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--- what_is_wrong_with_100_utilization_thinking [2016/03/30 09:47] – [Understanding Real Cause and Effect of Utilization] hpsamios
+++ what_is_wrong_with_100_utilization_thinking [2020/06/02 14:22] – external edit 127.0.0.1
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 ====== Understanding Real Cause and Effect of Utilization ======
-I want you to have a look at the following chart((Basis of chart results come from [[the_principles_of_product_development_flow_second_generation_lean_product_development_-_don_reinertsen|The Principles of Product Development Flow: Second Generation Lean Product Development - Don Reinertsen]] although it has been liberally interpreted to aid in understanding.)):
+{{ :cycle_time_vs_utilization_rates.jpg?500 |}}
-{{:cycle_time_vs_utilization_rates.jpg?500 |}}
+I want you to have a look at the chart((this version of chart results come from [[the_principles_of_product_development_flow_second_generation_lean_product_development_-_don_reinertsen|The Principles of Product Development Flow: Second Generation Lean Product Development - Don Reinertsen]] which was originally from the Kingsman Formula, although it has been liberally interpreted to aid in understanding.)):
 This is what actually happens when you increase the utilization rate beyond a certain threshold. Basically it says that "as we approach 100% utilization the time it takes to process something becomes exponentially large." This is an application of "queuing theory". It turns out that every time you halve the amount of excess capacity, you double the time it takes to process something. So as you move from 60% to 80% utilization you double the time it takes to process something, and moving from 80% to 90% will double it again.
 What does this say about loading up a person's work to 100% utilization? Basically if you are focussing on utilization rates there will come a point when you are valuing someone being "busy" over someone producing something in a timely manner.
+Interestingly you instinctively understand this effect even if you have not applied this to software. If you have a road system filled to capacity with cars and you are a car trying to get from point "A" to point "B" what are your chances? A "road system filled to capacity" is a traffic jam and so you will take a long time to get to your location.
 ====== Now What Are You Going To Do? ======
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   * [[http://www.leanessays.com/2010/11/managing-pipeline.html|"Managing the Pipeline"]] by Mary Poppendieck. Mary is one of the original thinkers in the are of lean principles applied to software development. Her essays are always useful and get more useful as you need to grow your implementation of agile and lean to the overall organization.
   * [[http://brodzinski.com/2015/01/slack-time-value.html|Economic Value of Slack Time]]
+  * [[https://observablehq.com/@troymagennis/how-does-utilization-impact-lead-time-of-work?collection=@troymagennis/agile-software-development|How Does Utilization Impact Lead Time of Work]]: Excellent interactive model by @TroyMagennis allowing you to explore different how the Kingman formula works.
   * [[http://brodzinski.com/2012/03/myth-of-100-utilization.html|A Myth of 100% Utilization]]
 {{tag>Enterprise Utilization Slack Risk RiskManagement FAQ PresentationIdea}}
+~~LINKBACK~~
+~~DISCUSSION~~