Abstract
This paper focuses on analyzing value chain of Fluor Corporation. The paper is carrying out evaluation of several processes of Fluor along with a Close and comprehensive analysis of all processes that deliver high quality to the customer. The company deals with mega projects hence it is very important to complete the projects on time with all desired specifications and good quality. An effective Value chain helps in completing the projects on time with high quality.
Fluor Value Chain Analysis
Thesis Statement: this paper intends to discuss a comprehensive analysis of Fluor Value Chain. The paper further elaborates upon how Flour is able to establish a strong value chain for its engineering, maintenance services, construction and procurement businesses.
Introduction
Fluor is public organization that provides its services in the field of engineering, maintenance, construction and procurement businesses. The company is successfully running its business since year 1890 and delivered various mega projects. The company is known for delivering high quality projects in the given time. Few major projects of the company are pipeline system in Trans-Alaska, modernization of Whiting refinery for British Petroleum and Oakland bay bridge project. Fluor is delivering its high quality services in more than twenty-five countries across the world with around 41000 employees. Fluor provides its services in all divisions of supply chain of its customers. It is imperative for Flour to focus on its processes and resources to fulfill the urgent and critical demands of customers. The biggest challenge in front of Fluor was how to understand business as well as strategic requirements of customers and how effectively respond to those requirements.
Description of Theories/Core Concepts
Michael Porter has given value chain that is very effective tool to deal with various operational and strategic aspects of organization. Value chain theory can applied to internal processes by elaborating on all important value-added processes starting from procurement of raw material, production, marketing, human resource, selling and after sales service of final products. Value chain also covers external processes that helps in understanding needs of customers, outsourcing, vertical integration, horizontal expansions and strategic alliances. A study, conducted by R. Kaplinsky elaborates that effective value chain and analysis is very helpful in serving global market. The author mentiones that economy of each country is different hence the need of customers is also different. One can evaluate the economy and needs of customers with the help of value chain analysis. W. McPhee and D. Wheeler also mentioned that company should use porters value chain analysis not only for internal but also for external processes. Value chain analysis is significantly helpful in four ways
1. In conducting cost analysis and cost reduction.
2. Product and services Differentiation.
3. Product development and research.
4. In understanding the strategic requirements of customers.
Analysis/Explanation/Discussion
Fluor adopted value chain tool to strengthen its internal operation and used value chain analysis to understand its customers. We can define value chain of Fluor as follows:
Building and production materials
Heavy Machinery, Equipment and Tooling
Finance and indemnity
Utilities and logistics
Human Resources Management
Information and Communication Technology
Enforcement of Rules and Regulation
Research and Development
Commencement
Design
Tendering
Project Execution
Facility Management
Infrastructure and Logistics: Fluor is having strong infrastructure in terms of having offices in more than 25 nations. The infrastructure is organized and planned in such manner to deal with customers effectively and able to compete with rivals. Company’s huge presence helps in managing logistic and local operation for various projects.
Human Resource:
The company is having huge strong base of around 41000 employees across the globe. Internal HR policies are effective to retain experienced and knowledgeable staff. Employees from other countries also help in executing task of local clients and understanding business scenario effectively.
Finance:
Fluor is having good financial position with its net income of $ 698.1 million in the year 2011.
Information and communication Technology:
Fluor use latest technology to reduce its operational cost and increase margins. The system helps in integrating various process suppliers, communication and project management.
Process enhancement and Project Management:
A close monitoring and evaluation of existing processes helps in developing new modified processes. The company delivers its best, since beginning of project until execution with the help of experience human resources, effective planning, and technology.
Conclusion
After above discussion we can say that value chain is an effective model that helps in stream lining all internal and external processes. Fluor used value chain analysis to execute effectively its processes and to understand its customers.
Extending the Conversation
1. How Customer’s value chain analysis can be helpful for any organization?
2. What are the five steps that help organizations to understand strategic requirements of its customers?
References
Abraham, S. C. (2006). Strategic Planning: A Practical Guide for Competitive Success. Stamford, Connecticut: Thomson Press.
Kaplinsky, R. (2004). Spreading the Gains from Globalization : What Can Be Learned from Value-Chain Analysis? Problems of Economic Transition , 74 - 115.
Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.
Wayne McPhee and David Wheeler. (41). Making the case for the added-value chain. Strategy & Leadership , 2006.
