How can you use the Kanban flow efficiency formula to optimize your team's throughput?

1 What is flow efficiency?

Flow efficiency is the ratio of the time that a work item spends in active stages (such as design, development, testing, or deployment) to the total time that it spends in the Kanban system (from the moment it enters the backlog to the moment it reaches the done column). It is expressed as a percentage, and it reflects how well your team is minimizing waste and maximizing value creation. A higher flow efficiency means that your work items are moving faster and smoother through the workflow, and that your team is spending more time on productive tasks and less time on waiting or resolving issues.

2 How to calculate flow efficiency?

To calculate flow efficiency, you need to track the time that each work item spends in each stage of your Kanban board. You can use a tool like Jira or Trello to record the start and end dates of each stage, or you can use a physical board and a stopwatch or a timer app. Then, you need to add up the time that each work item spends in active stages and divide it by the total time that it spends in the system. For example, if a work item spends 10 days in the system, and 4 days in active stages, its flow efficiency is 4/10 x 100% = 40%.

3 How to improve flow efficiency?

Improving flow efficiency involves reducing the time that work items spend in passive stages, such as waiting for approval or resources. To do this, Kanban practices and principles can be implemented, such as limiting work in progress (WIP) and implementing a pull system. Additionally, visualizing workflow with a Kanban board can make it transparent and help identify and eliminate waste. Lastly, managing flow by measuring and monitoring metrics like cycle time, lead time, throughput, and flow efficiency can track and improve team performance while optimizing the process to deliver value faster.

4 How to use flow efficiency formula?

The flow efficiency formula can help you gain insight into your team's performance and identify opportunities for improvement. It can also be used to set realistic goals and expectations, evaluate the impact of changes, and compare and benchmark your team's performance. To use the formula effectively, you should calculate it regularly and consistently, analyze it in relation to other flow metrics, and communicate it clearly to your team and stakeholders. This can provide a basis for feedback, learning, and improvement.

5 How to interpret flow efficiency?

Interpreting flow efficiency can be tricky, as there is no universal or ideal value that applies to all teams and projects. However, some general guidelines can help you understand it. Generally, flow efficiency tends to be lower in knowledge work, such as software development, which typically ranges between 15% and 35%. Moreover, it can vary significantly across different stages of the workflow, like development versus testing or design versus deployment. Additionally, it can change over time due to team maturity and evolving work items.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?