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Supply Chain Management of Harza Engineering Company -
January 10th, 2011
Located in the heart of Chicago, Harza Engineering Company is the premier water resources development firm in the Midwest. The company has a long history of successful projects in the United States and abroad, including the Derbendi Khan Dam, built in Iraq in 1963, which was at that time the world's tallest rock-fill dam; the Reza Shah Kabir Dam in Iran, one of the tallest thin-arch dams ever built; and the Guri Project in Venezuela, the largest hydroelectric facility in the world.
The founder of Harza Engineering Company, Leroy Francis Harza, was a student of Professor Daniel W. Mead, chairman of the Department of Civil Engineering at the University of Wisconsin at Madison. In the early years of the 20th century, Mead had established one of the first independent engineering consulting practices. According to Mead, dams and power plants should be designed and their construction supervised by experts in engineering, who should have no financial interest in the facilities. Only impartial engineering expertise could assure safe and economical facilities.
Working in Mead's design office, Harza learned about running an engineering consulting practice. In 1912, after graduating from Wisconsin, Harza moved to Portland, Oregon, to set up his own practice. Unfortunately, there was little demand for consulting engineers in the American Northwest, and the young man was forced to take a job in Chicago with a construction firm that was part of the Insull Group of utilities. Yet Harza was still convinced that there was potential for an independent engineering consulting practice, so he approach Samuel Insull to convince him of the benefits. Insull, an influential man in Chicago, was impressed by Harza's enthusiasm and agreed to help him form Harza Engineering Company.
During the 1920s Harza Engineering concentrated on designing dams. Its assignments included the Dix Dam in Kentucky, which, as the tallest rock-fill dam in the world at the time, provided the company with needed publicity. In the wake of this project, Harza Engineering was contracted for new projects across the country, and the firm grew in both total revenues and staffing. Under the Middle West Utilities Company, which was owned by Samuel Insull, Harza Engineering was contracted to build dams and electrical power plants for the rural electrification program initiated by Franklin D. Roosevelt's New Deal administration. However, by the end of 1932, at the height of the Great Depression, business came to a grinding halt. In one year the firm shrank from a total of 50 employees to just one--the owner himself.
Harza suffered a heart attack in 1933. As he recovered, so did the fortunes of his company. Harza Engineering was contracted by the Loop River Public Power Authority in Nebraska, and Harza Engineering began to build hydroelectric power plants funded by the federal government's PWA program. Additional assignments were soon forthcoming from the Army Corps of Engineers, who were responsible for constructing large flood control projects and power plants on rivers throughout the United States. One of the company's most lucrative contracts during this period came from the South Carolina Public Service Authority, which contracted Harza Engineering to design and construct the Santee Cooper project, the largest power plant in the state, at a cost of more than $50 million. By the end of the decade, Harza Engineering Company was employing almost 200 people.
With the entry of the United States into World War II, most of the company's engineers were called to active duty, and the firm gradually shrank until only the owner and a secretary remained. One of the bright spots during the war was the company's first overseas contract. Before the war, the government of Uruguay had arranged for the German government to design and build a hydroelectric dam in their country, but the Germans were prevented by the British blockade of Montevideo Harbor from delivering the generating equipment. Harza Engineering Company was called upon by the United States government to supply Uruguay with American equipment, and the company was subsequently contracted by Uruguay to make sure that all the equipment was correctly installed.
After the war, Harza was determined to return to the full range of activities that the company engaged in before the hostilities. The rural electrification program was resumed, and the market for electrical power increased across the United States. Soon the company was contracted to design and supervise the construction of hydroelectric dams in Wisconsin and Washington state. By 1947 Harza Engineering was once again fully operational and sound enough financially to significantly increase the number of its employees.
During the postwar period, the company also built upon its experience in Uruguay to attain many overseas contracts. The reconstruction era of the late 1940s was the heyday for engineering companies that designed large dams harnessing hydroelectric power, and Harza took advantage of numerous international opportunities. New projects were initiated in Taiwan, Iraq, Pakistan, Ethiopia, Jordan, the Philippines, Iran, and India. By the early 1950s approximately half the company's projects were located overseas.
After L. F. Harza died during the early 1950s, his successors at Harza Engineering continued to carry out the founder's vision. The company gained a worldwide reputation for quality, reliability, and honesty, and many developing countries sought its engineering services for important and sensitive projects. In 1951, for example, the company was contracted to design a flood control system for the Meric-Evros River that forms the boundary between Greece and Turkey. This extremely sensitive assignment involved an exchange of land and a reconfiguration of the actual boundary between the two countries, and Harza Engineering was required to balance the amount of land transferred to within one-tenth of an acre. In 1953 the company was asked to design a master plan for the irrigation of land adjacent to the Jordan River in the Kingdom of Jordan. That same year the company was also contracted to design a water control plan and construct a storage dam for the Tigris River in Iraq. During the mid and late 1950s Harza Engineering was asked by the government of Iran to design three dams, one of which would serve as the major water supply to Tehran, in addition to functioning as a source for irrigation and hydroelectric generation.
From 1958 to 1962 Harza engineers were working for Vietnam, Laos, Cambodia, and Thailand to conduct a hydrologic study on the Mekong Delta. At approximately the same time, after India had gained its independence from England, the Indian government diverted the water from rivers in the Indus Basin system for use exclusively in India, denying over three million people in Pakistan access to the water. The United States and the industrialized nations of Western Europe provided more than $2 billion to the Pakistan government for the development of other water sources to offset the loss of the Indus Basin headwaters; Harza Engineering was appointed as the engineering consultant to the Pakistan government. The Mangla Dam in Pakistan is one result of the company's efforts in that country.
Throughout the 1960s and 1970s Harza Engineering was heavily involved in providing engineering services in Iran. Projects included a multi-purpose dam for the Karun River in southern Iran, which became a 650-foot arch dam providing hydroelectric power of over one million kilowatts. Downstream, Harza Engineering designed a complex but highly efficient irrigation distribution system for arid land. Unfortunately, when the Islamic Revolution overthrew the Shah of Iran, Harza Engineering Company was asked to leave the country. The firm had already completed its major projects, which were in full operating condition at the time of the revolution; however, the company was unable to collect its fees for the work completed. Harza Engineering appealed to the international tribunal in The Hague, Netherlands, but the company's claims were never resolved.
In the late 1970s the company worked extensively in Latin America. In 1979, under the auspices of the Kissinger Commission, Harza Engineering was asked to design a plan for flood control, irrigation, and drainage in the Sula Valley in northern Honduras. Covering 258,000 acres, the project was of great benefit to farmers in the surrounding area. The company also designed all of the hydroelectric generating plants in El Salvador.
Major projects in the United States during these years included the controversial Tunnel and Reservoir Project (TARP) in Chicago. Chicago has combined sewers, where flood runoff and domestic sewage flow along the same sewers to treatment plants. When the city experiences extreme rainfall, excess water, including sewage, is dumped into the Chicago River or Lake Michigan. Harza Engineering was asked to find a solution to the problem and continued to work on it into the mid-1990s. Other major domestic projects included a water supply to Denver, a pumped-storage project in Bath Country, Virginia, and a hydroelectric generation project in Susitna, Alaska. The Susitna project included the design and construction of the highest rock-fill dam in North America.
The early 1990s brought economic recession, which hit the engineering field hard. Although Harza Engineering had grown into one of the largest and most prestigious firms in the industry, it did not escape the effects of the downturn. Amid keen competition, management at the company chose to consolidate its services with those of another firm in order to cultivate more contracts. As a result, Harza Engineering merged with Kaldveer & Associates, a consulting firm in the field of geotechnical engineering. In 1992 the company was listed as the 22nd largest engineering firm in the international market, and 13th overall in the specialized power engineering market.
By the end of 1993 the recession had nearly come to an end, and Harza Engineering concentrated on improving its international market share. Since the market for engineering consulting services in the Middle East was essentially saturated, the firm turned toward opportunities in China, Latin America, and Eastern Europe. With the demise of Communism, many nations in the former East Bloc began to contract specialized engineering consulting firms for help in rebuilding their infrastructure. Harza was at the forefront of this development. By 1995 the company had moved from 13th to 10th on the list of companies in the field of power engineering consulting.