Turner Construction Company - Essay Example

?Turner Construction Company Turner Construction Company is regarded as one of the largest construction companies in the United s as well as theworld, as its construction volume hovered around $8 billion in the year 2010. (turnerconstruction.com). It is also regarded as one of the prodigious builders, as it has executed some of the well-known buildings or landmarks throughout the world. Turner Construction has contributed fully or sizably to the construction of the United Nations Secretariat building located in Manhattan, New York, the multipurpose indoor venue the Madison Square Garden, passenger terminals at JFK International Airport, LaGuardia Airport, the current world’s tallest structure, Burj Khalifa in Dubai, UAE, as well as numerous other commercial, industrial, and sports facilities. (companies.jrank.org). It was founded in the year 1902 by Henry Chandlee Turner with a start-up capital of $25,000 in New York City and one of its first jobs was to build a concrete vault for the Thrift bank in Brooklyn, value of which was only $600. From those humble beginnings, it started carrying out large scale projects both in the private and government sector throughout America, only pausing during the World Wars, when it diverted its focus in the construction of military camps and other government buildings. Tuner and his family members as well as representatives managed the company for close to 90 years, until 1999, when it was acquired by the German construction company HOCHTIEF Germany for $370 million. With the takeover by Hochtief AG, Turner Construction Company got access to majority of Hochtief’s operations in geographical territories like United Kingdom, Australia, etc., as well as to the clients in the heavy construction field. Thus, it is operating as the subsidiary of HOCHTIEF in over 40 countries, employing around “6,000 internal employees and tens of thousands of subcontractors working on up to 1,500 job sites at any given time in 30 states and multiple countries.” (Whitney 2007). Operational areas The construction industry is an important industry in the service sector, as it involves lots of investments on the part of the construction company as well as from the clients. However, when its identity has a service industry is focused, it gives different perspectives. That is, according to some experts, construction industry comes under the manufacturing sector. As Valence (2010) states, as the construction industry provides services like management, coordination and other finances related activities, it has to be classified as a service industry. However, he (2010) further adds that as it also develops and delivers products like buildings and structures, it can be constituted under the manufacturing sector. Langford and Male (2008) validates this confusion by stating that although it is commonly known as a service industry, it is a misnomer to classify so because it comes up physical products in the form of constructions. However at the same time Langford and Male (2008) provides a balanced stance by stating that given the nature and diversity of activities carried out in the construction industry, it can be classified both as a service as well as manufacturing industry. When the service and manufacturing aspect of Turner is focused, it seems that Turner Constructions views itself as the service industry. Because, it is stated to offer “a broad range of construction services, including general contracting, construction management, project management, design-build, multiple building programs, maintenance services, planning and preconstruction and feasibility studies.” (morgan.experience.com). Although, it offers all the above services to clients in all sectors, however, starting from the recessionary period in 2008, it has restricted itself to focusing on certain sectors. That is, the Turner Construction “learned a tough lesson in diversification during the late 1980s and 1990s, when commercial contractors suffered from the overbuilding in that sector.” (Wood 2011). So, in that direction, Turner created its core competencies in a very broad range of sectors, by focusing on the institutional and government clients, and limiting its work in commercial as well as residential sector, thus emerging unscathed in the financial recession period and also touching good financial figures. Among the institutional clients, Turner mainly did projects for the Health care institutions and educational institutions. For example, “about 25% of Turner's work is in health care, and in the year 2010, it “began a $70-million expansion of St. Mary's Hospital for Children in Bayside, N.Y.; a $60-million Tisch Hospital upgrade at NYU Langone Medical Center in New York; and a $340-million facility for University Medical Center of Princeton in Plainsboro, N.J.” (Wood 2011). Turner Constructions continues to focus on these two sectors, because it is receiving adequate projects from these two sectors itself. Most of the new queries come from the previous and the existing clients, who want Tuner to accomplish their newer projects. Thus, with repeat clients representing around 75% of Turner's business in 2010, long-standing relationships in established markets seem to have “factored heavily into many of Turner's recent wins.” (Wood 2011). Turner Construction keeps pace with the current Construction industry upsurge thereby fulfilling the need for more buildings and other construction requirements. The Formal control and maintenance aspects of the composite relationship between Turner Construction and its customers start from the signing of the construction contract until the turnover of the buildings and equipment. As Turner Constructions takes care of all the processes from start to finish, its operational areas start from sourcing the materials from its subsidiary Turner Logistics, who source it from the suppliers through the supply chain, constructing the building through its in-house team as well as sub-contractors, quality checking, and oversee it till the finished building is handed over to the clients. After the contract is signed, it was Turner Constructions’ “responsibility to look for suppliers of the necessary materials and to provide the most accurate estimates possible of all cost factors, including materials and labor.” (Brown, Ikenberry and Herman 2009, p.23). Then when the time comes to initiate the building constructions process, they would bring in many subcontractors, providing particular sections of the project to complete. Even while the subcontractors start the work, Turner Constructions with its strong team of employees will play an active role, by overseeing the contractors’ work and importantly by coordinating with and quality checking them. “Turner was responsible for identifying them, assessing the adequacy of their skills to the task, and ensuring adherence to the construction documents and monitoring quality at all stages during construction.” (Brown, Ikenberry and Herman 2009, p.23). Although, the subcontractors carry out the ground works, Turner Constructions by taking the supervisory role determine the speed, quality and efficiency of the building process. This was pointed out by Patrick Aulson, the senior vice president of human resources, who stated, “On job sites, we have levels of superintendency that oversee subcontractors, safety and actually build the projects. In that family, they progress through purchasing, estimating, project management — you might become a chief estimator.” (Whitney 2007). When it comes to supply or value chain, the vendors and suppliers plays a major role, and Turner Constructions is association with Turner logistics optimally manage them incorporating various quality standards to successfully complete their projects. Turner Logistics, LLC is a wholly owned subsidiary of Turner Construction Company, and they only supply products or equipments to the subcontractors for the construction projects, after sourcing it from various suppliers and vendors. Turner Logistics supply the main products and that includes various mechanical as well as electrical equipments including chillers, cooling tower, generators, and switchgear, with additional products such as light fixtures and hospital equipment also added to the product line. (turnerconstruction.com). Turner Logistics adds value to the sourced product through aggregated purchases with major vendors and suppliers “and by eliminating inefficiency in the construction supply chain.” (turnerconstruction.com). The company takes a sole responsibility pose of the control and maintenance of construction and equipment delivery schedules. Even at the same time, Turner Constructions also coordinates with their customers’ own construction engineers in various projects, to get the clients’ expected results. The Turner’s Staff works side by side with staffs of the clients including their mechanical engineers, IT engineers, etc., along with its subcontractors in order to lessen the construction period and decrease cost to an allowable level. Communication is most effective and Turner is able to do that apt coordination with the staffs of the client. Turner Constructions organisational structure establishes a value chain for their products. The company focuses its attention on the construction of high quality buildings and offers other construction service to its clients, even while maintaining a good relationship with its suppliers. This makes its value chain a productive as well as effective process, as it generates value added services and solutions for its customers, even while improving the efficiency of Turner. Turner has over one hundred years of construction experience behind it. It has in –house experts who can easily fit customer’s needs with affordable high quality products. Also, the Turner Construction Company’s Facility Equipment Sourcing Solution along with Turner Logistics catapults it to a higher echelon in all its projects. Each of the company’s projects is fitted with savvy and long years of expertise that usually translates to establishing a value chain to its valued customers. This chain results to an excellent balance in terms of schedule saving, product selection and cost savings. Turner Construction through Tuner Logistics benefits from its major construction projects through direct buying of long lead –time construction equipments and construction materials from its suppliers. Consequently, the above -par service of Turner’s suppliers translates to excellent service to its construction clients. Turner Logistics provides assistance to its clients by pinpointing the elements that can benefit from direct buying. It assists in the purchasing of construction materials, equipment and other accessories for its clients by coordinating with its suppliers. Tuner Logistics as well as the purchasing department people in Turner Constructions will the client company their expert opinion on the right mechanical equipment, electrical equipment, refrigeration equipment, light fixtures, VAV Boxes, material handling equipment, and other construction needs. Also, Turner Construction also advises its clients on the optimum time table when to buy their material needs in order to save on storage, maintenance and installation costs. In turn, this ensures that the Turner’s operational budget and time table are within pre –budgeted levels. Thus, the buying background of Turner’s purchasing and logistics Department have proven to be very reliable, with the purchasing department staff has been fine –tuned to immediately manage any obstacle in the purchasing sphere. Turner Construction has built a strong supply chain, and so the company fulfills its tasks by aligning its sourcing strategy to comply with key goals of each project undertaken. The Company’s Facility Equipment Solutions concentrate on the implementation of aggregated, direct bidding or purchasing in line with the company policy of giving its clients a list of products to choose from, a choice of several construction schedule scheme that will match the customer’s budget. Turner Construction ensures that all its suppliers will strictly deliver all of the construction materials well within the time. Company strictly monitors the actual delivery and the schedule delivery of construction equipment and other construction materials on a weekly basis. Thus, any unexpected delays can be easily rectified before they all reach insurmountable levels. The company also eliminates lag time during the submittal of customers’ orders and the review of the construction process. Definitely, the company has a very good track record in terms of construction delivery schedule (Lim, Acito and Rusetski 2006). Turner Logistics keeps their construction suppliers on their toes as they are continually updated on the Turner Clients’ material needs, design needs and equipment requirements to complete each project. Thus, Turner will feed their design team, its suppliers and the customers much needed current data to complete the project in a timely manner and in a cost effective way. For, an early coordination between the construction design team with other parties in the Supply Chain will definitely lead to a well crafted scope of work that ensures the increase in value of Turner’s construction projects. Importantly, Turner’s in-house staffs will check for quality issues, both in its supplier side as well as regarding the work of the subcontractors. When it comes to quality management inside Turner Constructions, it is optimal because it uses variety of options to maintain quality from using quality inspection officials who will do checks at the supplier side as well as ground level, to using specialized quality checking software as part of its information systems. The materials from the suppliers’ are quality checked and value added by Turner Logistics by putting it through thorough testing processes. Then, when it comes to checking quality on the ground, Turner’s in-house quality checking team including quality managers will visit the construction spots to check for the various quality aspects. “For the most part, we subcontract the physical construction, and we provide the service to manage the project and to be the quality assurance managers so that a project is built on time and within budget.” (Whitney 2007). In addition, they also use specialized softwares like Prolog Softwares, Vela, etc., as part of their Information systems based quality checking. With theses systems, the management team of Turner can track the construction process taking place all over the world, including whether quality standards are being followed, without leaving the office and visiting the construction site in-person. That is, these softwares enable Turner to virtually do quality checking and quality management. Thus, quality management has been followed with sincerity by Turner Constructions. Turner Construction’s role in maintaining and controlling the value supply chain is to minimize any untoward occurrences. This way it fully expects the construction clients to give his or her suggestions, comments, adjustment to original orders and even complaints anytime along the supply chain process in order to decrease waste cost and time delay caused by errors or other influential factors. The information gathered from clients at any stage of the construction supply chain process is mainly to include their inputs in making calculated and insightful decisions whenever influential issues crop up. Turner Construction implements the theory that constraints that slow down the flow of goods and service within the supply chain such as government constraints, economic constraints, local culture based constraints, etc., should be hurdled immediately (Marshall 1999). Turner Company works ingeniously around these constraints to service the needs of its many market segments at optimum speed and with value. The company tries to lessen expenses in order to increase in profits in every possible way. Also, Turner always tries to finish projects on time in compliance with the pre –set construction time frame. Information systems Organizations will normally use Information Systems (IS) or any Information Technology (IT) tools to optimize its operations in all spheres. Especially, if the organizations have widespread operations or ongoing projects in various parts of the world, IT tools will be of great help in cutting down the long physical distances. That is, aptly established IS or IT network can connect the organization, particularly its headquarters with the project managers or employees, suppliers and importantly clients. Thus, the organization can communicate, quality check and give instructions to its employees working in various projects in distant places, as well as communicate, clarify and update about the project’s progress to the clients. This is what Turner Constructions is doing through the apt of various IT tools. However, Turner Constructions could not get hold of these tools at the first instances itself, as it faced certain issues or problems with its earlier use of IT tools. IS centric problems, Turner Constructions faced was due to its earlier use of Bidcom Software in early 2000s. When Turner Constructions undertook the renovation of the Hearst Memorial Mining Building, located in the University of California at Berkeley campus, it had difficulties in identifying a single all encompassing project management software program that can enable Turner to keep in contact with all the stakeholders, and has the flexibility to be used in all their projects, irrespective of size and location. When the university officials suggested using web-based Bidcom software, Turner started using it to “coordinate information between the university, as owner, Turner, an executive architect, a preservation architect, mechanical engineers, structural engineers, and more than 24 subcontractors.” (Sweet 1999, p.36). However, the consensus among the Turner’s engineers was that the software did not provide the expected coordination or results. In addition, the software Bidcom was not compatible with all the other softwares that were used by Turner as part of its IS. As pointed out by Sweet (1999, p.36) the Turner’s engineers stated that although Bidcom improved certain operational processes, it complicates and “makes for a level of error in other areas”, and also there was no universal IS platform inside Turner that enabled the project-management software programs including Bidcom to easily communicate with each other. (Sweet 1999, p.36) Along with this broader problem, there were more intricate problems because of the use of Bidcom, which in a way nullified the purpose of using Bidcom. That is, although Bidcom was used by Turner to track the many requests and clarifications from its subcontractors, because of certain technical deficiencies in the software, Turner personnel had to manually enter those requests. In addition, those requests were forwarded to the owners, which included the Turner’s top management team as well as the clients of the projects, instead to the personnel in the relevant departments, thus forcing the owners to again forward to the relevant architects or engineers. Also, the design changes that resulted in change orders cannot be entered on Bidcom, and has to be “entered on a different tracking system.” (Sweet 1999, p.36). Importantly, the main problem that impeded the purpose of virtual coordination between all the parties is Bidcom’s inability to transfer and/or distribute all the computer design drawings including blueprints ‘to and from’ all the key stakeholders including the subcontractors, Turner’s in-house employees or managers at the project site, clients, various departments inside Turner, etc. “To have all shop drawings prepared by subcontractors transferred back to Turner online would require that each subcontractor have a computer and blueprint plotter,” and importantly the software to transfer them. (Sweet 1999, p.36). Due to these limitations of this Bidcom software as well as other earlier used softwares, Turner Constructions had to look for various other options with Knowledge Management as key support base. In any type of organization, knowledge in any form is indeed valuable and so managing knowledge entities are important for the success and even the survival of the organizations. Knowledge entities can comprise any forms of knowledge including visible data in the form of company data, designs, reports, etc., as well as invisible data in the form of employees’ skills, knowledge, attitude, etc., and therefore Knowledge Management consists of managing those entities. As Tiwana (2000, p.7) states “Knowledge management enables the creation, communication, and application of knowledge of all kinds to achieve business goals.” Seiner (2000) further expands on this aspect of KM by stating, “Knowledge Management envisions getting the Right Information within the Right Context to the Right Person at the Right Time for the Right Business Purpose”. On those same lines, Turner wanted to adopt IT tools that can enable it to share or reach its ‘visible’ knowledge of designs as well as ‘invisible’ knowledge of ideas, suggestions and clarifications to the Right stakeholders of subcontractors, employees and clients in Right Time for the Right Business Purpose. Actually, Turner Constructions already has a Knowledge Management setup called Turner Knowledge Network (TKN), which contains Learning Management System (LMS). Through this TKN and LMS, it provides web-based knowledge network solutions that can enable its employees track their “skill requirements, analyze gaps in skills and proficiencies, and register for learning that addresses these knowledge gaps in areas such as Leadership, Management, and Technical skills.” (Park, Lee and Kwon 2010). Thus, it is being said that Turner through TKN and Turner University, “a blend of online learning and knowledge management, is creating a smarter and more conscientious workforce both internally and with its channel partners (owners, architects and subcontractors).” (clomedia.com 2003). One of the key web-based courses that are being offered by Turner University and also through TKN is the Prolog (Project Management and Collaboration Software) training. That is, as part of equipping the employees about various software applications and also for the apt management of knowledge, Turner started using Prolog softwares solutions. Importantly, as it wanted to fulfill its main objective of optimum collaboration and communication between the various stakeholders including in the areas of requests or clarifications as well as document sharing, Turner incorporated Prolog softwares. Prolog software solutions, “is widely recognized as the industry standard for project knowledge management and control for the architecture, engineering and construction (A/E/C) industry.” (meridiansystems.com). So, in 2002, it came across the Prolog software (Project Management and Collaboration Software) and has started using it, as that software was able to fulfill many of Turner’s objectives, as well as continuing to meet its new and current necessities. “Turner standardized on Prolog software for a centralized deployment approach in 2002.” (reuters.com 2011). This Prolog software was able to provide good communication channels for the interaction between the key stakeholders, thereby enabling Turner to finish the projects aptly and according to clients’ expectations. Prolog software is providing Turner apt support as part of its IS, however that support got further accentuated in 2011, when Turner incorporated Prolog Converge along with its other Prolog softwares suite. Prolog Converge is a “rich Web-based user interface and powerful Web services platform” to the existing Prolog software solution. (reuters.com 2011). This additional component enabled Turner not only fulfill its main objective of optimum collaboration and communication between the key stakeholders, but also enabled them to optimally manage design and document transferring and tracking, as well as enabled them to use this software with other softwares, without any compatibility issues. The main purpose of this Prolog Converge is that it provided apt channels for detailed document sharing and tracking, and in a way enabled Turner constructions to collaborate and communicate with its subcontractors, its own employees and clients. “The company recently selected Prolog Converge to help project teams collaborate more efficiently, and to offer its users flexibility in accessing and managing critical project data.” (reuters.com 2011). Apart from actualizing apt channels for communication, Prolog Converge integrated with other components of Turner’s IS because Turner was already running various Prolog software solutions. As Micky Doner, vice president and CIO of Turner, stated, “The ability to use Web services to integrate Prolog Converge with other major software platforms was a significant requirement of our IT strategy,” (reuters.com 2011).Thus, there were no compatibility issues and importantly it helped Turner to do away with the need for training the employees on the new Prolog Converge. As the employees were already aware and had skill sets needed for Prolog software solutions, it eliminated the need for training them. This perspective was also pointed out by Doner, “The ability to integrate these solutions seamlessly for the end user means fewer re-training and adoption issues while also reducing costs associated with running the system for Turner, our business partners and clients.” (reuters.com 2011). So, all the management and technical issues Turner Constructions faced in early 2000 due to deficient IS systems, is being managed aptly by Turner with the aid of Prolog software solutions. Recommendations and Conclusions However, as with any IS or IT tools, security is an important issue, and so Turner Constructions also need to further optimize the security of its IS system including Prolog software applications. Although, that software is viewed as one which is safe and secure, certain additional steps can be taken by Turner. That is, Prolog software solutions allows the users including Turner’s stakeholders “to exchange Prolog data with other systems while tightly maintaining data integrity, and adhering to the business logic, security settings and the system nomenclature established” by Turner personnel. (meridiansystems.com). In addition, it is supposed to “deliver additional project control and security for confidential project documents” (Kaestner 2007). Notwithstanding these features and commitments by Third Party solution providers, Turner Construction can initiate further more protective steps in every aspect or end of its IS or IT infrastructure, to make it foolproof for any intrusion. As Curtis states (2008) organizations including Turner Constructions has to keep on changing the passwords of key data centers frequently, installing a foolproof database system, tracking everything and monitoring the daily activity within its IT structure. Reed (2010) comes up with some more effective recommendations, which includes regular reviews to ensure that all open user accounts are valid and properly configured; regular testing to ensure they are not vulnerable to SQL injection attacks, etc. The importance of information systems to an organization is paramount and it has been presently termed as the lifeblood of many organizations including Turner Constructions. Turner has more than a hundred years experience in the construction industry around the world. It has aptly implemented the right practices and processes in every aspect of its functioning, which helped it in achieving the required outcomes. If the Turner Construction continues in the same positive vein, by incorporating an optimal Information System with apt security features, it can actualize good communication and coordination among all the stakeholders, thereby further elevating the organization to top echelons. 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