Session Title: Understanding Flow Debt Session Overview: While CT and CFD and trailing indicators, we discuss one of the lead indicators - Flow Debt. In this session, we explain what is Flow Debt and its significance. Learning objectives Understand Flow Debt Understand how it should be used for our Kanban systems

1. @sudiptal
Understanding Flow Debt
Why some systems do not improve CT after reducing WIP?
Sudipta Lahiri
Head of Products and Engineering
1Sep 22, 2018

2. @sudiptal
Influencers…
Andy Carmichael Dr. Ramesh Patil, CTO, Digité
https://xprocess.blogspot.com/2015/08/what-is-flow-debt.html
2Sep 22, 2018

3. @sudiptal
Technical Debt
• Technical debt is the implied cost of additional rework caused by
choosing an easy solution now instead of using a better approach that
would take longer
• Compared to monetary debt
• If technical debt is not repaid, it can accumulate 'interest', making it harder to
implement changes later on.
Source: Wikipedia
Sep 22, 2018 3

4. @sudiptal
Understanding Flow Debt
• Given a finite capacity to service demand, when we prioritise working
on one work items over another, we adversely impact the Cycle Time
of the latter
• This is typical of a Kanban system
• Flow Debt means delivering more quickly now at the cost of slower
delivery times later
• Flow Debt quantifies this impact and helps understand the operations
of Kanban Systems
Sep 22, 2018 4

5. @sudiptal
Flow Debt vs Other Metrics
• Flow Debt is a measure that provides a view of what is happening
inside our system
• CT or TP or Velocity: are measures when the items is completed
Sep 22, 2018 5

6. @sudiptal
So, what is Flow Debt…?
6Sep 22, 2018

7. @sudiptal
Let’s model a simple Kanban system…
• Assume:
• A Kanban System with a CT of 2 weeks
• The cumulative number of items entering the system equaled the cumulative
number of deliveries as of a given date (no WIP piling up in the system)
• The arrivals and deliveries are smooth over the given period
• The items are delivered in the precise order they arrived
• All the items are delivered
• Then
• The time the last item spent in the process was also 2 weeks
• The Average CT for the items = 2 weeks!
Sep 22, 2018 7

8. @sudiptal
System A: An ideal “queue” system
• A simple system with Capacity
(WIP) of X cards…
• … with a Fixed Departure Rate of
cards per unit time (1 week)…
• … with the same Arrival Rate of
Cards per unit time (1 week)…
• … meaning 1 card is replenished
when 1 card is delivered!!
CFD
• Average CT = Actual CT for each
card
• This system has 0 Flow Debt!
8Sep 22, 2018

9. @sudiptal
System B: Order is not respected
• What happened here…
• For the items in the lightly shaded region, the FIFO
condition is relaxed!
• Since the Average Arrival Rate = Average Departure Rate,
the Average CT is unchanged!
• However, Actual CT for cards in NOT same anymore!
• Items sloping down have less CT; Items sloping up have more
CT
• So, items sloping down are reducing their CT at the
expense of the items whose CT is getting delayed
• They are experiencing Wait Time now…
9Sep 22, 2018

10. @sudiptal
Let’s take this to the next level…
What happens when an item is expedited…
10Sep 22, 2018

11. @sudiptal
For System A: An ideal “queue” system
WIP = 5
(4 items ahead of a new item)
Average CT = Actual CT = 5
11Sep 22, 2018

12. @sudiptal
Flow
Debt = 0
SurplusDeficit
Flow
Difference from
Average CT
Difference from
Average CT
Prioritising 1
card impacts
4 cards that
were ahead
of it….
12Sep 22, 2018

13. @sudiptal
SurplusDeficit
Flow
Flow
Debt = 0
Flow Debt =
Sum (Average CT – Actual CT) for all cards
13Sep 22, 2018

14. @sudiptal
Why is understanding Flow Debt important?
• Decisions you take today to prioritise one card over another clearly
impact the CT of the future cards
• This behaviour is ONE OF THE REASONS that will make your CT
histogram look worse… let us understand why.
Sep 22, 2018 14

15. @sudiptal
We all know
this...
CT Distribution
has a long tail!
15Sep 22, 2018

16. @sudiptal
However, latter is better than former…
Mode
CT shifts left
Spread is narrower
16Sep 22, 2018

17. @sudiptal
Impact of Flow Debt on CT Histogram
• While the Average CT may remain
the same, the CT spread will look
worse
• Preferring one card over another
will mean this:
• High probability that the preferred
card will finish earlier than the
Average
• High probability that the cards that
started earlier will finish later => their
CT will be longer than otherwise
• This makes future predictability
more error prone
• Average is more misleading than
helpful
17Sep 22, 2018

18. @sudiptal
Beyond CT distribution…
• Just like in the plots that we were showing… its important to periodically
clear our Flow Debt!
• This means that the cards that were held back (in order to prioritise
another) actually get delivered
• If these “delayed” cards continue to be in the process, your Flow Debt != 0
• It will keep growing!
• Flow Debt comes to 0 when you finish all the cards that you had started
• Therefore, START FINISHING!
• If you are not going to work on it, drop it! Don’t leave it on the Board.
Sep 22, 2018 18

19. @sudiptal
• Reach me at:
• @sudiptal
• slahiri@digite.com
• sudiptalahiri.wordpress.com
“Absorb what is useful, discard
what is useless and add what is
specifically your own”
Bruce Lee
Sep 22, 2018
19