The Strategic Insights and Benefits of Turnkey Projects in International Business - Paper Example

Introduction

Clients in the modern business world would want to buy a complete set of the project instead of an unfinished one to complete by themselves. The turnkey projects exist for clients who prefer to buy a completed project designed and engineered by a single source. I am interested in the term turnkey project because it will get more insights into why clients would prefer to purchase an already completed project. As one of the best ways of carrying out international business, I wish to find out more about how it is beneficial to clients. I am curious about how the turnkey projects minimize costs and speedy completions by a single source customer.

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Explanation of the Key Term

A turnkey project is a contract where a firm prefers to fully design, equip, and construct a manufacturing or business facility and hand it over to the buyer when it is ready for operation for payment in turn. Turnkey projects are prominent in international businesses and are considered cost-effective and time-efficient. Private sectors are usually contracted to design and construct a business project or building and hand it over when it is ready for occupancy and operation. The sole responsibility rests with the contractor to complete the project within a specified timeline and cost and quality. For instance, government-owned housing projects are usually contracted with a private developer who undertakes all the essential activities, including land purchasing, permitting and planning and construction, and finally selling the completed project to the government.

Major Article Summary

Vignesh and CHandan (2018), in their article "Modern Practices in Project Management of Turnkey Engineering and Construction projects," dig deeper into the modern management practices of turnkey projects in oil, power plants, gas, and other capital projects. According to Vignesh and Chandan (2018), a turnkey project is a project in which the contractor takes the sole responsibility in completing all aspects of the project and then hand over to the client ready for operationalization, factoring in the timelines within which it has to be done, the cost and quality of the final result. The modern turnkey project management practices adhered to internationally from engineering, procurement and construction and Quality, health, and environmental safety are also argued in the journal article. The article further discusses the software tools used to monitor and supervise the project's execution daily, in supplying and tracking the items ordered for the project. Vignesh and Chandan (2018) further explain that various gate reviews are carried out at appropriate phases of the project as it continues with construction.

They continue to illustrate that turnkey project management is a collaboration between the contractor and the client. The article looks at the contractor's sole responsibility and risk of project completion as an advantage of the turnkey projects. The article discusses the modern practices that a contractor of the gas and oil turnkey project would follow in executing oil and gas projects. On award of a contract, the turnkey project is a fixed lump sum fixed schedule contract. Thus, Vignesh and Chandan (2018) sum up by saying that a successful turnkey project management depends on cost, schedule, quality, health, safety, and environment. The various phases ranging from feasibility study to commissioning are also discussed in the article. The turnkey project contract in engineering and construction is, according to Vignesh and Chandan (2018), engineering, procurement construction, and commissioning (EPCC).

Discussion

Vignesh and Chandan’s (2018) article discusses the modern practices in turnkey project management. Thus, it lays bare how the turnkey projects help clients get readily tailored projects that meet their needs and specifications. The way the article puts it, turnkey projects reduce the burden of managing and supervising the project by owners, as the contractor's entire responsibility lies. The article discusses the importance of turnkey projects in terms of timelines. The contractors in charge design their work schedules such that there is no time lost, and the project is completed within the required timelines (Merna & Smith, 1990). The article illustrates how modern turnkey management results in cost savings. This is made possible because the client is only responsible for the lump sum amount agreed, any overhead costs are taken care of by the contractor ("Research on adjustments for changes in the contract price of variations under the EPC mode ——Based on the conditions of Contractfor EPC/Turnkey projects," 2018). The article looks at the importance of having a balanced view of cutting costs without compromising the project's quality.

Turnkey projects provide the best solutions when manufacturing, refining, or processing plants in a business. Choosing to outsource a project to professional contractors has proved to be cost-effective, time-bound, and appropriate to businesses (Doebber et al., 2016). It saves the owner or a business the risk of struggling to complete a major business project in the house. In their article, Merna and Smith (1990) turnkey projects are suitable for multidisciplinary projects. The style of such project management depends on the contractor. The project's cost and scope are at the contractor's disposal as he makes costs and presents them to the client, who will pay them in exchange for the completed project.

The turnkey project manager needs to be keen to carry out the project successfully (Ismail, 2014). There may arise shifts in trends that a manager of the project has to factor in that is crucial for the entire industry. This needs to be taken care of to analyze, which brings value for the client and management wise.

References

Doebber, I., Deru, M., & Trenbath, K. (2016). Turnkey heating, ventilating, and air conditioning and lighting retrofit solution combining energy efficiency and demand response benefits. https://doi.org/10.2172/1247954

Ismail, Z. (2014). Improving maintenance management practices for building facilities. Journal of Construction Engineering and Project Management, 4(3), 21-32. https://doi.org/10.6106/jcepm.2014.4.3.021

Merna, A., & Smith, N. (1990). Project managers and the use of turnkey contracts. International Journal of Project Management, 8(3), 183-189. https://doi.org/10.1016/0263-7863(90)90021-3

Research on adjustments for changes in the contract price of variations under the EPC mode ——Based on the conditions of Contract for EPC/

Turnkey projects. (, 2018). 2018 International Conference on Economics, Politics, and Business Management (ICEPBM 2018). https://doi.org/10.25236/icepbm.2018.90

Schneider, J. (2004). Design/Build — Turnkey projects. Public-Private Partnership for Urban Rail Transit, 154-226. https://doi.org/10.1007/978-3-322-81708-2_5
Vignesh, K. S., & Chandan, S. (2018, November 27). Top Business Schools in Bangalore - Top MBA College in India | ISBR. https://www.isbr.in/journals/Modern-Practices-in-Project-Management-of-Turnkey-Engineering-and-Construction-Projects.pdf