1.0EXECUTIVE interesting acquisitions by SNC-Lavalin. Facing many
1.0EXECUTIVE SUMMARYBeing one of the leading groups of engineering and construction companies in the world, SNC-Lavalin is one of the most exciting and stimulating companies to read about. Having offices across Canada, U.S.
, and in 30 other countries is just a small dose of their interesting attributes. Throughout this paper, the reader will understand the relevant steps and activities taken by SNC-Lavalin on a daily basis and on all projects. Having an innovative advanced management system and interesting projects around the world that involves revenues that total over $3 billion for 2003 are just a few traits that will capture any reader’s interests about a company. Having part ownership of the world’s first all-electronic, open-access toll highway (Highway 407) is just one of the interesting acquisitions by SNC-Lavalin. Facing many expenses and still being able to gain a profit year of after year by such a large company is an achievement in itself. Reading such a report can only enlighten many in the endeavour’s in which they would like to pursue.
Such a reputable Canadian company can only encourage entrepreneurs to reach for the stars in their business endeavour’s. Learning about how a Canadian company achieved such a position in many of the industries can only encourage readers to work harder for their goals. After reading this report, you will gain an in depth understanding of the operations that go on every day at an inspiring world leading engineering and construction company. 2.0INTRODUCTIONSNC-Lavalin is one of the leading groups of engineering and construction companies in the world, a global leader in the ownership and management of infrastructures, and a key player in facilities and operations management. The SNC-Lavalin companies have offices across Canada, in the U.
S., and in 30 other countries around the world and are currently working in some 100 countries. The SNC-Lavalin subsidiaries provide expertise that covers all stages of a project’s work plan, from the pre-feasibility study and financing, through the engineering, procurement, construction and management, to instrumentation, commissioning, operations and validation. They provide services to a variety of industry sectors including agrifood, biopharmaceuticals, chemicals and petroleum, defence, environment, heavy construction, mass transit, mining and metallurgy, telecommunications, industrial and manufacturing, power, and water management. SNC-Lavalin offers its expertise on a fee-for-service, turnkey or lump sum basis.
It also offers internationally sourced project financing and equity investments for Build Own Transfer (BOT) and Build Own Operate Transfer (BOOT) projects, as well as privatization, including infrastructure management and day-to-day operations. SNC-Lavalin is a world-class player in the business of public-private partnerships, as demonstrated by its part ownership in Highway 407 near Toronto, which is recognized as one of the most successful road concessions in the world. Highway 407 is a critical component in the Greater Toronto Area highway network serving as a bypass and commuter route. Highway 407 is the world’s first all-electronic, open-access toll highway.
SNC-Lavalin has set the pace for technical innovation in engineering design and implementation with its multi-purpose Project Management System (PM+). It is a totally integrated database which covers all facets of a project, from initial planning to final commissioning, in one seamless package. The company uses 3D computer-aided-design and other standard technology.
SNC-Lavalin has built a proven track of worldwide reputation for delivering projects on time and on budget. Founded in 1911 and active internationally for over 40 years, SNC-Lavalin’s business units worldwide are autonomous and have access to global resources needed to assume total responsibility for every aspect of a project. 3.0ENVIRONMENTAL BACKGROUND”Concern for the environment and communities in which it operates, and a commitment to the safety and well-being of its people are key corporate values for SNC-Lavalin” 3.1 External EnvironmentSNC-Lavalin’s operations strategy consists of several key elements: oBuild on its recognized expertise in its core sectors and develop new expertise in technical fields with promising growth opportunitiesoUse its financing capabilities to enhance its competitiveness in major projectsoUse its technical expertise and financial capabilities to develop and acquire infrastructure concessions with solid fundamentals and potentialoContinue to leverage the international network it has built up over nearly 40 yearsThe construction industry is a seasonal industry in the sense that during the spring and summer months, SNC is much more productive and profitable. Due to union regulations and occupational health and safety regulations, SNC-Lavalin must have a continued commitment to all unions and there stipulations. For example, during the winter, all construction premises must be isolated from the outdoors if the temperature is below 2 degrees Celsius.
The wind must be blocked with reinforcing panels and these evident areas need to be heated with portable heaters. These measures obviously increase expenses and therefore take a portion of the profit. The company does take into consideration these measures while bidding for the project, but most times under estimate these measures because of the unpredictable and inclement weather. Because of such measures, SNC-Lavalin has developed a risk management department. They have developed and applied rigorous risk assessment, mitigation and management practices to reduce the nature and extent of the financial, technical and legal risks under all contractual agreements. SNC-Lavalin’s operating efficiencies combined with a culture of financial performance accountability among its work force, have permitted the corporation to achieve sustained results for over a decade.3.
2 Internal EnvironmentThe construction-engineering business is highly competitive. SNC-Lavalin is one of the worldwide leading groups of construction-engineering companies and, within each industry sector, competes with one or more Canadian or international firms that concentrate on that particular industry. Such competitors are AMEC, Bechtel and PCL. Domestically, construction-engineering firms compete primarily on the basis of price, the proposed project staff and the experience and size of the firm. As the leader in Canada, SNC-Lavalin has a competitive advantage in obtaining contracts for large capital projects because they most often successfully meet all above requirements and always meet the customer’s needs and wants. They have developed a reliable, honourable and dependable relationship with their customers which stems out to perspective customers.
Their reputation and quality on time work has established them as a world leader. Their suppliers have yet to express any problems with their delivery of payments. SNC-Lavalin has a great association and connection with their suppliers that dates back many years. 4.
0ORGANIZATIONAL ANALYSIS4.1 Goods and Services DesignThe services design of SNC-Lavalin is to maintain and strengthen its core engineering business, to develop new skills and activities, and to respond to the changing needs of clients and markets. The policy of SNC-Lavalin is to achieve client satisfaction through the careful management of their work processes, with due attention to value creation through scope, schedule, cost control, and with emphasis on safety and the environment. Their contracts and order handling move from bid to delivery to site in a efficient and timely matter.
Not only do they provide engineering services but they also provide manufacturing services. Therefore SNC-Lavalin provides both intangible and tangible attributes. They provide a service through their engineering department and provide a good through their manufacturing department.
What makes SNC-Lavalin so successful is the integration or collection of both of these attributes. Through such techniques as computer-aided design (CAD),computer-aided manufacturing (CAM) and Pert Networking charts help to make the production effective and understandable for all. A key component of SNC-Lavalin’s design stage is the implementation of manufacturability and value engineering activities.
This significantly helps to improve job design of prevailing projects and the job safety at these projects. Another key component of their service design or manufacturability is by using an engineering drawing. All projects involve this drawing.
It is very important to complete and show what the customer wants and it shows how to achieve that. By implementing and involving such designs and steps, SNC-Lavalin has developed a rapid response to changing consumer demand.4.
2Quality Management Quality at SNC-Lavalin means satisfying clients on each and every project and mandate we execute. It is the policy of SNC-Lavalin to achieve client satisfaction. Quality is an integral part of every aspect of the business. The head of each business unit or a functional or support unit is empowered to develop and implement a Quality Management System (QMS) specific to the line of business.
Refer to Appendix 1 for the Hierarchy of the Quality System. A quality plan shall be developed for every project or mandate based on the business unit QMS. The quality plan shall address the specific needs of the client, key technical features, execution measures to ensure success and a monitoring plan to deliver results. It also incorporates methods to obtain feedback from the client during project execution for measuring and monitoring client satisfaction. Monitoring of quality plans focuses on the application and improvement of work processes and methodology. At the completion of each project, all information will be taken in and documented by the project manager and disseminated within the business unit.
Because of this, each department will develop a continuous improvement program, focusing on the improvement of work processes and its own QMS. To have the highest respect for clients, shareholders, and the communities in which SNC-Lavalin works, all of there programs are on the applicable requirements of ISO 9001 International Standard for Quality Management Systems. 4.3Process Design and Capacity PlanningBeing one of the leading groups of engineering and construction companies in the world, many would assume that SNC-Lavalin would have problems meeting all the demands of their clients and perspective clients. SNC-Lavalin has yet to turn down a project due to over capacity. SNC-Lavalin maintains this through developing a stable client base with significant repeat business and with the tremendous help of their leadership in project management capability, supported by state-of-the-art project management system. SNC-Lavalin’s PM+ or project management system is based on totally-integrated databases.
It covers all facets of a project, from initial planning to final commissioning, in one package. PM+ allows authorized parties both on-site and remote access to a cumulative database of project information. Through such patented technology, SNC-Lavalin can easily manage any process and meet all requirements of their clients.
4.4 Location Selection SNC-Lavalin has been active internationally for 40 years and has established a dedicated international division, with a network spanning every continent. Its multidisciplinary, multicultural and multilingual team ahs firsthand knowledge of the cultures, customs and geography of the countries in which it operates. By deciding to create an office in other countries, any company would face prevailing multicultural and multilingual problems. So, in order to solve this problem, SNC-Lavalin acquires or purchases other companies within those countries.
The SNC-Lavalin companies have offices across Canada, in the U.S., and in 30 other countries around the world and are currently working in some 100 countries. With so many companies they have easy access to global resources needed to assume total responsibility for every aspect of a project.
Before acquiring such companies SNC-Lavalin goes through an extensive research phase. It decides whether the company has a reputation that accompanies SNC-Lavalin’s and whether their company is producing at a rate that is acceptable and obviously profitable. They also look at whether the company is situated or in proximity to suppliers and markets. By purchasing such companies and creating new divisions, SNC-Lavalin is slowly diminishing all competition. 4.5 Layout DesignMaterial management within SNC-Lavalin is a key to the layout design of their warehouses. Their layout design allows for quality surveillance and shop inspection, shipment verification and certification, transportation and customs administration and shop surveys.
With an effective layout like this, it is not a surprise that SNC-Lavalin is so successful. On all project sites they have a fixed-position layout, meaning all trades within the site is assigned a space for various time periods. Weekly or bi-weekly, all trades come together in a meeting to discuss space assignment and other upcoming events. Their layout design is resolved prior to the beginning of all projects.4.
6 Human ResourcesSNC-Lavalin has over 6,000 employees in offices around Canada and in some 30 countries. In order to fully utilize all employees, SNC-Lavalin has complex work schedules and employment stability policies. SNC-Lavalin holds employment constant. They have a great relationship with employees and provide great incentives to employees. They empower employees to take initiatives and assume responsibilities. They provide career opportunities to employees in a challenging and rewarding equal-opportunity work environment. They assure the development of the technical and managerial know-how of our employees to remain at the top of the industry sectors.
They also encourage share-ownership by employees. Therefore, all employees at some time gain job enrichment and employee empowerment. Some jobs within SNC-Lavalin are specialized but many employees encounter job expansion. For example, labourers must be able to carry out many tasks. They must be able to work with concrete and at the same time be a well rounded carpenter.
Within the office, SNC-Lavalin looks for a well rounded education with a university degree. If a certain individual acquires a specialized degree or designation, for example, CA (chartered accountant) than a position within the office is available at all times. Employees do not stay in the same position for long; SNC-Lavalin urges and motivates employees to move within the corporation with incentive systems. This enables and induces the employee to work harder which benefits SNC-Lavalin in the end. The work environment is always safe and complies with occupational health and safety regulations. SNC-Lavalin has an objective of zero accidents in the workplace and the elimination at source of any risk or danger.
SNC-Lavalin uses a Pert Networking chart to accomplish all tasks on time. This helps to depict when the task needs to commence and when it needs to be finished by (labor standards). This is an easy and efficient way to illustrate the sequences and steps involved in a project for all employees.4.7 Supply-Chain ManagementWith a vast amount of subsidiaries, SNC-Lavalin has accomplished the task of effective supply-chain management. SNC-Lavalin has acquired many of their suppliers as a division of their group.
By purchasing their suppliers and involving them into their group, SNC-Lavalin has bypassed any time consuming negotiation strategies. They have already created a long-standing trust with their suppliers, so any quality, delivery, payment and cost negotiations have already occurred and both supplier and receiving company have an understanding. All price negotiations occur prior to the bid of the tender. All costs need to be researched and calculated in order to accurately bid for a possible project.
By miscalculating, SNC-Lavalin may incur major costs down the road during or at the end of the project. SNC-Lavalin has a few supplier supply-chain strategy. They look to develop a long term “partnering” relationship with a few suppliers to satisfy the end customer. But at some times they may switch too a many supplier strategy depending on the project. If the project does not involve any supplies currently received by their suppliers, then SNC-Lavalin must request a quotation from many suppliers, with the order going to the low bidder.
Having a global supply and being a virtual company, SNC-Lavalin relies on just-in-time delivery of supplies. At certain times during the project, a supply needs to be delivered on time at the site. All known dates are previously displayed to suppliers with a comfortable amount of time to deliver items. Therefore, SNC-Lavalin works through a pull system in order to cut costs and deliver the completion of the project on time.
With a vast array of suppliers near many job sites, most of the manufactured goods or supplies are moved by truck. Depending on the complexity, technological expertise and size involved, any such good or supply needed to complete a project may be delivered at some times through the use of airfreight or railroads. What also must be looked at is the most cost effective way to delivering a supply, but at most times this is incurred by the suppliers. 4.8 Inventory ManagementFor over 80 years, SNC-Lavalin’s Global Procurement Group has met the current and future challenges of worldwide supply demands by providing efficient supply and delivery solutions to its clients and projects under a single point of contact and responsibility. With more than 350 procurement professionals located strategically around the globe in permanent offices in 30 countries, SNC-Lavalin Global Procurement manages client capital and project capital commitments for goods and services totaling more than Canadian $2 billion per year.
Today’s global supply market presents an increasingly costly challenge to end-users for the procuring, expediting, inspecting and transporting of materials and goods originating from the four corners of the world. SNC-Lavalin facilitates this process through its international network in the management of the end-users supply chain. In support of its proven project execution methodology, SNC-Lavalin uses a centralized, tailor-made computerized system which is accessible to all procurement locations and is capable of capturing and reporting on key data for each planned step, providing accurate information for rapid management decision-making in each phase of the procurement process. The system is linked to the SNC-Lavalin corporate database of supplier and contractor performance records. This system keeps the management of inventory always accurate and keeps ordering costs and lead time at a minimum. Inventory items like concrete bags and spray paint do not have any holding costs because they are always used and always needed at the projects disposal.
Items like these to a construction and engineering company are very important to have at all times. All other ordering costs are all accounted for during the bidding process. With all this in mind, SNC-Lavalin uses a perpetual inventory system. Track of all orders are kept on record continuously and always current.
4.9 SchedulingWithin all SNC-Lavalin projects, a master production schedule is created. They know at all times what is to be completed and when it is to be completed. Having over 6,000 employees, the scheduling of them is very important to the financial existence of the company and continuing to gain respect from their employees.
Trying to keep a level schedule or level strategy for employees is an ongoing work priority for every project. But what must be understood is that, an aggregate planning of employees is sometimes implemented and needed to keep costs down. Unfortunately, this may not be accepted by some employees, but it’s what the construction industry faces. The scheduling of employees, subcontractors and inventory is over most times an intermediate time range, depending on the size of the project. In order to work responsibly, the operations manager or site superintendent is a key to an efficient production. He or she plans the scheduling of employees and helps with the completion of any discrepancies in production by the subcontractors. 4.
10 MaintenanceSome of the many subsidiaries are allotted to the maintenance of the facilities or projects that are completed. SNC-Lavalin always keeps in close contact of their projects and clients. Maintenance is an integral part of SNC-Lavalin’s quality system.
They have a preventative maintenance program that involves routine inspections and servicing in order to keep a good relationship with long-standing clients. At least once in each calendar year, SNC-Lavalin will perform a review of each project or facility and evaluate its effectiveness and look for continuous improvements. With such measures, SNC-Lavalin is no surprise that they are a world leader in engineering and construction.
They look to achieve total quality for each of their projects. Depending on the project, SNC-Lavalin may implement a computerized maintenance system to help detect any problems (i.e.
problem and solution part). But with such a worldwide reputation, SNC-Lavalin is known to take care of their clients to the end and beyond. With well-trained personnel and reliable employees, it is uncommon that SNC-Lavalin will face any maintenance problems. By giving employees a sense of “ownership”, all production is completed to the fullest, with the outmost amount of care.
Well-maintained equipment is always followed by employees which in turn improves quality and performance. Because of such actions, SNC-Lavalin always produces to the specifications and is always on time.5.0 PROBLEM IDENTIFICATION AND SOLUTIONSNC-Lavalin builds large chemical, gas, petrochemical and pharmaceutical facilities and is facing process fugitive emissions. Chemical and petrochemical facilities include pipe work, reactors, distillation towers, exchangers and various other components which, theoretically are leak free.
In reality, gases are emitted to the atmosphere from equipment micro-leaks. These leaks are called process fugitive emissions. At a given plant, there are anywhere from a few thousands to hundreds of thousands of leak points from which tons of process gases are escaping into the atmosphere. The gas may be composed of volatile organic compounds (VOCs), contributors to urban smog, toxic or explosive substances, greenhouse gases (GHGs) and ozone depleting substances (ODSs), etc. In addition, process gas leaks are associated to economic losses since, in many cases, the gases have a high market value and are dangerous to the atmosphere and in turn our health. To solve this problem, SNC-Lavalin should either switch suppliers of the piping and various other components, which would be the least costly method, or they should implement some sort of software that detects any leaks and therefore facilitates the repair of process components.
This method would very costly, but in the end would be most cost efficient and could provide some profit to SNC-Lavalin by selling it to other facilities. It is very possible that other facilities are experiencing such difficulties and therefore a piece of software like this would be beneficial.5.0SUMMARYThroughout this report there are brief descriptions of the operations at SNC-Lavalin.
At sometimes it may be difficult to summarize the operations of such a large corporation, but during this report it has been achieved. The reader will be able to understand how one of the leading groups of engineering and construction companies in the world has achieved such a status. Through a brief analysis and explanation of the history, its competitors, its organizational management activities and an evident problem with its solution can the reader fully understand such a complex and active corporation. But being such an active and international corporation, such problems will and do arise. Such a problem in this report is the outflow of many potentially dangerous process fugitive emissions.
This significant and imperative problem and be solved by the either switching suppliers of the pipe work or various other components where there are leaks or to implement some sort of software to detect the location of any leaks so they can be repaired quickly. This major problem must be solved quickly and in a cost efficient manner. This report discusses the methods and activities involved in SNC-Lavalin in a professional, yet straightforward manner so all readers can grasp such an interesting Canadian company.