38 weeks of waiting seems crazy, doesn’t it? The things is, if you were to track the time spent adding value versus the time spent waiting in your organisation you will probably find something similar. In most organisations the end-to-end cycletime is dominated by waiting time.

The incredible cost of queues In the example above, the Cost of Delay for this feature was actually more than $200,000 per week! So, the 38 weeks that this opportunity spent waiting in various queues cost the organisation nearly $8m in lost revenue. Knowing this puts the cost of waiting into perspective, doesn’t it? If they had taken the 5 minutes needed to estimate the Cost of Delay for this feature then a number of key decisions would have been made quite differently. It’s one thing for an organisation to be blind to queues. It’s another level of blindness to have no clue what those queues are costing. If we’re going to make better decisions, we really need to understand the Cost of Delay of the things flowing through the system.

Optimising for speed Like most organisations, Maersk was focused more on the efficiency of the parts of the process, than the speed of the end-to-end delivery of value. For instance, it is normal to find approval and funding processes that are optimized for the efficiency of those doing the approving, seriously impacting the speed and efficiency of the whole system. Maersk Line, of course, was the same. Part of what drives these poor system-design decisions is that we have a really bad understanding of how much the delays are actually costing us. Cost of Delay gives us a language and understanding of the cost of all these queues. Without information about value and urgency the system will optimise for other things, with suboptimal results.

Results Implementing Cost of Delay alongside other changes at Maersk Line lead to significant improvements in value delivered, end-to-end speed and the quality of what teams were delivering.