Program & Batch: PGDM 2013-2015Term: Term VICourse Name: Operations StrategyName of the

faculty:

David Newlands

Topic/ Title : Evaluating Operations at 3C CompanyPvt. Ltd.

Original

or Revised Write-

up:

Original

Contact No. and email of Group Coordinator:

7840083823ft13harshitsharma@imt.ac.in

Group Members: Sl. RollNo.

Name

1 1301-526

Harshit Sharma

2 1301-199

Satyen Chopra

Company History

3C Company is a infrastructure developer in the Indian market. Ithas established itself as a pioneer in green constructiontechnology in the Delhi NCR market. The 3C stands for “Create,Care and Conserve”. It is the only player in its sector in Asiato have three Platinum and four gold rated LEED certified greenbuildings by IBGC (Indian Green Building Council).

The company’s leadership has some of the best industry experts inthe field of infrastructure.

Figure 1: Business Verticals at 3C

Figure 2: The 3C Mandate

3C Company

Development

Hospitality Education

Facility managemen

tArchitect

ure

Figure 3: Some of the clients of 3C

Industry Environment:Key insights from the Indian infrastructure industry:

Spending on Infrastructure estimated to be 10% of GDP duringthe 12th five year plan – Planning Commission of India

Private Sector is becoming a major player in the sector The demand from residential sector is boosting the real

estate market which is expected to reach 180USD mark by2020

Many Indian firms are entering into Joint ventures and othertie ups for sourcing construction equipment

Company Processes

Work Breakdown Structure

It involves dividing major tasks into minute activities forincreased accountability and better monitoring. It is done so asto allocate resources, divide tasks among staff, identifyingcritical activities, and adhering to schedule activity wiserather than a broader category wise monitoring.

Major Activities include:

Building foundations and structural sheds with EOT

LD Converter, Casting Platform equipment, Steel transfer car

Alignment, maintenance, storage of testing area

Hydraulic, water and utilities systems

Creating utilities: Water, gas cleaning passage, HVAC, dust

conveying system etc

Electrical Systems: Substation & Control rooms, Main control

buildings

Miscellaneous works: Flooring, Roads and drains, Administrationbuilding, Storage facilities, Laboratory, Parking areas, Repairshops, Rest sheds etc

Scheduling: It includes identifying critical activities and

subsequent activities to be undertaken in the sequence as per WBS

designed already. The duration is mentioned for each activity and

MS Project tells the actual time required till all the activities

would get completes. Following are some excerpts from what it

actually does:

Staffing/Organizational Structure

The project includes role of several designations requiring a

typical set of tasks to achieve targets at each level. The

prominent among them include:

1. Cluster Project Manager (1 Nos.)– To take strategic

decisions at Business unit level such as allocating capital

amount beforehand, approving high value resource purchases,

assigning key positions involved in the project. And

monitoring all simultaneously undertaken projects so as to

have sync between all of them and deliver the right product

at the earliest.

2. Project Manager (1 nos.) – He is the whole and sole of the

project. Every key decision is being taken by him and nobody

challenges his authority. Allocation of staff to different

verticals, resources, machinery, sub-contractors, approval

of budgeting and scheduling, client billing, approving the

raised material requirement, management review meetings,

corporate meetings, addressing all kind of labor issues and

taking stringent measures to rectify the same etc. He heads

all the respective heads: Civil, Structural, Quality,

Safety, Equipment, Infrastructure, Plant and machinery.

3. Field in-charge (6 Nos.): These are area specific power

heads who control their individual areas of expertise viz.

Planning, Civil, Structural (Fabrication, Erection,

Equipment and piping), HSE (health and safety), Quality and

P&M (Plant and machinery). There are several other key

activities under administration such as Labor relations,

accounts, purchase departments which have been centralized

and are under direct control of Cluster Project manager.

Project Costing: Every project needs funds. But proper allocation

of funds and timely receipt of the same should be ensured well in

advance, else many unseen incidents such as delays in delivery,

Labor Strikes, unavailability of resources and raw material etc.

may take place. And to decide which activity requires how much

amount of money is the main aim in Project Costing. There is a

fixed gross budget for each major milestone and all subsequent

tasks under that umbrella must be achieved within that budget

only. Broadly categorizing them, there are several types of costs

associated namely:

a. Civil Works Cost: These include Earthwork, Concrete,

Reinforcement, Fabrication & Fixing of Insert plates and

bolts, Shuttering works etc.

b. Mechanical/Structural Works Cost: These include fabrication

and erection of steel structures

c. Plant and Machinery Costs: Hiring costs of equipment such as

Excavators, Dumpers, Piling Rigs, Concrete mixers, Cranes,

Crushers, Welding Machines, Boom placers (for concreting),

Electrical equipment, Trucks and trailers etc.

d. Overheads: Safety Equipment, Staff and salary allowances,

Employee benefits, Labor Retrenchments, Taxes and duties,

Power Distribution costs, conveyances, Insurances, Financing

costs, Administration expenses, Temporary establishments,

Rentals and Service charges, etc.

e. Escalation Costs: These are the costs that are added due to

miscellaneous unforeseen increase in several components of

the costs discusses above. The primary ones include Hike in

Minimum Labor wages to be decided by the government,

Inflation, Change in economic policies by the government,

Prices of Fuel (mainly diesel), Prices of material (mainly

steel and concrete).

Quality Management The project involved quality check at every single activity

ranging from making molds for civil works to welding the minutest

of joints to checking alignment of structures and then while

painting the structures as per clients specified shade and

coating thickness.

I. Civil: Checking the dimensions of piling joints,

foundation levels coordinates and height, foundation

bolts tensile testing, brick work finish, dimensions of

pillars to be used while constructing civil buildings,

surveying activities etc.

II. Fabrication: Checking the dimensions while initially

fitting of items of columns/beams/girders, checking

hole diameter and dimensions, quality and thickness of

welds as per specified drawings (NDT testing,

Ultrasonic Testing, Radiographic testing etc.)

alignment of joints, final dimensions check after

fabrication is completed, final visual testing,

checking thickness of painting and shades using paint

thickness tools.

III. Erection: Alignment checking using mercury gauges,

welding tests while joining two members at height,

welding at permanent holes and joints, final painting

color before covering the structures etc.

IV. Final Sheeting &Painting: The client provides details

for the final painting to be done on the building.

Sheeting color is also decided by the client and

checking the exact thickness and dimensions of the same

becomes an important task w.r.t. quality.

RISK and Risk Aversion

1. Labor Unrest: Being located in a tribal region, high unrest

possibilities are there as these people do not know much

about the outer world apart from their own, and if provoked,

they might lead to severe damage to resources, which would

ultimately lead to increased cost and time to complete the

project. Hence, they are constantly apprised of the Do’s and

Don’ts so that no untoward incident occurs. However, these

things do happen and damages are done, but these have been

minimized by educating them of these sensitivities and

repercussions of their acts. Also, they keep on demanding

wages hike very frequently which is practically not

possible, and negotiations may take several days and strikes

take place. Hence, such risk costs have to be taken into

account before deciding costs and raising budgets well in

advance.

2. Weather Constraints: The project into consideration here was

executed in Odisha, a place where there is really hot and

humid from April to September and its practically impossible

to go out after 11 am till 4 pm owing to the heat. Hence,

there will be huge productivity losses, so such time losses

have to be considered while preparing the schedule for the

specified time period. An alternate to counter balance this

was used at the site, the working hours were stretched 2

hours earlier in the morning and 2 hours extended in the

evening so as to make up for those lost 4 Hours (excluding 1

hour for lunch) in return to break for those hours. Also,

rains are main hindrance to construction work, so additional

shifts are scheduled on weekends for making up of the losses

on those days to neutralize the affected productivity.

3. Productivity: All workers and staff might not work at same

productivity levels. So to counter that imbalance, different

tasks are allocated to people possessing different

potentials. For example: Fabrication of light weight

sections would be given to more productive worker and

heavier sections to slower workers so that eventually both

end up doing equal tonnage of work targeted to achieve.

Also, proper Sub-contractor management is required so that

there is no lag between the target and achieved quantity of

work.

RecommendationsAfter analyzing the processes and methodologies followed at 3CCompany, we observed the processes were well organized and SOPswere available for various processes. The focus on technology andgreener ways to build the infrastructure is the key factordriving the company forward. An efficient senior management isresponsible for keeping the employees motivated and determined tostrive for more.

With all our observations made, we have the followingrecommendations for 3C:

Crashing of standard activities and schedules to save onmoney and cost. There are certain routine activities ininfrastructure industry like foundation laying, concreting,routing of electrical wires etc, these activities can befurther analyzed and broken into simpler activities, havingdone that crashing can be done using Primavera or MicrosoftProject.

Thoroughly worked out client and supplier contracts andpayment terms for better cash flow and healthy financials.The invoicing to customer and documentation should befurther streamlined to achieve better and higher positivecash flow. The infrastructure business inherently involves alot of risk and thus it is very important for the companiesto remain cash positive for most of the project duration.

It was observed that the construction equipment and othercapital intensive resources which have very high per houroperating and opportunity cost were lying idle in certaininstances as informed by staff. This can be reduced byefficiently managing the resources by using resourceoptimization using various ERP tools like Primavera etc.

Some of the time intensive activities which lead toextension of schedules and delays onsite should be taken

care of by using prefabricated items and weighing theopportunity cost of getting it prefabricated and fabricatingit onsite.

References

1. www.the3c.in

2. http://www.pmi.org/Knowledge-Center/Publications-Project-

Management-Journal.aspx last accessed on August 21, 2014

3. http://www.journals.elsevier.com/international-journal-of-

project-management/ last accessed on August 21, 2014

4. http://www.villanovau.com/resources/project-management/

construction-project-management/#.U_cq8vmSyZA last accessed on

August 21, 2014

5. http://www.lntecc.com/ last accessed on August 21, 2014