Operations Management - Case Study - Punj Lloyd Limited

SUMMARY

Punj Lloyd is one of the largest engineering construction companies in India providing integrated design, engineering, procurement, construction and project management services for energy industry and infrastructure sector projects. It provides engineering construction services for onshore and offshore pipelines, gas gathering systems, oil and gas tanks and terminals including cryogenic Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) storage terminals, process facilities in the oil and gas industry including refineries and for power plant projects. Punj Lloyd has worked not only in infrastructure sector but on several projects in the telecommunications sector also. In addition, it provides value added engineering services for energy industry and infrastructure projects as well as comprehensive plant and facility maintenance and management services.

Its operations are spread across the regions of the Middle East, the Caspian, the Asia Pacific, Africa and South Asia. It has 13 subsidiaries including subsidiaries in Kazakhstan and Indonesia, and 12 project and marketing offices, including in the United Kingdom, Tunisia, Libya and Saudi Arabia. Its services include detailed engineering, field services, material procurement and overall project and construction management. Punj Lloyd own a large fleet of sophisticated construction equipment and skilled employee resources, together with strong engineering capabilities enable it to successful implement modern engineering construction methodologies and strong project management practices.

Punj Lloyd is strongly committed to health, safety and environment policies and practise in the execution of the projects and has received several awards and certifications for its operations and projects from the British Safety Council as well as from its clients. It also enjoys various accreditations such as the ISO 9001:2000 QMS, the ISO 14001:1996 EMS and the OHSAS 18001:1999 OHSMS from Det Norske Veritas (“DNV”).

In over 20 years of experience in construction projects, Punj Lloyd have constructed more than 5,300 kilometres’ of pipelines and four million cubic metres of tanks and terminals capacity and have executed 11 refinery modernization and quality improvement projects. It has also worked or is working on 14 highway projects in the infrastructure sector.

“In the years ended March 31, 2005 and in the nine months ended December 31, 2005 Punj Lloyd generated approximately 42.74% & 67.53% of its consolidated sales and contracts revenue from projects executed outside India.” Punj Lloyd Limited, home, profile <http://www.punjlloyd.com/main.asp?p=profile.htm>[1]

It’s a matter of discussion that even though the increases in competition and to stand strongly in the global market in construction field, how Punj Lloyd adopt its strategic operations? If there are any strategy is deficient in the company’s operations, what type of strategy would be better for its operations? In any case, to understand any problems or shortcomings if it has, we will have to understand its strategic plans to find out the better solutions.

INTRODUCTION

ORIGIN AND EVOLUTION

Punj Lloyd Limited (PLL) was incorporated as Punj Lloyd Engineering Pvt. Ltd. on 26th September 1988 with the specific aim of taking over all the engineering, turnkey & general construction activities along with other specialized technical services.

Punj Lloyd Engineering Pvt. Ltd. was renamed Punj Lloyd Pvt. Ltd. on July 11, 1989. On conversion into a public limited company on 22nd July 1992 the name was changed to Punj Lloyd Ltd.

SERVICES PROVIDED BY PUNJ LLOYD LIMITED.

Punj Lloyd Ltd. is a total engineering construction company with activities including cross country pipelines, tank ages, cryogenic system, oil & gas, petrochemicals, oil & gas piping projects, piping jobs, industrial construction, effluent treatment, fertilizers, bridges, highway engineering, civil engineering, & construction for the power and irrigation, water supply, water treatment, distribution networks, on-shore & off-shore pipelines, infrastructure services, broadband services.

According to Hill T. (2005 pp.4-5), every business is managed through three major functions: finance, marketing, and operations management. Other business functionsвЂ"such as accounting, purchasing, human resources, and engineeringвЂ"support these three major functions. Finance is the function responsible for managing cash flow, current assets, and capital investments. Marketing is responsible for sales, generating customer demand, and understanding customer wants and needs.

To understand the role of Operations Management and Strategy in Punj Lloyd, we will have to know the organizational set up of the Company.

ORGANIZATIONAL SET UP OF THE COMPANY

PROCESS DESIGN:

“The process by which some functional requirement of people is satisfied through the shaping or configuration of the resources and/or activities that comprise a product, or a service, or the transformation process that produces them.” Slack N., Chambers S. and Johnston R, (2001, 2004, 2007) Operations Management., Chapter 4 вЂ" Process Design, 5th Ed., p.88, London: Prentice Hall.[3]

Process Design in Punj Lloyd can be described as part of its integrated process which is involved with all the other aspects of the business: namely, business planning, marketing and sales, finance, human resource management, purchasing, research and development.

This process necessarily involves both the all-important client/customer, and the supplier upon whom the organization will be heavily dependent, especially in a JUST-IN-TIME operation.

Punj Lloyd maintains creative and versatile process engineers for the basic design studies, calculation of heat and material balances, specifications of the entire item of process equipment and purchase and inventory diagram. Review of plot plan, critical piping routes and selection of equipments is additional functions.

The relationships between the different parts of the process are shown in the following figure.