Author: Hector Garcia

Raising standards of a sustainable supply chain

ConnectAmericas interview with Héctor García Salgó, regional president of Bechtel in Latin America, who discusses the importance of developing a sustainable supply chain and working with suppliers from Latin America. 

Related article:

Cultivate business in Latin America

English transcript of the interview:

Interview with Héctor García Salgó, Regional President of Bechtel in Latin America.

Could you introduce Bechtel to those who do not know the company?

My name is Héctor García Salgó, I am the Regional President for Latin America of Bechtel. Bechtel is an engineering and construction company with 118 years of history. It’s the largest engineering and construction company in the United States and one of the 10 largest in the world. We have participated in projects across the five continents, currently we are executing projects in more than 40 countries and we have presence in diverse sectors of the infrastructure spectrum. We have, on the one hand, projects in the Oil and Gas sector, with all the individual segments of that industry: from upstream, downstream, liquefied natural gas, pipelines, water, tanks and offshore. We participate in Mining and Metals. We participate in infrastructure projects, including transportation and power generation and telecommunications and we also participate in projects with the Environmental, Defense and Nuclear Energy sector. We have principal offices in the United States in Reston, Virginia, in the Washington, DC area; in San Francisco, which is our traditional base; in Houston for our Oil & Gas business; in London for our infrastructure business and; in Santiago, Chile and Brisbane for our Mining and Metals business.

What is Bechtel's vision in the medium and long term, specifically in Latin America?

As a private company, we have the advantage of establishing a medium and long term vision independent of what results markets can be waiting for, that is, we can plan strategically in the way that best suits the company. In that sense, through what our executives say, we do not seek to have the biggest projects, we want to execute the best projects. This is how we seek to position ourselves and offer our participation in projects around the world, including Latin America. During the last years, we have participated very actively in the Mining and Metals sector in Latin America and lastly in the infrastructure sector, particularly in Brazil. Our vision is to expand that participation, of course to maintain an important activity in the Mining and Metals sector, but as a whole we are also promoting initiatives in the Oil and Gas sector in several countries, Mexico in particular, especially as a result of reforms that were recently approved a couple of years ago, and also in the sector of major infrastructure, transportation and power generation.

How does Bechtel work with local suppliers?

On the one hand, we have a portal where suppliers interested in working with us are registered. On the other hand we already have a database of years of having worked with suppliers in certain countries with whom, evidently, based on their previous performance, we seek to continue working. At all times we look to evaluate the suppliers who have the experience, capacity necessary, we visit our facilities. We establish, when necessary, mechanisms of assistance, collaboration so that these suppliers can operate with the standards that we require in our projects and what in every case we always seek is that suppliers are congruent and that have operational and business policies that are consistent with ours, that is, our values of operating safely, with quality and with principles of ethics and integrity. It’s what we expect from our suppliers anywhere in the world. What we found is that we leave a legacy of improvement in the operational performance of these companies which, in turn, is cascaded for the companies that work for them, so that it is improved to all participants of the supply chain in the infrastructure projects in which we work.

What are your impressions about suppliers in Latin America in general?

Let's talk about our participation with suppliers in Latin America and only in the last five years we had a turnover of more than $9 billion dollars with suppliers in Latin America. Our experience, in general, has been very positive. We believe that suppliers of goods and services in Latin America operate to very high standards, are committed to quality, and achieve their delivery commitments on time. For us it is very important to see that these relationships are maintained and that companies are committed to operating to the standards that we demand, which are the standards that we commit ourselves on our part in our contracts. What have we found? They have operational discipline, administrative discipline in many cases, but at the same time we have found that there are situations and opportunities for improvement in the supply chain. I will give you a situation that normally occurs: when we work with a supplier, let's say at the first level, that is, who operates directly with us, we find that its standard is adequate and is at the level that we hope it is. However, problems arise when these suppliers in turn depend on other suppliers in the next chain link and when those suppliers are not evaluated, they are not prepared to respond to these operating standards, the service levels deteriorate. So, what we find is that while the first tier is, highly compliant, we need to extend and help extend that high level of performance to companies that are at the subsequent levels of the supply chain.

What are the standards that Bechtel seeks? What areas of improvement have you identified in this supply chain?

When I talk about our relationship with suppliers and their suppliers in general, I repeat, our experience has been very positive. What we have found is: safety standards, quality, delivering goods or equipment on time, is what we are looking for. What sometimes happens is that communication at other levels of the supply chain does not arrive effectively or companies are not able to meet on time for a variety of reasons. They may be due to administrative, cash flow problems, because they have exceeded in the commitments they can accept, and that is very important. When we expect them to meet our demand, providers must have enough installed capacity. Many times, because they want to make a commitment, these suppliers stretch too much and go beyond their capacity. This is where we must work, identify situations situations with them, and prevent those problems before they occur, making sure that they do indeed have the capacity to fulfill their obligations and try, as I said before, to extend this to the subsequent levels of

How does Bechtel contribute to supplier development in the region?

We believe in collaboration with our suppliers worldwide and of course we carry it at the local level, we strongly believe that our projects will detonate and benefit, not only in terms of the project itself but in terms of the participation of the local productive chain including craft local suppliers of goods and services, in terms of economic spill and in terms of involving them in projects, raising their operating standards. What happen? We offer training, through academies and workshops with suppliers, with the workforce, so that when finishing a project after about an average cycle of three years of a project, what we leave as legacy more beyond the infrastructure project, be it a power generation plant, a liquefaction plant for natural gas, a gas pipeline, an airport, a copper mine, any of these projects what we see as a legacy is that those who participated with us, they will go to the next project to offer their services to other companies in the local Engineering and Construction industry and they will offer it with higher standards than they did before working with us.

Why has Bechtel decided to join ConnectAmericas.com?

We believe that ConnectAmericas is a very valuable initiative that, of course, drives the Inter-American Development Bank and through which suppliers throughout Latin America will be able to have much more agile access to knowledge of business and activity opportunities in their own countries, but also in other countries. What we see through ConnectAmericas is a vehicle of communication to reach all those suppliers with whom it might be more difficult to communicate directly and raise through that platform the operating standard for these providers and try to support their operations, not only in their countries but in other countries in the Latin American region and why not, take advantage of that platform to help them collaborate with us in other parts of the world.

Sign up on the Bechtel supplier portal

To all suppliers interested in collaborating with us, I invite you to register your interest and to respond to the questionnaires that are on our website www.supplier.bechtel.com. There they will be able to present your skills, present your company to the people in charge of evaluating the suppliers within Bechtel at the corporate level and in each of our business units will be able to know what you offer and contact you.

The Regional President of Bechtel in Latin America invites you to join ConnectAmericas.

I want to take the opportunity to extend an invitation to join this initiative and for all interested suppliers to participate in infrastructure, Engineering and Construction projects take advantage of the ConnectAmericas platform to register their companies, their experience, their capacity and in turn the information that this platform offers can be provided and can be made available to all participants in the industry. I think it would be in the best interest of all to boost the business in the Americas.

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The Build100 blog brings together Bechtel and industry experts to share insights and innovations around global sustainability issues that will have an impact over the next 100 years.

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