Apparent in Hindsight

Dedication

As disciples of Eli Goldratt, we are heavily influenced by his thinking. He trained us to always take a systems view, seek causal linkages between various seemingly disconnected problems till we hit the leverage point. He taught us that the truth is revealed by critical deductive logical thinking approach, not just by examining data. Apparent in Hindsight is a tribute to him and his approach to thinking.

This book is also dedicated to all our clients. They have been an equal part in generating and validating the content of this book. It is their trials & tribulations that we have relied upon to draw the journey of the main protagonists.

preface

In last few decades, leading management thinkers like Jay Forrester, Peter Senge, Eli Goldratt amongst many others are highlighting the need for taking systems view of organization and managing it with a systems approach. Despite widespread consensus on systems approach, conventional management approach in a vast majority of companies, that we have seen, still continues to be highly local in nature. Problems are diagnosed through the eyes of the silos of departments. If there are issues in distribution, most managers seek solutions in the domain of distribution. Production problems have to be solved in production and so on. The very approach of trying to seek solutions to problems in the department where the problem is observed ignores the inherent dependencies that exist in a system. The source or the root cause might lie somewhere else. Accordingly, the approach of dealing with a problem at the place of its observation is likely to be local or symptomatic in nature. Such approaches usually lead to solutions which solve one problem but create another in some other department after a point of time. Hence, many solutions are dismantled only to be re-implemented. Centralization is followed by decentralization, which then goes back to centralization. Customization is replaced by standardization, which is again substituted by customization. Vendors are rationalized and then again expanded. This phenomenon (we call it the treadmill syndrome) is more widespread than organizations would admit.

In this book, we have taken the example of the Indian auto component industry to highlight unsolved problems and the need for a systems approach in management to deal with them. Despite decades of investment in various enterprise-wide IT solutions, connectivity infrastructure, lean management implementations, a typical tier one auto component supplier continues to suffer from chronic problems of month-end skew in dispatches, sluggishness of production in the first week of the month and frequent expediting and perennial searches for matching components in assembly. OEMschange schedules and distributors complain about high mismatched inventory and low margins. Long days at work and sleepless nights on month-ends, quarter-ends and year-ends are part of the inescapable norm. All talk of work-life balance is restricted to rosy posters on the wall or are good for boring speeches.

These problems have reached a stage where they are now accepted as “typical” industry issues. If you find yourself complaining, you are most probably a rookie. The only time it ends is when one retires.

The book attempts to provide a diagnosis and an answer to the above problems using the systems approach of Theory of Constraints. Many solutions detailed in the book are based on Eli’s original thoughts. We have built upon them as we learned new things while applying his theory in companies we have worked with, in the by-lanes of wholesale markets of Delhi, Kolkata and Mumbai and in the OEMs and the not-so-sophisticated upstream ‘owner-cum-manager’ driven plants that supply components to Tier 1 vendors.

Apparent in Hindsight is the culmination of a decade’s experience of implementing pull based Theory of Constraints (TOC) solutions in about 20 companies in the auto industry right from OEMs at one end of the spectrum to the unorganized Tier 3 and 4 vendors. Each journey has had its shares of highs and lows, allowing us to gain tremendous ‘know why’ and more importantly the ‘knowhow’ of the sequence of implementation. Many of Theory of Constraints implementations suffer from erroneous sequencing of solution components.  Many confuse the logic of the solution as being the same as the sequence of implementation. The fact that both are different bodies of knowledge is not widely recognised. A congested road requires a flyover but if one directly builds a flyover, theroad would be further congested, compounding an already poor situation.

The book not just provides the diagnosis and the solution approach but also offers an insight into the sequence of solution implementation so that the performance of the organisation and the motivation of its managers do not go on a downhill journey from their current situation.

We have presented our ideas in the form of a story. A story allowed us to present the inherent logic of the solutions without falling into a trap of confirming examples.

Management books are mostly written to present a theory with examples to back them. This approach is flawed as it suffers from confirmation bias. Highlighting common patterns of famous companies, successful or otherwise, can lead to randomly correlated variables being presented as cause and effect –this is not scientific even if there is plenty of data collected for confirmation. The only way is to present the inherent logic of a solution without the support of examples. We hope, that by presenting the logic in the form of a story, we have written a very reader-friendly book.

We also hope we have been able to present an engaging and insightful journey of a company’s struggles and the intertwined personal stories of its key managers while trying to present the diagnosis of problems and the solution approach.

Breakthrough solutions look like common sense but only after they have been verbalized; they are apparent only in the hindsight. We are sure many of you will get that feeling at the end of the book.

summary

The book delves deep into the chronic problems faced by almost all companies in the Indian automotive industry. It closely examines and challenges the fundamental assumptions that have held firm since time immemorial and guided the management of these companies in procurement, operations, distribution and sales.

Apparent in Hindsight is also a commentary on the cathartic state of much haloed improvement techniques being employed by companies for decades – large and small alike, with little improvement to show for the humungous efforts being put in. What it also presents is the only practical way to improving the state of affairs of such companies which is extremely powerful because it is very simple.

Presented as a story of two key managers of a company – the narrative follows their personal and professional struggles as they deal with conflicts and contradictions that life is presenting to them and their attempts to surmount their problems.

“This book is a must read for all auto professionals. We are in the process of transforming the spare parts systems for commercial vehicles business using the concepts highlighted in the book."

Sanjeev Garg,
Vice President & Global Head, Customer Care,
Commercial Vehicles BU, TATA Motors

“The philosophy given in the book has not only changed my organisation but also my personal life.”

Mr Niranjan Kirloskar,
Managing Director, Fleetguard Filters Pvt Ltd, Cummins Group

"The principles given in this book are fundamental paradigm changes from the way industry operates, but at the same time they are very practical. We have implemented these principles in our entire operations & supply chain and achieved significant results"

Mr Nihal Kulkarni,
Managing Director, Kirloskar Oil Engines Ltd

"Finally a practical method to resolve the disharmony between production and sales"

Mr Nagaraju Srirama,
President & Director, J.K.Fenner (India) Ltd