The need for rapid build-out of infrastructure in India is quite well-known and has been extensively documented and highlighted. According to an OECD report1, to keep her economy growing and to keep expanding opportunity at all levels, India needs to build more than ₹ 60 Lakh Crores ($1Trillion) of infrastructure in the next 5 years.

The challenges facing the infrastructure growth are also well-known. For example, according to an IMF report2, approvals and implementation of infrastructure projects are a major bottleneck and need to be sped up. Financing and labour shortages are widespread, and there has been a low level of interest from private sector in PPP (Public Private Partnership) projects due to uncertainties in approvals, land acquisition and execution timelines.
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WHAT IS REQUIRED

While macro changes like making land acquisition transparent and quicker, creating a single window approvals process across multiple government agencies, implementing labour reforms, and creating a robust credit off-take system are definitely required, and each of them will help accelerate the infrastructure growth, they will take their own time to implement given the political climate in the country.

The point is, India also needs an effective managerial approach to the problem, an approach that can be implemented in a short timeframe and can deliver significant results even while the macro changes remain a work-in-process.
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THEORY OF CONSTRAINTS – A MANAGERIAL APPROACH TO DEBOTTLENECKING PROJECTS

The Theory of Constraints (TOC) was originally used for debottlenecking factory production. During the last 15 years it has also been applied very successfully to debottleneck projects.

Major users of the Theory of Constraints in projects include industrial companies like Boeing and Airbus as well as the US Navy, the US Air Force and the Israeli Defense Forces – who have used it to increase the rate of project completions by 20% to 45% and reduce costs by 10% to 20%.

The TOC approach is especially useful for environments ridden with bottlenecks and constraints. Its main premise is that decision-making and other management processes should be designed to make the best use of constraints. Instead of spreading the limited resources (like financial capital, labour , engineers and technical experts, and even the administrative personnel and ministers) thin, apply them in a focused way as follows:

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‍1. Right-Loading of Execution Resources

You cannot get more projects done than the resources you have. Inundating and overloading the limited resources with too many projects is not just useless – it is actually counterproductive because it only intensifies competition for resources and creates a logjam in execution.
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‍¹ http://articles.economictimes.indiatimes.com/2014-02-21/news/47559268_1_oecd-robust-growth-emerging-economies^‍

² http://www.aninews.in/newsdetail3/story103300/india-should-resolve-039-bottlenecks-039-in-power-infrastructure-sectors-foreconomic-growth-imf.html
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With TOC, execution resources are first applied to complete projects already underway. New projects are started only as execution capacity is freed up by completing projects already underway. TOC also provides practical ways to create a prioritized pipeline of projects as well as execution processes to systematically complete projects quickly.
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2. Full Kitting of Projects in Queue

Fighting fires once projects have begun is very expensive and seldom useful. It only forces unnecessary compromises.

With TOC, ministerial, administrative and other governmental capacity is used to mitigate the afore mentioned risks – including awarding of contracts, closure of designs, closure of approvals required for smooth progress, lining up permissions from different authorities viz. Railways, Forest Department, completing land acquisitions etc. – BEFORE, NOT AFTER projects start. It is called “Full Kitting” of projects.

Full Kitting is done in the order of priority and according to the projected start dates of projects. As soon as Full Kitting is accomplished, a project ‘qualifies’ to move from the queue into execution.
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3. Focused and Actionable Reviews at the Highest Level

Having fewer projects in execution at a time not only increases project completion rates, but also reduces fire-fighting. This means that only important issues, the ones that cannot be resolved at execution levels, are likely to hold up the projects.

TOC provides intelligent control mechanisms that highlight these issues before they become problems, not after the projects have already been delayed. These controls are best leveraged by conducting actionable project reviews at the highest levels.
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4. Contractor Enablement

The first three points already increase the chances that contractors can speed up their execution. They can better maintain a healthy cash flow, making government projects more lucrative for them to be involved in.

TOC also provides ways to find “constraining situations” or “conflicts” that create win-lose scenarios and turn them into win-win. It allows project sponsors and owners to align contracting processes and contractor incentives to faster completion of projects.
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TOC RESULTS IN INDIA

500+ contractors and 300+ projects have benefitted significantly by using the TOC solution in the last 7 years in India. These projects have included roads, drainages, water lines, ship-lifts, shipyards, metro lines and stations, large textile, steel and power plants, hotels, schools and hospitals among others.

• The Bihar Urban Infrastructure Development Corporation benefitted by applying this solution in the areas of  full-kitting and contractor alignment to the tune of 200% increase in the productivity of its 20+ contractors.
• EPC companies like L&T, JMC Projects, Kalpataru Power Transmission, Everest Industries, etc., have seen their productivity improve in the range of 30 to 50% within a span of 6 months.
• Organisations like NTPC, Tata Steel, Dr Reddy’s Labs, Vardhman, Welspun, Uttam Galva Steel, Trident, Everest, SREI and many others, have followed the TOC methodology in their projects and have seen acceleration of their projects by 20 to 50% with the same budget, and better contractor motivation throughout the project life cycle.
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POSSIBLE IMPLEMENTATION

• A typical approach would be to apply this solution for a limited time on one project. However the downside of such an approach is that success or failure can be a fluke. Also, improvement in one project might not justify the investment of time and cost. Hence, a better way would be to apply this solution for a limited period (6-12 months) on a small portfolio of representative projects. Once it is established that this solution delivers significant results, it can be scaled up and applied to the entire portfolio of projects
• The Ministry of Roads is currently delivering 14 km of NH road construction per day and the target is to achieve 30 km per day within 2 years3. As a possibility, TOC can be applied to achieve this goal within 9 months.
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SUMMARY

Growth in infrastructure is the key to the upliftment of India’s masses and its rise to a global power. Debottlenecking infrastructure is of paramount importance! While macro changes are essential, the country can also benefit from a superior managerial approach like TOC. Already proven around the world, it can deliver significant results quickly and bring back confidence in the system; release cash locked in the system and encourage private sector players to again start participating in PPP projects.
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‍³Press statement of Mr. Nitin Gadkari, Union Minister for Road Transport, Highways and Shipping:
http://www.livemint.com/Politics/Huc3fCSKq2Zy0WWxfaPauK/Centre-aims-to-build-30-km-NH-every-day-Nitin-Gadkari.html

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