Most of the time is spent waiting in queues, not processing

Average Formula One race lasts 90 minutes. Usually there are two pit stops, ~2 seconds each. Utilization of the pit stop crew of 22 people is only 0.07% per race!

In case of F1, this utilization rate doesn’t bother you, but if you’re a manager I’m pretty sure you would have a panic attack if some parts of your teams were utilized as low as this pit stop crew is.

Now, imagine how much final race time increases if some of the pit stop members are not available when needed because they’re busy with something else? It is important for pit stop members to be there when it’s needed, not to be utilized as much as possible. In Lean terms it means optimizing for flow efficiency, not resource efficiency.

It takes 2 seconds for the pit stop crew to change the tires. But if some members are not available, time spent waiting for those members dominates the time it takes to change the tires. Huge majority of organizations are optimizing for the time it takes to change the tires, while most of the time, they’re wasting on, is waiting for necessary pit stop crew members that are busy with something else. That’s optimizing for the wrong thing.

Switch from utilization and efficiency mindset to throughput and flow efficiency mindset happens when we recognize that most of the time is actually spent waiting in queues, not processing.

At that point we realize that the most important thing to make sure, in order to minimize the lead time and maximize the throughput, is that the given skill is there exactly when needed, rather than maximizing its utilization rate.

Or to put it in Theory of Constraints terms, this video beautifully explains why non-constraints (pit stop crew) must! have excess capacity compared to the constraint (F1 car) in order to achieve the shortest lead times and highest throughput.

Your goal is not to utilize people as much as possible. Your goal is to, as much as possible, minimize the lead time to make an impact. Even if it means engaging some people or skills only 0.07% of the time.

Note: credit for coining goal of “minimizing lead time to make an impact” goes to Daniel Terhorst-North.