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Enough is Enough! Let's make late projects a thing of the past

Enough is Enough! Let's make late projects a thing of the past

Project-Flow Management holds the key to building India's infrastructure faster, to achieving Gati Shakti.

Now time is ripe to use this method across the board and stop accepting late projects as fate accompli. Now time is ripe to use this method across the board and stop accepting late projects as fate accompli.

According to the Ministry of Statistics and Program Implementation (MoSPI), 47 months is the average delay on infrastructure projects larger than Rs 100 crore.

The situation in the rest of the world is not much better. Infra projects larger than $100 million, according to McKinsey & Co., are late by an average of 20%. And every 10% delay causes a 2-3% cost overrun for infra projects. 

If delays in infra projects are such a drain on profits for project owners and builders alike, why have we grown numb to them? Maybe because we can always find someone to blame. 

Also Read: 443 infra projects show cost overruns of Rs 4.45 lakh crore

Maybe because it's easy to buy into Daniel Kahneman's "planning fallacy" argument, which suggested that we are wired to underestimate the time it would take to finish a project. Or maybe because it's easy to believe that projects are too complex to finish on time.

Still, we cannot give up so easily. When a 24-month highway project takes 36 months, it might just reduce profits and strain cash flow for large builders; but for small contractors, cash being stuck makes their business anaemic-always struggling and unable to grow. 

When a $1 billion overhaul of US Navy's aircraft carriers takes five years instead of four, it might not make a dent in their big scheme of things; but when Rs 11 lakh crore of India's Union budget gets stuck in unfinished projects, it will affect her ability to provide housing and clean water to her people, reduce logistics costs for manufacturers, and generate surplus resources for future investment.

You might ask, "Haven't we tried everything though? The industry already spends more than $10 billion a year on improving project management: $8 billion on project management software; $3-5 billion on training project managers. 

Also Read: PNC Infratech bags Rs 864-cr road project in Uttar Pradesh

Not to mention the money spent on project managers' salaries and project management consultancies. Postmortem lessons are documented after the failure of every major project. And yet those problems keep recurring!"

Yes, projects are not easy. Many workstreams must come together at the right time. Approvals, land acquisition, clearances, designs, material and equipment supply, civil works, installation and testing of machinery, etc. all must happen in a timely manner. 

Despite ongoing changes and delays-scope and technical specs change, approvals and clearances don't happen on time, materials and equipment don't arrive as promised, etc. Coordinating so many moving parts does seem impossible. 

Not surprisingly, in the 2017 Annual International Conference of Associated Schools of Construction, it was reported that coordination losses account for 25-50% of the time in construction projects whereas external delays account for only about 15%.

However, what if we view the problem from a different lens, not as a problem of coordination but that of FLOW? Consider traffic for example. 

The objective is to keep overall traffic flowing instead of worrying about individual vehicles. Increasing traffic flow is not about getting faster cars on the road. 

It's about regulating the flow, by pacing the entry of cars onto highways. If you reduce the number of vehicles on a jammed highway just by 20%, you increase the speed from 5 kmph to 50 kmph. 

The number of vehicles that complete their journey within a given window also increases tenfold, and everyone gets to their destination much faster.

Similarly, the objective in projects is to keep various workstreams flowing instead of worrying about individual tasks. 

The faster those workstreams flow, the faster projects get done, and the more the number of projects that get done. 

Workstream Metering, controlling when a workstream gets activated based on available capacity, does wonders in projects too. 

It largely obviates the need for coordination because available resources are automatically focused on the most important work. 

Coupled with intelligent "traffic" signals to manage priority conflicts when unplanned incidents occur, it keeps projects moving toward completion at full speed.

This technique for improving project delivery is not just an idea. Based on an Israeli physicist's Theory of Constraints, it has been successfully used in India by organisations like L&T, NTPC, JSPL, GRSE, Vardhman Fabrics, Vikram Solar, CenturyPly, and Wonder Cement. 

It has helped them beat industry benchmarks. Now time is ripe to use this method across the board and stop accepting late projects as fate accompli. Project-Flow Management holds the key to building India's infrastructure faster, to achieving Gati Shakti.

(The author is CEO, Realization Technologies, Alumnus IIT-Delhi | Carnegie Mellon University.)

Published on: Mar 16, 2022, 4:21 PM IST
Posted by: Manali, Mar 16, 2022, 4:17 PM IST