On operations management and some numbers I crunch
I wrote this internally to some leaders and it would be great to know how others think differently than me.
Operations management is about three things: throughput, inventory, and operational expense.
I built a few dashboards in Grafana to monitor some numbers, which give me answer to our throughput and inventory. To make things “complete”, I will soon be adding cost monitoring by pulling data from AWS filtered by cost allocation tags.
Throughput is the rate of the system generates output for its goal. If time is spent to produce greater output leading to the goal (better sales!), we are being productive. Any other work that doesn’t move us closer to goal is waste.
The graph at the right hand side are lagging indicators to predict eventual slower throughput. For example, having high defects indicates that the team produces not just work but waste that introduces rework.
Inventory is the investment made to the system to be converted into output to reach its goal (different from WIP and finished goods inventory). I classify unfinished stories as inventory in my monitoring: those that you have invested to refine and those that you are still working on.
If your inventory has been rising, you might want to slow your team down from adding more stories but invest on producing actual output, or increase the capacity of the team to produce quicker.
Monitoring these numbers allow me to add new perspectives to the team, as input and validation to their reflection, as well as strategic tool for capacity planning. The dashboard is open to everyone in the organization, although its usual readers are the team leaders from engineering team.
If you work on engineering management, I wonder if you follow these numbers, and if you have a cheaper way (even if it’s not quantifiable) to understand the state of your operations.
