula @marciosete
  7. 7. @marciosete The shocking reality organisations face today
  8. 8. Why should I bother?
  9. 9. Flow Efficiency is a soundboard of your system of work
  10. 10. @marciosete Effectiveness of organisations’ working time
  11. 11. Characteristics of environments with high flow efficiency Throughput Predictability Visibility Stability Quality Learning cycles Effectiveness Business Responsiveness Happiness Sense of Purpose Professional Pride Cost of maintenance Disruptive variability Failure rate Time to recovery Lead time Queue time Time to learn Burnout / Turnover Rework@marciosete
  12. 12. @marciosete Effectiveness is the goal
  13. 13. Effectiveness from the outside in is presupposed whereas from the inside out is contextual and temporal
  14. 14. #2 - HOW YOU CAN MEASURE IT
  15. 15. You need just two things 1. Lead time a. Commitment date b. Delivery date 2. Touch time a. Dots on card b. Time spent in status c. Manual entry in a custom field @marciosete
  16. 16. Few things you need to consider 1. Nature of the work a. Work item type b. Class of service c. Size 2. Granularity a. Days, hours, minutes 3. Sophistication of your solution @marciosete
  17. 17. Utopian in knowledge/creative work 100% 0% 15% 40% 60% Normal (average system performance) Commonly observed (low system performance) Great (high system performance) @marciosete FLOW EFFICIENCY LEVELS
  18. 18. #3 – HOW YOU CAN IMPROVE IT
  19. 19. The big five sources of delay 1. Dependencies on shared services, other teams, specialists or vendors 2. Too much work-in-progress 3. Team liquidity 4. Manual and repetitive work 5. Blockers @marciosete
  20. 20. Principles and practices with great leverage that might be helpful in your unique context 1. Loosely Coupled Architecture 2. Test-Driven Development 3. Trunk-based development 4. Comprehensive test automation 5. Build, release and deploy automation 6. Feature toggling 7. Continuous Integration 8. Infrastructure as Code 9. Immutable Infrastructure 10. Dev/Prod environment parity @marciosete Technical PracticesWays of working 1. Autonomous teams 2. Limiting work-in-progress 3. Lightweight change approvals 4. Working in small batches 5. Managing flow 6. Making policies explicit 7. Visual management 8. Classes of service 9. Last Responsible Moment 10. Culture of continuous learning
  21. 21. Starting the journey... ■ Take a snapshot of your current flow efficiency ● Pay attention to different work item types and classes of service ■ Host a retrospective and commit to pursue evolutionary changes ● Identify sources of waiting time ● Discuss which are by design and which aren’t ● Brainstorm alternatives ● Formulate initiatives ● Prioritise the ones will give you the best bang for buck ■ Set a target to motivate change ● Focus on the Standard class of service to begin with ● Gamify the process and celebrate the small wins ● Hold the whole value stream accountable ■ Visualise flow, batch size, sources of delay and variability ● Make it brutally visible ■ Use dollars to communicate delays @marciosete
  22. 22. “The biggest leverage in improving delivery rate (often referred to as "productivity") is not to improve the motivation of the workers, or to improve the working practices to reduce the local cycle times in the activity columns, rather the biggest leverage is to focus on reducing delays.” David J. Anderson
  23. 23. what I want you to remember...
  24. 24. @marciosete Effectiveness from the outside in is presupposed whereas from the inside out is contextual and temporal Flow Efficiency is the most powerful improvement driver The only way of improving flow efficiency is via global optimisation Delays are your invisible killer The biggest leverage in improving productivity is to focus on reducing delays Flow Efficiency less than 15% is very common (and bad); between 15-40% is normal; above 40% is great! Effectiveness is the goal Flow Efficiency is a soundboard of your ways of working Flow efficiency is contextual to the nature of work
  25. 25. Principal Consultant & Head of Technology Services https://www.linkedin.com/in/marciosete https://twitter.com/elabor8 https://twitter.com/marciosete https://medium.com/@Elabor8 https://medium.com/@marciosete Thank you! Danke! www.elabor8.com.au marcio.sete@elabor8.com.au Marcio Sete

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