What is turnkey project?
A turnkey project is an approach used by various industries (including manufacturers) to execute projects that can be easily deployed. Turkey projects are built ‘ready for operation’ by a vendor or a contractor.
What makes these projects distinct is that a vendor or contractor will work with the project owners or clients, based on a contract signed by both parties, to undertake the complete project, overseeing all stages from start to end.
A turnkey project or contract as described by Duncan Wallace (1984) is A contract where the essential design emanates from or is supplied by, a contractor and not the owner so that the legal responsibility for the design, suitability and performance of the work after completion will be made to rest with the contractor. 'Turnkey' is treated as merely signifying the design responsibility of the contractors.
Turnkey Project Examples:
To understand the concept of turnkey better, let us begin with a more familiar everyday example of turnkey.
When planning the interiors of your house you would be presented with two options, one is to design and build from scratch (DBB method), and the other option would be to opt for a more modular method of picking from pre-fabricated examples & fittings.
Think ‘Ikea or Interior experience showrooms’
Modular homes come close to what ‘turnkey’ projects are like for manufacturers. Although they are not referred to as turnkey (this would depend on the characteristics, scale/scope of projects).
Much like in the case of modular homes, the designer/architect takes charge of the project end to end, delivering a complete home.
In comparison: Manufacturers work with vendors or contractors end-to-end on a manufacturing project in the case of turnkey projects.
Within the same example of turnkey in real estate, turnkey would be used to construct apartments by builders. It is defined as a home or property that would be ready for occupation for its intended purpose, i.e., a home that is fully functional, needs no upgrades, and is ‘ready to move homes’.
In commercial use, a building set up to do auto repairs would be defined as turnkey if it came fully stocked with all needed machinery and tools for that particular trade.
Note: Turnkey is executed at a larger scale with lesser options to customise.
Now we can refer to a more technical and manufacturing-based example:
In the manufacturing industry, every equipment installation or project installation involves multiple functions, teams, vendors etc.
Installation of an HVAC system:
If a company wants to install an HVAC system they need, to begin by procuring the right HVAC systems, then they would require an electrical team to connect it, the civil team to lay the foundation and place it, and then the mechanical team to connect the pipes and valves.
Here you can see how, in order to install and run simple equipment like HVAC (which almost all manufacturers require) - there is the bandwidth required from multiple teams - both internal and external.
The number of teams & individuals who would need to get involved would increase as the job size or scope increases. It becomes progressively difficult for the plant managers to coordinate with all these teams and execute the project within the decided time frame.
Having understood this gap, vendors choose to provide turnkey solutions such as a turnkey HVAC system - where the civil, electrical and mechanical along with the HVAC system is handled, installed & executed by the vendor. These vendors also come with the experience & expertise to be able to execute it within defined time frames. The vendor can either choose to outsource the work to contractors or maintains a team, but in either case, the entire installation falls under their scope.
Best examples of turnkey projects in India
At Venwiz we curate & onboard vendors post a thorough verification process. Thus when it comes to providing the best examples of turnkey projects, we believe our vendors' projects showcase the best capabilities, scope of work and execution.
Below are two examples of turnkey projects in India, by Venwiz vendors:
A case study in collaboration with M/s Bright Construction & Co.
A client reached out to vendor M/s Bright Construction & Co. They needed the vendor to lay a foundation, that was to be constructed in one go, the weight of the foundation was estimated to be at 400+ MT which without the proper support during concreting, could break the supporting structure and create a hazardous situation. This would also add huge costs and time delay implications.
M/s Bright Construction & Co along with the client's engineers studied the problem and chose to reinforce the shuttering support with densely packed and adjustable pipes. This created the provision to adjust the support at varied zones (differently).
In addition to that, the structure was also made self-supporting, (in line with Newton’s Third Law) by running additional TMT bars tying up the shutter plates on the opposite side. Vertical TMT bars embedded within the foundation raft were also furnished for additional strength to the shutter plates. After the casting was set, these vertical bars were removed.
For further safety and to avoid traffic-related delays at the busy construction site, the concrete pouring was scheduled on a Friday night, when all the other would not be carried on thus avoiding any hindrance to the RMC mixers from reaching the site.
Due to intensive and careful planning along with innovation and safety measures, the project was completed successfully with the best finish of the concrete. There was no leakage, bulging or honeycomb etc., that appeared on the foundation. The project was completed on time using a ready-to-operate turnkey solution, without a cost overrun or any accidents.
A case study in collaboration with M/s Lennox Clean Air Technologies
A globally-leading manufacturer & supplier of advanced sensing thermistors needed to upgrade their existing HVAC to a clean room facility.
The clean room facility requires a combination of different activities like civil work, partitions, HVAC, filters, isolation doors, panels, flooring etc.
For the execution, the client would have to depute multiple vendors for a single project. They estimated nearly 5 months for the installation and commissioning of the project using multiple vendors and needed a better solution to overcome these challenges.
M/s Lennox Air Technologies started out as simple manufacturers of clean room facilities and pivoted towards providing end-to-end turnkey projects for total clean room facilities through identifying the gaps in offerings by others in the sector.
M/s Lennox Air Technologies took over as the client's one point of contact for the entire project.
- The project was completed in a span of 3 months instead of the projected 5 month period.
- Given the vendor's technical expertise, the company also implemented energy conservation schemes during the project through the replacement of belt drives, usage of VFDs (variable-frequency drive), and Moving from legacy power control to Thyristor power control for heating etc.
- Post-implementation, the client achieved a 30% reduction in energy consumption as well.