Management Of Vinci Construction Grands Projets Management Essay

Vinci formerly known as Société Générale d’Enterprises, is a private multinational French Contractor that has maintained a 100 year track record in France and all over the world. It has maintained position on the top 3 of the world’s largest construction companies since the 1990’s. In 2009, it landed on Top 3, unbeaten for years and moved down to 2 places only from 2008 as Chinese railway contractors rose outstandingly due to the country’s billion dollar stimulus plans.(fig1)The world leader in concessions and construction, employing 162,000 people in about 100 countries, Vinci finances, designs, builds and manages the facilities that improve everyday life; the systems that transports us, the public and private buildings in which we live and work, the urban developments that create and improve our communities, and the water, energy and communication networks vital to human existence.( http://publi.vinci.com/vinci/vinci-profile-2010.pdf) Records report an annual turnover rate of £33.5 billion for this company.

One business line of Vinci is the Vinci Construction Grands Projets. It has design and build operations in Africa, America, Asia, Europe, the Middle East and Oceania. It specializes in private or public, diverse and complex facilities, in Civil Engineering such as complex bridges, tunnels, dams and in Building such as major industrial facilities, huge shopping centres or hotels. This group may team up with other local contractors to achieve successful projects.

Vinci Construction Grand Projets is the lead contractor for the world’s longest bridge between Qatar and Bahrain, the construction of the Brightwater tunnels in Seattle in the United States, motorway interchange in Trinidad and Tobago, wastewater pumping stations in Thai Nguyen in Vietnam, confinement shelter for the Chernobyl sarcophagus in Ukraine, the Prague Four Seasons Hotel and the Olympic Ataturk Stadium in Istanbul.

The list goes on for their approved and completed projects. The quantity of these has an equal reputation of quality of products and full services through assimilating unique management styles, networked organizations that are actively collaborating with each other, utilizing their tools and systems, human resources and talents effectively. They have played a major part in the fabrication of new standards in the construction industry through its widespread example of excellence in performance in major building and public works worldwide despite the current economic difficulties.

Figure 1 Chris Sleights. Jul-Aug 2010. The Global Top 200. New Report. International Construction. Vol 49 No 6 pg 12. KHL Publications

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Figure 2 Vinci Group

Task 1

Evaluating the strategic objectives of operations management within the organisation

The Role & Importance of Effective Operations Management

The operations of a design-build construction project are divided into phases. First, the Contractor such as Vinci Grands Projets after awarded a design-build construction contract must make certain pre-project decisions to decide what project delivery system to use. At this stage, they decide whether they would engage specialty subcontractors for the build or construction operations and who will be responsible for particular scope of work and the type of contract to be used. Second, the planning and design of the project is then carried out by engineers and architects. Then the subcontractor is selected, after which the subcontractor mobilises in order to carry out the field operations, or if Grands Projets is solely responsible for carrying out the site operations, then mobilisation starts. This field work or operations is what a lay person would call “construction”. Lastly, the project must be handed over to Client or Owner of Project, terminated and brought to a close.

Operations Management is concerned with the design, planning, control and improvement of an organization’s resources and processes to produce goods of services for customers. (Johnston, 1997) For a construction company such as Vinci Construction Grand Projets, the activity of determining that the processes set forth for the design and build operations with the goal of achieving quality results is effectively managed, is the very essence in fact of operations management. The operations function affects directly how well the organization performs to satisfy the customers. The focus is on the construction contractor, Vinci Construction Grand Projets which carries the lead responsibility for the on-site installation work operations and all of the associated operations from start to finish.

The first role of operations management is performing the tasks of design, planning, control and implementation activities of the operations function. The second role of operations management is the fundamental purpose of it which is the transformation of input resources into goods and services. Its third role is building operations strategy; the understanding of the organization’s strategic intentions and thereby translating these into operations performance criteria to be used in decisions for planning, control and improvement of operations resources and processes. Operations then can support, implement and move corporate or business strategies of an organization.

One task of operations management is to take the responsibility in designing the standard operating procedures, technological processes involve in the operation of project, the architectural concepts, designing of the size and location of facility, the economic studies, the reviews of the regulatory bodies for compliance, the zoning regulations, the building codes, design of the safety, environmental and quality standards of the whole operations. This activity is set to determine so that the start to finish operations has a process designed to determine how infrastructures or services will be delivered according to specifications set out in the project contract. Planning activities include forecasting future demands, availability of resources, time, political, sociological, environmental impacts of project, the overall technical and economic resource planning. The main purpose of Planning is to plan time, cost and resources adequately to estimate the work needed and to effectively manage risk during project execution. The internal operations is basically the production of the Designer’s plan and specifications into physical structures, therefore planning of procurement of materials, services, and equipments is needed to put these in place at the right time for the construction to avoid loss. Controlling, therefore is tracking durations of the construction operations and ongoing costs, constantly monitoring and evaluating information against the estimates as initially planned. At this stage, operations management tackles adjustments in variations of cost or changes in time of delivery of project. It observes project operations or execution so that problems can be detected in a timely manner and to control and correct problems when necessary. All resources should be coordinated, on schedule and within the budget. An equally important part of monitoring and control is quality management, to assure that the work complies with the technical requirements set forth in the contract documents. In addition, the contractor has an important role in managing the work safely and in way that minimises adverse environmental impacts and its effects on producing quality products and services.

Further, operations management involves improving of the performance of the operations. Operations management roles don’t end in delivering goods in time but maintaining products and services according to specified quality standards and continuous improvement on the execution of these operations.

The operations management of a construction company involves input resources or the transforming resources which includes the facilities and the staff, its design team, the engineering team, the administrative team, the construction workers, the subcontractors, specialty contractors, the material suppliers, fabricators each of which play a vital role in the project team to complete a successful project or the output which is to deliver the demand in a timely fashion. The transforming resources act upon the transformed resources which are the materials, the information and the customers which are in some way transformed by the operation.

The Strategic Objectives of the Organisation

Vinci’s is currently pursuing a corporate strategy geared towards international growth. In its 2010 Profile, its strategic plan is to extend this Concession- Construction business model to reinforce the Group’s resilience while strengthening their capacity to generate growth by intensifying recently launched efforts so as to:

optimise the Group’s position in its local markets, to harvest growth opportunities;

invest in market segments and technological niches that offer above average development potential such as oil and gas infrastructure or energy services;

generate more long-term business, not only in concessions (development of operating infrastructure services) but also in contracting (facilities management, industrial and energy equipment maintenance, management of public lighting, road maintenance, etc.);

expand the Group’s capability to design, manage and implement complex projects. We will pursue this strategy mainly through organic growth as our priority goal of controlling debt will limit acquisitions in cash. (http://publi.vinci.com/vinci/vinci-profile-2010.pdf)

Analyzing these strategies, Vinci Construction Grand Projets will undoubtedly be able to perform effectively and deliver according to these strategic plans. Firstly, Vinci Construction Grand Projets, is practicing involvement at local levels wherever it operates, Europe, Middle East or Asia, it partners or ties-up with other local companies, which allows them to set up a wide range of solutions. For example, in one of its projects, on the London Channel Tunnel Rail Link, it teamed up with Morgan (a british contracting). Both companies worked successfully to hand out the project before date and even below the budget. They have been working together until present as two separate entities since 1998, continuing to attract projects and profits. Morgan, being able to give inputs on local market, and Vinci Grand Projets contributing from experience of expertise in the global scene, surely and favourably landed the latter company in a position to to harvest growth opportunities in their company.

Secondly, by specializing and investing on Energy, Exceptional Buildings, Hydraulics, Major Facilities, Real Estate Development and Transportation, the Grand Projets has proved that they hold the highly technological niche in the design-build industry.

The current economic downturn has decreased the demand for projects. It made revenues for this company declining for the last two years. Seeing this threat, the whole organization was still able to spring back against this by maintaining its position in delivering quality products and services because it had strong international technical experience that it seems the market relies on them for these special projects which they are currently contracting on. There is a continuing downward trend in 2010 but this company at the meantime remains vigilant to these threats, it is on the constant lookout for competition in its services and products. It is a strong company as it is able to improve productivity by having an effective management operation system. Further, it has made efforts to provide training for employees to develop skills, encourage innovative minds, competitiveness and strengthening their business model and its position in the industry.

1.3 Evaluation of the Success of Operations Objectives in Meeting Organizational Objectives

VINCI Construction’s objective is overall performance. It measures success on more than just economic and financial results; success is also judged in terms of social responsibility, solidarity, the environmental value of projects and response to the expectations of users and the broader community. (http://publi.vinci.com/vinci_construction/2009-vinci-construction-annual-report.pdf)

Values of Vinci Construction Grand Projets:

Excellence

We aim for excellence in the design, construction and financing of major projects. Maximising client satisfaction while respecting the environment is the essence of all our actions, from the most simple to the most highly technical.

Employee recognition

Our greatest asset is the men and women we employ. They work as a team, towards the same goal. Our company trains, listens to and communicates with its employees, and makes a point of recognising the contribution of each of them.

Safety

We do not believe accidents are inevitable. We take every possible step to make our sites safe places of work. Our policy: “zero accidents”.

Individual responsibility

The men and women working on our projects enjoy a wide measure of autonomy and have all the means they need to do their job. In return, we expect loyalty and transparency.

Innovation

Since every project is unique, we harness our creativity to find customised solutions that meet even the most complex requirements of our clients and the end-users.

Profit

Our company’s culture of profit, which is shared by all, ensures the continuity of our business and underwrites our long-term commitment to clients. (http://www.vinci-construction-projets.com/projets.nsf/en/mission-values.htm)

Because the operations management involves large scale decisions every minute of the operation, it is vital that the operations managers of an organization such as Vinci Construction have a set of general principles that guides them in decision making process. This is the operations strategy or the overall set of activities and decisions that creates the role and objectives of the operations. This is needed so that it can contribute to and support the organization’s corporate and business strategy.

The above values are used by the operations management of Vinci Construction Grands Projets to ensure that it contributed effectively to the corporate strategy. It does so by translating strategy into the operational objectives which is overall performance. It has made sure that it has identified the importance of such objective, focused on it and delivered it well. Excellence, Employee Recognition, Safety, Individual Responsibility, Innovation and Profit are Values to guide their daily operations objectives.

At the Grands Projets functional operations level, reaching the objectives means building on time, on budget and on quality while assuring added value, all of which they have consistently achieved. Because the operations are mainly design and build and per project basis, the operations objective to achieve its organizational objective should include plans that state a clear purpose, measurable expected outcomes, fall back plans in the event the primary plan cannot be implemented, costs and benefits. Although the detailed operational strategic plans of all operations will not be discussd on this paper, Grand Projets have organized it in such a way that no matter how mobile and unique each project may be, and even being an integrated model group, the operations have effectively carried out its daily functions by being flexible, adapting to varied situations or activities to provide unique treatment to customers and even coping to unexpected outcomes or problems in the operations. By minding quality, their project operations are done the right way, by not making mistakes and by not creating defective products or services. By doing things fast, the company hand outs the project on time increasing the availability of its services to customers, making them dependable. This company has taken into consideration that costs of projects means not doing things cheaply but giving good value to customers while keeping the budget and providing the expected level of return of the project. By minding its social and environmental responsibility in its operations, it has proved that its objectives are well on track to drive the organizational objectives.

For example, their “zero accident” policy goes in line with the company’s social responsibility and the assurance of safety for all employees involved in the construction operations. A considerable input on part of operations management is allotted to accident prevention and safety. The operations strategy includes 15-minute safety meetings, accident-prevention competitions, analysis of accidents and near-miss incidents, etc. This is even more offered not only to direct employees but also to subcontractors and temporary worker recruit companies. For the past five years, the number of occupational accidents had trim down by about 35%. This is just one of the many operations tasks of helping fulfil the organizational goals discussed in Task 1.2.

Task 2

DESIGNING AND MONITORING APPROPRIATE SYSTEMS TO ENSURE QUALITY OF PRODUCT SERVICES

Resources, Tools and Systems Required to Support Business Process

A process is defined in ISO 9000 as a set of interrelated or interacting activities which transforms inputs into outputs and goes on to state that processes in an organization are generally planned and carried out under controlled conditions to add value.

A business process is a set of coordinated tasks and activities, is conducted by both people and equipment, that will lead to accomplishing a specific organizational goal.

Business process of this organization implies a strong emphasis on how the work is done within an organization in realizing a goal. The process is a specific ordering of work activities across time and place, with a beginning and an end, and clearly defined inputs and outputs. It uses resources and tools. It creates value of some kind for the customer.

The Resources of this company is categorized into two; Operational divisions and Support Divisions. The Operational Divisions are the business lines or geographical areas, Project managers, construction managers, Q & A managers and commercial managers. The Support Divisions are engineering, human resources, quality-safety environment, finance, legal and communication. These teams provide services to the projects and are responsible for the implementation of business processes. The other crucial resources that support the business process are technology (technological requirements for operation, design resources and construction technology), machines, materials, money, customers and information within the whole operations.

The whole business process of Grand Projets is based on the company Manual which gathers the processes, procedures and guides enabling them to use their resources, tools and systems to reach their objectives and improve their operations. Systems are developed successfully to strengthen controls and followed in practice. It should have the following elements to support the whole business process; control system to produce a building which satisfies the client, produce a building where quality is related to price and to produce a building in which sufficient time is allowed to obtain the desired quality.

Implementation of Quality Audit Systems to Manage and Monitor Quality Standards

Quality in ISO 9000:2000 is defined as the degree to which a set of inherent characteristics fulfils the requirements. Quality is relative to what something should be and what it is. The something may be a product, service, decision, document, piece of information or any output from a process. (Hoyle 2007).

A specific management system is designed for each project during the preliminary phase of worksite planning that takes into account:

• Contractual obligations

• Legal and regulatory dispositions in the host country

• The nature of the work and risks associated with the project

• Constraints associated with the environment (human and natural)

• Special materials and equipment.

In 2000, bringing together the extended expertise of its constituent companies, VINCI Construction Grands Projets obtained ISO 9001, 2000 certification. In 2009, the certificate has been issued under the revised standard ISO 9001 : 2008.

In 2006, VINCI Construction Grands Projets obtained AFAQ certification for its health and safety management system in accordance with ILO-OSH-2001 (International Labour Office: Occupational Safety and Health), thus becoming the first large-scale French company to obtain this certification. Since 1999, the Northern Europe division within the “France – Europe – Americas” operational division has also been certified under “VCA LSC **” version 2004/04 by the AIB Vinçotte Group in Belgium.

The environmental management system in effect at VINCI Construction Grands Projets is in compliance with the stipulations of the ISO 14001: 2004 standard and is certified by AFAQ since 2004. It is audited every year as part of VINCI’s environment report. (http://www.vinci-construction-projets.com/projets.nsf/en/our-approach.htm)

Control system is a tool that is vital in this company’s project operations which is intended to control cost, risk, quality, communication, time, change, procurement, and human resources. This company has Quality Auditors who sees to it that the projects are important to the financial statements; they review the development process and business processes as a whole including procedures for how these are implemented. Quality assurance are the planned and systematic actions focused on providing the members of the operational team the confidence that components are designed and constructed in accordance with applicable standards and as specified by contract. Quality control is the review of services provided and completed work, together with management and documentation practices, that are geared to ensure that the project services and work meet contractual requirements. This contractor’s quality assurance programme includes all activities to assure quality including selection of subcontractors, training of the workforce, use of proper methodology and various testing activities. Quality control is one aspect of quality assurance, the aspect that reviews work done to determine whether it conforms to requirements (this is the monitoring function) and brings it into conformance if the examination identifies the defects (this is the control function).

Vinci has subscribed to Total Quality Management philosophy and their QA/QC control programmes derived directly from its basic tenets. It relies on a cooperative form of doing business that uses talents and capabilities of both labour and management to continually improve quality and productivity using teams with the ultimate goal of delighting both internal and external customers. It goes beyond statistical techniques for measuring and controlling quality as it includes a management philosophy and approach that goes beyond these techniques.

To alleviate construction quality problems and assuring quality performance by construction contractors is certification by the ISO (International Organisation for Standardisation). Vinci Construction Grands Projets obtained the ISO 9001:2008 as an organisation that design, produce, install and service products. The certification process requires the organisation to develop and implement a quality system that meets several guidelines in topics such as management responsibilities, contract review requirements, purchasing requirements, control of quality records and training requirements. An accredited external auditor then evaluates this organization’s system’s effectiveness and when approved, the organisation will thus be registered as ISO certified.

A big part of their responsibility asides creating financial returns is its environmental responsibility. The environment resources are directly of use to their projects, from soil, timber, minerals, oil or gas. Operations Management work in line with implementing Quality and Safety Policies and Environmental Policies to guide project operations.

Vinci Construction Grands Projets’ environment management system complies with the requirements of the ISO 9001:2000 quality standard, ILO OSH:2001 safety standard and ISO 14001:2004 environment standard. Each year, it is certified by AFAQ-AFNOR Certification.

As they are committed to health and safety prevention as well, they have used Capability Assessment Toolkit assessment which is an excellence model used in the U.K. based on criteria set by European Foundation for Quality Management. They are involved int the UN Global Impact, respecting the 10 principles to human rights, labor laws, environment protecting and the fight against corruption.

Importance of a Quality Culture to Ensure Continuous Monitoring and Development of the Process

Policies on Quality has shaped the business process within the design- build operations of Grands Projets. Promoting quality and quality awareness is strongly called for by operations management and that it is leading and implementing the process to continuously improve its efficiency in order to contribute to the satisfaction of its clients, employees, partners and sub-contractors. The whole organization is committed to support for example, Quality-safety-environment approach and convey it with conviction to his colleagues, to communicate this policy to sub-contractors and to make sure there is an adherence to it, to provide each team members to actually implement this business process approach on quality, to record and analyse shortfalls and deviations in order to prevent causes and to inform on and help promote innovations and good practices on this matter.

Part of their approach is monitoring employee satisfaction and monitoring customer satisfaction. Grand Projets regularly conducts surveys that target all customers or clients. This is also essential in promoting trust and open communications. This has helped the management in detecting strengths and areas on which needs improvement.

To in fact ensure continuous monitoring and development of the process, quality awareness is recognized and awarded by creating Innovation Awards Competitions , a core of their strategy and management. It aims to recognize and promote its employees original solutions in the projects such as materials, processes, techniques, equipments, management, sustainability, safety and dissemination. The purpose of the competition is to create a state of mind which allows the employees in the front line to progress in terms of quality, safety, lead times and respect for the environment.

In fact in one of the most recent Innovation Awards, Vinci Construction Grands Projets was awarded the Safety prize for which they used film shot on location at worksites to raise awareness among employees about risky workplace and risks associated with on-site behaviour. This won them the award because of the effectiveness and true innovation of the approach which was done globally and adapted to local needs. When people work safely, they can better push quality products and services. Promoting quality and safety means being able to maintain one’s livelihood and keeping business. This is one process of monitoring operations work in line with the objectives and that results of such would detect of any need for further development of the operations process.

Task 3

Improving Organizational Performance

Current Performance Systems and Work Activities of the Organization and Problems and Opportunities for Improvement

Vinci Construction Grand Projets has always strived for a “zero fault” level of performance through the implementation of internal control systems by management crew and independent auditors. The Quality Management System of this company has made it to being one of the most effective companies in the design- build contracting industry. They have lived up to their customer expectations in giving the requirements set out by their clients. Their main approach on quality is increasing quality awareness among its employees and its suppliers and subcontractors. Their policy is focused on client satisfaction and the desire to guarantee a long standing quality in all the projects that they will be undertaking. The external recognitions and progress in implementing the tools used in Quality Management in their operations have helped the company to improve the organization as a whole and enables them to continue to enrich their operational plans.

One of the many operations that is vital to the design and build operations is the Procurement operations. Their purchasing policy complies with quality, safety and environmental management systems and well as promoting to procure only of sustainable products and materials. To do this, they assess suppliers and subcontractors to ensure they meet the requirements, procure timber from approved sources, seek alternative materials incorporating higher proportions of recycled materials, specify materials that require special alteration prior to installation to minimise waste, use materials which can readily be reused or recycled when they reach their end life, continually reduce their vehicle fleet’s carbon dioxide emissions by encouraging uptake of less polluting vehicles, at all times consider the energy efficiency of plants, equipments and materials and ensure that whatever service or material they are purchasing, that it will be legal, ethical and in accordance with client requirements.

Staff involved in this operation may need special training to be able to support such tasks. As Grands Projets work globally, they may be working in multicultural settings which can pose as a problem at times. The delivery and flow of information must be developed in such a way that all necessary information regarding procurement policies be communicated properly and thoroughly taking into consideration the language and culture differences. With Grands Projets, they have appropriate HR training focused on core-skill management and languages. Training then is offered in various areas either through external suppliers or through learning modules offered by in-house experts from all departments. This enhances motivational practices for teams at worksites who are working and collaborating with different cultures.

Recommendations on Improvement on Goals and Objectives of the Organisation Resulting in the Reduction in the Variation Between What Customers and Other Stakeholders Want and What Products, Processes and Services Deliver

Since their objective is overall performance, the understanding of Client’s need of quality products and services should be brought up even to the lowest level in the organization so that time, cost and technical performance attributes to achieving quality be as widespread as possible. This should be spread over the whole organisation including temporary workers and subcontractors who themselves may have a system of their own. It must be taken into consideration that on-site management of a construction project involves great amounts of paperwork, even for small projects. The purpose of this is to communicate directions, questions, answers, approvals, general information and other material to appropriate members of the team. The dissemination of important information has a ripple effect on the overall performance objective.

The proper and effective transmission on knowledge of goals and objectives in a construction industry is vital to delivery of what Clients need. Information may be in electronic form and thus computer based approaches to the organisations and management of all project communication and documentation be developed in a way that all who participate in the operations be able to make optimum use of such. A collaborative web based or online means for facilitating of all relevant communication like procurement, technical submittals, commercial documents, memorandums, approvals and contract specifications which form part of all information needed for the very existence of the construction business. Ineffective document and information control can contribute to delay factors. Ease of communication in the whole organization should be recommended for such an organization which deals with major complex civil engineering and building structures. Therefore, there should be constant auditing of quality systems for the dissemination of information to drive the organisation’s strategy which is to facilitate communication of all relevant information among the head office and the on-site project team and between clients and subcontractors.

Evaluation of the Wider Implications of Proposed Changes Within the Organisation

Decisions by heads of functional departments-estimating, buying, plant etc and decisions by managers of construction projects often impact on the whole business since individual projects represent a large proportion of a building contractor’s turnover and profit. Their decision to allow all staff in the organization to have access on online information system or a computer based approach to the flow of information would benefit the company. Resistance to such decisions would be based on whether these systems would be costly and appropriately used. On site workers may not have the time to leave site and undergo training. Managers may not see the full benefit of access to information. Too much unorganized information presented to managers can result in confusion and paralysis of decision making which makes managers think that subordinates may not be able to handle such information even better.

3.4 Plans, Implementations and Evaluation of Changes within the Organisation

The goals should determine how relevant information be transmitted. This company has an effective information control procedures which have already been used and has contributed much to achieving their goal. It would just be recommended that these procedures need not be complex for those who may not have extensive training to use such information system. Therefore, managing information, the reliance on electronic data correspondence increases the need to continuously update data and information control. Failure to maintain adequate information control can result in huge financial risks. Poor or missing information can readily lead to project delays, uneconomical decisions, or even the complete failure of the desired facility. Training for using and understanding of the information control technology and any computer applications should be widely encouraged. Training is the heart of quality improvement and so improvement techniques should be provided to help work towards the very basic objective of overall performance and the elimination of errors by the use of an effective information system that can be used by all employees who a play part of the organisation, including subcontractors and internal customers/suppliers. A procedures manual should be distributed for controlling flow of information. Functionality should be implemented, ensuring information is available to the right people when they need them. Therefore, effectively managing the bulk of information to ensure its availability and accuracy and its transmission within all levels in the organisation to bring about delivery of quality of goods and services is a big task of the operations management. The flow and control of information is as important for the collaborative working environments of Vinci Construction Grands Projets and the whole of Vinci integrated business models. This is because many of the employees work on different aspects of a project and information sharing is crucial in operations decisions.