Exercises

# The Balanced Flow Chart Exercise

This exercise is in beta – there are missing instructions and some few errors – see if you can spot them;)

The Balanced Flow Chart exercise is a great companion for chapter 3.1 of my new book –  Making Work Visible.

PURPOSE: To discover what Lead time, Throughtput, Change Failure Rate (CFR) and Percentiles are by performing them by hand and learn what each can reveal. This exercise measures one metric trend in four different areas and was inspired by Larry Maccherone and Troy Magennis, Focused Objective, http://focusedobjective.com/team-metrics-right/.

1. How fast
2. How productive
3. How good
4. How predictable

It’s fairly easy to game a metric and therefore important to measure the impact of the change in one metric by showing the other metrics. People can observe negative impacts to metrics from other metric change.

Time: 30 – 60 minutes

MATERIALS:

INSTRUCTIONS: Manually plot and calculate the four metrics listed above.

1. Create a legend for the different symbols used to mark the different work item types.

2. Using the data in the Flow time spreadsheet, mark the flow time of each work item on the blank balanced flow chart. The x-axis is the calendar date that the work item completed on. The y-axis if the number of days (the flow time) of the work item. Ex: the biz request on line 18 of the spreadsheet started on Sep 5 and finished on Sep 19, resulting in a flow time of 14 days. The correct mark for this work item is located at (19,14) on the chart as shown below.

3. Determine productivity with the Throughput (TP) by totaling the number of work items completed each week. Create a histogram in the TP section at the top of the chart. (hint – the throughput of all work items completed the first week rhymes with late)

4. View quality (how good) by calculating the Change Failure rate (CFR). Do this by dividing the number of completed Failure Demand items by the total number of completed work items. The CFR rates for all work items and only biz request work items completed the week of Sep 4 is done for you. Failure demand work is noted with a “yes” on the Flow time spreadsheet data.

5. Calculate the 90th percentile for all work items completed per week. If you want to be more predictable, look at probability. Instead of asking, “What date is this request due?”, ask the question, “What’s the probability of finishing this request within so many days?” The 90th percentile is the value for which 90% of the data points are smaller and 10% are larger.

Here’s how to calculate the 90th percentile for the week of Sep 4th:
flow time for each work item  {1, 2, 3, 3, 5, 6, 7, 9}  (dataset of 8 numbers)

8 x .9 = 7.2  (multiply the number of items in the dataset by 90%. You could round down here, which would result in the 90th percentile = 7.

Or – you could use a weighted mean to calculate a more precise 90th percentile.
9 – 7 = 2      (subtract the 8th number in the dataset by the 7th number in the dataset)
2 x .9 = 1.8   (multiple the difference by 90%)
7 + 1.8 = 8.8  (add the above result to the 7th number in the dataset which results in the 90th percentile = 8.8.

6. Review the set of four metrics on the Balanced Flow Chart. Discuss how each metric could be gamed.

If you filtered for revenue generating items only, based on data for the month of Sep from the Flow time spreadsheet data, we could say with 90% confidence that Revenue generation type work will take somewhere in the range of 8 – 20 days to complete. Maybe 90% is good enough for a large percentage of the work. If you are making pace makers, where failure is not an option, then for that type of work, go for the 100% percentile and crank up the expected timeframe to 25 days.

The idea here is to be approximately right instead of exactly wrong – use science & Probability to set expectations instead of arbitrary due dates.

Please comment with feedback on how this exercise worked for you – Looking to improve it over time.
Many Thanks!

Dominica