The 4 basic concepts of Value Stream Management II-EN

In the previous article in this series, we looked at a few basic concepts of VSM: organizational silos and value streams. Today we will look at the missing ones: metrics and customer focus.

Metrics

We need to choose what and how we measure because it is critical to improving performance and becoming more agile.

What do we currently measure in most organizations? x

First, we need to measure the activity evels within the processes (output), that is, the amount of work and the level of activity. These metrics are usually local to each silo or team. For example:

• Metrics for Agile, Scrum, and XP teams: team velocity, number of bugs fixed, code quality metrics, unit test results, etc.  
• Metrics for DevOps teams: deployment frequency, time to deploy changes, failure rate, environment availability, crash recovery time, etc.

These metrics are only of use as long as we end up doing something with them. But they don’t help optimize the entire end-to-end value chain.

What if we were to measure the entire workflow and value stream?

In order to do this, the first step would be to identify the value streams to get a clear picture of what is happening in the value creation and delivery flows. And then, we could measure the time it takes for the tasks to flow through the value stream processes.

Value Stream Mapping is a technique that measures the timing of the entire process, from start to finish. As our goal is to accelerate the value delivery to customers, we are interested in measuring activity times and waiting times. In the following example, we see in green the time it takes to perform each of the tasks of the process and also the waiting time painted in red:

The ratio between the activity time and the total time, including waits, is called flow efficiency. Although the efficiency value is a number between 0 and 1, it is easier to understand if we talk about flow efficiency as a value between 0 and 100%. An efficiency of 100% would mean that all workflows are without delay and that there is no waiting or blocking in the process.

Let’s see this with an example. Let’s imagine we take the car to the repair shop this Monday, and the mechanic says he will be ready to pick it up on Friday. If the mechanic only takes a couple of hours for the repair, most of the time, the car will be waiting in the shop. In this case, the efficiency is very low: 4%.

Of course, the flow efficiency should be as high as possible. But even so, in software development teams, an acceptable efficiency is usually between 15 and 20%.

If it is lower, surely we must do something to increase the productivity of the value stream teams. But if it’s too high, it’s a little suspicious, and we should probably investigate what’s going on-maybe some waits are sneaking in as uptime.

Another thing we could measure in VSM is workload. That is the amount of work in progress-the Kanban WIP. There is some correlation between workload and the time it takes for a task to finish. If the work-in-progress load is too high, there is probably a lot of work waiting, and we need to examine what is going on; on the other hand, if the load is too low we may be underutilizing available capacity.

We need to measure so that we have visibility into the workflow at all times and then make informed decisions.

And we come to the last concept: the raison d’être of all this.

Customer focus

Customers and users are at the beginning of the value stream (with the pull of requests) and, at the end (as recipients of the value of the solutions, products, and services created and maintained by the teams).

Organizations that focus on their customers and understand their needs, empathize with them, are more agile, are more innovative, increase user satisfaction, create more sustainable solutions, increase the commitment of their employees, and have greater alignment and collaboration between teams.

All improvements must be directed toward customers and users. With VSM, anything that does not have a positive impact on customers has no value and is considered a waste of time or resources.

All of the above benefits justify the effort to optimize the operation of value streams. Accelerating the value delivery to customers by applying VSM requires a more systemic, end-to-end, end-to-end approach to development processes and breaking down silos.