Unblock the Flow for Better Economics

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Plumbing for Profit
Martin Burns
Senior Principal Transformation Consultant
Agile on the Rocks
15 September 2015
Unblock the Flow for Better Economics
EnterprisePlumber

2. 2 © 2015 CA. ALL RIGHTS RESERVED.Photo: https://flic.kr/p/ombuy1
Martin Burns
Enterprise Plumber
Recovering Programme Manager
SAFe Program Consultant
Barely Adequate Blues Guitarist
@MartinBurnsSCO

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Remember This Number
MartinBurnsSCO

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Why
Plumbing?
MartinBurnsSCO
Because
unblocking
works
better than
pushing

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Why
Plumbing?
MartinBurnsSCOPhoto: https://flic.kr/p/9HkPtf
Because
unblocking
works
better than
pushing

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Why does
Fast Flow
Matter?
Photo: https://flic.kr/p/ePJfZw
Don Reinertsen
While you
may ignore
economics,
it won’t
ignore you
MartinBurnsSCO

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Cost of Delay: Single Big Batch –v- Incremental Small Batches
Time
ValueRealised
Additional Value Realised by
Incremental Delivery,
AKA
Cost of Delay of Single Batch Delivery
Incremental Delivery
Single Batch Delivery
MartinBurnsSCO

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What’s
Your
BHAG?
Best Economic Return: Reduce your Cost of Delay
MartinBurnsSCO

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Flow in
Human
Systems
Photo: https://flic.kr/p/kZzA3c
Photo: https://flic.kr/p/6pMHyG Photo: https://flic.kr/p/pchmRp
Photo: https://flic.kr/p/4v2ZXP Photo: https://flic.kr/p/wys2v
MartinBurnsSCO

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Flow in
Human
Systems
AKA Queues
Photo: https://flic.kr/p/kZzA3c
Photo: https://flic.kr/p/6pMHyG Photo: https://flic.kr/p/pchmRp
Photo: https://flic.kr/p/4v2ZXP Photo: https://flic.kr/p/wys2v
MartinBurnsSCO

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Who enjoys
Queuing?
Photo:https://flic.kr/p/mKvdtV
Queues Create...
Longer Cycle Times
Increased Risk
More Variability
More Overhead
Lower Quality
Less Motivation
MartinBurnsSCO

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Know Your Enemy 101: Little’s Law
Lead Time =
Queue Length
Throughput
MartinBurnsSCO

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Know Your Enemy 101: Little’s Law
1 month =
12
12 per month
Lead Time
Queue Length
Throughput
MartinBurnsSCO

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Queuing Maths 101: Little’s Law
2 months =
24
12 per month
Lead Time
Work in Queue
Throughput
MartinBurnsSCO

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Queuing Maths 101: Little’s Law
0.5 month =
6
12 per month
Lead Time
Work in System
Throughput
MartinBurnsSCO

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A System of Queues
Analyse Design Implement Validate Deploy
Q Q Q Q
Q Q
MartinBurnsSCO
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

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Do you
measure
lead times?
Do you
measure
queues?
Photo:https://flic.kr/p/mKvdtV MartinBurnsSCO

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Flow Plumbing Easy Tips
(Without spending any money)
1. See The Queues, Feel the Pain
“If you only quantify one thing, quantify the cost
of delay” - Reinertsen
2. Swarm: T-Shaped People
Bankers, consider the principle of Liquidity in
your Dev Capacity.
3. Active Queue Management
Take an axe to your backlog: things will get
better.
Sequence jobs for maximum return -
smaller/higher value ones: higher priority.
4. Stop Starting, Start Finishing
The most important word for any Product Owner
to learn is “No”.
ProTip for Kanbanistas… run your board
backwards (Right to Left)
Try These
Tomorrow
MartinBurnsSCO

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3 Strategies
to Improve Your Flow
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Flow Efficiency
>
Resource Efficiency
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Analyse Design Implement Validate Deploy
Flow Efficiency %
Q Q Q Q
Q Q
MartinBurnsSCO
Flow
Efficiency%=Σ Valuable Work Duration
Σ Queue Wait Duration

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Flow Efficiency %
Flow
Efficiency%=
What’s Yours?
MartinBurnsSCO
Σ Valuable Work Duration
Σ Queue Wait Duration

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Typical Enterprise SW Flow Efficiency
%=
MartinBurnsSCO
Σ Valuable Work Duration
Σ Queue Wait Duration
%
Typical Flow
Efficiency

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25. 25 © 2015 CA. ALL RIGHTS RESERVED.Photo: Håkan Forss MartinBurnsSCO

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Source: Reinertsen % Utilisation
% Flow Efficiency
% Wait Time
MartinBurnsSCO
Big batches drag
the curve left
When load & utilisation
become too high,
you will see a
sudden and
catastrophic
reduction in
throughput
Don Reinertsen

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Sources: Mödig & Åhlström: This is Lean
ResourceEfficiency
Flow Efficiency
Photo: pixabay.com
Photo: https://flic.kr/p/cCheFS
Photo: https://flic.kr/p/5z8Ah3
Photo: https://flic.kr/p/ECZiuC
MartinBurnsSCO

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Sources: Mödig & Åhlström: This is Lean
Andy Carmichael @andycarmich
ResourceEfficiency
Flow Efficiency
Photo: pixabay.com
Photo: https://flic.kr/p/cCheFS
Photo: https://flic.kr/p/5z8Ah3
Photo: https://flic.kr/p/ECZiuC
Islands of Efficiency
Poor End to End performance
High Responsiveness
At High Cost
Zone of Improbability
Wasteland
Optimal Region
MartinBurnsSCO

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Islands of Efficiency
Poor End to End performance
High Responsiveness
At High Cost
Wasteland
Sources: Mödig & Åhlström: This is Lean
Andy Carmichael @andycarmich
ResourceEfficiency
Flow Efficiency
Photo: pixabay.com
Photo: https://flic.kr/p/cCheFS
Photo: https://flic.kr/p/5z8Ah3
Photo: https://flic.kr/p/ECZiuC
Zone of Improbability
Optimal Region
MartinBurnsSCO

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Lower the Waterlevel
See the Rocks
Photo: https://flic.kr/p/6T2pdh MartinBurnsSCO

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Break the Batch
Unclog the Queue
MartinBurnsSCOPhoto: https://flic.kr/p/arphGG

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Optimum
Economic
Batch Size
Optimum
Economic
Batch Size
Find & Reduce Optimum Batch Size
Source: Reinertsen Batch Size
MartinBurnsSCO
Transaction Cost
Holding Cost
Total Cost
Optimum
Economic
Batch Size
Cost

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Takeaways
1.Flow is a critical economic factor
2.Queues are universally painful
See the queues; see their cost
3.3 Key Strategies:
a.Flow Efficiency before Resource Efficiency
Most Enterprise Dev is no better than 5% Flow Efficient
b.Lower The Waterline; Remove the Rocks
c. Cut the Batch Size by Reducing Transaction Costs
MartinBurnsSCOPhoto: https://flic.kr/p/oPmZUx
Stop Starting, Start Finishing

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Senior Principal Transformation Consultant
martin.burns@ca.com
Martin Burns
@MartinBurnsSCO @ca_agile
slideshare.net/CAinc
linkedin.com/company/ca-technologies
ca.com/us/why-ca/agile-management.html
Photo: https://flic.kr/p/9HkPtf
Stop Starting, Start Finishing