175 Principles of Product Development Flow

ECONOMIC PRINCIPLES

E1: The Principle of Quantified Overall Economics: Select actions based on quantified overall economic impact. (p.28)

E2: The Principle of Interconnected Variables: We can’t just change one thing. (p.29)

E3: The Principle of Quantified Cost of Delay: If you only quantify one thing, quantify the cost of delay. (p.31)

E4: The Principle of Economic Value-Added: The value added by an activity is the change in the economic value of the work product. (p.32)

E5: The Inactivity Principle: Watch the work product, not the worker. (p.33)

E6: The U-Curve Principle: Important trade-offs are likely to have U-curve optimizations. (p.35)

E7: The Imperfection Principle: Even imperfect answers improve decision making.(p.36)

E8: The Principle of Small Decisions: Influence the many small decisions.(p.36)

E9: The Principle of Continuous Economic Tradeoffs: Economic choices must be made continuously. (p.37)

E10: The First Perishability Principle: Many economic choices are more valuable when made quickly. (p.38)

E11: The Subdivision Principle: Inside every bad choice lies a good choice. (p.39)

E12: The Principle of Early Harvesting: Create systems to harvest the early cheap opportunities. (p.40)

E13: The Principle of Decision Rules: Use decision rules to decentralize economic control. (p.41)

E14: The First Market Principle: Ensure decision makers feel both cost and benefit. (p.42)

E15: The Principle of Optimum Decision Timing: Every decision has its optimum economic timing. (p.44)

E16: The Principle of Marginal Economics: Always compare marginal cost to marginal value. (p.45)

E17: The Sunk Cost Principle: Do not consider money already spent. (p.46)

E18: The Principle of Buying Information: The value of information is its expected economic value. (p.47)

E19: The Insurance Principle: Don’t pay more for insurance than the expected loss. (p.49)

E20: The Newsboy Principle: High probability of failure does not equal bad economics. (p.50)

E21: The Show Me the Money Principle: To influence financial decisions, speak the language on money. (p.51)

QUEUEING PRINCIPLES

Q1: The Principle of Invisible Inventory: Product development inventory is physically and financially invisible. (p.55)

Q2: The Principle of Queueing Waste: Queues are the root cause of the majority of economic waste in product development. (p.56)

Q3: The Principle of Queueing Capacity Utilization: Capacity utilization increases queues exponentially. (p.59)

Q4: The Principle of High-Queue States: Most of the damage done by a queue is caused by high-queue states. (p.61)

Q5: The Principle of Queueing Variability: Variability increases queues linearly. (p.62)

Q6: The Principle of Variability Amplification: Operating at high levels of capacity utilization increases variability. (p.64)

Q7: The Principle of Queueing Structure: Serve pooled demand with reliable high-capacity servers. (p.64)

Q8: The Principle of Linked Queues: Adjacent queues see arrival or service time variability depending on loading. (p.66)

Q9: The Principle of Queue Size Optimization: Optimum queue size is an economic tradeoff. (p.68)

Q10: The Principle of Queueing Discipline: Queue cost is affected by the sequence in which we handle the jobs in the queue. (p.69)

Q11: The Cumulative Flow Principle: Use CFDs to monitor queues. (p.71)

Q12: Little’s Formula: Wait time = Queue Size/Processing Rate. (p.73)

Q13: The First Queue Size Control Principle: Don’t control capacity utilization, control queue size. (p.75)

Q14: The Second Queue Size Control Principle: Don’t control cycle time, control queue size. (p.76)

Q15: The Diffusion Principle: Over time, queues will randomly spin seriously out of control and will remain in this state for long periods. (p.76)

Q16: The Intervention Principle: We cannot rely on randomness to correct a random queue. (p.79)

VARIABILITY PRINCIPLES

V1: The Principle of Beneficial Variability: Variability can create economic value. (p.87)

V2: The Principle of Asymmetric Payoffs: Payoff asymmetries enable variability to create economic value. (p.88)

V3: The Principle of Optimum Variability: Variability should neither be minimized nor maximized. (p.91)

V4: The Principle of Optimum Failure Rate: Fifty percent failure rate is usually optimum for generating information. (p.92)

V5: The Principle of Variability Pooling: Overall variation decreases when uncorrelated random tasks are combined. (p.95)

V6: The Principle of Short-Term Forecasting: Forecasting becomes exponentially easier at short time-horizons. (p.96)

V7: The Principle of Small Experiments: Many small experiments produce less variation than one big one. (p.98)

V8: The Repetition Principle: Repetition reduces variation. (p.99)

V9: The Reuse Principle: Reuse reduces variability. (p.100)

V10: The Principle of Negative Covariance: We can reduce variance by applying a counterbalancing effect. (p.100)

V11: The Buffer Principle:Buffers trade money for variability reduction. (p.101)

V12: The Principle of Variability Consequence: Reducing consequences is usually the best way to reduce the cost of variability. (p.103)

V13: The Non-linearity Principle: Operate in the linear range of system performance. (p.104)

V14: The Principle of Variability Substitution: Substitute cheap variability for expensive variability. (p.105)

V15: The Principle of Iteration Speed: It is usually better to improve iteration speed than defect rate. (p.106)

V16: The Principle of Variability Displacement: Move variability to the process stage where its cost is lowest. (p.107)

BATCH SIZE PRINCIPLES

B1: The Batch Size Queueing Principle: Reducing batch size reduces cycle time. (p.112) 124

B2: The Batch Size Variability Principle: Reducing batch size reduces variability in flow. (p.112)

B3: The Batch Size Feedback Principle: Reducing batch size accelerates feedback. (p.113)

B4: The Batch Size Risk Principle: Reducing batch size reduces risk. (p.114)

B5: The Batch Size Overhead Principle: Reducing batch size reduces overhead. (p.115)

B6: The Batch Size Efficiency Principle: Large batches reduce efficiency. (p. 115)

B7: The Psychology Principle of Batch Size: Large batches inherently lower motivation and urgency. (p.117)

B8: The Batch Size Slippage Principle: Large batches cause exponential cost and schedule growth. (p.,117)

B9: The Batch Size Death Spiral Principle: Large batches lead to even larger batches. (p.118)

B10: The Least Common Denominator Principle of Batch Size: The entire batch is limited by its worst element. (p.119)

B11: The Principle of Batch Size Economics: Economic batch size is a U-curve optimization. (p.121)

B12: The Principle of Low Transaction Cost: Reducing transaction cost per batch lowers overall costs. (p.123)

B13: The Principle of Batch Size Diseconomies: Batch size reduction saves much more than you think. (p.124)

B14: The Batch Size Packing Principle: Small batches allow finer tuning of capacity utilization (p.126)

B15: The Fluidity Principle: Loose coupling between product subsystems enables small batches. (p.126)

B16: The Principle of Transport Batches: The most important batch is the transport batch. (p.128)

B17: The Proximity Principle: Proximity enables small batch sizes. (p.129)

B18: The Run Length Principle: Short run lengths reduce queues. (p.130)

B19: The Infrastructure Principle: Good infrastructure enables small batches. (p.130)

B20: The Principle of Batch Content: Sequence first that which adds value most cheaply. (p.131)

B21: The Batch Size First Principle: Reduce batch size before you attack bottlenecks. (p.133)

B22: The Principle of Dynamic Batch Size: Adjust batch size dynamically to respond to changing economics. (p.135)

WIP CONSTRAINT PRINCIPLES

W1: The Principle of WIP Constraints: Constrain WIP to control cycle time and flow. (p.145)

W2: The Principle of Rate Matching: WIP constraints force rate-matching. (p.146)

W3: The Principle of Global Constraints: Use global WIP constraints for predictable and permanent bottlenecks. (p.147)

W4: The Principle of Local Constraints: If possible, constrain local WIP pools. (p.148)

W5: The Batch Size Decoupling Principle: Use WIP ranges to decouple the batch sizes of adjacent processes. (p.150)

W6: The Principle of Demand Blocking: Block all demand when WIP reaches its upper limit. (p.151)

W7: The Principle of WIP Purging: When WIP is high, purge low value projects. (p.151)

W8: The Principle of Flexible Requirements: Control WIP by shedding requirements. (p.152)

W9: The Principle of Resource Pulling: Quickly apply extra resources to an emerging queue. (p.153)

W10: The Principle of Part-Time Resources: Use part-time resources for high variability tasks. (p.153)

W11: The Big Gun Principle: Pull high-powered experts to emerging bottlenecks. (p.155)

W12: The Principle of T-Shaped Resources: Develop people who are deep in one area and broad in many. (p.155)

W13: The Principle of Skill Overlap: Cross train resources at adjacent processes. (p.156)

W14: The Mix Change Principle: Use upstream mix changes to regulate queue size. (p.156)

W15: The Aging Principle: Watch the outliers. (p.159)

W16: The Escalation Principle: Create a preplanned escalation process for outliers. (p.160)

W17: The Principle of Progressive Throttling: Increase throttling as you approach the queue limit. (p.161)

W18: The Principle of Differential Service: Differentiate quality of service by workstream. (p.161)

W19: The Principle of Adaptive WIP Constraints: Adjust WIP constraints as capacity changes. (p.162)

W20: The Expansion Control Principle: Prevent uncontrolled expansion of work. (p.163)

W21: The Principle of the Critical Queue: Constrain WIP in the secion of the system where the queue is most expensive. (p.164)

W22: The Cumulative Reduction Principle: Small WIP reductions accumulate. (p.165)

W23: The Principle of Visual WIP: Make WIP continuously visible. (p.166)

FLOW CONTROL PRINCIPLES

F1: The Principle of Congestion Collapse: When loading becomes too high, we will see a sudden and catastrophic drop in output. (p.172)

F2: The Peak Throughput Principle: Control occupancy to sustain high throughput in systems prone to congestion. (p.174)

F3: The Principle of Visible Congestion: Use forecasts of expected flow time to make congestion visible. (p.175)

F4: The Principle of Congestion Pricing: Use pricing to reduce demand during congested periods. (p.176)

F5: The Principle of Periodic Resynchronization: Use a regular cadence to limit the accumulation of variance. (p.177)

F6: The Cadence Capacity Margin Principle: Provide sufficient capacity margin to enable cadence. (p.178)

F7: The Cadence Reliability Principle: Use cadence to make waiting times predictable.(p.179)

F8: The Cadence Batch Size Enabling Principle: Use a regular cadence to enable small batch sizes. (p.179)

F9: The Principle of Cadenced Meetings: Schedule frequent meetings using a predictable cadence. (p. 180)

F10: The Synchronization Capacity Margin Principle: To enable synchronization, provide sufficient capacity margin. (p.187)

F11: The Principle of Multiproject Synchronization: Exploit scale economies by synchronizing work from multiple projects. (p.187)

F12: The Principle of Cross-Functional Synchronization: Use synchronized events to facilitate cross functional tradeoffs. (p.188)

F13: The Synchronization Queueing Principle: To reduce queues, synchronize the batch size and timing of adjacent processes. (p.189)

F14: The Harmonic Principle: Make nested cadences harmonic multiples. (p.190)

F15: The SJF Scheduling Principle: When delay costs are homogeneous, do the shortest job first. (p.192)

F16: The HDCF Scheduling Principle: When job durations are homogeneous, do the high cost-of-delay job first. (p.193)

F17: The WSJF Scheduling Principle: When job durations and delay costs are not homogeneous, use WSJF. (p.193)

F18: The Local Priority Principle: Priorities are inherently local. (p.196)

F19: The Round-Robin Principle: When task duration is unknown, time-share capacity. (p.196)

F20: The Preemption Principle: Only preempt when switching costs are low. (p.197)

F21: The Principle of Work Matching: Use sequence to match jobs to appropriate resources. (p.198)

F22: The Principle of Tailored Routing: Select and tailor the sequence of subprocesses to the task at hand. (p.199)

F23: The Principle of Flexible Routing: Route work based on the current most economic route. (p.200)

F24: The Principle of Alternate Routes: Develop and maintain alternate routes around points of congestion. (p.201)

F25: The Principle of Flexible Resources: Use flexible resources to absorb variation. (p.202)

F26: The Principle of Late Binding: The later we bind demand to resources, the smoother the flow. (p.202)

F27: The Principle of Local Transparency: Make tasks and resources reciprocally visible at adjacent processes. (p.204)

F28: The Principle of Preplanned Flexibility: For fast responses, preplan and invest in flexibility. (p.205)

F29: The Principle of Resource Centralization: Correctly managed, centralized resources can reduce queues. (p.206)

F30: The Principle of Flow Conditioning: Reduce variability before a bottleneck. (p.208)

FAST FEEDBACK PRINCIPLES

FF1: The Principle of Maximum Economic Influence: Focus control on project and process parameters with the highest economic influence. (p.214)

FF2: The Principle of Efficient Control: Control parameters that are both influential and efficient. (p.215)

FF3: The Principle of Leading Indicators: Select control variables that predict future system behavior. (p.215)

FF4: The Principle of Balanced Set Points: Set tripwires at points of equal economic impact. (p.216)

FF5: The Moving Target Principle: Know when to pursue a dynamic goal. (p.218)

FF6: The Exploitation Principle: Exploit unplanned economic opportunities.(p.219)

FF7: The Queue Reduction Principle of Feedback: Fast feedback enables smaller queues. (p.220)

FF8: The Fast Learning Principle: Use fast feedback to make learning faster and more efficient. (p.221)

FF9: The Principle of Useless Measurement: What gets measured may not get done. (p.222)

FF10: The First Agility Principle: We don’t need long planning horizons when we have a short turning radius. (p.222)

FF11: The Batch Size Principle of Feedback: Small batches yield fast feedback. (p.223)

FF12: The Signal to Noise Principle: To detect a smaller signal, reduce the noise. (p.224)

FF13: The Decision Rule Principle: Control the economic logic behind the decision, not the entire decision. (p.225)

FF14: The Locality Principal of Feedback: Whenever possible make feedback local. (p.226)

FF15: The Relief Valve Principle: Have a clear, predetermined relief valve. (p.227)

FF16: The Principle of Multiple Control Loops: Embed fast control loops inside slow loops. (p.228)

FF17: The Principle of Controlled Excursions: Keep deviations within the control range. (p.229)

FF18: The Feedforward Principle: Provide advance notice of heavy arrival rates to minimize queues. (p.229)

FF19: The Principle of Colocation: Colocation improves almost all aspects of communications. (p.230)

FF20: The Empowerment Principle of Feedback: Fast feedback gives a sense of control. (p.231)

FF21: The Hurry-Up-and-Wait Principle: Large queues make it hard to create urgency. (p.232)

FF22: The Amplification Principle: The human element tends to amplify large excursions. (p.233)

FF23: The Principle of Overlapping Measurement: To align behaviors, reward people for the work of others. (p.233)

FF24: The Attention Principle: Time counts more than money. (p.234)

DECENTRALIZATION PRINCIPLES

D1: The Second Perishability Principle: Decentralize control for problems and opportunities that age poorly. (p.246)

D2: The Scale Principle: Centralize control for problems that are infrequent, large, or that have significant economies of scale. (p.247)

D3: The Principle of Layered Control: Adapt the control approach to emerging information about the problem. (p.248)

D4: The Opportunistic Principle: Adjust the plan for unplanned obstacles and opportunities. (p.249)

D5: The Principle of Virtual Centralization: Be able to quickly reorganize decentralized resources to create centralized power. (p.250)

D6: The Inefficiency Principle: The inefficiency of decentralization can cost less than the value of faster response time. (p.251)

D7: The Principle of Alignment: There is more value created with overall alignment than local excellence. (p.252)

D8: The Principle of Mission: Specify the end state, its purpose, and the minimal possible constraints. (p.252)

D9: The Principle of Boundaries: Establish clear roles and boundaries. (p.253)

D10: The Main Effort Principle: Designate a main effort and subordinate other activities. (p.254)

D11: The Principle of Dynamic Alignment: The main effort may shift quickly when conditions change. (p.255)

D12 The Second Agility Principle: Develop the ability to quickly shift focus. (p.255)

D13: The Principle of Peer-Level Coordination: Tactical coordination should be local. (p.257)

D14: The Principle of Flexible Plans: Use simple modular plans. (p.258)

D15: The Principle of Tactical Reserves: Decentralize a portion of reserves. (p.258)

D16: The Principle of Early Contact: Make early and meaningful contact with the problem. (p.259)

D17: The Principle of Decentralized Information: For decentralized decisions, disseminate key information widely. (p.260)

D18: The Frequency Response Principle: We can’t respond faster than our frequency response. (p.261)

D19: The Quality of Service Principle: When response time is important, measure response time. (p.261)

D20: The Second Market Principle: Use internal and external markets to decentralize control. (p.262)

D21: The Principle of Regenerative Initiative: Cultivating initiative enables us to use initiative. (p.263)

D22: The Principle of Face-to-Face Communication: Exploit the speed and bandwidth of face-to-face communications. (p.263)

D23: The Trust Principle: Trust is built through experience. (p.264)