What is flow efficiency?

Flow efficiency is a key metric in lean management that measures the proportion of time a work item spends in active work (value-adding activities) compared to the total time it spends in the process. It highlights the actual time spent working on an item versus how much time the item spends waiting. Organizations use flow efficiency to identify waste in their processes and pinpoint areas where work items experience delays or bottlenecks.

Teams can track flow efficiency to visualize how well their value streams work and make targeted improvements to reduce wait times. This metric serves as a powerful indicator of process health and can reveal fundamental issues in how work is organized and prioritized. Understanding flow efficiency helps organizations shift from focusing solely on resource utilization to optimizing the smooth flow of work through their systems.

What does flow efficiency measure in the value stream?

Flow efficiency helps teams identify how work moves through their value stream: as a streamlined process or with waste and bottlenecks. It measures the ratio between value-adding time and the total lead time in a process or value stream.

The proportion of time spent on value-adding work versus waiting.
Areas where work items get stuck or delayed.
Process inefficiencies that contribute to longer lead times.
Opportunities to improve workflow and reduce delays.
The impact of handoffs and transitions between teams or departments.

Teams use flow efficiency tracking to improve waste elimination and create smoother, more efficient value streams.

What is the formula to calculate flow efficiency?

To calculate flow efficiency, divide the value-added by the total lead time and multiply the result by 100%. The formula is:

Flow efficiency = (Value-added time / Total lead time) × 100%

Value-added time is the time spent actively working on the item, and total lead time refers to the entire time from when work enters the process until it is completed. A good flow efficiency is in a range from 15% to 25% in knowledge work environments, with highly optimized processes maybe achieving 40%, while world-class lean companies may reach 50% or higher.

While 100% flow efficiency may seem like a good aim, it is neither realistic nor desirable, as it would require perfect synchronization and no flexibility in the system. The goal should be the continuous improvement of flow efficiency over time rather than a specific target number.

How does Enji support good flow efficiency?

Enji is a platform that helps teams achieve and maintain a good flow efficiency with automated reminders and real-time data analysis of workflows. Stakeholders can monitor projects and tasks in a single location for a complete view of their teams' flow.

Enji features Alerts and proactive bots that keep teams focused on task completion without leaving any steps in a certain status for too long. This keeps projects within deadlines with automated reminders to take action. Likewise, Enji's AI Copilot helps managers identify roadblocks to improving flow efficiency in a matter of minutes without unnecessary meetings.

Key Takeaways

Flow efficiency is the ratio between value-adding work time and total process time.
The formula is: Flow efficiency = (Value-added time / Total lead time) × 100%.
Good flow efficiency in knowledge work typically ranges from 15-25% top companies may achieve 40-50% flow efficiency.
Companies should not aim for 100% flow efficiency as it is not realistic or desirable and eliminates necessary flexibility.
Most companies begin their lean journey with flow efficiencies below 10%.
Improving flow efficiency requires addressing bottlenecks, excessive WIP, and unnecessary handoffs.
Consistent measurement over time provides insights into process improvement effectiveness.
Enji helps teams improve their flow efficiency through real-time data analysis.

Last updated in April 2025