Lean Management Basics - Monitoring Flow Efficiency

Measuring the flow efficiency of your process is crucial for the successful implementation of Lean project management. Learn what is it and how to measure it.

Introduction

The efficiency of your team’s workflow is among the most important metrics in Lean management. Measuring it is crucial for determining whether you are implementing the model successfully. Tracking precisely the efficiency of your flow can be extremely easy and will show you exactly where your weaknesses are and how they affect the results of your team.

Flow Efficiency as a Basis of Lean Management

Driven by the Lean principles, this management model aims to help you focus more on value-adding activities and optimize your process by removing as many activities that generate waste as possible.

Tracking the efficiency of your team’s workflow is crucial for optimizing the whole process. Flow efficiency is the ratio between value-adding time and the lead time (the frame between the order and delivery of the product) required to complete the process. Тhe time during which a person or a machine is actively working towards completion of a given target is the value-adding time.

Following this line of thought, the typical non-value-adding time activity and one of the eight wastes in Lean management is waiting on something. It can be separated into two categories:

    • Wait time
    • Blocked time

Wait time is accumulated when a task is waiting on something that doesn’t depend on the person working on it. The most typical example of generating wait time in Kanban is when a card is awaiting someone to review it before moving on to the next column of the Kanban board.

Blocked time in Kanban

On the other hand, blocked time is generated when an assignment gets stuck somewhere in the workflow and there is something that’s in the way of resuming work. Block reasons can range from waiting on personal capacity (usually because another task requires immediate attention) to waiting on a repair team to fix a hardware/software issue.

The major difference between these two types of waste is whether the inactive time is expected or not. If it is expected, you should consider it as wait time. If not, then the task accumulating it is considered blocked. Knowing how much time goes to waste waiting on something gives you insights about where you need to improve your process.

How to Measure Flow Efficiency?

If you are a leader who is new to Lean management, measuring flow efficiency might seem like a difficult task. In reality, it is done with the help of this simple formula:

Flow Efficiency[%]=Value-added Time/Lead Time*100

Explaining it in a practical manner, if one of your software engineers needs 5 days to complete a feature, but she spends only one day actively working on it, then the flow efficiency of developing this particular feature is 20%.

Calculating this by hand for every task that passes through the workflow of your team is going to create more waste than value for every leader that applies the Lean management model.

This is especially true when you have to account for every factor that affects it. Thankfully, with digital kanban software you can track flow efficiency without having to dedicate much of your time to this activity.

Tools for Calculating the Flow Efficiency in Kanbanize!

Flow efficiency widget

In Kanbanize, you can monitor flow efficiency directly on the Main dashboard with the help of a specifically designed widget. It is highly customizable and you can get a quick overview of the efficiency stats that you wish to track.

Flow efficiency chart

In addition, you’ve got at your disposal an actionable chart that will measure the efficiency of your flow with more detail.

It can be an invaluable weapon in your Lean management toolbox. The chart will automatically gather data from every card that passed through your Kanban board during a time frame of your choice, accumulate the overall flow efficiency for the period and visualize the results.

A significant benefit of using a digital solution is that you have a wide range of workflow filters at your disposal. In addition, you are at liberty to include or exclude additional factors such as blocked time of cards. The same is applicable for different stages of your team’s workflow.

This way you can monitor different aspects of your flow’s efficiency with just a few clicks and gather data about where you need to improve. As a result, you will be able to identify redundant stages of your workflow or reassure yourself that new steps are needed for the sake of boosting performance. Nonetheless, you will be able to track the personal efficiency levels of your team and learn more about their strengths and weaknesses.

In Summary

Flow efficiency is the ratio between value-adding time and the lead time. Measuring it will help you:

  • Understand whether you are improving or not
  • Visualize how much time goes to waste waiting on something
  • Get insights where you need to improve your process

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Step 4

Aging Work in Progress (WIP) in Lean Management

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Cycle Time Histogram for Lean Management

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