BHEL P R

“BHARAT HEAVY ELECTRICALS LIMITED

&

THE STUDY OF MARKET POTENTIAL FOR CONTROL EQUIPMENTS AT

BHEL”

Dissertation Submitted to the ALAGAPPA UNIVERSITY in partial fulfillment of the

requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

CHAKRAPANI AWASTHI

Enrollment No:-083173871

Project Guide

Mr.-Manohar Ramesh MBA

NIILM School of Business

Bangalore-560025

DIRECTORATE OF DISTANCE EDUCATION

ALAGAPPA UNIVERSITY

KARAIKUDI – 630 003

JUNE 2010

1

DECLARATION

I hereby declare that the dissertation market potential for control equipment’s at

BHELsubmitted for the MBA (General) degree is my original work and the dissertation has not

formed the basis for the award of any Degree, Associate Ship, Fellowship or any other similar

titles.

Place:-Bangalore

Date:-30 June 2010 Signature of the Student

2

GUIDE CERTIFICATE

This is to certify that the dissertation entitled “THE STUDY OF MARKET POTENTIAL FOR

CONTROL EQUIPMENTS AT BHEL” is a bonafied research work carried out by

CHAKRAPANI AWASTHI & ENROLLEMENT NO. 083173871 of MBA (General) in

partial fulfillment of the requirements for the award of the degree of Master of Business

Administration ( General ) and that the dissertation has not found the basis for the award

previously of any Degree, Diploma, Associate ship, Fellowship or any other similar title.

Place: Signature of the Guide

Date: Manohar Ramesh

Head – Corporate Relations & Placement

NSB Bangalore

3

ACKNOWLEDGEMENT

It’s my special privilege to extend words of thanks to all of those who have helped me and

encouraged me in completing the internship successfully.

I sincerely thank Mr. Manohar Ramesh, Head CRPC – NIILM School of Business, for giving me

an opportunity to take up this research. I would like to express my profound sense of gratitude to

Mrs. Sasmita Bebortha, Campus Head– NIILM School of Business for providing me support to

conduct this research.

I feel extremely privileged that I completed my project under the guidance of Prof. Krishna K.

Havaldar, who spent his quality time even during his busy schedule to make me understand the

each and every aspect about the procedure of carrying out research study and guiding me

throughout the project.

I owe a special debt of gratitude to Mr. G. Kalyana Sundaram, Senior Manager HRD who has

been kind enough to permit me to take up internship study at BHEL-EDN. My warm thanks to

Mr. A. T. Seralathan, Manager Marketing CE, Mr. G. Senthil Kumar, Deputy General

Manager Marketing CE and Mr. Shailesh Kumar Singh, for their kind co-operation.

I also thank Prof. B. Suresh and Prof. Rajasekhar, program managers for their constant

support and well wishes during the project.

My gratitude will not be complete without thanking God and I am grateful to my beloved parents

and friends who have been a constant source of inspiration.

Chakrapani Awasthi

4

TABLE OF CONTENTS

Sl. No Topics Page no

Introduction

1 Industry profile 9

2 Company Profile 12

Functional Analysis

3 Production Department 33

4 Marketing & commercial department 38

5 Human resources department 41

6 Finance department 60

7 Quality Department 70

8 MIS 76

9 Factory service department 78

10 Summary of analysis & inference 81

PART-B Study of the Problem

11 Research design 84

12 Methodology 85

13 Limitation of the study 86

5

14 Summary of findings 91

15 Inference 92

16 Conclusion 94

Table

No.PARTICULARS Page No.

17 My Learning 95

18 Bibliography 96

19 Annexure 97

6

LIST OF TABLES

Si

No. Particulars

Page

No.

1 Major Manufacturing plants & Their products 16

2 No of customers purchased the control equipment’s 86

3 Dependence of customer on supplier 87

4 Awareness about BHEL 87

5 Opinion about BHEL 89

6 No. Of potential buyers 90

7

LIST OF CHARTS

Sl No. Particulars Page No.

1 Shares holders pattern 18

2 Market shares of BHEL 18

3 BHEL’s role in power sector 19

4 Organisation chart for P&A 42

5 Finance Department 61

6 Turnover for last five years,PBT 65

7 Performance and highlight 67

8 Quality Department 70

9 CII model for TQM(BHEL) 73

10 MIS 78

11 Business activity flow chart 80

12 No. Of customers purchased the control equipment’s 86

13 Awareness about BHEL 88

14 Opinion about BHEL 89

15 No.of Potential Buyers 90

8

INDUSTRY PROFILE

The critical role played by the power industry in the economic progress of a country has to be

emphasized. A self sufficient power industry is vital for a nation to achieve economic stability.

Indian Power Industry

(A) Before Independence

The British controlled the Indian power industry firmly before Independence. The then legal and

policy framework was conducive to private ownership, with not much regulation with regard to

operational safety.

(B) Post Independence

Immediately after Independence, the country was faced with capacity restraint. India adopted a

socialist structure for economic growth and all the major industries were controlled by public

sector enterprises. By 1970's India had nationalized most of its energy assets, due to its

commitment to social goals. By the late 1980's the Indian economy felt the strain of the socialist

agenda followed since independence. Faced with a serious deterioration in public finance and

balance of payment crisis, the Union government as part of its policy of economic liberalization

allowed greater investment by private sector in the power industry.

Power

Constitutional Position

Power as a matter of legislative and executive competence, falls in the Concurrent List (List III

of the Seventh Schedule to the Constitution of India).Both the Parliament and state legislatures

9

have the rights to pass laws on the matter and any law passed by the Parliament overrides the

existing state laws unless

Consolidate and rationalize existing laws.

To address the issues of developing industry including regulation, power trading, non

discriminatory open access, choice of dispensing with vertically integrated state

enterprises and encouraging private enterprise.

Future Trends:

According to experts the private sector would play a greater role in power generation and

foreign investments would increase considerable in his sector.

The government of India’s Hydrocarbon vision 2025 gives in details the guidelines for

the policies in India for the next 25 years to attract investment in exploration, production,

refining and distribution of petroleum products.

Analysis of Indian power sector:

India had been traditionally depending on thermal power as a major source of power generation ,

which constitutes about 65% of current capacity . Balance is contributed by Hydel power (26%),

Nuclear (3 %) and Renewable energy (6%).Over 87% of the current installed capacity in the

country is by the government, and with the state governments having lion’s a share of over 52%

and the balance by central (federal) government. Due to the initiative of government of India to

encourage Public Private Partnerships in power sector, share of private companies has gone up to

steadily to MW, about 13 % of the installed capacity. This report covers the overall industry

scenario, demand & supply, growth drivers, critical success factors for the industry. It also deals

with investment opportunities in the sector and an outlook.

'Indian Power Sector Analysis” focuses on the growing marketplace for power sector in India. It

thoroughly investigates the current market trends, evolving markets, and growth prospects for the

Indian power industry. It will help the client to analyze the driving forces and leading-edge

opportunities critical to the success of the power industry.

10

The research study analyzes the prevailing scenario in the Indian power sector along with the

existing policy and regulatory framework. It tracks the growth and performance of the Indian

power sector, the ongoing reform initiatives and offers statistical updates on power generation,

transmission and distribution, along with a rational future forecast.

11

Key Findings:

- More than 64% of India’s total installed capacity is contributed by thermal power. Significant

jump in unit size and steam parameters will result in higher efficiencies and better economics for

the Indian power sector.

- Western region accounts for largest share (30.09%) of the installed power in India followed by

Southern region with 27.76%.

- Unbalanced growth remains the cause of concern for the Indian power sector. Only about 56%

of households have access to electricity, with the rural access being 44% and urban access about

82%.

- Southern region remains the dominant region in renewable energy source accounting for more

than 57% of the total renewable energy installed capacity.

Key Players

These major players currently operating in the Indian power sector such as National Thermal

Power Corporation Limited, Nuclear Power Corporation of India Limited, North Eastern Electric

Power Corporation Limited, Power Grid Corporation of India, Tata Power, etc.

12

BHEL – An Overview

BHEL is the largest engineering and manufacture enterprise in India in the energy

related/infrastructure sector today. BHEL has built over the years ,a robust domestic market

position by becoming the largest supplier of power plant equipment in India , and by

developing strong market presence in select segments of the industrial sector and the

Railways. BHEL was established more than 40years ago ushering in the indigenous Heavy

Electrical Equipment industry in India , a dream which has been more than realized with

a well recognized track record of performance. It has been earning profits continuously since

1971-72. BHEL has the proud privilege of having been selected as one of the

‘NAVARATNA’ PSU by the government of India.

BHEL manufactures over 180 products under 30 major product groups and caters to core

sector of the Indian Economy viz.,Power Generation and Transmission , Industry ,

Transportation , Renewable Energy , Defense , etc. The wide network of BHEL’s 14

manufacturing divisions , 4 power sector regional centers , 8 service centers , 15 regional

offices and a large number of Project Sites spread all over India and abroad enables the

Company to promptly serve its customers and provide them with suitable products ,

systems and services-efficiently and at competitive prices. The quality & reliability of its

products is due to the emphasis on design, engineering and manufacturing to international

standards by acquiring and adapting some of the best technologies from leading companies in the

world, together with technologies developed in its own R&D centers.

BHEL has attained ISO 9001 certificate for quality management and all the

manufacturing units/divisions of BHEL have been upgraded to the latest ISO-9001:2000

version. All the major units/division of BHEL have been awarded ISO-14001 certificate for

Environmental Management Systems and OHSAS-18001 certification for Occupational

Health and Safety Management Systems. BHEL was the first Public Sector Company in

the country to win the coveted ‘PRIZE’ for its Haridwar unit under the CII Exim Award

forbusiness excellence, as per the globally recognized model of European Foundation for

Quality Management.

13

The company received EEPC’s Top Exports for the seventeenth year in succession. It

has also won the SCOPE Meritorious Award for R&D and Innovation 2005-06 for

commendable contribution in the area of R&D and Innovation.

BHEL has:

Installed equipment for over 90,000 MW of power generation - for Utilities, Captive

and Industrial users.

Supplied over 2,00,000 MVA transformer capacity and sustained equipment

operating in Transmission & Distribution network up to 400 KV - AC & DC. 

Supplied over 25,000 Motors with Drive Control System to Power projects,

Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc. 

Supplied Traction electrics and AC/DC locos to power over 12,000 Kms Railway

network. Supplied over one million Valves to Power Plants and other Industries.

BHEL's operations are organized around three business sectors, namely Power,

Industry including Transmission, Transportation, Telecommunication, & Renewable Energy

and Overseas Business. This enables BHEL to have a strong customer orientation, to be

sensitive to his needs and respond quickly to the changes in the market

The greatest strength of BHEL is its highly skilled and committed 47,000 employees. Every

employee is given an equal opportunity to develop himself and improve his position. Continuous

training and retraining, career planning, a positive work culture and participative style of

management have engendered development of a committed and motivated work force leading to

enhanced productivity and higher levels of quality.

BHEL has a major presence in the domestic power market and accounts for 64% of the

nations installed power generation capacity , thus making a significant contribution to the

growth and development of the country’s economy over the years. It has had consistent

track record of growth, performance and profitability and has been reported by the World Bank

as being “one of the most efficient enterprises in the industrial sector at par with international

standards of efficiency”.

14

BHEL ‘s Contribution to various Core Sectors:

Power Transmission Sector:

BHEL is a leader in the field of power transmission in India with a wide range of

transmission systems and products. BHEL manufactured Transmission Products have a

proven track record in India and abroad. It also provides turnkey solutions Utilities and

Industries. Substations and Reactive Power Compensation installations set up by BHEL are

in operation all over the country. It has executed HVDC project in India with major

HVDC products viz., converter transformers , smoothing reactors , thermistor valves and

filter capacitors manufactured and supplied from its works.

Industry Sector:

Since its inception in 1982 , the Industry Sector business has grown at an impressive

rate and contributes significantly to BHEL’s turnover. It supplies all major equipment for

industries: AC/DC machine, solar photovoltaic systems and heating systems ,electrostatic

precipitators, fabric filters, etc. BHEL also provides solution for water management

systems, coal & ash handling plants.

The industries which BHEL serves include Steel, Aluminum , Fertilizer, Refinery ,Oil

&Gas Exploration ;Production & Pipelines , Petrochemical ,Chemicals ,Automobiles, Cement,

Sugar ,Paper, Mining, Textiles etc.

Transportation Sector:

In the transportation field , BHEL’s product range covers : Mainline AC locomotives,

AC/DC dual-voltage locomotives, diesel-electric shunting locomotives, EMU Coaches, diesel

power car and diesel-electric locomotives, track machines and solutions for Urban

Transportation Systems ,including Electric Trolley Buses, LRT & MRTs. Most of the

trains operated by Indian Railways are equipped with traction equipment and controls

manufactured and supplied by BHEL.

15

BHEL IN INDIA :

Registered office & Corporate Headquarters : NEW DELHI

Corporate Research& development Division : HYDERABAB

Over 100 Power Plant Project Sites all over India

BHEL has 14 Manufacturing units in India:

BANGALORE

BHOPAL

GOINDWAL

HARIDWAR

HYDERABAD

JAGDISHPUR

JHANSI

RANIPET

RUDRAPUR

TIRUCHIRAPPALLI

BHEL Service Centers:

CHANDIGARH

KOLKATA

NAGAPUR

NOIDA

PATNA

SECUNDERABAD

VADODARA

VARNASI

BHEL Regional Offices:

NOIDA (NORTHERN REGION)

KOLKATA (EASTERN REGION)

NAGPUR (WESTERN REGION)

16

MAJOR MANUFACTURING PLANTS AND THEIR

PRODUCTS

17

MANUFACTURING PLANT

PROFILE

PRODUCT

HEP, BHOPAL Hydro sets, Nuclear turbines, Thermal sets (110

MW), AC Motors & large Electric Motors, Power

Transformers, Traction Machine & Controls for

traction & industrial applications, Diesel Generating

sets, Switchgear, Capacitors, Industrial turbines.

TP, JHANSI Power transformers (less than 220 KV) freight Loco

transformers, Instrument transformers, AC Locos

Diesel Electric Shutters etc.

HPEP, HYDERABAD Thermal sets, Gas turbine generator sets combined

cycle/Cogan plants, Industrial TG sets, Compressors,

Oil Rigs, mills, SF & MOCB switchgear, Heat

exchanger.

HEEP, HARDWAR Casting and forging for thermal/Hydro sets, motors

defense etc. Special facilities like 9000T press For

forgings, electric arc furnaces for melting steel, etc.

SSTP, TRICHY Seamless steel tubes.

BAP, RANIPET Boiler auxiliary fans, Electrostatic Preheaters.

EDN, BAGALORE Variable speed drives, programmable. Login and

digital controllers, Power devices, meters,

photovoltaic/solar – Panels, simulators, etc.

EPD, BANGALORE Insulators: solid core, bushings, pin.

BOARD OF DIRECTORS:

18

Shri K. Ravi Kumar Chairman & Managing Director

Shri Dr. Surajit Mitra Director

Shri Dr. Sutanu Behuria Director

Shri Sanjay M. Dadlika Director

Shri Ashok K. Aggarwal Director

Shri Shekhar Datta Director

Shri Manish Gupta Director

Shri Madhukar Director

Shri S. Ravi Director

Shri C.S.Verma Director (Finance)

Shri C.P.Singh Director (E, R&D)

Shri Anil Sachdev Director (HR)

Shri B.P.Rao Director (IS&P)

Shri N.K. Sinha Company Secretary

19

SHAREHOLDING PATTERN:

MARKET SHARE :

20

BHEL ‘S ROLE IN INDIAN POWER SECTOR

BHEL ELECTRONIC DIVISION -A PROFILE

The Electronics Division (EDN) of BHEL, situated at Bangalore, was

formed in 1976,mainly to establish a strong base in the areas of

power and control electronics, to supplement the company’s pioneering

efforts in power generation and transmission equipment manufacturing.

The division came into being when BHEL took over the Radio and

Electricals Manufacturing Company (RAMCO), which formally merged

with BHEL-EDN in 1980. Making a modest beginning with a turnover

of Rs.3 crore in 1976-77, the unit was poised to record a turnover of

over Rs.500 crore. The growth is amply reflected in the fact that most

of the power plants and process industries in the country are equipped

with products and systems made by BHEL-EDN.

21

It has established itself as a market leader in new generation Power

Plant Automation System. Besides manufacturing and supplying state-of-

the-art control and automation equipment and systems for power plants

and process industries, the Electronics Division has also emerged as a

leading player in the fields of Power Transmission and Distribution,

Industry, Transportation and Renewable energy sources.

BHEL-EDN has been successful in meeting the demanding

requirements of International markets in terms of technical

specifications and qualities, establishing references in over 25 countries

by installation of Automation, Semiconductors and Photovoltaic

Systems.

Focus on achieving customer delight through product excellence,

adherence to quality, relentless efforts and unwavering commitment to

in-house solutions, along with Technical collaborations with international

leaders, have been the main factors contributing to the units rapid

growth and success.

In recognition of its commitment to the quality systems and

procedures, the unit has been certified for ISO 9001. It is also the first

Electronics Industry in Bangalore to get ISO 14001 Environment

Management System Certification and OHSAS 18001 Certification.

In its commitment towards integrity, confidentiality, availability and

security of information, EDN has been certified for ISO/IEC

27001:2005, Information Security Management System (ISMS) Standard.

In addition to their comprehensive products profile a number of new

technology areas have been earmarked for future developments. Prominent

among them are power and control electronics for traction application,

energy management systems, training simulators for defense applications,

electronic energy meters etc.

BHEL’s vision envisages further growth for EDN, transforming it into

a world class enterprise, providing comprehensive solutions to

22

customers while exploring new frontiers in software and hardware

application to fulfill the growing needs and expectations of the global

market. The company has already joined the United Nations “Global

Compact” and has committed to support the set of core values

enshrined in its ten principles in the areas of human rights, labor

standards, environment and anti-corruption.

BHEL EDN comprises an excellent and experienced group of 1950

employees who are classified into executives, supervisors, artisans and who

are further classified into skilled, semi skilled and unskilled workers.

VISION

A World Class Engineering Enterprise .Committed to Enhancing

Stakeholder Value.

MISSION:

To be an Indian Multinational Engineering .Enterprise providing Total

Business Solutions. Through Quality Products , Systems and Services in

the fields of Energy, Industry. Transportation, Infrastructure, and other

potential areas.

VALUES:

Zeal to excel and Zest for Change.

Integrity and Fairness in all Matters.

Respect for Dignity and Potential of Individuals.

Strict Adherence to Commitments.

Ensure Speed of Response.

Foster Learning , Creativity and Team work.

Loyalty and Pride in the Company

CONCERN FOR SOCIETY

Striving for the growth of the nation, BHEL-Electronics Division has always

been contributing for the upliftment of the poorer and backward sections of

23

the society. Three villages near Bangalore have been adopted by BHEL and

a number of social welfare programmes like solar electricity, low cost

housing, educational, medical and drinking water facilities have been

implemented resulting in remarkable transformation in the living conditions

of the villagers.

OBJECTIVES

BHEL’s objectives for the current financial year are to achieve 7395MW

power plant equipment’s which is planned and synchronization comprising

6983MW Thermal and 412 MW in Hydro. Similarly 6900MW have been

planned and trial operation completion during 2009-10 comprising 6488MW

Thermal and 412MW of Hydro. In addition BHEL also planning to

commission 260 MW of lift irrigation and other small Hydro projects.

In line with the capacity and capability enhancement strategy adopted by the

company, the manufacturing capacity expansion from 10000MW per annum

to 15000MW per annum is proceeding apace and plans are afoot to hike this

further to 20000MW by 2011-12.

THE MAJOR MILE STONES :

1976 : Take over of Remco.

1977 : Supply of first control equipment product.

1983 : Supply of first Photovoltaic Panel.

1985 : Supply of steam turbine control.

1986 : Entry into telecom with first EPABX supply.

1987 : Entry into HVDC controls for Rihand-Delhi.

: Supply of first AC drive system for ID fan control in

500MW power plant.

1988 : Supply of Procontrol systems for C & I.

1992:Entry into Defense Electronics business.

1994 : Supply of Gas Turbine Controls.

24

1995 : Supply of MAX-L and MAX-XL exchanges.

2000 : Supply of first power converter for 3PH 6000 HP LOCOS.

2001 : Supply of first control electronics for 3PH 6000 HP

LOCOS.

: Supply of first converter for 3PH AC / DC EMU

: Introduction of first high power SFC for lift irrigation &

pumped

storage scheme

2002 : Introduction of new technology for C & I : maxDNA

2003 : First PADO system commissioned at 500 MW at

Simhadri

: ERP implementation using SAP package

2004 : First unified maxDNA based C & I system commissioned

for 500MW at

Ramagundam

: 3MW Photovoltaic production achieved

2005 : First 500MW Nuclear Turbine at Tarapur unit 4

commissioned with EDN

Supplied TG controls.

: INSAT 4A launched by ISRO on 22nd December 2005

with Batteries and

Solar Panels of BHEL make

PRODUCT PROFILE

CONTROL EQUIPMENT:

Power Plant Automation (DCS)

Industry Automation

AC & DC Drives

Power Supplies

25

Excitation Systems

Reactive Power Management Systems (RPM) like SVC

SCADA

PADO (Performance Analysis, Diagnostics & Optimization)

SEMICONDUCTORS & PHOTOVOLTIC SYSTEMS:

Power Semiconductor Devices

Solar Cells, PV Modules & PV Systems

Space Grand Solar Panels & Batteries

DEFENCE ELECTRONICS:

Infantry Weapon Effects Simulator System (IWESS)

Small Arms Training Simulator (SATS)

SIMFIRE

Integrated Platform Management System (IPMS)

Ship Control System

SERVICE OFFERED:

Harmonic Measurement and Analysis

System study for Reactive Power Compensation

Erection and commissioning by highly experienced team of

Engineers

In -house expertise for efficient Service-After-Sales

Assured Supply of Spares

A highly competent team to respond to Customers’ emergency

needs

Total Solutions to Renovation and Modernization requirements

Concept to Commissioning solution for large size Solar Power

Plants

A BRIEF OVER-VIEW OF THE PRODUCTS

26

POWER PLANT AUTOMATION

Any power plant is a mini industrial cosmos with a variety of control

elements with intricate inter-relationships. BHEL-EDN offers a large variety

of control equipments for power stations ranging from simple control

systems to single push button automation for power plants of any size.

Digital automation systems for controlling steam/water turbines, boilers and

generators employing Distributed Control Systems (DCS) are amongst the

products that are offered. The systems for power plants include CRT-based

MAN-MACHINE interface and computer based information management

and optimization systems.

BHEL-EDN also has unified DCS solution for the entire power plant

comprising of boiler, turbine balance of plant (BOP) bringing uniformity in

hardware, software, and operation methodology as well as spares inventory

to the user.

Amongst the individual control systems for steam generators manufactured

by BHEL-EDN are:

-Burner management systems

-Secondary air dampener systems

-Soot blower control systems &

-Bypass control systems

-BHEL-EDN manufactures integrated control and instrumentation

systems capable of monitoring and controlling the critical

parameters of a steam turbine to high degree of accuracy. The

system is designed for automatic safe start up and shut down, as

well as efficient operation during normal and abnormal conditions.

Balance of plant (BOP) automation comprises of:

- Control

- Monitoring and information system including regulatory controls.

27

- Co-ordinate controls

- Sequential controls

- Interlocks and protections

- Alarm annunciation

- Operator interface units as well as performance calculation for the

entire power plant.

Higher-level automation can also be offered ensuring automatic plant start-

up, shut down and plant optimization.

Solutions also include automation for gas turbine based on open and

combined cycle power plants as well as hydro power plants.

BHEL-EDN also manufactures SPEEDTRONIC MARK IV/MARKV

controls for gas turbines with technical know-how from GE (USA). BHEL-

EDN is the only sub licensee of GE (USA) for manufacturing and servicing

MARK IV/MARKV gas turbine controls in the world.

DC DRIVE SYSTEMS:

BHEL-EDN’s Thyristorised Digital Convertors are used for DC

drives with constant power or constant torque control. Many such

converters are already in service in rolling mills and process lines in

industries like steel, aluminums, rubber, cement, coal and copper.

Converters up to 10000A ratings with digital controls have been

supplied by BHEL-EDN.

AC DRIVE SYSTEMS:

BHEL-EDN’s adjustable speed AC Drive System with load

commutated inverter is a highly energy efficient system for

controlling synchronous motors used for flow Control Applications

like fans, pumps, and compressors in power plants and industries.

Speed control of squirrel cage induction motors with GTO (Gate

Turnoff) thermistors’ are cost effective and low on maintenance and

28

find widespread use in industries. The digital controls with hot stand

by control and power channel increase system availability and make

these drives user friendly. A number of systems have been designed

for ID Fans and Boiler Feed Pumps (BFP) of various ratings up to

500 MW power plants.

EXCITATION SYSTEMS

BHEL-EDN offers Excitation Systems in Synchronous Generators

for hydro, thermal, nuclear, co-generation, and combined cycle, DG

power plants as well as for synchronous machines in industrial

applications. With the ever-growing size and complexities of the

power system network, fast response excitation systems capable of

meeting more stringent specifications are called for to improve

system stability and availability. The state-of-the-art excitation

system offered by EDN includes fast acting, fully controlled

semiconductor bridges along with digital controls. Redundant

philosophy in power and control circuits employed ensures high

availability and hot repair/ replacement possibilities. The digital

electronics with self-diagnostic feature, programmable logic controls

and serial communication etc., provide easy and efficient integration

with plant DDC. Unique facility exists at works for closed loop

performance testing, using an online real time generator simulator.

STATIC VAR COMPENSATION SYSTEMS (SVC)

With quality of power supply-gaining prominence both in utilities

and industries, BHEL-EDN offers indigenously developed

technology for reactive power management by way of Series

Compensation Systems and Shunt Compensation Systems. A number

of systems have been supplied for both utility and industrial

applications for improvement of voltage, reactive power controls etc.

BHEL-EDN manufactures thyristor valves and controls for the SVC.

29

To cater to the need of LT loads, solid state switched capacitor

systems using Thyristors or Triacs are also offered for improving the

power factor, reducing the reactive power demand.

POWER SEMICONDUCTOR DEVICES

BHEL-EDN manufactures Power Thermistors Devices and Diodes of

various ratings to meet the requirement of high power electronic

systems used for various applications in Power, Industry and

Transportation systems. While high power thermistors devices are

used in high current rectifiers for Industrial projects, high voltage

thermistor devices are used in HVDC applications.

PHOTOVOLTAIC SYSTEMS

Realizing the tremendous potential of Solar Power as a Non-Conventional Energy Source, BHEL-EDN started manufacturing Solar Photovoltaic (SPV) Cells and Modules besides developing complete SPV Systems. A sophisticated facility with a capacity of 2MW per annum has been set up for manufacture of cells and modules. The SPV systems are specifically designed keeping in mind the necessity. Some of the major systems in operation are SPV Power Plants (Stand Alone and Grid Interactive), Solar Power Systems for Rural Radio Phones, Telecommunications, Railway Signaling and other applications.

DEFENCE ELECTRONICS

With the strong background of Control, Instrumentation and System

aspects of power plants and industries, BHEL-EDN has diversified

into the field of Simulators for training police, paramilitary and

defense personnel with state-of-the-art technology. The following

types of Simulators are manufactured.

SIMFIRE

Simfire is laser based outdoor training simulator for training of crews

in armored fighting vehicles with precision gunnery and tactical

warfare without using live ammunition, resulting in a much more

effective training at much lower cost.

30

INFANTRY WEAPON EFFECTS SIMULATION SYSTEM

The Infantry Weapon Effects Simulation System (IWESS) is a laser-

based system, which simulates the effects of small arms live fire like

Self Loading Rifle, Light Machine Gun, and Snipers etc. The IWESS

is used for training in Police, Paramilitary, Military forces etc. The

IWESS greatly reduces the usage of real ammunition and it gives the

soldier the realism of being able to accurately use his personal

weapon and also gives immediate feedback about the effectiveness of

his fire position, shooting skills, weapon skills and use of ground

cover.

SMALL ARMS TRAINING SIMULATOR

Small Arms Training Simulator (SATS) is an indoor simulator used

for marksmanship training. The system can be adopted for small arms

such as Rifles, Light Machine Guns etc. The SATS system is

computer based and can accurately simulate small arms with real

recoil effect. It is a substitute for live ranging training, thereby

reducing ammunition cost involved in training.

31

WORLD CLASS TECHNOLOGIES

With a view to bring world class technologies from world leaders to Indian

clients, BHEL-EDN has entered into strategic alliance with many

international giants, and sourced technologies from them.

The significant tie-ups for different products/systems include:

Siemens AG : DC Drives

: Power Semiconductor Devices

: Brushless Excitation System

: Electronic Automation for

Steam Turbines

AD Trans (through CLW) : 3 Phase AC Loco

Taxis : DC/AC EMU

ABB : HVDC Controls

: Distributed Control Systems]

: Static Excitation Systems

: Large Area Power

Semiconductor Devices

General Electric : AC Drive Controls

: Gas Turbine Controls

Sulzer Brothers : HP/LP, HP, PRDS Controls

C-DOT, India : RAX, MAX-L, MAX-XL

Stock Eqpt. Co. : Gravimetric Feeder Controls

Combustion Engg. : Flame Scanner Amplifiers

Lockheed Martin

Information Systems : Tactical Training Simulators for

Tanks

OSCMAR : Infantry Weapon Effects

Simulator Systems

32

Spartans : Small Arms Training

Simulators

33

BHEL CUSTOMER’S PROFILE :

ABB : Static excitation systems

: HVDC Control

: Semi-conductors

Siemens AG: DC Drive Control

: Semiconductors

OSCMAR : Infantry Weapon Effects Simulator System

NTPC

Indian Railways

L & T Cements

Defense ministry

TATA Iron & steel

Nuclear power corporation

Ahmedabad electric company

Tata electric company

ONGC

Reliance industry

Indian Petro Chemicals

Easy steel

34

ELECTRONICS DIVISION GROWTH

BHEL- EDN has grown rapidly over a period of time. Its shown in the

below graph:

35

SWOT ANALYSIS of BHEL-EDN:

SWOT analysis stands for strength, weakness, opportunities and threats

an analysis it is given below:

STRENGTHS:

BHEL is India’s leading manufacturer of power equipment.

It has diversified into all vital sectors of the industry, reaching

its benefits of energy to every corner of the country.

It has very good product mix that is place, product, price, promotion.

It has an effective human resource management in the country.

It has a consistent track record of growth , performance and

profitability.

Good work culture, job security, and high employment.

Quality products and services.

A customer focused company that firmly believes in being a friend

for life.

Continuous improvement in production rates especially in Control

Equipment, which is the major contributor of profits.

Staff optimization by downsizing.

Talent scouting through campus recruiting and administration of

nationwide test.

WEAKNESSES:

The operating expenses of the company are comparatively high

which affects in its profit earnings capacity.

Slow updating of technology with time.

Overstaffed departments with people not opting for VRS.

Slow processing of documents due to centralized administration.

Poor accountability on people contribution and performance.

36

Union intervention in the company’s policies and working.

There is lack of an aggressive and dynamic manufacturing.

OPPORTUNITIES:

Customers looking for Turnkey capability.

Enter into Power Generation Business

Providing Total Services to Co-gen. and Captive Power Plant needs

of industry

Increased volume in Transmission and Distribution Business

Usage of international financing

Develop as a Troubleshooting service provider

Increase export share

Strategic acquisition and mergers

To expand its market share by introducing new products.

To firm up strategic alliance with global leaders for the introduction

of better and newer products.

To provide opportunities to individuals to advance their career

prospects at an incredible pace.

Support by Government.

Availability of labour at cheap costs.

Order and collaborations from overseas.

THREATS:

Competition from few companies.

Fast technological changes may affect the company.

Absence abroad may hamper export prospects unlike the competing

MNCs.

New entrants in the field.

Disinvestment policy of the Government.

High cost price in view of overheads.

37

38

FUNTIONAL ANALYSIS

PRODUCTION DEPARTMENT

Production in EDN is divided into 3 product groups.

PRODUCT GROUP

CONTROL

EQUIPMENT

SEMI-CONDUCTOR &

PHOTOVOLTIC

DEFENCE

SIMULATOR

PRODUCT PRODUCTIONTYPE LAYOUT

Control equipment Job order production Group technology

(Product and Process)

SC & PV Batch production Mixed & product

Defense simulator Job order production Product and Process

39

PRODUCTION MODEL

FABRICATION SHOP & TOOL ROOM

There are 2 fabrication shops in the electronics division and one tool room

for the entire factory needs. Fabrication shop no.1 caters the need for meters

and capacitors division. Fabrication shop no.2 caters the requirement of CE

division.

Tool room is common for the division. Tool room has number of machine

tools such as lathes, milling machines, grinding machines, NC & CNC

machines and many special purpose machines.

DESIGNS:

Design department comes into picture after the commercial group prepares a

MO and sends it to designs. Its significance lies in the fact that most of the

orders of BHEL-EDN are customized. The design department takes into

consideration the requirements and features asked by the customer and

design the product accordingly.

PROCUREMENT OF MATERIALS:

MATERIAL REQUIREMENT

STORESMRP PROBABLE DATE

(Checks for the materials OF

COMPLETION

40

in stores) (it looks for

the pending order)

RAISING INDENT

SUPPLIER

FOLLOW UP:

Present month requirement is received by PPC and MPC and once in 3

months they meet and review the issues.

INVENTORY:

Additional material, new material and reduction material are accommodated

and amended by purchase department. BHEL-EDN maintains minimum

order quantity method for non-moving and slow moving materials. This is to

allow of purchasing any quantity from manufacturers, where batch order,

that is MOQ (no less order if it is necessary than it is ordered). Hence it

takes care of non-moving and slow moving materials.

MATERIALS MANAGEMENT:

The department’s major responsibility is to make sure that the right material

of the right quality and quantity is supplied at the right price and at the right

time. AGM or a senior DGM usually heads this department.

There are two departments that work under materials management for

achieving its objectives, they are:

Purchase

Stores

MATERIALS PLANNING AND CONTROL (MPC):

This department is usually headed by senior DGM. This department plays a

strategic role in materials management. MPC is the prime agency responsible

for the availability of any material required for production and hence

41

constantly keeps track of material status. It is the department, which receives

the material requisition (M.R) from the engineering dept and makes sure that

the required material is made available to the manufacturing section. As this

department has the major responsibility of the stock in the store and for

allocation and coordination with the purchase department for procuring the

right material.

Functions of M.P.C:

Allocation of materials

Follow up

Authorization

Inventory control

PURCHASE:

This department is headed by the senior DGM. This is the department that

has key responsibility for placing the purchase order (P.O) and procuring the

right material.

PURCHASE PROCESS:

The technique of processing the right material from right supplier at a right

price can be termed as the major function of the purchase. The steps carried

out in this process of purchase are:

1. An initial check if there are any orders placed for similar material. If

so then order placed is amended for the additional required quantity.

2. In the absence of any such order being placed there is a check for any

rate contract (R.C) with the suppliers for the material intended. If

any R.C is found, the order can be placed immediately

3. In absence of any such R.C, check is made for any similar order

placed in the past. If there is any order placed and the quantity

required is less than three times and if the number of order placed of

the same orders being less than three times, a repeat order can be

placed.

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4. In absence of any such repeat purchases, tender is called for and the

purchase order is released.

STORES:

This department is headed by the senior DGM. The major responsibility of

this department is to store the material and issue them when requested by the

authorized intender.

Stores of BHEL-EDN:

Maintain assembly store or component store.

PCB stores: mechanical stores and electronic stores.

W.I.P stores.

Stores telecom

Semiconductor stores.

Photovoltaic stores.

Energy meter and capacitor stores.

Tool crib stores.

Central tool crib stores.

Inflammable and chemical stores.

Scrap and surplus stores.

Maintenance stores.

INDUSTRIAL ENGINEERING:

Industrial Engineering is oriented towards optimum usage of the resource

available. It includes the techniques like work study, time study, method

study and PTS etc. Some of the advantages of Industrial engineering are

stated below

In calculating the expected time required to complete a project

In fixing time standard for jobs

In production planning and control

43

In analysis of man, machine and material flow

In performance appraisal

In computing efficiency of the individual

In estimation of overtime required in completion of any time bound

project

In decision making of Top management

Make or Buy decision

Assessing training needs

Assessing manpower requirement

As already discussed IE focuses towards optimization of resource

available

Vendor rating

FUNCTIONS OF MARKETING DEPARTMENT

Market exploration

Order booking

Offering

Bidding

Preparing annual budget

projections

Exploration of market is very important for new products as well as

oid products. Planning commission forecasts as well as based on the

projections of the working group, annul plans will be prepared by this

department and in turn it will be always tracking the laying of the

new electric line and tenders. Cost estimates will be given by Finance

44

department, which makes the work easy for this department for quoting

to a bid.

Approach to marketing is different at BHEL as the customers are

usually known and orders are of large size and value. The main

function of Marketing Department is to procure manufacturing order

in coordination with the commercial group. The central manufacturing

agency is located at the corporate office in Delhi. It breaks a

composite project and assigns to the required manufacturing units.

BHEL usually adds a profit margin about 10-12% of the order. BHEL-

EDN has a separate marketing department for each product group.

BHEL has been a leader in the power sector for a long time. Its

Turnkey capacity gives it a competitive edge. After Liberalization

BHEL is acing tough competition from MNC’s like Siemen’s ,ABB,

Cegetec, and C-DOT etc. Some other customers are Tesco, MRL, and

Jindal power company Limited.

The process of sanctioning a project goes through the following

stages :

Pro – active

Marketing

Tendering

Post –tender follow

up

The following ways are used for getting an order:

a) Direct enquiry

b) Bidding after floating an enquiry tenders and procures (annexure

checklist for tender review), technical viability studies and

commercial analysis is done to select the best one, 80-90% of the

orders floated have been bagged by BHEL.

45

c) Global competitive bidding (funded by World Bank).BHEL’s

international competitiveness is demonstrated by the fact that it has

bagged 86% of the order floated for competitive bidding.

COMMERCIAL DEPARTMENT

Commercial department acts as an internal customer to the EDN.

FUNCTIONS:

Every month follow up has to be done.

Preparation of plans. Based on the internal orders and shop floor

capacity turnover plans will be prepared.

Billing, invoice and dispatch

Commercial department issues dispatch and billing instructions, based

on the above instructions the invoice will be prepared. In case of Ex-

workers, constructions for covering up insurance will be given to the

consignee.

If it is for destination, it is the duty of EDN to cover the insurance. In

case of export invoice, packing list and GR form will be sent. Earlier

even the payment of excise duty was rested with department but now

the Finance department has taken over this function.

Periodical monitoring i.e. monitoring the achievements, and

comparing that whether they are doing as per the schedule.

Packing

MANUFACTURING PROCESS

The marketing section procures orders from customers, through

advertisement, Propaganda’s and promotional methods. A copy of this

order is passed to the commercial section. The commercial section

prepares a manufacturing order on the basis of the customer

46

specifications. The Engineering section makes a note of these

specifications and tries to design the product. At the same time, a

copy of the order is issued to the material management section so

that the required material can be made available at the stores for

production. Once the product are produced, they need to be tested by

the testing section before being issued or transported to the

customer’s sites.

SWOT ANALYSIS OF MARKETING DEPARTMENT

STRENGTHS:

BHEL has a very good product mix that is place, product, price,

promotion.

Reputation.

Brand image.

WEAKNESS:

Limited competition.

Dependence on collaborators

OPPORTUNITIES:

High market potential

Global market expanding

Industrial growth upward

Bench marking and best practices’ implementation

Widespread network across the country and around the globe.

47

Order and collaborations from overseas.

THREATS:

Fast changing market conditions.

New competitors emerging

HUMAN RESOURCE DEPARTMENT

HUMAN RESOURCE MANAGEMENT:

With the changing business scenario, BHEL is awake to the change and

challenges before it. In terms of new approaches to Human Resource

Management; developing and sustaining a dynamic work culture which

enables joint optimization of organizational goals and individual potential,

taking care of changing aspirations of the people are the key areas of focus

for the organization at this juncture.

Human resource is very valuable and is an asset to any organization and it

implies to BHEL too. BHEL has an effective HR department. Recently

HRD separated to Personnel & Administration Department and it is now

clubbed with EDP and headed by a common AGM. There is a DGM-HRD

who envisages the function of HRD.

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ORGANISATIONAL CHART FOR P & A DEPARTMENT

49

SM (Law & admin)

Deputy Officer Sr.Personal Officer STAFF

GENERAL MANAGER

SENIOR OFFICER

SDGM (CE MARKETING)

FINANCIAL APPROVAL

GOVERNMENT APPROVAL

FEASIBILITY

STUDY

PERSONNEL AND ADMINISTRATION DEPARTMENT

The Personnel and Administration Department takes care of all the policies,

rules and procedures relating to various aspects of HUMAN RESOURCE

MANAGEMENT and is intended to serve as a basis for the effective and

uniform implementation of these across the entire organization. In other

words, it is just managing the people by an effective personnel policy.

BHEL is proud of the personnel policy that was framed more than 3 decades

ago and updated very often. It provides various benefits to the employees.

There is a common Head for Personnel and Administration Department. The

duties of personnel and administration are widely classified into 4 wide

categories. The various jobs handled under each head are listed below.

There are 3 senior assistants, personnel assistants and office superintendents

all handling serious functions. The entire department is headed by a DGM

(HRD).

DISTRIBUTION IN HR DEPARTMENT:

All the units have their separate HR departments, which administrate the HR

functions at the unit level. Apart from this, there is a conferrable HR, which

controls all HR departments. This conferrable body is responsible for all the

policy, decision-making and other key functions.

WORK CULTURE:

The most priced assets of BHEL are its employees’ continuous training and

retaining of a positive work culture and participative style of management.

This has resulted in developing of a committed and motivated work force,

which is ready to meet the challenges of the future. Workers participation at

all levels including the shop, the plant and even the board has become the

50

norm at BHEL. Representatives of workers actively participate in various

advisory bodies. All employees are given encouragement to take part in

cultural, sports, educational and other activities. A unique work culture has

set a tradition of individual responsibility and commitment, which reflects in

every sphere of BHEL’s growth.

51

COMMITTEES:

BHEL has a corporate policy and culture that encourages the committees at

various levels of operations for the various aspects. Some of the committees

that have contributed to the productivity are the safety committee, canteen

management committee etc.

EMPLOYEE CLASSIFICATION

1. EXECUTIVES

E1 -Officers \ Engineers

E2 -Senior Officers \ Engineers

E3 -Deputy Manager

E4 -Manager

E5 -Senior Manager

E6a -Deputy General Manager (DGM)

E6b -Senior Deputy General Manager (SDGM)

E7 -Additional General Manager (AGM)

E8 -General Manager (GM)

E9 -Executive Director (ED)

2. SUPERVISORS

3. ARTISANS

4. SUPPORTIVE TECHNICAL STAFF

5. UNSKILLED WORKERS

6. SEMI SKILLED WORKERS

7. CLERICAL AND OFFICE STAFF

8. TRAINEE ENGINEERS\ OFFICERS

52

9. TEMPORARY AND CASUAL WORKERS

53

IMPORTANT FUNCTIONS OF HRD

1. TRANING AND DEVELOPMENT OF EMPLOYEES:

Training is one of the efficient tools that help an organization in

avoiding obsolescence of the knowledge of manpower. Some of the

reasons for training are:

Technological obsolescence

Motivation

Attitudinal changes

Reduce manpower turnover

Improve the qualities

Increase the productivity

Personnel growth

Training is classified into two types:

In house training

External training

IN-HOUSE TRAINING

When the training is conducted within the BHEL – EDN premises it is

considered In house training. The trainers would be internal or external;

usually an expert in the field is called for such training. There are training

coordinators to evaluate the need for any training required in their

department. They further co-ordinate with HRD in organizing the training

54

program. Some of the common topics covered are personality development,

aptitude, social responsibility, social development and attitude etc.

EXTERNAL TRAINING

These are the training programs, which any executive can undergo and are

usually conducted by the professional consultants from any part of India or

abroad.

These include the workshops that are conducted in hotels and the programs

conducted by the professional bodies or educational institutions. The

subjects dealt with include personality development, stress management, etc.

All are allowed to attend such program depending on the importance of the

subject and the designation of the executives. The external training is

usually for high cadre employees.

BUDGET

The total budget allocated for the training is Rs 25 lakhs. The amount is

exclusive of the sum paid to the trainers and the training program. It does

not include traveling expenses related to training.

2. TRAINING FOR APPRENTICESHIP AND MANAGEMENT

TRAINEES:

BHEL has stopped recruiting for the lower level, which required less

qualified persons. Undertaking apprentice meets this need. Every

year 600-700 apprentices are selected for various levels of jobs with

different background. The apprentice of various trades and

specializations are recruited depending on the requirement placed by

the various departments.

MONTHLY ENROLMENT:

55

Every apprentice is fixed a monthly stipend of Rs. 1900/-, as per the

Government Policies and an additional Rs. 50 is provided from

BHEL, amounting to a net stipend of Rs.1950.

Every apprentice is given the canteen facility, which gives the food at a

subsidized rate.

Apart from this, they can also make use of company’s transport. They

are even provided a pair of uniform.

SELECTION PROCESS OF APPRENTICE:

The apprentices are selected from all over Karnataka through a

campus recruitment process. The process of selection is through

written test and interview.

MANAGEMENT TRAINEES:

BHEL has the policy of employing only at lower level of executive

cadre, which is E1 class. Later they are promoted based on their service

and merit. The executives selected on the E1 classes are called the

management trainees. They are on the training period of one year, later

they are all absorbed as

regular permanent employees. In the period of training they are offered a

salary of Rs 7000/-, then they are finally selected as engineers.

3. METHOD OF SELECTION FOR MANAGEMENT TRAINEES:

The various steps followed in selection are as given below.

1. Advertisements: The Corporate Office, Delhi, specifying the

needs of all the units and offices, gives Advertisements in all

major newspapers.

56

2. Screening: Written examination in which, Part1 constitutes

academic specialization of the candidate, Part2 constitutes

general awareness and aptitude. Both the parts are of the

objective type.

3. Interviews: Interview committee conducts the interview of

the selected candidates on various aspects of individual like

enthusiasm, initiative, creativity, attitude, behavior, loyalty

factors, etc.

STUDENT TRAINEES:

As a social obligation and responsibility, BHEL – EDN is continuously

helping young students by providing the necessary project training.

In plant training (non-technical aspect)

(M.B.A, M.COM)

Industrial training (technical aspect)

(Diploma, B.E, M.E)

Industrial visits.

CO-ORDINATION IN SEMINARS AND MEETINGS:

One of the important activities of the HRD is coordinating the various

seminars and meeting organized in the premises. It is the responsibility of

HRD to arrange for the necessary facilities and infrastructure. In certain

cases, they even host seminars, which are of social benefit.

TRANSFER POLICY:

Executive employee of the company is liable for transfer from one

department / section/ job with in the same unit / division or from one

57

unit/ division of which company to another or from the discretion of

the management.

At the same time while implementing the transfer policy the carrier

base promotion policy has also to be reckoned with.

58

WELFARE AND BENEFITS

LEAVE TRAVEL CONCESSION (LTC):

Once in every 2 years, employees can go on LTC to any desired destination

in India along with their family members. An employee of the grade of

DGM and above can claim airfare, where as others can claim for second-

class AC rail fare.

RETIREMENT BENEFITS:

Individuals who retire on completion of service duration get some of the benefits if

he has been in continuous service for the past 3 years. They include

Pension

Provident fund

Group insurance etc.

VEHICLE LOAN

Vehicle loans are provided for all the permanent employees depending on

their cadre for a 2 wheeler/4 wheeler. Employees of the cadre of E2 and

above are only provided a 4-wheeler loan. Other employees are provided

with 2 wheeler loans. The loan amount is Rs. 15000/- and 1, 10,000/- for

two-wheeler and 4 wheeler respectively. The loans are made available at the

interest fixed by SBI.

DEATH COMPENSATION

In case of death of any of the employees during service, BHEL provides all

the benefits that are due to the nominee. Provident Fund and Gratuity

payments are allowed to the immediate payments, it however doesn’t

provide any job compensation for any of its family members. Any of the

savings during the course of service and any unsettled cashable leaves are

paid to the family members immediately.

59

COMPUTER LOANS

All the executives are entitled to a computer loan of Rs 80000/- at an interest

of 1.8% per month (fixed by S.B.I).

UNIFORMS:

Every employee and casual labourer is provided the material for a pair of

uniform every year. The stitching charges are paid by the company, which is

fixed by the Corporate Office.

INTERNET REIMBURSEMENT:

Executive of E1 to E5 is entitled to claim for 100 hours of Internet charges.

Where as the E6 and above can claim for 250 hours for a year.

MEDICAL EXPENDITURE:

The company meets all the medical expenses incurred by the employees.

The claims can be made on monthly basis. In case of high amount for major

surgeries or such, the advance can be obtained by producing the necessary

documents. The claims can be made for every family member of the

employees.

TRAVELING ALLOWANCE:

Any of the traveling expenses incurred by an employee for any official work

is met as per the guidelines. The Executives of E5 class and above can claim

for carfare.

NEWSPAPER ALLOWANCE:

60

Every employee is given newspaper allowance every month. The amount is

however fixed by the Corporate Office and is included in the salary.

HOUSING FACILITIES

The employees are eligible to claim accommodation facility.

DEARNESS ALLOWANCE

DA is granted to compensate the price increase above CPI 1099 points, to

which the revised salary grades relate. Payment of DA based on slab basis

relate to percentage increases over quarterly of AICPI 1099.

INCENTIVES/ BONUS

BHEL does not practice incentives on any individual performance. Every

year based on the turnover and profits, yearly bonus is given to all its

employees as fixed by the corporate office.

WORKING HOURS

Every individual has to put in a minimum of 48 hours of work per year, 7:30

am to 4:35 pm in all working days except on Saturday (7:30 to 12:30 pm),

Sunday is weekly off.

LEAVES

Casual Leave (CL):

During the period of training and on absorption, every employee is eligible

for CL of 10 days per year. CL can be claimed even for half a day.

61

Earned Leave (EL):

During the period and on joining, each employee is entitled to EL with salary

for 30 days in the first five years of service. The minimum limit of the

accumulation is 240 days.

Maternity Leave:

All female employees, excluding apprentices, according to the Apprentices

Act 1961, are entitled to the grants of maternity leave. Subject to the

provision of this act, every woman shall be entitled to and her employer shall

be liable for payment during the period of her actual absence immediately

proceeding and including the day of her delivery and for the immediate six

weeks.

Canteen Facilities:

Every employee, temporary or casual is provided with the canteen facility.

The food is available at subsidized rate.

LAW & ADMINISTRATION

Law & Administration is playing a vital role in maintaining the company

rules & regulations & to give justice for the employees. It has its own legal

advisors to maintain justice in the organization. An executive takes care of

the departments. Quite a large number of disputes of BHEL-EDN are about

the quarrels between two parties regarding the breaking of company rules &

regulations laid by corporate office.

Disciplinary action is taken against the employees who do not obey the rules.

Depending on the seriousness of the case, it is transferred to the court.

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4. PERFORMANCE APPRAISAL

Every authority maintains Annual Confidential Report (A.C.R.) of all his

subordinates with the performance recorded very often. It is kept highly

confidential and is available only to the senior authority and the personnel

department. During the time of performance appraisal the promotion

committee discusses the various positive and negative factors.

63

PROMOTIONS

Every employee is eligible for promotion. The criterion for promotion is

time bound and performance/merit based. The promotion is given once the

employee completes the stipulated duration and then based on the

performance; promotions are awarded. The list is usually released twice a

year, once during June and other during December.

PROMOTION POLICES AND RULES:

Objectives:

To provide all employees with broad equality of opportunities in

growth and career prospects.

To ensure fairness, equality, consistency and uniformity in the

matters of promotion of employees in all the units/divisions of the

company

To sustain the high morale of the employees by informing them of

the promotion opportunity existing in the organization.

PROMOTION RULES:

Classification of group/cadres:

For the purpose of promotion and career growth all the employees are

included in one of the following groups/ cadres.

Sr. Executive cadre E6 and above

Executive cadre E1 to E5

Supervisory cadre SA1 / SB 1 to SA7/SB7 & IE’S

Skilled labour A3 / B3 to A11 / B11

Semiskilled group A2 / B2

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Unskilled group A1 / B1

Sr. Executive cadre is treated as all company cadres. Promotion to and

within this cadre will be regulated on a company wide basis and carried out

by the corporate office on the recommendations of the special committee.

VOLUNTARY RETIREMENT SCHEME (V.R.S):

Realizing the organization structure not being a pyramid and the number of

people in the middle management being some of the lower class, BHEL has

come out with V.R.S. The benefits to the employees were as below:

45 days salary of each completed year of service.

Claim on gratuity and provident fund as per the legal rules under the

various schemes.

Exit Interviews:

Not many people used to leave BHEL prior to liberalization. Now when

many MNCs have opened their offices and are offering better prospects, it is

observed that considerable amount of people are quitting for better prospects.

BHEL cannot offer a higher pay package to any position other than defined

in the personnel policy. Exit interviews were conducted for the employees,

quitting BHEL. A specific form is to be filled by every employee and even

inferences are taken on the working and the improvement of the

organization.

Dealing on their reasons for quitting the organization, BHEL has found that

better prospects are the main cause and it is not really possible to tackle this

problem; BHEL is trying to develop loyalty among its employees.

65

Medical facilities:

Medical facility unit has own hospital and has a contact with a chain of

hospitals like:

St. Johns hospital for neurology, Apollo hospital for cardiology,Mallya ,

CMC Vellore for cancer disease , KIMS

Service is free for the employees in these hospitals and facilities are given

for the employees and his family, but for children only up to 18 years of age.

Depending upon the grade of the employee the hospital facility is provided

as

General ward ------employee

Semi private ward ------for E1

Private ward ------for E11

INSURANCE:

Insurance establishment is responsible for two types of insurance

Group saving insurance connected with corporate office and LIC

Group saving linked insurance

PARTICIPATIVE MANAGEMENT:

The avenues, opportunities and means available for all levels of employees

to participate in the company’s policy making, decision making and planning

of company’s systems, procedures, improvements and business operations is

known as participative management

PARTICIPATIVE MANAGEMENT IN BHEL:

66

Participative management in BHEL is implemented in BHEL through

various forums, committees, representations, bargain able means, awards,

recognitions and informal negotiations, counselling or discussions.

AVENUES IN BHEL

JOINT COMMITTEE:

Is a tripartite committee comprising of all trade unions, all local

managements and corporate policy making body ofBHEL including CMD

and board of directors.

Joint committee is an apex committee which decides on key issues like wage

revision, bonus, company’s career policies, operations or anything that

would apply to BHEL as a whole.

TRADE UNION:

Recognized union/s in units will negotiate with union on local and unit level

issues. There can be single or multiple unions in each unit with or without

affiliation to any national trade union organisation.

PLANT COUNCIL:

Plant council is a body comprising of union nominees on the one side and the

senior executives on the other side. They will meet periodically to discuss

and sort out many issues concerning business operations at unit level.

SHOP COUNCIL:

Shop council is a wing of plant council which is formed at departmental

level to discuss problems, performance and plans at departmental level and

comprises of members nominated by union and management

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WORKS COMMITTEE:

Is a statutory body with 8 member’s elected and equal number nominated by

management? They would discuss working conditions, quality of work life

and recommend solutions to problems, if any.

CANTEEN MANAGING COMMITTEE:

Is an elected body with three members from the workers and equal number

nominated by the management. The committee ensures smooth working of

the canteen and suggests plan of improvement.

SPORTS COMMITTEE:

Is an elected body with three members and with equal nominated

representatives from management. The committee facilitates, sports, literary

and cultural activities from amongst employees.

BHEL EPF:

Employees’ provident fund trust of BHEL is an elected body of trustees and

nominated members who manage the provident fund account and the finance

under this fund including loan disbursement and final settlement.

SAFETY COMMITTEE:

Central safety committee is a nominated body which studies, solves and

improves safety issues in the organisation. It generates enhanced awareness

amongst employees and recommends safe work practices

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SAFETY STEWARDS

Safety stewards are nominated by the management to represent each work

area, educate co-employees, bring to the notice of management various

problems and issues concerning safety.

COMPANY APPOINTED COMMITTEES:

Plant quality committee

Product committee

HSE – apex committee

HSE – working committee

Olic – official language

Grievance redressed committee

HRD governing council

Training co-ordinators scheme

Inference facilitators

Productivity co-ordinators

AWARDS AND RECOGNITIONS:

Excel awards

Impress – inference and productivity awards

Awards for sports, cultural and literary activities

OTHER ASSOCIATIONS

BHEL executive association

BHEL officers’ club

WIPS [women in public sector]

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BHEL supervisory staff association

BHEL SC ST welfare association

BHEL kannada hitharakshanasamithi

OTHER FORUMS

Management trainees’ hostel administration Committee

BHEL township resident’s forum

BHEL retired Employees forum

BHEL credit co-operative Society

BHEL house building society

INVOLVEMENT BY PARTICIPATION IN OTHER ACTIVITIES

Social responsibility

Environment

Children summer camps

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SWOT Analysis of Human Resources Department:

Strength:

BHEL has an effective human resources management in the

company.

Highly motivated and large work force.

Good work culture, job security and high employment.

Dedicated employees.

High job security.

Sense of commitment, involvement and belongingness.

Assured career growth.

Human touch.

Weakness:

Imbalance in distribution of workload among the employees.

Poor accountability on people contribution and performance.

Time bound promotion policy and high job security leading

sometimes to improper working on part of employee.

Opportunities:

Predetermined customers and good contractual relationship.

Availability of labour at cheap costs.

Threats:

Age factor of employees.

Outstanding payments.

Curb on manpower.

Labour turn-over in highly skilled, technical & areas of expertise

Huge salary bill

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FINANCE DEPARTMENT

Departmental Structure

Executive Director

A.G.M Finance

Senior D.G.M –1 Senior

D.G.M –2

D.G.M - 1 D.G.M – 2

Senior Manager – 1 Senior Manager – 2 Senior

Manager – 3

Manager – 1 Manager – 2 Manager – 3

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SECTIONS OF FINANCE DEPARTMENT

The various sections under finance department are:

Book and budget

Sales

Priced stores ledger

Costing

Establishment

Bills payable

Books & budget:

Collection of accounts from different sections

Preparation of trial balance and final accounts

Coordination with auditor

Helps statutory auditor

Sales:

It deals with

Collection

Debtor’s ledger

MIR etc.

Priced stores ledger:

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This section is responsible for maintaining accounts for the stores in

monetary items.

Costing:

Each product is having a separate section. It sets the cost that is used by

commercial group to add profit margin to set the price.

Establishment:

This section is responsible for cash disbursements and payment. It handles

all the payment to the employees such as

Benefits:

Medical reimbursement

Provident fund

Incentives

Loans and advances etc.

Bills payable:

This section handles the payment to be made to the suppliers once the S.R.V

(store receipt vouchers), P.O (purchase order) invoice are received, cross

verification of the P.O terms, quality and quantity assurance with the S.R.V

and invoice. Once all the claims are found satisfactory, the payment is

issued as per the terms.

Features:

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BHEL is the first government company to publish accounting policies. They

have centralized cash credit control and centralized cash management.

BHEL units cannot borrow directly from outside but from centralized

component account. The surplus funds of any BHEL unit are allocated to

other units and interest is charged on them.

OTHER IMPORTANT FUNCTIONS –

Payment to establishment – wages, salary etc.

Payment to suppliers,

1. Indigenous purchase

2. Important purchase (e.g. purchase, bills)

Terms of payment for purchase are:

Letter of credit (L/C) (most preferential)

Advance (D.D)

Cash and delivery (C.O.D)

Site draft (S.D) (if supplier is not familiar)

Pro-forma payment

SERVICE BILLS:

This section maintains bills for payment of

Factory service

Maintenance (civil & mechanical)

PURCHASE FINANCE:

Procurement of both indigenous and imports, 300 crores of material is

purchased every year and 50-60% are imports.

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INTERNAL AUDIT:

The main functions of internal audit are:

Fault recognition

Inferences for improvement

Overseas work of book budget

Assisting working level people

Internal audit conducts site audit, once in a year.

IT is a practice of conducting an internal audit before this statutory external

audit and this audit is conducted by CAG (Controller Auditor General).

ADDITIONAL INFORMATION:

Weighted average method is used for inventory valuation.

- Companies use act of 1956 straight line depreciation method on

fixed assets.

- By income tax act 1961 written down value method is used for

charging depreciation

TURN OVER FOR LAST FIVE YEARS ( Rs.CRORES)

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77

PROFIT BEFORE TAX (PBT) FOR LAST FIVE YEARS

(Rs.CRORES)

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79

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SWOT ANALYSIS OF FINANCE DEPARTMENT

Strength:

BHEL has consistent track record of growth, performance and

profitability.

Highly experienced accountants, CA, ICWA employees are

recruitment.

Weakness:

Stringent rules are involved in preparing accounts

Enormous paper work is involved.

Errors are possible in calculations of accounts.

Opportunities:

Paper work can be reduced by using latest technologies

Threats:

Competitors will be able to view the progress and performances

of the company which is prepared by the finance department.

Disinvestment policy of the government.

QUALITY DEPARTMENT

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ORGANISATION CHART OF QUALITY DEPARTMENT:

QUALITY ASSURANCE:

BHEL has acquired ISO-9000 certification for most of its operations.

Emphasis is given to the highest standards of quality at every stage of

operations through implementation of quality management systems and

procedures in line with international standards and practices. International

bodies like “ASME” and “API” have awarded certification to BHEL after

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SM (Welfare) P & A

DGM (P & A) DGM Personal Officer

DM (P) DGM

Assistant General Manager

DGM (P) GENERAL

Comprehensive scrutiny and verification of systems and operations in force

is in various units. Calibration facilities / testing laboratories have also been

accredited under the NCTF scheme being operated under the aegis of DST

(Department of science and technology).

Focus on Quality:

ISO 9001 certification conferred by the Bureau VERITAS Quality

International (BVQI) UK, on Electronics Division has enabled it to

strengthen its presence both at home and in the International market.

A rigorously quality assurance programme is followed by BHEL-EDN. The

facilities and procedures being used, dovetail to the requirement of this

quality plan. The Quality Manual defines quality responsibilities,

relationships, systems and procedures for all functions and personnel

necessary to focus and integrate the quality activities.

Latest, high precision test equipment in each area of testing is available in

the mechanical, electrical, electronics and chemical laboratories. A full-

fledged metrology laboratory (accredited by National Accreditation Board

for Testing and Calibration laboratories) caters to periodic in-house

calibration of all mechanical gauges and fixtures. All electron test and

measuring instruments are calibrated regularly at the unit’s well-equipped

Instruments calibration laboratory.

The concept of quality circles has been an integral part of EDN’s operations

and has resulted in commendable improvements in systems and processes.

The proximity and access of BHEL –EDN, Bangalore to a number of

defense and civilian test and evaluation facilities like CQAL, ETDC, CPRI,

IISC and LCSO has been a great advantage in keeping up with quality

standards (including different international standards and documentation).

EDN also has a close working relationship with organizations like Bharat

Electronics (BE), National Aeronautics Laboratory (NAL) and several

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defense laboratories. Availability of subcontractors and vendors certified

and approved by agencies like C-Dot, defense and space research

organizations is another distinct advantage in Bangalore.

Inline with corporate policy on Environment Management Systems BHEL

Bangalore based units are certified under Environment Management System

ISO.

NATIONAL AND INTERNATIONAL RECOGNITION:

BHEL photovoltaic modules certified to the international standard

IEC 61215, by Joint Research Centre, European commission, ISPRA,

Italy.]

ISI certification (IS 13779) for Electronic Energy Meters.

HN Thandani award conferred on EDN by the Indian Institute of

Industrial Engineering in recognition of innovative development and

support to industrial engineering and productivity.

IETE Corporate award for EDN by the Institute of Electronics and

Telecommunication for outstanding performance and excellence in

Electronics and Telecommunication.

EDN’s quality circle won the second prize in the National

Convention of Quality Circles.

For the second consecutive year, EDN received the British Safety

Council Award.

As a commitment towards Total Quality Management (TQM) in line with

CII / EFQM guidelines, annual improvement action plans are being

implemented involving techniques like;

Benchmarking

Business Process Re-engineering

Six Sigma and

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Kaizen

These are resulting in cycle time reduction for further improvements in

delivery and technological process up gradation, leading to improvement in

quality of products and enhanced customer focus on a continuous basis.

To fulfill its role as a corporate citizen towards protection and conservation

of the environment and ensuring that its products and systems also meet such

requirements, BHEL has finalized a Corporate Environment Management

Policy for ISO 14001 certification.

For ISO 9001 certification the INTERNAL AUDIT is done once in 6 months

by the BHEL personnel independent of their functions and the External

Audit is done by BVQI (Bureau Verities Quality International)

The management Responsibilities regarding Quality are:

Management must define and document its policy objectives and

commitment to quality.

Ensure that it is understood and implemented at all levels.

Define responsibilities and authorities.

Identify verification activities and assign to competent personnel with

adequate resources.

Appoint a management representative.

THE CII MODEL FOR TQM (followed by BHEL)

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Senior Manager

Senior Manager

Senior Manager

Senior Deputy

Manager

Manager

Senior Manager

Impact on society

Resources

ENABLERS RES

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Deputy General Manager

SELF-ASSESSMENT

Continuous improvement

Business Excellence

QUALITY SYSTEM STANDARDS

ISO – INTERNATIONAL ORGANISATION FOR

STANDARDISATION

ISO SERIES OF STANDARDS

ISO 9000, ISO 9001, ISO 9004

ISO 9001:

Covers management responsibility, contract review, control of

design, purchase, documents, production, testing storage etc.

All units of BHEL are ISO 9001 certified

Certification Agency- BVQI (Bureau Veritas Quality International)

Internal Audit once in 6 months

BVQI (external) Audit once in 6 months

First certification was in July 1993

Recertified in Nov 1996(once in 3 yrs)

Further recertified in Dec 2000

ISO 9000-2000 VERSION- BRIEF OVERVIEW

Revised standard is compatible with principles of ISO 14000 and

TQM. It centers on results achieved through P-D-C-A (Plan, Do,

Check, Act) and process approach.

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Focus on business needs, continual improvement through measurable

performance parameters leading to customer satisfaction.

Mandatory documentation requirement simplified; required in 6 of

the following areas.

1. Document control

2. Quality records

3. Internal audit

4. Control of non-conforming products

5. Corrective action

6. Preventive action

ISO 14000 (ENVIRONMENT MANAGEMENT SYSTEM)

Covers Statutory, Regulatory Acts

(Pollution, Chemical Treatment, Discharge etc)

Energy Conservation, Resource Utilization

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MANAGEMENT INFORMATION SYSTEMS

DEPARTMENT

BHEL has decided to take up information technology as a business initiative

with its existing expertise in IT and rich domain knowledge in power station

engineering, servicing and allied areas. BHEL can leverage itself to diversify

into the new economy sector of InfoTech and IT enabled services. The

company is strengthening its IT linkages within the organization and is

evaluating its approach towards emerging opportunities in IT, including e-

business which is fast transforming the traditional ways of business

transactions.

With these strategies, initiatives and continuous efforts to enhance its

competitiveness by reducing cycle time, cost and improving quality, BHEL

is on its way to achieving its vision of being a world class innovative,

competitive and profitable engineering enterprise providing total business

solutions.

Computerization in BHEL commenced at the very inception of the company

in the sixties. Initially, the manufacturing units were dependent on the

technology transferred from the collaborators through collaborator supplier

systems procedures and computer programs with suitable adaptations. The

systems and procedures formulated those days laid a strong foundation for

the development of an information technology base in the years that

followed.

Over the years, starting with the unit records machines, the computing power

and its technology was gradually upgraded in line with the functional needs

of the company. Suitable changes were adapted in the information

technology scenario.

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Today, computers are being deployed in all facets of the company’s

operations both for business and engineering applications. Each of the

manufacturing units has a strong functional, computerized system base

supported by state-of-the-art information technology.

The major units have centralized mainframe computers, while minor ones

have got mini-computer systems. The front-end-user-friendly desktop

personal computers are used in each of the units extensively.

In the data communications area, all the units are linked up through a wide

area corporate data network, BHELNET. Each of the major units is in the

process of setting up its campus-wide backbone network supported by the

LAN for inter-office/departmental connectivity for systems integration.

The company has a professional outlook towards the information technology.

Strategies and strengthening in IT infrastructure is in line with the future

business requirements. A core group of IT personnel are available in each of

the units with proper support and direction from a similar apex body at the

corporate level. The enterprise-wide computerized systems, web enabled

technology, e-commerce concepts, collaboration and concurrent engineering,

Simulation modeling and video conferencing are some of the newer areas

considered for adaptation today, for meeting the business challenges of the

future.

SAP IMPLEMENTATION:

BHEL-EDN in co-operation with Wipro is in the process of implementing

SAP, an ERP Package for the proper integration of business process among

different departments. They have planned to implement SAP in about six

months time.

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MIS SUB SYSTEMS

MIS

Transaction Management Decision

Office

Processing Reporting Support

Automation

System (TPS) System(MRS) System(DSS)

System(OAS)

FACTORY SERVICE DEPARTMENT

Functions :

Maintenance services

Power and transport service

Maintenance of information technology systems (PC’s)

Canteen, gardening, lift, etc.

Design and fabrication special type of machines

Operation and maintenance of vehicles

Maintenance at township

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Transportation Section:

In EDN, there are 4 Fork lifters, 3 tractors, 2 trucks and 3 cars.

Additional cars for the moment of Executives will be hired.

Maintenance and service of all these vehicules come under the perview

of this department.BMTC buses are hired for facilitating the employees

to reach factory and back home at the beginning and of each shift.

Drivers will be given identity cards except these; other people are not

permitted to drive in the vehicles into the premises.

Township:

InBangalore, ther are 169 fiats allotted on the basis of seniority.

Maintenance of these flats also comes under this department. Civil

maintenance bore well maintenance: this department will look after

sports club maintenance etc.

Maintenance:

This section will look after mechanical and electrical maintenance.

Since this is the process industry, several types of machines are used.

For the maintenanace department, starting time is receiving the

complaints, down is getting the requsition slip and end time is handing

over the machine to production department. There are 2 types of

maintenance viz. preventive and breakdown maintenance.

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BUSINESS ACTIVITY FLOW CHART

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Leadership Policy & strategy Customer satisfaction

SENIOR ENGINEER

EX-FOREMAN SAFETY

MANAGER (Safety)

SENIOR MANAGER(Factory Service)

PLANNING AND DEVELOPMENT - STRATEGIC BUSINESS PLANNING

MARKETING – SECURING ORDERS THROUGH TENDERS AND NEGOTIATIONS

COMMERCIAL – PROJECT MANAGEMENT, CONTRACTING

MATERIAL PLANNING, INDENTING, ORDERING [P.I., P.O., VENDOR DEVPT.

ENGINEERING - BOM, DEVICE LIST, MID

RELEASE OF M.O. MANUFACTUR-ING ORDER

MATERIAL RECEIPT – GOODS INWARDS / INSPECTION / SRV

PPC – PRODN. PLANNING & CONTROL – MRS, LOADING & SCHEDULING

SUMMARY OF ANALYSIS AND INFERENCES

Problem Analysis

1. Slow adaptation of new technology

2. To improve the sales turn over ratio.

3. To reduce the cost of production time.

4. To improve quality to satisfy customer future needs.

5. A new technology will reduce the cost and time also the company

will be able to cater the requirement of the customer.

Scope:

1. Compare analysis between the existing technology in BHEL and

advance technology in the market.

2. To determine the effectiveness of the new technology.

Data Collection:

1. Primary Data

2. Secondary Data

Primary Data:

1 Direct marketing with employees.

2 Guidance of product guide in BHEL.

Secondary Data:

1 Books

a) Marketing Management(Philip Kotler)

b) Production Management (Ronald J. Ebert)

2 Company manuals

3 BHEL website

4 Business World

Limitations:

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Need for study

1) Competitors of BHEL are adopting new technology very fastly and

grabbing. The marketing in term reducing the share of BHEL.

2) To meet customer's anticipation with high quality production with

minimum cost.

Inferences

1. Control Equipment to continue to be main contributor

2. Growth in Photovoltaic business should be anticipated

3. It is also necessary that the job rotation to be made in periodical

intervals.

4. Effective training should be imparted to the employee over the

change in technology.

5. Shift in Telecom business from land line to mobile

6. To tap business in WLL and Access products

7. Entry into defence areas like Embedded Electronics, Naval Mines

and Torpedoes, Computer Graphic Images (CGI) based Simulators,

Battle Management System, and Combat Training Centre (CTC) etc.

8. - Very important of all is the marketing department function i.e. it has

to do good advertisement and build brand awareness in the market.

9. - Job rotation, job enlargement, job enrichment needs to be done

frequently in EDN which would motivate a employee to do better.

10. - As BHEL faces a tough competitions from private firms it must

formulate better policies that attract customers.

11. - In order to survive and to be a leader BHEL needs to come out of

new products continuously and increase its product line.

12. - BHEL also needs serious technology upgrading since in some

production units, the machinery being used is as old as 1980's.

13. - It needs young upgraded work force than an older force so it needs

to replace them gradually as time permits.

14. - It needs also to eliminate the excess work force.

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Findings

- BHEL-EDN's products are priced higher than its competitors.

- Recruitment process has been increased from last two years, due to increase

in demand.

- BHEL among the public sector claims to be the best and which is true.

- BHEL has learnt it hard way and has been continuously striving to compete

with the competitors and has been successful.

- BHEL-EDN does not approach the customer instead it waits for the

customer to come to it since its products are priced higher than other players

in the field so it thinks that those who can afford its products will

automatically approach it.

- Because of computerization there is cost reduction in the form of reduction

in paper work and also quickness of action.

- BHEL is showing consistent growth prospective.

- There has been constant rise in BHEL-EDN's profit year after year.

- BHEL-EDN is managing its Human Resources and marketing very

effectively by conducting various types of training and other sessions.

- It has centralised many functions which helps of better control and

coordination.

5.2 Inferences

- Very important of all is the marketing department function i.e it has to do

good advertisement and build brand awareness in the market.

- Job rotation, job enlargement, job enrichment needs to be done frequently

in EDN which would motivate a employee to do better.

- As BHEL faces a tough competitions from private firms it must formulate

better policies that attract customers.

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- In order to survive and to be a leader BHEL needs to come out of new

products continuously and increase its product line.

- BHEL also needs serious technology upgrading since in some production

units, the machinery being used is as old as 1980's.

- It needs young upgraded work force than an older force so it needs to

replace them gradually as time permits.

- It needs also to eliminate the excess work force.

3.1 Statement of the problem

To find out the market potential for control equipment’s.

3.2 Title of the study

“A study on market potential for control equipment’s manufactured by

BHEL-EDN, Bangalore”.

3.3 Objectives of the study

To study the market potential for the control equipment’s in

Bangalore.

To find the influence of Word Of Mouth (WOM) communication in

purchase of the products like control equipment’s.

3.4 Need for the study

As the company is planning to bring a new product to the market, it is

important to estimate the market potential of the product in the market.

Estimating the market potential for a business is critical in evaluating its

viability and provides an estimate of the maximum total sales potential for a

given market. Once the estimated market potential has been calculated, it is

possible to determine if the market is large enough to sustain our proposed

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business or sustain an addition competitor in the marketplace. It is important

that the estimated market potential sets an upper boundary on the market size

and can be expressed in either units and/or sales.

It is also important to study about the sources through which the customers

collect the information about the products and the services, so that we can try

to promote our products through those channels. Word of mouth

communication also playing one of the important role in the organizational

buying. So it is important to know whether there is influence of word of

mouth communication in purchasing of the products like electric control

panels. If there is an influence of word of mouth communication, then the

company has to concentrate in bringing the quality and durable product to

the market and also it has to concentrate on its after sales services, as the

customers mostly communicate about the after sales service to one another.

It is necessary to know about the awareness level about the company in the

market, so that it will be easy to estimate the expenditures to be incurred to

promote the product. It is also important to know about whether the

customers who are aware about the company are having favorable opinion

about the company to look back into its strategies.

3.5 METHODOLOGY

3.5.1 Type of the study

This study is descriptive in nature as it involves the study of market potential

for the product, it covers the understanding of whether the respondents

require the control equipment’s or not, their sources of collecting the

information and also studying the awareness level about the company among

the respondents.

3.5.2 Sources of data

a) Primary b) secondary

(i) To attain all the mentioned objectives we relied on the secondary data.

We drafted the questionnaire for the companies, asked them to fill up the

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questionnaire and got the necessary information to attain our stated

objectives.

(ii) Secondary data was collected through BHEL publications and websites.

3.5.3 Sampling Plan

a)The sampling method adopted for the study was “non probability

Sampling”. The samples were selected on the basis of three criterions. Firstly

the companies should be active manufacturers in country. Secondly, they

should have the in hand projects and they should have the corporate offices

in India.

b) Sampling units were the distributer of powers.

c) Sample size

A sample size of 30 is taken for the study.

3.5.4 Tool for Data Collection:

A questionnaire was been designed as a tool for data collection. It contained

the questions for understanding the requirement of electric control

equipments, whether they are ready to purchase or not, their sources of

collecting the information about the products and the services and their

awareness level about the company.

3.5.5 Control method

Personal interviews were used to contact builders.

3.6 LIMITATIONS

Within the given time frame it was possible to meet around thirty

companies only.

Only major companies have been considered.

Only major companies were considered for the study

3.6.1 Tool for Data Collection:

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A questionnaire was been designed as a tool for data collection. It contained

the questions for understanding the requirement of electric control

equipment’s, whether they are ready to purchase or not, their sources of

collecting the information about the products and the services and their

awareness level about the company.

Table .No:4.1 Table showing No. of customers purchased electric control

equipment’s

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Responses No of respondents %of respondents

Yes 30 100

No 0 0

Total 30 100

Graph .No: 4.1 Graph showing No. of customers purchased electric

control equipment’s

Interpretation

Out of thirty respondents, all the respondents told that they have purchased

the electric control equipment’s, i.e. 100 percent of respondents responded

that they have purchased the electric control equipment.

Inference

It is obvious that, the companies need the electric control equipment’s and

already they are using the control equipment’s in their projects for the safety

purposes.

2) You mostly rely on

a) Single supplier b) Multi-supplier

Table.No:4.2 Table showing dependence of customers on suppliers

Purchase option No of respondents %of respondents

Single supplier 8 26.67

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Multi supplier 22 73.33

Total 30 100

Graph No: 4.10.1 Graph showing Awareness about BHEL amongst

respondents

Interpretation

Respondents were asked whether they are aware about the Bharat Heavy

Electricals .Ltd or not.87% of the respondents responded that they are aware

about the company. And only 13% of the respondents responded that they

are not aware about the company.

Inference

The Bharat Heavy Electricals.Ltd is the well known company in the market.

It has well established its roots in the market and has created well awareness

in the market. This company doesn’t have worry much about creating the

awareness in the market.

11) If yes, what is your opinion about this company?

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a) Favorable

b) Unfavorable

c) Don’t know

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Table No: 4.11.1 Table showing Opinion about the BHEL

Responses No of respondents %of respondents

Favorable 26 100

unfavorable 0 0

Don’t know 0 0

Total 26 100

Graph No: 4.11.1 Graph showing Opinion about the BHEL

Interpretation

Out of the 87% companies who are aware about the company, all of them

have favorable opinion about the company.

Inference

The company is well known for its good quality of products and the services.

The company is providing the good quality of products to its customers..

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Table No: 4.11.2 Table showing number of Potential buyers

Responses No of Respondents % of Respondents

Yes 25 83.33

No 5 16.66

Total 30 100

Graph No: 4.11.2 Graph showing Potential buyers

Interpretation

Out of the thirty respondents who responded to the question, 83% told that

they ready to purchase the control equipments, if the company provides all

the necessary criteria that they look into the control equipments.Only 13% of

the respondents told that they don’t purchase from this company.

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Inference

The new product control equipment has a good potential market with

reference to Bharat heavy electricals among the companies of the Bangalore.

The companies are in need if the electric control equipments as they use it in

their companies for the safety purposes.

5.1 Summary of findings:

All the companies are using the electric control equipment’s in

their projects. The companies are giving prime most importance

to the electrical safety in the companies constructed by them.

Most of the companies rely on the multi suppliers. They rely on

multi suppliers, because they may get the price benefits. So it is

very difficult to retain these customers as they will be always

having the multi options.

When it comes to the criteria that the companies look into when

purchasing the control equipment’s are, the price, the company

brand name and the quality stand as the three major criteria

which influence the purchase of the electric control

equipment’s. After sales service is the least preferred criteria

when it comes to the purchase of electric control equipment’s.

This indicates that the customers look into only tangible things

like price, the company brand name etc., or else we can say that

the products like electric control equipment’s need less after

sales service.

The majority of the companies rely on the consultants for the

information about the products and the services. Secondly it

comes to the industry websites which provide the information

about the products and the services. Thirdly it comes to the

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Word of Mouth Communication through which the companies

collect the information about the products and the services. One

of the interesting things is, the sales persons are considered as

the very least providers of the information about the products

and the services. We can say that the builders bear very less

amount of patience to deal with the sales persons.

One of the interesting thing that we found out is, around 86% of

the builders use Word of mouth communication as the source of

information. So we can say that word of mouth communication

is one of the reliable sources of information and is used by

majority of the builders for collecting the information about the

product and the services. Customers spread the comments about

the products to one another through word of mouth

communication, so it is important to serve the good quality

product to increase our sales.

Majority of the companies treat word of mouth communication

as important. By word of mouth communication the companies

seek information about the product durability, after sales

service etc., which can’t be seen while purchasing the products.

Price and the design of the product are given less importance in

the word of mouth communication.

Major percent of the word of mouth communication is received

and communicated about the positive things of the products and

the services, but at the same time the portion of the customers

communicate about the negative things of the products also.

Hence it is important to keep track on the both positive and the

negative things of the product.

About 87% of the builders are aware about the company Bharat

Heavy Electricals.Ltd. So we can say that the company has well

established its roots in the market. Among the customers who

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are aware about the company all are having the favorable

opinion about the company. So it is easy for the company for

promoting its new product in the market and also the company

doesn’t have to incur lot of expenditures on promoting its

control equipment’s.

5.2 Inferences:

- Very important of all is the marketing department function i.e it has to do

good advertisement and build brand awareness in the market.

- Job rotation, job enlargement, job enrichment needs to be done frequently

in EDN which would motivate a employee to do better.

- As BHEL faces tough competitions from private firms it must formulate

better policies that attract customers.

- In order to survive and to be a leader BHEL needs to come out of new

products continuously and increase its product line.

- BHEL also needs serious technology upgrading since in some production

units, the machinery being used is as old as 1980's.

- It needs young upgraded work force than an older force so it needs to

replace them gradually as time permits.

It needs also to eliminate the excess work force

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CONCLUSION

Objective 1: To study about the market potential for the control

equipment’s in BHEL-EDN Bangalore

BHEL has entered a new phase of growth. Its quick progress was aided by

the collaboration with international leaders in the field of power and control

electronics.

All the products have continued to be the undisputed leaders in the

categories, which is extremely creditable in the changing environment.

The current phase of innovation and business solutions has thrown up a

number of challenges and opportunities for a changed approach to business

itself, especially in the power sector.

The organization has to explore new ways to tap the market for business

and adopt strategies like lease financing, joint financing, joint bidding/

contortion, joint ventures deferred credit, financial packages, equity

participation etc., appropriately

BHEL-EDN has earned profits from the initial stage of its operations and it

is confident of meeting all the challenges that lies ahead and aims at

achieving the highest turnover.

A true corporate citizen of the world. Electronic division stands poised for greater

conquests in many challenging fields, using state of the art technologies and

keeping pace with the international standards.

Today BHEL is one of the most profiteering PSUs in the country. All the

products have continued to be the undisputed leaders in the categories, which

is extremely creditable in the changing environment.

BHEL is more than just a company, a responsible member of the eco-

conscious community, contributing towards the preservation of the

environment. A true corporate citizen of the world. Electronic division stands

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poised for greater conquests in many challenging fields, using state of the art

technologies and keeping pace with the international standards.

BHEL-EDN has earned profits from the initial stage of its operations and it

is confident of meeting all the challenges that lies ahead and aims at

achieving the highest turnover.

MY LEARNING

It was great to work in BHEL which is one among the NAVARATNAS. In

my 7weeks of learning of BHEL-EDN I was exposed to various departments

of BHEL this project work helped Mie to know how actually an organization

functions. I could relate my class room learning’s to actual working of an

organization. While undergoing the project at BHEL EDN I came to know

how actual marketing is done for B2B products.

Marketing management and business research in BHEL EDN was blend of

both class room sessions and practical exposure.

Through this internship, I got an opportunity to apply whatever

knowledge I had about management in real corporate world. Usually

internships will be restricted to only one department of the

organization but I got not only to study all the departments but also to

formulate strategies to improve overall organization by formulating

Organization Development Interventions. The findings and

inferences along with the details of research have been appreciated by

the management. After the completion of this research work

successfully, I am more confident to enter the most competitive

corporate world where I hope to get the most challenging tasks which

can be accomplished successfully using my skills and the

organizational resources.

I learnt how to carry on the research activities for the formulation of

strategic policies. I also learnt how to interact with the top level

executives and get the required information. I understood the

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importance marketing policies during this research activity. I was

able to channelize all the knowledge acquired from different sources

which taught me the usage of right thing at right time.

BIBLIOGRAPHY

PUBLICATIONS

1. BHEL manuals and publications.

2. Company magazines

3. Marketing Research

ISBN 0071009930,

Mc Graw Hill, 4th editions

Author: Thomas C. Kinnear

James R. Taylor

4. Marketing Management,

ISBN

4thEdition, Author: Philip Kotler

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WEBSITES

1. www.bhel.com

2. www.abb.com

3. www.siemens.com

4. www.google.com

5. www.honeywell.com

6. www.ecil.com

7. www.metroautomation.com

QUESTONNAIRE

1) Have you purchased electric control equipment’s from BHEL?

Yes

No

2) You mostly rely on

Single supplier

Multi supplier

3) What major criteria do you use while buying control equipment’s

The company brand name

The quality

The price

After sales service

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4) What are your sources of collecting information about a product or

service and its suppliers?

Industry websites

Word of mouth communication

Consultants

Sales Persons

5) Do you rely on word of mouth communication as a source of

communication?

Yes

No

6) How important is WOM as a source of information?

Very Important

Important

Neither/ nor

Less important

Not important

7) What percentage of time do you receive positive vs negative

WOM?

30vs20

40vs30

20vs30

50vs40

8) What percentage do you communicate positive vs. negative?

10 vs. 20

20 vs. 10

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30 vs. 20

30 vs. 40

9) Are you aware about Bharat Heavy Electricals Ltd.?

Yes

No

10) If yes what is your Opinion?

Favorable

Unfavorable

Don’t Know

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