the dirty secret about product development work queues

Mismanaged queues are hurting your Product Development success

Conversation Facilitator: David Fernandez

September 27th, 2014

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David Fernandez – Organizational Agility & Leadership Development Coach

• Providing Clients:

– Agile Coaching: Assessments, Training (Full Agile Curriculum) , Transformation (embedded coaching), and Tune-ups

– Leadership Coaching and Development

• 23 years supporting Lean leadership and Agile transformations

• MBA (Organizational Change), MS-Computer Science, Certified Scrum Master, Agile Certified Planner (PMI), Scaled Agile Framework Program Consultant

• Industry Experience: Manufacturing (Auto, Furniture), Insurance (Property, Casualty, Life), Financial Services (Commercial & Government), Workplace Services, Cloud & Managed Infrastructure Services, Education, Human Capital Management

• Held formal leadership responsibility (Portfolio Mgr., Division Lead [Architecture, Eng, QA],

Sr. Program Director) over global Product Development with cross-functional teams of 300+ people in three industries

• Former Operational Finance Controller who instituted Lean Manufacturing in two companies and co-led a company turn-around to avoid closure

• Clients include: Thomson Reuters, Farmers Insurance, Steelcase, Century Link, Paycor

Decision Framework Consulting, LLC

Contact: David@DecisionFrameworkConsulting.com616 469 9091

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Goals for today

• Challenge you to confirm that your organization is severely sub optimized in its product delivery flow

• Inspire you to read and devour “The Principles of Product Development Flow” - Reinersten

• Tease you with the 8 key flow principles and dispel the myths on the one of them: Queue management

• Compel you to properly and fully embrace Agile methodology and Lean Startup practices, resolving problems in these 8 key areas

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Agenda

• Why Queues are important to manage

• The Behavior and Economics of Queues

• How to Manage Queues

• How Agile Methodology addresses these concerns

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What is the essential problem?

• We need to test hypotheses to determine the true needs of customers, yet we try to drive out variability, which drives out opportunity to learn quickly.

• We ask for permission to begin (and continue) development, even though we know we already have begun. We do not acknowledge this reality and avoid trying to measure and learn from that progress incrementally, from the beginning.

• We evaluate and try to control, only what we can see in our intangible profession, leading to highly dysfunctional economic trade-offs

• We pursue capacity utilization, creating non-linear delays in learning and economic benefit

• We fail to express proxy variables in a common unit of measure to make appropriate economic decisions

Cost of Delay is our key measure

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Recommended Books

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Types of Waste

• Over (ill-timed) Production• Waiting• Transport• Inappropriate Processing• Unnecessary Inventory• Unnecessary / Excess Motion• Defects

• How do we avoid waste and maximize Value-added work?• Can you visualize the waste in your product development

flow?

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What are we doing wrong?

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Product Development Flow

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Knowledge Work queues – Physically & Financially Invisible

Individuals & Interactions OVER Process & Tools

Visible only thru the effect:• Increased

Cycle Time• Delayed

Feedback• Priority

Switching• Status

Reporting

Tangible Production Flow Example

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The Economics of Queues

• Queue size optimization is an economic trade-off of Cost of Delay and Cost of Capacity

• Queue cost is affected by the sequence in which jobs are handled in the queue

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Trading Scope with Schedule and/or Cost

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Long Queues – Root Cause of Economic Damage

Plus: More Overhead

98% of Product Developers do NOT Measure them

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Base Decisions on Economics

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Queue Cost: Task Sequence Handling is Crucial

Only 15% of PDs know their CoD

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Managing Queues

• Use Cumulative Flow Diagrams (CFD) to monitor them

• Wait time = Avg Backlog Size / Velocity

• Don’t control capacity utilization, Control queue size

• Don’t control cycle time, control queue size

• Know when to intervene; diffusion and randomness

• Avoid high-queue states

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What does a CFD look like?

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CFD to visualize Product Dev queues?

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Reducing Wait Time & Leveraging Variability

• Temptation to “fully load” resources [capacity].

• Individual’s natural inefficiencies (Parkinson’s Law)

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Shrink Batch Size and Queue, Increase Value & Reduce Waste

D.B.T. D.B.T. D.B.T. D.B.T. D.B.T.

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Don’t pursue Capacity Utilization

Uncertainty of Demand and Capacity

Queue Size and WIP are indicators of high utilitization

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Switch-tasking cost? A simple exercise …

Count to 13 by 1s Increment the Alphabet Count to 37 by 3s

1 A 1

2 B 4

3 C 7

… … …

13 M 37

Add 1 column, repeat exercise, to prove the non-linear problem

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Don’t focus on Capacity Utilization

Capacity Utilization

Throughput

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Cumulative Flow Diagrams

We can see both Demand and Capacity impact

Steep slope represents large Batches

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Agile Manifesto

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Kanban in Action

Customers / Market

Product Mgmt

$

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Optimize Flow – Manage Queues with WIP Limits

ondeck

coding testing qccept

1) Work is managed visually

2) Limited work in progress

3) Flow is pull-based

backlog done

Admin wants a report of site-wide activity

5

Bob

Seller wants to remove an ad

5

Traveller wants to e-mail a hotel booking

2

Traveller wants to e-mail a car booking

2

Traveller wants to e-mail an airline booking

2

Traveller wants to link to on-line check-in

2

Traveller wants to link to cancel a booking

2

Hotel owner wants to check usage data

2

Airline wants to check usage data

2

Traveller wants to register with the system

3

Sue

Traveller wants to see their upcoming trips

2

Tom

Traveller wants to copy a booking

2

Bob

Traveller wants to edit a booking

2

Tom

Traveller wants to delete a booking

1

Sue

Traveller wants to enter a booking

3

Bob

Rental agency wants to check usage data

2

Seller wants to show an ad

5

Sue

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Enterprise Agilility

ARCHITECTURE

AGILE OFFICE

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RELEASE TEAM

EPICS

LOB LEADERSLOB CUSTOMERS

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ESCALATION