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Operations Management | Using 'Theory of Constraints' in Improving Urban Infrastructure

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Using 'Theory of Constraints' in Improving Urban Infrastructure

- by R. Rajesh & Kiron Kumar Varma *

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Page - 13

b) The SPV in this case refers to the special purpose vehicle, which could be loosely defined as a prototype for infrastructure. What we are suggesting is that once a model for the infrastructure is developed for a specific project, the same model can be transferred to a similar project, thereby reducing the fixed costs involved in developing the model again.

Transition Model

The transition model consists of the following steps: -

  • Run both systems parallel - Transfer small projects to PPP on a trial basis.

  • Continuous monitoring of the PPP model and refining them.

  • In case of failure of the PPP model, revert back to the existing model and develop a new model with a different constraint.

  • Benchmark PPP against similar models developed elsewhere and re-engineer until the system becomes optimal.

    Drawbacks of the Model

    The following are the main drawbacks associated with the PPP model: -

  • Inordinate delay to get tangible results from the model.

  • Model may not be transferable due to varying economical and political conditions.

  • Initial resistance can stall the implementation of the model.

  • Selfish motives of the private players have to be accounted for.

  • Open communication and flow of information cannot be guaranteed.

  • Conflicts with complementary systems may affect the optimal performance of the model.

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    * Contributed by -
    R. Rajesh, PGDBA - 1st Year,
    Kiron Kumar Varma, PGDBA - 2nd Year,
    K. J. Somaiya Institute of Management Studies & Research, Mumbai.

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