From Waste to Warp Speed: How a Leading Logistics Company Used VSM to Deliver a 29% Increase in Value

This global transportation company provides business services and logistical solutions to small businesses, large corporations, and individuals. Dedicated to delivering dependable services with a customer-centric focus, this North American-based company values innovation and invests in modern data and technology capabilities to support its complex operational landscape.

After embarking on a multi-year transformation journey and successfully implementing the Scaled Agile Framework® (SAFe®) to maximize business agility, the transportation company needed to increase their speed of delivery as cost-effectively and efficiently as possible. With 25 billion daily operational events, they needed a robust value stream management (VSM) solution that could provide actionable, data-driven insights across their extensive value stream portfolio, as well as identify areas of waste and delay.

The transportation leader selected Planview® Viz as their VSM solution to amplify their SAFe implementation by providing Flow Metrics and data-driven insights. They leveraged VSM data to identify areas of waste and inefficiencies in the software delivery lifecycle. The next step was to implement small-scale data-driven experiments and iterative improvement cycles across multiple Program Increments (PIs) to optimize flow. Then, the organization scaled proven learnings across additional Agile Release Trains (ARTs) to increase delivery speed without raising costs.

This transportation leader needed to accelerate their time-to-market and reduce inefficiencies in delivery without increasing costs or investing in additional development capacity.

To accomplish this critical goal, they made the strategic decision to focus on optimizing flow across the enterprise, starting with small-scale improvements on teams and ARTs.

However, the organization lacked two critical components:

1. Standard Flow Metrics to use as a baseline for improvements.
2. Actionable data insights that identified significant bottlenecks across value stream delivery.

Without aggregated data from various development tools and visibility into bottlenecks and waste, the organization struggled to identify specific areas for improvements.

Additionally, they lacked an end-to-end holistic view of their software development lifecycle to understand where work was stalled, causing significant bottlenecks and delays.

“We always want to deliver more value to our customers faster, but you’re not given a blank checkbook and told cost doesn’t matter,” said a Senior Consultant of Business Agility. “To be efficient, we really needed to know what steps in the process were slowing us down, and we needed data insights to understand those opportunities and how they varied against teams, ARTs, and even portfolios.”

Without a robust VSM solution that provided actionable data and insights, business leaders lacked an understanding of which areas to target for improvement and where to focus their efforts to increase their speed to market.

To gain visibility into areas of waste and delay, leverage data-driven insights to optimize flow, and realize more value from their investments in SAFe, they selected Planview Viz as their VSM solution.

The organization began with small-scale flow optimization experiments on teams and ARTs to increase speed to market, then scaled proven, data-driven improvements across additional ARTs.

Increasing Flow Velocity, or throughput, was the focus of the organization’s first improvement experiment. Although it seemed counterintuitive, they believed that by reducing the amount of work in progress (i.e., Flow Load), they could deliver faster and increase Flow Velocity.

The company also leveraged the Planview Viz Bottleneck Finder to gain a holistic view across its end-to-end software delivery lifecycle. Flow states with the largest bottlenecks identified further opportunities for flow improvements and cost savings.

“Another way to identify what to improve is to understand what step in the process is causing the largest delay, and that’s the bottleneck you want to address. We easily get this insight from Planview Viz because it’s collecting data about how long each step for each work item that flows through the system is taking,” said a Senior Business Agility Consultant.

“When we drilled into the bottleneck, we learned we had 25 features in test and they were staying there over 15 times longer than other stages, so that’s the bottleneck. The next step was to develop a hypothesis for how to improve and reduce the bottleneck,” recounted the consultant.

By running iterative flow experiments and comparing Flow Metrics across multiple PIs, the organization was able to validate their hypotheses, identify new areas for improvement, and implement changes at scale.

“We took the approach of starting small with a proof-of-concept test. We tested the solution with three Agile Release Trains, baselined our metrics, then started making improvements. Then another iteration cycle. After that is probably a good time to expand the test. Take another team or ART through the same steps and continue to iterate. Eventually, we scale and optimize flow across the enterprise,” said the consultant.

After implementing this approach and monitoring Flow Velocity over the duration of four PIs, the organization validated their theory, observing a significant increase in Flow Velocity at 29%.

“Our hypothesis was that by reducing the average Flow Load or WIP during a PI to less than the historical velocity, we would deliver more. Our experiment proved to be successful – we saw a big improvement in Flow Velocity of 29% over four PIs, and in one PI, we went from delivering 17 features to 24,” said the Senior Business Agility Consultant.

During the experiment, when the company encountered an outlier, they were able to drill down into the data to a granular level, revealing another opportunity to optimize flow.

“We discovered a new variable, which was an increase in production incidents that caused a drop in Flow Velocity. This was a great insight into what we could improve next and informed the next flow improvement experiment, where we reduced technical debt by planning to allocate more resources toward tech debt features for the next PI,” said a Senior Business Agility Consultant.

The transportation company succeeded at accelerating the speed of delivery across multiple teams without increasing costs by leveraging data-driven insights generated from Planview Viz. By keeping Flow Load at 70-80% of historical Flow Velocity, they achieved sustained improvement to Flow Velocity. Prior to the experiment, the teams’ baseline metric for Flow Load was 224% of Flow Velocity.

Additionally, embracing data-driven insights enabled the transportation leader to also realize meaningful cost savings.

“If you’re seeing improvements in Flow Velocity and Flow Time, there are financial savings associated with that. If you’re improving Flow Velocity, you’re holding cost constant, but you’re getting more done, so you can equate that to a savings in development team capacity. With a reduction in Flow Time, you have savings related to the cost of delay. By not delaying the business value of important portfolio initiatives, you’re getting financial savings,” said the Senior Business Agility Consultant.

After completing multiple successful flow improvements, the organization continues to leverage metrics and learnings from the experiment by incorporating the data into their ongoing PI Planning. This allows product leaders to develop roadmaps with greater accuracy and use bottleneck insights as leading indicators of potential delays or waste throughout the PI.

“In addition to using data and insights for retrospectives and controlled experiments, we also proactively use the data to prepare for a PI. We can set specific, realistic targets for Flow Metrics based on historical data, then during the PI we monitor the Bottleneck Finder insights to stay ahead of them,” said the Senior Business Agility Consultant.

To meet the rapidly changing operational landscape of delivery services, the transportation company has championed a continuous improvement mindset, and is empowering teams across the enterprise to interpret and use Flow Metrics and insights to initiate new flow improvement cycles.

“We want people close to the work to know that the data’s going to help them solve their problems. Maybe they always had an idea for something they wanted to do, or we need more testers, or something else. We’re always looking at the Flow Metrics for improvement areas,” said the Senior Business Agility Consultant.