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Vector’s Engineering &amp; Construction consulting practice, offers tailored solutions for Engineering, Procurement and Construction (EPC) companies, enabling them to identify and address constraints in project execution and operations that may hinder their sales growth and profitability.&nbsp;By implementing a unique Flow Management approach in its consulting assignments for construction projects, Vector has enabled clients such as Skipper Ltd., Bajaj Electricals (Engineering &amp; Projects Division), Godrej (Electricals &amp; Electronics Division), Tata BlueScope Steel Ltd., and KEI Industries Ltd. to complete projects ahead of schedule while increasing the number of projects executed within the company's allocated operating expenses.

An Engineering and Construction (EPC) company’s ability to grow and sustain sales and profits is limited by constraints in Project Management and Sales.

Consulting Services for Engineering and Construction Businesses

The growth of project organizations dealing with turnkey projects involving engineering, procurement and site construction has slowed down despite healthy demand because they operate in a highly uncertain environment (ROW issues, bureaucratic hurdles, etc.) Find out how companies can not only manage but also flourish in spite of these challenges.

Industries

Engineering & Construction

We have partnered major names in the EPC industry to create and implement radical solutions which have redefined industry benchmarks. These include:

Clients

Client Speaks

A. Erecting and commissioning Transmission Tower (TL) is among the most complex projects environments. Towers are erected across vast geographical expanses, many times on private land; often these projects can be derailed by legal hurdles. In addition, there are conflicts between how the manufacturing plant can supply the materials required and how the engineers on the site want to erect the towers. It can get further complicated with the involvement of customers (Government bodies or PSUs) who play a major role in execution. (They supply part of the material; every major step in execution like creation of BOQs, material dispatch etc., requires customer inspection and approval.)

Q. What are the challenges of managing projects in your environment?

A. Earlier, we managed projects to meet monthly and quarterly turnover targets. This meant poor subordination to site requirements. Therefore, we switched focus to overall project flow. We were richly rewarded with high turnover. For example, previously we prioritised large batches of ‘A’ type towers over other material. These towers are easy to make and are good for turnover (in the short term). However, eventually we saw that this wasn’t serving the interests of the project as whole. For fast stringing, what the site needed was an assortment of towers. We had to shift gears. It called for dramatic changes in manufacturing, procurement, and management thinking.

Q. What key paradigm changes were implemented?

A. We began implementation in April 2012 with Vector Consulting Group as our consulting and implementation partner. Yes, it was an arduous journey because we had a high number of open projects with severe delays and overruns. We had the challenge of closing all the old projects, and simultaneously, bringing in proper processes for new projects.
Closure of chronic old projects inevitably led to extra expenses and write offs. The Projects division almost wiped out the profits earned by other departments of the company. We had to bite the bullet. We closed a record number of sites in a single year. At the same time, with the help of Vector’s consulting services we put in flow processes for new projects. Today, every new project is well ahead of schedule. Power Grid has recognized us as the best in project execution in category of TL tower projects unto 765KV.

Q. Was the implementation journey difficult?

A. In the last two years, we have focused on flushing out old projects. So profits have taken a beating. The portfolio has been getting cleaner with new projects. This should translate into better profits next year. On the top line, we are growing by more than 75 percent. Working capital has more than halved. Next year this will improve further.

Q. When do you expect operational results to translate into financial results?

A. We realized that when your own house is in order, it is much easier to control external variables. For example fast execution reduces chances of legal issues cropping up at the site. (The site does not remain open for too long which means the window is much shorter for any legal trouble to crop up).

Q. How did you handle external conditions?

Engineering, Procurement and Construction (EPC) organizations that take up turnkey projects (involving engineering, procurement, and site construction) operate in highly uncertain and risky environments. To execute these construction projects, EPC organizations require coordination and cooperation among many stakeholders, such as state-owned companies, individual landowners, contractors, and so on. What's more, they even may need the weather to be on their side!&nbsp;In addition to external uncertainties in an EPC environment, internal aspects such as delays in the arrival of designs and the staggered arrival of the large variety of materials needed for each construction project create de-synchronization. Often, work at the project site is force-started without complete drawings or materials. Frequent interruptions and inadequate resourcing by contractors add to the delays in EPC projects. Eventually, these construction projects are prematurely commissioned (despite a 'tail' of incomplete tasks and billing). These incomplete-but-commissioned projects are unfavourable for both parties. They tie up valuable resources of the EPC company. At the same time, customers of these projects have to contend with long periods of low performance (as compared to initial specifications).&nbsp;&nbsp;Most EPC projects in the country suffer these chronic delays despite investment in 'planning-heavy' solutions and expensive project management software to manage external and internal uncertainties better. This is because none of these project management solutions addresses the key challenge: 'How to manage resources and projects DESPITE an environment of high uncertainties?'&nbsp;Vector’s Engineering &amp; Construction consulting practice has helped Engineering, Procurement, and Construction (EPC) companies in enhancing project efficiency, resulting in faster completion times. This achievement is possible even amidst inherent environmental uncertainties, thanks to the effective alignment of materials, design, contract labor, and issue resolution throughout the construction process. Know more about Vector's suite of solutions for engineering, construction and procurement projects:&nbsp;&nbsp;

Project Operations

Engineering, Procurement and Construction (EPC) organizations that take up turnkey projects (involving engineering, procurement, and site construction) operate in highly uncertain and risky environments. To execute these construction projects, EPC organizations require coordination and cooperation among many stakeholders, such as state-owned companies, individual landowners, contractors, and so on. What's more, they even may need the weather to be on their side!&nbsp;In addition to external uncertainties in an EPC environment, internal aspects such as delays in the arrival of designs and the staggered arrival of the large variety of materials needed for each construction project create de-synchronization. Often, work at the project site is force-started without complete drawings or materials. Frequent interruptions and inadequate resourcing by contractors add to the delays in EPC projects. Eventually, these construction projects are prematurely commissioned (despite a 'tail' of incomplete tasks and billing). These incomplete-but-commissioned projects are unfavourable for both parties. They tie up valuable resources of the EPC company. At the same time, customers of these projects have to contend with long periods of low performance (as compared to initial specifications).&nbsp;&nbsp;Most EPC projects in the country suffer these chronic delays despite investment in 'planning-heavy' solutions and expensive project management software to manage external and internal uncertainties better. This is because none of these project management solutions addresses the key challenge: 'How to manage resources and projects DESPITE an environment of high uncertainties?'&nbsp;Vector’s Engineering &amp; Construction consulting practice has helped Engineering, Procurement, and Construction (EPC) companies in enhancing project efficiency, resulting in faster completion times. This achievement is possible even amidst inherent environmental uncertainties, thanks to the effective alignment of materials, design, contract labor, and issue resolution throughout the construction process. Know more about Vector's suite of solutions for engineering, construction and procurement projects:&nbsp;

delivery of EPC projects

Near

reduction in working capital deployed

Upto

release of capacity in departments

improvement in profits

improved return on capital employed

increased sales project delivery for sensitive customer segments

When EPC projects are completed faster, the sales team has to source more project orders (or bid and win more orders) to leverage the EPC company's released project execution capacity. This is a time-consuming exercise and often involves engaging with prospective customers at an early stage (even before the specifications are defined or bids are floated). The sales team's ability to expand its efforts in the market is restricted when its bandwidth is taken up by execution, coordination, and documentation-related activities of existing EPC projects, such as design submission, collection coordination, procurement coordination, etc.&nbsp;With the help of Vector’s Engineering &amp; Construction consulting practice EPC companies can increase the bandwidth and effectiveness of the sales team.

Sales

increase in overall sales

More than

Efficiency to maintain adequate order backlog without dropping prices

Improved quality of customer servicing

Ability to intervene in early stages of the customer ordering process

Stable or improved market share

The health of EPCs is best assessed not by studying their turnover growth but by analyzing the flow rate of projects into the company. A comparison of the cumulative curve of new project orders in the system and completed projects would reveal that there are three stages in the evolution of an EPC (see graph). In the green stage, an EPC company can maintain the project completion rate in line with the rate of starting new projects. On the other extreme is the red zone, in which the EPC company continues to open new projects even as previously opened projects remain incomplete. A project management company approaching the red zone can show turnover growth. However, severe margin losses (during project execution) and ballooning receivables can together restrict the entry of new projects (by high margin pricing) and shackle the company’s focus on closing older projects. A standalone small or mid-size EPC company can get wiped out in the red phase!&nbsp;&nbsp;Perform a comprehensive diagnostic assessment of your company using this specialized test developed by Vector Consulting Group, tailored for engineering, construction, and procurement (EPC) firms. This assessment will help you evaluate your business and provide you with practical and effective project management solutions.&nbsp; &nbsp; &nbsp;

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Ba Diagnostics

The health of EPCs is best assessed not by studying their turnover growth but by analyzing the flow rate of projects into the company. A comparison of the cumulative curve of new project orders in the system and completed projects would reveal that there are three stages in the evolution of an EPC (see graph). In the green stage, an EPC company can maintain the project completion rate in line with the rate of starting new projects. On the other extreme is the red zone, in which the EPC company continues to open new projects even as previously opened projects remain incomplete. A project management company approaching the red zone can show turnover growth. However, severe margin losses (during project execution) and ballooning receivables can together restrict the entry of new projects (by high margin pricing) and shackle the company’s focus on closing older projects. A standalone small or mid-size EPC company can get wiped out in the red phase!&nbsp;&nbsp;Perform a comprehensive diagnostic assessment of your company using this specialized test developed by Vector Consulting Group, tailored for engineering, construction, and procurement (EPC) firms. This assessment will help you evaluate your business and provide you with practical and effective project management solutions.&nbsp; &nbsp;

Diagnostics

Vector Consulting Group offers consulting services to engineering and construction companies to enable business growth and sustenance of profits, by developing high speed project execution capabilities.

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