HAL Report Final

Marketing Management at HAL 2012

SHRI RAM SWAROOP MEMORIAL GROUP

OF

PROFESSIONAL COLLEGES

SUMMER TRAINING PROJECT REPORT

ON

“MARKETING MANAGEMENT”

FOR

SUBMITTED TO U.P. TECHNICAL UNIVERSITY, LUCKNOW FOR THE PARTIAL

FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of:

Dr.Amit Mehrotra, Lecturer, Shri Ram Swaroop Memorial Group of Professional Colleges, Lucknow

Submitted By:

JAYATI

Roll No.-1112270068

(Session 2012-13)

1


PREFACE

With respect to the allotted period, I had the privilege of having a formal relationship with the

organization as trainee but informally it is a sacred place for me as it is my first practical

exposure to an organization to know and get aware to an organizational real practical stressful

environment. It was a great opportunity extended to me to work with such a large organization.

Since the duration of my summer training was short, in comparison to the monolithic level of

functioning in the organization, so it became difficult to cover each and every aspect in detail

but I have tried my best to see all the important points related to my study. This study gave me a

practical exposure of the functioning of marketing department.

The project report is the mere constitution of varied functions, which are handled by the

Marketing department. In the due course of my study I became aware of the concepts, which are

used in HAL. The system follows a proper flow chart for performing the activities in a

systematic order

The whole study is bifurcated into various departments and the roles performed by each of them.

Although all these sections are different from each other and perform their separate operations

but these are interrelated with each other.

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ACKNOWLEDGEMENT

I would like to express my thanks to M/s Hindustan Aeronautics Ltd, Accessories

Division, Lucknow Division, who gave me an opportunity to study in such a large

organization.

I am grateful to Mr. Subodh Saxena, Chief Manager (Marketing) , Mr. M.B.

Shankhawar, Chief Manager (CS), Mr. Diwakar Saxena, Sr. Manager (Planning) and Miss

Sonia Pandey who inspired, guided and gave their valuable suggestions.

I would like to affirm my gratitude to Mr. Jitendra Kumar, Manager (Planning) and

Mr. S.P. Singh, Sr. Manager, Training for their necessary help and encouragement intended

in this project.

I convey my thanks to all those names do not appear but who contributed

significantly. Their valuable suggestions considerably helped me in the final drafting of this

report. They helped me at every stage of project work. Their contribution, lesson of wisdom

has therefore been affectionately appropriate rather than grateful acknowledged.

Many thanks to all of them, for their patience and support to help me on this project work.

Because of all their help only my effort base fruits and made me able to present this report

JAYATI

MBA (2nd Year)

Sri Ramswaroop Memorial Group of Professional Colleges

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Table of ContentsMASTER OF BUSINESS ADMINISTRATION............................................................................................................1

1. COMPANY PROFILE.......................................................................................................................................7

2. INTRODUCTION..........................................................................................................................................10

3. HISTORY AND GROWTH OF HAL.................................................................................................................11

4. OBJECTIVES OF HAL....................................................................................................................................15

5. VISION OF THE COMPANY..........................................................................................................................16

6. MISSION OF THE COMPANY........................................................................................................................16

7. VALUES OF THE COMPANY.........................................................................................................................17

CUSTOMER SATISFACTION.....................................................................................................................17

COMMITMENT TO TOTAL QUALITY........................................................................................................17

COST AND TIME CONSCIOUSNESS..........................................................................................................17

INNOVATION AND CREATIVITY...............................................................................................................17

TRUST AND TEAM SPIRIT........................................................................................................................17

8. ORGANISATIONAL STRUCTURE...................................................................................................................18

9. CORRUPTION FREE SERVICES......................................................................................................................20

10. COMPLAINTS AND GRIEVANCES.............................................................................................................21

11. SYSTEM LAYOUT.....................................................................................................................................22

12. CUSTOMER PROFILE...............................................................................................................................23

DOMESTIC..............................................................................................................................................23

INDIAN AIR FORCE......................................................................................................................................24

INDIAN NAVY..............................................................................................................................................24

AIR INDIA....................................................................................................................................................24

BORDER SECURITY FORCE...........................................................................................................................25

ONGC..........................................................................................................................................................25

AIRPORTS AUTHORITY OF INDIA.................................................................................................................25

INDIAN COAST GUARD................................................................................................................................26

INTERNATIONAL.....................................................................................................................................27

BRITISH AEROSPACE...................................................................................................................................28

REPUBLIC OF MAURITIUS............................................................................................................................28

NIGERIAN AIRFORCE...................................................................................................................................28

13. DIVISIONS AT HAL...................................................................................................................................29

AIRCRAFT DIVISION, BANGALORE...........................................................................................................29

AIRCRAFT DIVISION, NASIK.....................................................................................................................30

ENGINE DIVISION, KORAPUT..................................................................................................................31

ACCESSORIES DIVISION, LUCKNOW........................................................................................................32

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LUCKNOW DIVISION...............................................................................................................................33

HELICOPTER DIVISION, BANGALORE......................................................................................................36

14. PRODUCTS OF HAL.................................................................................................................................36

15. PRODUCTS OF HAL LUCKNOW DIVISION................................................................................................40

16. PRODUCTS IN CURRENT MANUFACTURING RANGE...............................................................................41

SU 30 MKI...............................................................................................................................................41

MIG-27 M...............................................................................................................................................42

RESTRICTED AIRCRAFTS..........................................................................................................................44

I. AGREEMENTS.............................................................................................................................................46

INTERNATIONAL AGREEMENTS..............................................................................................................46

DOMESTIC AGREEMENTS.......................................................................................................................47

17. CONTRACTS............................................................................................................................................48

18. LICENSE PRODUCTION............................................................................................................................50

HARLOW PC-5.........................................................................................................................................50

BAE SYSTEMS HAWK...............................................................................................................................50

SEPECAT JAGUAR....................................................................................................................................51

SUKHOI SU-30.........................................................................................................................................51

19. SERVICES AT HAL....................................................................................................................................52

ACCESSORIES DIVISION, LEO...................................................................................................................52

SUB-CONTRACT CAPABILITIES................................................................................................................53

CUSTOMER SERVICES.............................................................................................................................53

20. PRODUCT FLOW CHART..........................................................................................................................55

21. COMPANY ANALYSIS...............................................................................................................................57

BUSINESS DESCRIPTION..........................................................................................................................57

CORPORATE STRATEGY...........................................................................................................................58

LASTING BOND.......................................................................................................................................59

ABOUT HAL.............................................................................................................................................60

22. OFFICIAL HIERARCHY..............................................................................................................................60

23. MARKETING STRATEGIES........................................................................................................................61

24. FLOW CHART FOR MARKETING PROCESS...............................................................................................62

25. ROLE OF MARKETING DEPARTMENT......................................................................................................63

26. TOTAL NUMBER OF AIRCRAFTS DELIVERED............................................................................................63

27. SWOT ANALYSIS.....................................................................................................................................64

STRENGTH..............................................................................................................................................64

WEAKNESS..............................................................................................................................................64

OPPORTUNITIES.....................................................................................................................................64

THREATS.................................................................................................................................................64

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28. KEY COMPETITORS.................................................................................................................................65

29. BUSINESS CHALLENGE............................................................................................................................65

30. STRATEGY...............................................................................................................................................66

DESIGN & DEVELOPMENT......................................................................................................................66

ASSEMBLY & TESTING.............................................................................................................................66

31. INITIATIVES.............................................................................................................................................67

32. LEAN MANAGEMENT..............................................................................................................................67

33. LEAVE MANAGEMENT AT HAL................................................................................................................68

34. PRICING..................................................................................................................................................70

PRICING POLICY IN HAL:.........................................................................................................................71

MATERIAL PROCUREMENT PROCEDURE IN HAL.....................................................................................73

35. COST CONTROL TECHNIQUES.................................................................................................................75

36. BUDGETARY CONTROL...........................................................................................................................77

37. VARIANCE ANALYSIS:..............................................................................................................................78

38. FINANCIAL HIGHLIGHTS..........................................................................................................................80

39. INVENTORY AND MATERIAL MANAGEMENT..........................................................................................81

40. RESEARCH METHODOLOGY....................................................................................................................83

RESEARCH METHODOLOGY:-..................................................................................................................84

RESEARCH DESIGN:-...............................................................................................................................85

DATA COLLECTION:-...............................................................................................................................86

STANDARDS............................................................................................................................................86

41. TOOLS AND TECHNIQUES OF DATA ANALYSIS........................................................................................89

IMPROVEMENT OF THE DIVISION ON INTRODUCTION OF A WEBSITE...................................................89

AWARENESS LEVEL OF THE WEB BY THE WORKERS IN THE ORGANIZATION..........................................89

CUSTOMERS WHO RESPOND TO THE WEBSITE......................................................................................90

NUMBER OF CUSTOMERS WHO RESPOND VOLUNTARILY TO THE WEBSITE..........................................91

CUSTOMERS WHO PLACED ORDER THROUGH NET................................................................................92

INTERNATIONAL CUSTOMERS OVER THE WEB.......................................................................................93

42. FINDINGS, SUGGESTIONS AND CONCLUSION.......................................................................................100

FINDINGS..............................................................................................................................................100

SUGGESTIONS.......................................................................................................................................102

CONCLUSION........................................................................................................................................103

43. BIBLIOGRAPHY......................................................................................................................................104

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1. COMPANY PROFILE

HINDUSTAN AERONAUTICS LIMITED

LUCKNOW

The history of the Indian Aircraft Industry can be traced to the founding of

Hindustan Aircraft Limited at Bangalore in December 1940 in association with the

erstwhile princely State of Mysore and late Shri Seth Walchand Hirachand, an

Industrialist of extra -ordinary vision. Govt. of India became one of its shareholders in

March 1941 and took over the management in 1942. Hindustan Aircraft Limited was

merged with Aeronautics India Limited and Aircraft Manufacturing Depot, Kanpur to

form Hindustan Aeronautics Limited (HAL) on 01st October 1964.

Today HAL has got 16 production units and 9 research and design centers spread

out in seven different locations in India. Its product track record consists of 12 types

of aircraft from in house R &D and 13 types by license production. HAL has so far

produced over 3300 aircraft, 3400 Aero engines and overhauled over 7700 aircraft and

26000 engines.

HAL has engaged & succeeded in number of R & D programs for both the

military and civil aviation sectors. Substantial progress has been made in the current

projects like Dhruv -Advanced Light Helicopter (ALH), Tejas-Light Combat Aircraft

(LCA), Intermediate Jet Trainer (IJT) and various military and civil upgrades. The

deliveries of Dhruv were affected to Indian Army, Navy, Air Force and Coast Guard

in March 2002, in its first year of production which is a unique achievement.

HAL has played a significant role for India's space programs in the

manufacturing of satellite launch vehicles like PSLV (Polar Satellite Launch Vehicle),

GSLV (Geo Stationary Launch Vehicle), IRS (Indian Remote Satellite) & INSAT

(Indian National Satellite).

HAL has also two joint venture companies, BAeHAL Software Limited and

Indo- Russian Aviation Limited (IRAL). Apart from the two, other major

diversification projects are Industrial Marine Gas turbine and Airport Services.

Several co-production and joint Ventures with international participation are under

7


consideration.

HAL's supplies / services are mainly to Indian Defense Services, Coast Guard and

Border Security Force. Transport aircraft and Helicopters have also been supplied to

Airlines as well as State Governments of India. The Company has also achieved a

foothold in export in more than 30 countries, having demonstrated its quality and price

competitiveness.

HAL has won several International & National Awards for achievements in

R&D, Technology, managerial performance, exports, energy conservation, quality and

fulfillment of social responsibilities. M/S Global Rating, United Kingdom in

conjunction with The International Information and Marketing Center (IIMC) has

awarded the “INTERNATIONAL GOLD MEDAL AWARD” AT THE

INTERNATIONAL SUMMIT (GLOBAL RATING LEADERS 2003) LONDON,

UK to M/s. Hindustan Aeronautics Limited for Corporate Achievement in Quality and

Efficiency. HAL was also presented the INTERNATIONAL “ARCH OF EUROPE”

AWARD IN GOLD CATEGORY in recognition for its commitment to Quality,

Leadership, technology & Innovation. At National level, HAL won the top award

instituted- by SCOPE (Standing Conference of Public Enterprises) -The "GOLD

TROPHY" for excellence in Public Sector Management. The Company scaled new

heights in the financial year 2002-2003 with a turnover of Rs. 3120 Crore and export

of Rs. 103.89 Crore.

“To become a globally competitive aerospace industry while working as an

Instrument for achieving self reliance in design, manufacture and maintenance of

Aerospace equipment, civil transport aircraft, helicopter and missiles and diversifying

to related areas, managing the business on commercial lines in a climate of growing

professional competence.”

In the six decades, HAL has spread its wing to cover various activities in the

areas of Design, Development, Manufacture and Maintenance. Today HAL has 16

production divisions spread over at Bangalore, Nasik, Koraput, Kanpur, Lucknow,

Korwa, Hyderabad and Barrackpore. These divisions are fully backed by nine Design

Centers, which are co-located with the production divisions. These centers are

8


engaged in the Design and Development of combat aircraft, helicopter, aero engine,

Engine Test Beds, Aircraft communication and Navigation systems and Accessories

of mechanical and fuel systems and instruments. Its product track record consists of

12 types of aircraft from in house R &D and 13 types by license production. HAL has

so far produced over 3300 aircraft, 3400 aero engines and overhauled over 7700

aircraft and 26000 engines.

The current program are series production of ALH and delivery to our defense

and civil customers, production of Jaguar, the deep penetration strike aircraft, Dornier

Do-228, Multi Mission Aircraft and LANCER the Light Attack Helicopter and

upgrades of MiG-21 BiS, MiG-27 M and Jaguar. With the signing of Inter

Governmental Agreement and General Contract the license manufacture of SU MkI

has been launched.

HAL is the major design partner for aircraft and system / equipment as well as

for system integration of Light Combat Aircraft (LCA) which successfully completed

the first block of flights. The new initiative in R & D will include an Intermediate Jet

Trainer ( IJT ), a trainer for the 21st century, Light Observation Helicopter,

replacement for Cheetah and Chetak Helicopter and a Light Attack Helicopter, a

follow- on project for ALH.Partnership for co-production of ATR-42, an invitation

from Airbus to participate in A-380 project, and the new project to design and develop

a Multirole Transport Aircraft (100 seater) are signs of growth for the largely military

aircraft manufacturing company in the commercially competitive aerospace industry.

Design capabilities, modern facilities and skills combined with competitive pricing

and prompt deliveries, make HAL a valuable partner for challenging programmes in

Aerospace and related fields.

9


2. INTRODUCTION

To become a globally competitive aerospace industry while working as an instrument

for achieving self reliance in design manufacture and maintenance of aerospace

defense equipment and diversifying to related areas managing the business on

commercial lines in a climate of growing professional competence. Over the first five

decades HAL has spread its wings to cover various actives in the area of design,

development, manufacture and maintenance of Light aircraft, piston and jet engine of

imported category was delivered to HAL, Nasik division in the year 1978-79. A total

of 300 engines are to be delivered under this project. Against this task, the division

has already delivered 88 engines of different imported categories. The first raw-

materials engine is scheduled for delivery during the year 1982-83.In august1966 an

agreement was signed with Soviet Union to set up overhaul project in this division and

the government sanction was accord in 1967.Thefactory started overhaul of RF-

300series-III, R11F series 9&10& R11F2s/F2SK series engine. The division till the

end of March 1982has overhauled a total of 1067 engines. The division is currently

engaged in setting of facilities for taking up the overhaul of R25 series engines for the

year 1982-83 onwards. With the signing of internal governmental agreement forth

manufacture of MIG-27M Aircraft on 19th March 1982, this division would be

involved in the manufacture of 285 numbers of the engines from the year 1984 to 85

onwards. In order to attend the self sufficiency & to avoid difficulties regarding the

supply of the raw materials & other bought out items from USSR, it was decided to

provide indigenous support to spare manufacturing for the overhaul/maintenance of

the MIG fleet. The government approval for undertaking the task was received during

1977-78 & indigenous plan was formed to tackle.

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3. HISTORY AND GROWTH OF HAL

Hindustan Aeronautics Limited was formed on 1st October 1964 with the

merger of Hindustan Aircraft Limited and Aeronautics India Limited. Hindustan

Aircraft Limited was promoted by Late Sri Walchand Hirachand in December 1940 in

association with the government of Mysore as a Private Limited Company with its

registered at Bangalore and the interest of the Company and took over its

management. Sri Walchand Hirachand had the vision to start this Company for the

manufacture of aircraft for the first time in India.

The Harlow Trainer and Curtis Hawk fighter aircraft were the first two aircraft

produced by Hindustan Aircraft Limited and they were successfully test flown in

1942. However, soon after the aircraft manufacturing programs were abandoned in

favor of overhaul and repair of aircraft to support the war effort during World War II.

In August 1962 government of India entered into a collaboration agreement

with Soviet Union for the manufacture of MiG-21 FL aircraft including its engines

and Avionics India Limited was formed to undertake manufacture of MiG-21 aircraft

and factories were set up at Nasik in Maharashtra for the airframes and Koraput in

Orissa for the MiG aircraft. Hindustan Aircraft Limited and Aeronautics India

Limited were merged in October 1964 to form the present Hindustan Aeronautics

Limited.

Today, HAL has 16 Production Units and 9 Research and Design Centers in 7

locations in India. The Company has an impressive product track record - 12 types of

aircraft manufactured with in-house R & D and 14 types produced under license. HAL

has manufactured 3550 aircraft (which includes 11 types designed indigenously),

3600 engines and overhauled over 8150 aircraft and 27300 engines

11


HAL has been successful in numerous R & D programs developed for both

Defence and Civil Aviation sectors. HAL has made substantial progress in its current

projects:

Dhruv, which is Advanced Light Helicopter (ALH)

Tejas - Light Combat Aircraft (LCA)

Intermediate Jet Trainer (IJT)

Various military and civil upgrades.

Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard

in March 2002, in the very first year of its production, a unique achievement.

HAL has played a significant role for India's space programs by participating

in the manufacture of structures for Satellite Launch Vehicles like

PSLV (Polar Satellite Launch Vehicle)

GSLV (Geo Stationary Launch Vehicle)

IRS (Indian Remote Satellite)

INSAT (Indian National Satellite)

There are three joint venture companies with HAL:

BAeHAL Software Limited

Indo-Russian Aviation Limited (IRAL)

Snecma HAL Aerospace Pvt Ltd

Apart from these three, other major diversification projects are Industrial Marine Gas

Turbine and Airport Services. Several Co-production and Joint Ventures with

international participation are under consideration.

12


HAL's supplies / services are mainly to Indian Defence Services, Coast Guards and

Border Security Forces. Transport Aircraft and Helicopters have also been supplied to

Airlines as well as State Governments of India. The Company has also achieved a

foothold in export in more than 30 countries, having demonstrated its quality and price

competitiveness.

HAL has won several International & National Awards for achievements in R&D,

Technology, Managerial Performance, Exports, Energy Conservation, Quality and

Fulfillment of Social Responsibilities.

M/s Global Rating, UK in conjunction with the International Information and

Marketing Centre (IIMC), awarded the “INTERNATIONAL GOLD MEDAL

AWARD” HAL for Corporate Achievement in Quality and Efficiency at the

International Summit (Global Rating Leaders 2003), London, UK.

HAL was presented the International - “ARCH OF EUROPE” Award in Gold

Category in recognition for its commitment to Quality, Leadership, Technology

and Innovation.

At the National level, HAL won the "GOLD TROPHY" for excellence in

Public Sector Management, instituted by the Standing Conference of Public

Enterprises (SCOPE).

13


14


4. OBJECTIVES OF HAL

To ensure availability of Total Quality People to meet the Organizational

Goals and Objectives.

To have a continuous improvement in Knowledge, Skill and Competence

(Managerial, Behavioral and Technical)

To promote a Culture of Achievement and Excellence with emphasis on

Integrity, Credibility and Quality

To maintain a motivated workforce through empowerment of Individual and

team building.

To enhance Organizational Learning

To play a pivotal role directly and significantly to enhance Productivity,

Profitability and improve the Quality of Work Life

15


5. VISION OF THE COMPANY

"To make HAL a dynamic, vibrant, value-based learning organization with

human resources exceptionally skilled, highly motivated and committed to meet the

current and future challenges. This will be driven by core values of the Company fully

embedded in the culture of the Organization".

6. MISSION OF THE COMPANY

Enable all those working for HAL to give their best to ensure their all-round growth as

well as that of the organization. To become a globally competitive aerospace industry

while working as an instrument for achieving self-reliance in design, manufacture and

maintenance of aerospace Defense equipment and diversifying to related areas,

managing the business on commercial lines in a climate of growing professional

competence. "To become a globally competitive aerospace industry while working as

an instrument for achieving self-reliance in design, manufacture and maintenance of

aerospace Defense equipment and diversifying to related areas, managing the business

on commercial lines in a climate of growing professional competence

16


7. VALUES OF THE COMPANY

CUSTOMER SATISFACTION

We are dedicated to building a relationship with our customers where we become

partners in fulfilling their mission. We strive to understand our customers ' needs and

to deliver products and services that fulfill and exceed all their requirements.

COMMITMENT TO TOTAL QUALITY

We are committed to continuous improvement of all our activities. We will supply

products and services that conform to highest standards of design, manufacture,

reliability, maintainability and fitness for use as desired by our customers.

COST AND TIME CONSCIOUSNESS

We believe that our success depends on our ability to continually reduce the cost and

shorten the delivery period of our products and services. We will achieve this by

eliminating waste in all activities and continuously improving all processes in every

area of our work.

INNOVATION AND CREATIVITY

We believe in striving for improvement in every activity involved in our business by

pursuing and encouraging risk-taking, experimentation and learning at all levels

within the company with a view to achieving excellence and competitiveness.

TRUST AND TEAM SPIRIT

We believe in achieving harmony in work life through mutual trust, transparency, co-

operation, and a sense of belonging. We will strive for building empowered teams to

work towards achieving organizational goals.

17


8. ORGANISATIONAL STRUCTURE

18

ORGANISATIONALSTRUCTURE

DESIGNCOMPLEX

BANGALORE

COMPLEX

ACCESSORIES

COMPLEX

MIGCOMPLEX


19


9. CORRUPTION FREE SERVICES

We shall adopt systems and procedures which leave no scope for any

corrupt practice.

Maintain absolute confidentiality of the information/complaints

Believe that means and ends cannot be separated.

Good end calls for good means. Good means cannot but lead to good

ends. There shall be no need for anyone at any time to offer bribe or

any other inducement for doing business with us.

We shall promptly and expeditiously enquire into all genuine and

legitimate complaints of corruption against any employee of our

organization

Shall always be honest and transparent and would like to be seen as

honest. We shall not claim any judicial privilege for our documents

and records except in rare cases and that too in the interest of

national security.

Shall implement all the policies and directives of Central Vigilance

Commission.

10. COMPLAINTS AND GRIEVANCES

20


We shall keep our complaint and grievance readdressed Machinery

open and receptive to you.

Acknowledge your complaints and commit ourselves to redress

them within a period of thirty working days on receipt of the

complaints.

Should you still have any complaint or grievance you may also take

up the matter with the designated officer heading the public

grievance committee at our corporate and divisional offices.

Acknowledgment of grievances and disposal thereof within 30 days.

In case of any complaint or grievance, please take up the matter with

the officer

11. SYSTEM LAYOUT

21


Head of HAL Lucknow division is General Manager. The factory is divided into five

sub Divisions:

Instrument factory

Mechanical factory

Fuel factory

Design and Development

Sukhoi-30

12. CUSTOMER PROFILE

DOMESTIC

22


23


INDIAN AIR FORCE

HAL'S involvement with rotary-winged aircraft dates back to June 1962 when, to

meet the Indian Air Force's requirement for light helicopters, the Government of India

signed a license agreement with M/s SUD-AVIATION (Presently M/s

EUROCOPTER, France). The first helicopter type to be built at HAL Bangalore was

the Alouette ill, later named Chetak. The Alouette II, with the dynamics including

power plant of the Alouette ill was specifically developed to meet the Indian Army's

stringent requirement and was christened Lama by the French (and Cheetah by the

Indians). License agreement for the manufacture of CHEETAH (SA-315- LAMA)

was signed with M/s SNIAS, France (Presently M/s EUROCOPTER, France) in

September 1970 and the first Cheetah helicopter manufactured from raw materials

was delivered during 1976-77.

INDIAN NAVY

HAL developed Dhruv to meet the requirements of the Indian Navy. The Navy

received its first Dhruvs on 28 March 2002. It is expected to receive a total of 120

units to replace the Chetak helicopters in service. The naval variant is fitted with the

Super Vision-2000 maritime radar, capable of detecting targets with low radar cross

section at a range of 200 km. The anti-submarine version of the helicopter is fitted

with dunking sonar, torpedoes, depth charges The helicopter may also be fitted with

the missiles for anti-ship roles.

AIR INDIA

Bangalore HAL International Airport is a busy facility serving over 70 international

and domestic flights every day, and some eight million passengers yearly. The airport

is a major hub in southern India and is divided into two terminals. Terminal I contain

the departures lounge for domestic flights, while Terminal II serves arrivals of

domestic flights and arrivals and departures of international flights. Bangalore's very

own luxury Kingfisher and budget Air Deccan are amongst the main airlines operating

24


here, along with Air India.

BORDER SECURITY FORCE

HAL produced 159 Advanced Light Helicopters (ALHs) to be handed over to the

Indian Army. HAL was also focusing on producing Weapon System Integrated (WSI)

ALH to be handed over to the Services. The company had already handed over seven

ALHs to Border Security Force (BSF).

ONGCAccording to reliable sources from the helicopter aviation industry, the state-owned

oil exploration and production firm has decided to revive its Emergency Search and

Rescue (ESAR) plan for the western coast. The primary purpose of the service would

be to attend to emergencies of its own installations, which have the highest

susceptibility for explosions and catching fire. The firm already has a Medivac

helicopter — it uses an Indian-made Hindustan Aeronautics Limited (HAL) Dhruv

helicopter — that is used to ferry injured and sick ONGC personnel to and from

Bombay High, the offshore drilling platform. ONGC is a regular patron of helicopter

services for ferrying its workers and crew to Bombay High from the Juhu aerodrome

and is also contracted with state-owned helicopter operator Pawan Hans for this.

About 80 per cent of chopper flights from Juhu are already operated by ONGC.

AIRPORTS AUTHORITY OF INDIA

In the mid 1990s, friction started to arise between the Airports Authority of

India (AAI) and HAL. In 2005, a private consortium, Bangalore International Airport

Limited, (BIAL), in which AAI was a minority shareholder, finally started

construction on the new Bangalore International Airport

25

http://en.wikipedia.org/wiki/Airports_Authority_of_India

http://en.wikipedia.org/wiki/Airports_Authority_of_India


INDIAN COAST GUARD

During 1982-83, Major Servicing of Chetak / Cheetah helicopters of IAF was started

and subsequently Army, Navy and Coast Guard helicopters were also added.

Servicing of AN-32 aircraft was also started from 1988-89 and continued up to 99-

2000. In 2004, HAL, Barrack pore became a Branch unit of Helicopter Division,

Bangalore. Till 2010-11, 607 helicopters (MI: 304 Cheetah / Lancer and 224 Chetak

and T1SI/T2SI: 79 Chetaks) have been overhauled at Barrack pore Division.

Assembly of 10 nos. of Cheetal Helicopters for Indian Air Force and assembly of 3

nos. of Chetak Helicopters for Indian Coast Guard has been done at Barrack pore.

26


INTERNATIONAL

27


BRITISH AEROSPACE

HAL builds Hawks for British Aerospace. Public sector aeronautical giant Hindustan

Aeronautics Ltd (HAL) is in relation with BAE Systems about an expanded role in

building Hawk jet trainers for the global market. British Aerospace is the largest

operator of the Hawk. Last year, while negotiating the contract for 57 Hawks, BAE

Systems wanted to give HAL additional work in building Hawks in the future. BAE

Systems retains the capability to build Hawk in the UK to manage any additional

export orders which may arise and will also continue to work closely with HAL on

both current and future Hawk activities.

REPUBLIC OF MAURITIUS

The Dhruv has become the first major Indian weapons system to have secured large

foreign sales. HAL has entered into a partnership with Israel Aircraft Industries (IAI)

to develop and promote the Dhruv, IAI has also helped develop new avionics and

a glass cockpit for newer variants of the Dhruv. Dhruv has elicited interest in many

countries, mostly from Latin America, Africa, and West Asia including Mauritius.

NIGERIAN AIRFORCE

HAL transported 25 MiG-21MF and six MiG-21UM to the Nigerian Air force in

1975. One of them is preserved as a gate guard at Abuja air base.

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13. DIVISIONS AT HAL

AIRCRAFT DIVISION, BANGALORE

Aircraft Division was established in the year 1940. Since inception, the Division has

manufactured a variety of Aircraft both under license as well as indigenously

designed and developed.

Apart from 1st order of Hawk Mk132 Aircraft (66 Nos.), the division has signed

contract with Indian Air Force and Indian Navy to supply additional 57 Hawk

Aircrafts (40 Nos. Hawk for Indian Air force and 17 Nos. Hawk for Indian Navy).

Currently, the Division is manufacturing The Hawk Mk.132, a transonic tandem-

seat ground attack / trainer, powered by a single Rolls Royce Adour Mk.871 turbo

fan under license from BAE SYSTEMS, UK.

The Division is equipped with modern infrastructure in Plant and Equipment like

CAD - CAM Manufacturing Engineering, Quality Assurance and Customer support

System with 2179 highly skilled personnel including more than 511officers working

in a covered area of 2,25,000 sq.m.

The Division has so far manufactured over 2010 aircrafts of various types. With

experience and capabilities built over the past seven decades, the Aircraft Division

is bidding for substantial share in the International Aeronautical market.

29


AIRCRAFT DIVISION, NASIK

Aircraft Division, Nasik, established in the year 1964 for license manufacture of

miG-21FL aircraft & K-13 Missiles, is located at Ojhar, 24 kilometers from Nasik

and approximately 200 kilometers from Mumbai in the state of Maharashtra. The

division since then manufactured other MiG variants; viz MiG-21M, MiG-21 BIS

AND MiG-27 M aircraft. Along with manufacturing, the division also carries out

overhaul of the MiG series aircraft. It has well qualified and trained manpower in

different areas of aviation technology, viz design and development, manufacture

and overhaul of aircraft, accessories and related products.

The Division is an independent profit-centre and is currently engaged in the following activities:

Repair/Overhaul of MiG-21 aircraft variants/MiG-27 aircraft and their

aggregates & notables.

Supply of spares/units/consumables and aerospace fasteners.

Support to HAL and Non-HAL made aircraft in terms of Life extension,

Modifications, Site Repairs and investigations.

Diversification into Civil Aircraft manufacture by taking up work packages.

Export of MiG spares to Egypt, Syria, Vietnam, Malaysia, Algeria and

Poland.

So far the Division has manufactured more than 700 aircraft and overhaul more than

1300 aircraft. With the expertise gained over the last 3 decades, the division has

already made its presence felt in the global market and is fully geared up for

meeting any challenging task in the domestic and the international market.

30


ENGINE DIVISION, KORAPUT

Engine Division - Koraput, a unit of HAL's vast network, was set up in April 1964 to

manufacture R11-f2 turbo jet engine of MiG-21 FL aircraft under license from the

erstwhile USSR. Subsequently, the division took up, under various license

agreements, manufacture of R-11 series engines of MIG-21 FL and MiG-21M aircraft,

R-25 series engines of MiG-21 BIS aircraft and R-29B engines for Mig-27M aircraft.

Simultaneously, facilities were set up for overhaul of R-11 and R-25 series engines,

which started in 1971 and 1983 respectively. Starting from 1997 - 98 we have also

undertaken overhaul of RD - 33 Engines of MiG-29 aircraft. The Division has stepped

into diversification by signing on MOU with GTRE for supply of components

belonging to three modules (gear box, fan and turbine modules) of KAVERI engine

meant for LCA. The Division has also entered the export market by overhauling R25

engines for Vietnam, supply of helicopter gears for MH1, Japan and supply of spares

for Egypt. The Division has bagged an order from M/s allied Signals, USA for

machining of castings. Today the division has a rich and enviable experience of

manufacturing more than 1000 aero-engines and overhaul of nearly 4500 power

plants. The Division has the unique distinction of manufacturing almost all types of

components required for manufacture and overhaul of engines and spares for service

exploitation. The Division is equipped with modern Forge and Foundry shops which

cater to the requirements of prevision forgings and castings.

31


ACCESSORIES DIVISION, LUCKNOW

Accessories Division of HAL was established in 1970 with the primary objective of

manufacturing systems and accessories for various aircraft and engines and attains

self sufficiency in this area. At present it is turning out over 1300 different types of

accessories. The Division started with manufacturing various Systems and

Accessories viz, Hydraulics, Engine Fuel System, etc all under one roof to meet the

requirements of the aircraft, helicopters and engines being produced by HAL like

MiG series of aircrafts, Dornier, Jaguar, Advanced Light Helicopters (ALH), PTA,

Cheetah & Su-30 and repair / Overhaul of Avro, AN-32, HPT-32, Mirage-2000 &

Sea-Harrier aircrafts, Cheetah and Chetak helicopter.

The Division undertakes manufacturing and servicing of accessories under

Transfer of Technology (ToT) from more than 40 licensor from different

countries. This capability has culminated in indigenous design and development of

over 350 types of accessories for the Light Combat Aircraft (LCA) (Air force and

Navy version), Advanced Light Helicopter (all versions i.e. Army, Air force, Navy

& Civil), SARAS and IJT (Intermediate Jet Trainer). The Division is networked

with all sister Divisions and R& D Centers by LAN/WAN. Lean manufacturing and

ERP have been implemented to create an efficient manufacturing system. The

Division has also made steady progress in the area of Export.

32


LUCKNOW DIVISION

REPAIRS, MAJOR SERVICING AND SUPPLY OF SPARES

The Division carries out Repair and Overhaul of Accessories, with minimum turn-

around-time. Site Repair facilities are offered by the Division by deputing team of

expert Engineers / Technicians.

Services provided for:

Military Aircraft

MiG Series

Jaguar

Mirage-2000

Sea - Harrier

AN-32

Kiran MK- I / MK- II

HPT - 32

SU-30 MKI

Dornier-228

AVRO HS-748

Chetak (Alouette)

Cheetah (Lama)

The Division has comprehensive manufacturing capabilities for various Hi-tech

33


components, Equipment and Systems to customer's specifications and ensures high

quality, reliability and cost effectiveness.

The Division has over 25 years of experience in producing aeronautical accessories

making it an ideal partner for the International Aero Engineering Industry.

The Division also manufactures and supplies complete range of components of

Cheetah (Lama) & Chetak (Alouette) Helicopters, Jaguar and MiG series Aircraft to

Domestic and International Customers to support their fleet.

FACILITES:

Process

Heat Treatment facilities for all types of steels, Aluminum alloys, Copper, Nickel &

Titanium alloys.

Protective Treatment

Treatment facilities of all types like Plating, Publishing etc, SPECIAL types of

Surface protection & Painting facility, i.e. RILSAN Coating PTFE Coating, MOLY

DAG Coating.

Welding

Division has Electron Beam, Argon arc, Spot & Seam welding equipment to facilitate

intricate welding on thin metal bellows, capsules, stator Packs, Brushes etc. Our

welders are fully approved & certified by Civil Aviation Authority.

Rubber, Plastic, Foundry

These facilities are in - house to cater for the needs of various production / servicing

requirements.

34


Assembly and Test

8000 sq.mtrs of Clean/Air-conditioned room (class 10,000 with laminar flow

cabinets) where assembly & test activities for instruments, Hydraulics and Fuel

factories take place.

Attached facilities to Assembly Shops are:

Dedicated Test Equipment, Environmental Testing facilities to meet the

aeronautical acceptance standards.

Environmental Laboratory

Facilities for all types of Environmental testing as per requirements of BS, MIL &

JSS, available to meet regular requirements of type testing of all types of units’

designed/developed in the in-house R &D centre.

In addition the Lab also caters for the need of special type of testing for Wheels,

Hydraulic item etc. in dedicated test rigs/beds. Design Computer Centre with

unigraphic, CAD & Analytical Software Packages.

AWARDS:

The Accessories Division Certification is:

The ISO 9001 Certification for entire range of products and services.

ISO 14001 Certification for Environmental Management System

The Accessories Division Approvals are:

Approval from DGCA, Govt. of India for design and development,

manufacturing and repair.

Approval for Research & Design Centre by Department of Science and

Technology, Govt. of India.

Approval of Director General Aeronautical Quality Assurance for Military

35


Aviation products and services

HELICOPTER DIVISION, BANGALORE

HAL'S involvement with rotary-winged aircraft dates back to June 1962 the

Government of India signed a license agreement with M/s SUD-AVIATION

(Presently M/s EUROCOPTER, France). The first helicopter type to be built at

HAL Bangalore was the Alouette ill, later named Chetak

14. PRODUCTS OF HAL

36


37


38


39


15. Products of HAL Lucknow division

Instruments Sensors, Gyros

Flight instruments, electrical indicators, Fuel Gauge probes, Gyros, sensors

and Switches

Electrical power generation and control

AC/DC Generator, Control and protection units, inverters, Transformers

Rectifier units, AC/DC Electrical system, Actuators.

Land navigation system

Microprocessor controller

Under carriage, wheels and breaks

Hydraulic system and power control

Pumps, Accumulators, Actuators Electro-Selectors, Bootstrap Reservoirs and

various types.

40


Environmental control system

Pneumatics and oxygen system, cold air unit, water Extractors, valves.

Ejection system

Ejection Seats, Release Units

Engine fuel control system

Booster pumps, main and Reheat Fuel systems, Nozzle Actuators.

16. PRODUCTS IN CURRENT MANUFACTURING RANGE

Su 30 MKI

Su-30MKI is a long-range, high-endurance, heavy-class Air Dominance Fighter with

multi mission capabilities. It is currently the most advanced version of Su-

27 Flanker flying anywhere in the world. The Su-27, which was first produced in the

Former Soviet Union starting 1982 is counted among the world's best fighter aircraft

even without any upgrades; but some of the technology and capability that the Su-

30MKI boasts has absolutely no parallels across the world's air forces. The Su-30MKI

gives its operator, the Indian Air Force, a capability that will remain unmatched by all

rivals for the foreseeable future.

41


Twin-seater, Multi-role, Long range Fighter / Bomber / Air Superiority Aircraft

MAIN FEATURES:

Wing Center Section: It is the main load carrying structure of the aircraft. It provides

attachment points for landing gears, outer wings, fuselage nose section, and fuselage

tail section and air intakes.

Outer Wings: Outer wings are an integrated part of the fuselage, trapezoidal in shape

and swept back by 420. The flaperons are attached at the trailing edge, which operate

as ailerons and flaps. The leading edge flaps are located all along outer wingspan to

improve the aerodynamic characteristics.

Flight Controls: The aircraft longitudinal control is achieved by synchronous

deflection of stabilizers, lateral control by differential deflection of stabilizers and

flaperons and directional control by rudders.

Emergency Extension of Landing Gears: It extends the landing gears in case the first

hydraulic system fails. The bottle capacity is 9 liters

42


Emergency Extension of Refueling probe: It extends the air-to-air refueling probe in

case the second hydraulic system fails. The bottle capacity is 3 liters.

MiG-27 M

The Mikoyan MiG-27 is a variable-geometry ground-attack aircraft, originally built

by the Mikoyan design bureau in the Soviet Union and later license-produced

in India by Hindustan Aeronautics as the Bahadur ("Valiant"). It is based on

the Mikoyan-Gurevich MiG-23 fighter aircraft, but optimized for air-to-ground attack.

It remains in service with the Indian, Kazakh and Sri Lankan Air Forces in the ground

attack role. All Russian and Ukrainian MiG-27s have been retired.

Role of MiG -27 M

MiG -27 M is a ground attack aircraft which is a military aircraft with primary role of

attacking targets on the ground with greater precision than strategic bombers and

prepared to face stronger low-level air defense. This class of aircraft is ideal for close

air support on the battlefield, but they are also employed in other missions, for

example air interdiction or offensive counter air. A more general category is an attack

aircraft which, in addition to ground-attack types, includes aircraft for naval air-to-

surface missions. To clarify a common mistake: as opposed to fighter aircraft, attack

aircraft are not necessarily intended for air-to-air combat. However, they are often

equipped with air-to-air missiles for self-defense.

43


RESTRICTED AIRCRAFTS

Raefael

Leading defense and aerospace publication Flight Global has quoted industry

sources confirming the integration of Rafael Derby Air to Air Missiles with India's

indigenous HAL Teas Light Combat Aircraft for the Indian Air Force. Delivery of the

missiles is to begin in 2012. A contract to integrate Rafael's Derby medium-range air-

air missile with India's Teas light combat aircraft will be signed soon, according to

industry sources. Delivery of the missiles is expected from the second half of 2012,

following the final phase of integration tests that are planned for early next year.

Euro fighter Typhoon

44


The Euro fighter Typhoon is a twin-engine, canard-delta wing, multirole fighter The

Typhoon was designed by a consortium of three companies, EADS, Alenia

Aeronautical and BAE Systems, working through a holding company, Euro fighter,

which was formed in 1986. The project is managed by the NATO Euro fighter and

Tornado Management Agency, which acts as the prime customer. The aircraft is being

procured under separate contracts, named tranches, each for aircraft with generally

improved capabilities. The Typhoon has entered service with the Austrian Air Force,

the Italian Air Force, the German Luftwaffe, the British Royal Air Force, the Spanish

Air Force, and the Royal Saudi Air Force.

Export Products

Supply of Retable and Spares of Jaguar International and Cheetah (Lama) /

Chetak (Alouette) Helicopters

Repair / Overhaul of aircraft accessories of MiG series Aircraft, Jaguar

International Aircraft, Cheetah (Lama) / Chetak (Alouette) Helicopters and

Dornier Multi-role Aircraft

Supply of Ground Support Equipment for Aircraft such as MiG-23 / 27 / 29,

Mirage-2000, Jaguar, Light Combat Aircraft (LCA) Su-30 MKI, Sea Harrier,

Dornier DO-228, Avro HS-748 (Specific Version), Cheetah (Lama) / Chetak

(Alouette lll), Ml - 17, Advanced Light Helicopter (ALH).

45


Outsourcing:

Division has embarked upon selecting and creating a strong base of suppliers for

outsourcing precision components, tooling and test equipment. This is required to

handle higher loads of existing and new projects being undertaken in the division.

Vendors are selected as per the corporate guidelines, pursuing a vendor approval

process. Applicant Organization with established facilities & capabilities, willingness

to learn and excel in producing aeronautical level of quality product and with financial

strength and preferably with DGAQA approval stand a good chance in becoming part

of the aeronautical industrial expanse.

17. AGREEMENTS

International agreements

The US$35 billion fifth-generation fighter jet program with the Sukhoi

Corporation of Russia.

US$1 billion contract to manufacture aircraft parts for Boeing.

Multi-role transport aircraft project with Ilyushin of Russia worth US$600

million

120 RD-33MK turbo fan engines to be manufactured for MiG-29K by HAL

for US$250 million

46


Contract to manufacture 1,000 TPE331 aircraft engines

for Honeywell worth US$200,000 each (estimates put total value of deal at

US$200 million).

US$120 million deal to manufacture Dornier 228 for RUAG of Switzerland

Manufacture of aircraft parts for Airbus SAS worth US$150 million.

US$100 million contract to export composite materials to Israel Aircraft

Industries

US$30 million contract to supply avionics for Malaysian Su-30MK

US$20 million contract to supply ambulance version of HAL

Dhruv to Peru.

Domestic agreements

180 Sukhoi Su-30MKI being manufactured at HAL's facilities in Nasik and

Bangalore. The total contract, which also involves Russia's Sukhoi

Aerospace, is worth US$3.2 billion.

200 HAL Light Combat Helicopters for Indian Air Force and 500 HAL

Dhruv helicopters worth US$5.83 billion.

US$900 million aerospace hub in Andhra Pradesh.

US$57 million upgrade of SEPECAT Jaguar fleet of the Indian Air Force.

47

http://en.wikipedia.org/wiki/SEPECAT_Jaguar

http://en.wikipedia.org/wiki/Andhra_Pradesh

http://en.wikipedia.org/wiki/HAL_Dhruv


http://en.wikipedia.org/wiki/HAL_Light_Combat_Helicopter

http://en.wikipedia.org/wiki/Sukhoi_Su-30MKI


US$55 million fighter training school in Bangalore in collaboration

with Canada's CAE.

64 MiG-29s to be upgraded by HAL and Russia's MiG Corporation in a

program worth US$960 million.

Licensed production of 82 BAe Hawk 132.

18. CONTRACTS

Hindustan Aeronautics Ltd has signed a tripartite General Contract with United

Aircraft Corporation -Transport Aircraft (UAC-TA), their Russian partner and their

JV, Multirole Transport Aircraft Ltd (MTAL) for the Multirole Transport Aircraft

(MTA) project. HAL will carry out the design & development of its work share of

MTA at Aircraft R&D (ARDC) Centre at Bangalore while its Transport Aircraft

Division (TAD) at Kanpur will manufacture the prototypes. Serial production will

take place at Kanpur where dedicated facilities are being set up. HAL's other R&D

Centers and manufacturing divisions will share development of systems & LRUs and

manufacture of components, sub assemblies and composite structure. HAL will

48

http://en.wikipedia.org/wiki/BAe_Hawk

http://en.wikipedia.org/wiki/MiG-29

http://en.wikipedia.org/wiki/CAE_(company)

http://en.wikipedia.org/wiki/Canada


showcase its expertise in design of aircraft as well as systems, manufacturing & flight

testing while jointly working with the Russian team in Moscow as well as in India.

The Indian and Russian governments had earlier signed an Inter Governmental

Agreement for joint design, development & production of MTA on 50:50 sharing

basis and had decided to form a JV between HAL, UAC-TA & Rosoboron export to

execute the project. The primary objective is to achieve self-reliance in design &

development and production of aircraft of this size and also to manage the program

with international collaboration and a large number of global suppliers.

The aircraft will be designed for the roles of cargo/troop transportation; Para-

drop /air drop of supplies including Low Altitude Parachute Extraction System

(LAPES). The joint effort seeks to meet a requirement of 100 aircraft for the Russian

Air Force, 45 aircraft to the IAF and 60 for export. Total requirement for the present is

205. The MTA project preliminary design will start immediately after signing the

follow-up contract on preliminary design on which tripartite discussions have been

concluded.

HAL in India

Corporate Office

Bangalore

Liaison Offices

Mumbai

Delhi

Chennai

Vishakhapatnam

49


Manufacturing Units

Bangalore

Hyderabad

Luck now

Korwa

Koraput

Kanpur

Nasik

Design Centers

Bangalore

Hyderabad

Nasik

Liaison Offices out of India

London

Moscow

19. LICENSE PRODUCTION

A direct commercial arrangement between a US company and a foreign

government, international organization, or foreign company, providing for the transfer

of production information which enables the foreign government, international

organization, or commercial producer to manufacture, in whole or in part, an item of

US defense equipment is a licensed production. A typical license production

arrangement would include the functions of production engineering, controlling,

quality assurance and determining of resource requirements. It may or may not

include design engineering information and critical materials production and design

information. A licensed production arrangement is accomplished under the provisions

50


of a manufacturing license agreement per the US International Traffic in Arms

Regulation.

Harlow PC-5

Harlow PC-5 was a 1930s American military trainer version of the PJC-

2 designed and built by the Harlow Aircraft Company. The Harlow Aircraft Company

designed a version of the PJC-2 as a tandem two-seat training aircraft. The PC-5 had a

revised fuselage with dual controls. The aircraft first flew in July 1939 but it failed to

interest the United States Army Air Corps. Only five aircraft had been built when the

company was taken over by the Intercontinental Corporation. Components for 50

aircraft were supplied to the Indian company Hindustan Aeronautics, who were to

assemble the aircraft for use by the Indian Air Force as the PC-5A. The first PC-5A

flew in August 1941 but it is not known how many were assembled and flown.

BAE Systems Hawk

The BAE Systems Hawk is a British single-engine, advanced jet trainer aircraft.

It first flew in 1974 as the Hawker Siddeley Hawk. The Hawk is used by the Royal

Air Force, and other air forces, as either a trainer or a low-cost combat aircraft. The

Hawk is still in production with over 900 Hawks sold to 18 customers around the

world.

SEPECAT Jaguar

The SEPECAT Jaguar is an Anglo-French jet ground attack aircraft, originally

used by the British Royal Air Force and the French in the close air support and

nuclear strike role, and still in service with several export customers, notably

the Indian Air Force and the Royal Air Force of Oman. The Jaguar was successfully

exported to India, Oman, Ecuador and Nigeria. With various air forces, the Jaguar was

used in numerous conflicts and military operations in Mauritania, Chad, Iraq, Bosnia,

and Pakistan, as well as providing a ready nuclear delivery platform for Britain,

51

http://en.wikipedia.org/wiki/Pakistan

http://en.wikipedia.org/wiki/Bosnia

http://en.wikipedia.org/wiki/Iraq

http://en.wikipedia.org/wiki/Chad

http://en.wikipedia.org/wiki/Mauritania

http://en.wikipedia.org/wiki/Royal_Air_Force_of_Oman

http://en.wikipedia.org/wiki/Indian_Air_Force

http://en.wikipedia.org/wiki/Close_air_support

http://en.wikipedia.org/wiki/Royal_Air_Force

http://en.wikipedia.org/wiki/Ground_attack_aircraft

http://en.wikipedia.org/wiki/France

http://en.wikipedia.org/wiki/United_Kingdom



http://en.wikipedia.org/wiki/Jet_trainer


http://en.wikipedia.org/wiki/Hindustan_Aeronautics

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/United_States_Army_Air_Corps

http://en.wikipedia.org/wiki/Harlow_PJC-2



http://en.wikipedia.org/wiki/United_States


France, and India throughout the latter half of the Cold War and beyond. In the Gulf

War, the Jaguar was praised for its reliability and was a valuable coalition resource.

Sukhoi Su-30

The Sukhoi Su-30 is a twin-engine, two-seat super maneuverable fighter aircraft

developed by Russia's Sukhoi Aviation Corporation. It is a multirole fighter for all-

weather, air-to-air and air-to-surface deep interdiction missions. The Su-30 started out

as an internal development project in the Sukhoi Su-27 family by Sukhoi. The design

plan was revamped and the name was made official by the Russian Defense Ministry

in 1996. Of the Flanker family, only the Su-27, Su-30, Su-34 and Su-35 have been

ordered into serial production by the Defense Ministry. All the others, such as Su-37,

were prototypes.

20. SERVICES AT HAL

ACCESSORIES DIVISION, Leo

The Division carries out Repair and Overhaul of Accessories, with minimum turn-

around-time. Site Repair facilities are offered by the Division by deputing team of

expert Engineers / Technicians. Services are provided for:

Military Aircraft

MiG Series

Jaguar

Mirage-2000

Sea - Harrier

52

http://en.wikipedia.org/wiki/Sukhoi_Su-37

http://en.wikipedia.org/wiki/Su-34

http://en.wikipedia.org/wiki/Sukhoi_Su-27

http://en.wikipedia.org/wiki/Air_interdiction

http://en.wikipedia.org/wiki/Air_combat_manoeuvring

http://en.wikipedia.org/wiki/Sukhoi

http://en.wikipedia.org/wiki/Fighter_aircraft

http://en.wikipedia.org/wiki/Supermaneuverability

http://en.wikipedia.org/wiki/Gulf_War

http://en.wikipedia.org/wiki/Gulf_War

http://en.wikipedia.org/wiki/Cold_War


AN-32

Karan MK- I / MK- II

HPT - 32

SU-30 MKI

Civil Aircraft

Dornier-22B

AVRO HS-748

Helicopters

Chetak (Alouette)

Cheetah (Lama)

ALH (IAF / NAVY / COAST GUARD / CIVIL)

SUB-CONTRACT CAPABILITIES

The Division has comprehensive manufacturing capabilities for various Hi-

tech components, Equipment and Systems to customer's specifications and

ensures high quality, reliability and cost effectiveness.

The Division has over 40 years of experience in producing aeronautical

accessories making it an ideal partner for the International Aero

Engineering Industry.

The Division also manufactures and supplies complete range of components

of Cheetah (Lama) & Chetak (Alouette) Helicopters, Jaguar and MiG series

Aircraft to Domestic and International Customers to support their fleet.

53


CUSTOMER SERVICES

The division has established full fledge infrastructure, facilities & system for

ensuring optimum level for customer’s satisfaction on the products & services

rendered. The major area includes

Overhaul/ Repair of Ratable

The Division takes up over/repair of entire range of Electrical, instrument,

Mechanical & Armaments Notables.

Supply of Spares & others

Ground support equipments and rigs

Ground power unit, hydraulics trolley and power packs, dedicated test Rigs,

custom- build Fuel/ Hydraulics Test rigs.

Site Repair

The Division undertakes site repair of Aircraft at IAF bases by deputing

site repair teams.

Defect Investigation/Failure Analysis

The aggregate which was received on premature withdrawal from the

units are studied & the causes for defects /failures are investigated.

Repetitive cases are taken up for in the depth study & modifications are

incorporated in the unit to minimize the recurrence of such

defects/failures in future.

Product Training

54


The Division has positioned Service Engineers at various IAF bases to

closely liaise and to access the requirement of the customer. Based on

the feedback received from Service Engineers, the division renders

adequate support for fully exploiting the products.

21. PRODUCT FLOW CHART

The instrument factory is divided into-

Assembly shop

Manufacturing shop

Assembly shop is divided into: -

SHOP 1

SHOP 2

SHOP 3

SHOP 4

55


ALH

Manufacturing shop is divided into: -

NGL Shop

Smiths shop

Gyro shop

Press Shop

Following systems or instruments are manufactured in Instrument factory.

Barometric instrument

Gyroscopic instruments

Electrical and Electronics equipments

Fuel gauging systems

Ground level navigation systems

Process of product preparation follows certain steps. When the customer places

the order and it approved by the authorities the planning of steps for preparations are

to be layer by authorities now assembly of the material is done and stored in stored.

Now these are collected as required and experts prepare unit. Now the important step

comes of testing. Testing is done under specified conditions and assurance is done in

all respect then certificate is raised of being tested. Now the last step comes of proper

packing and storing. These are supplied to costumer under followed terms and

conditions

Request of costumer

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Planning of steps

Assembly of materials

Manufacturing of units

Testing of unit under for conditions

Collecting and proper packing of unit

22. COMPANY ANALYSIS

BUSINESS DESCRIPTION

HAL was established as Hindustan Aircraft in Bangalore in 1940

by Walchand Hirachand to produce military aircraft for the Royal Indian Air Force.

The initiative was actively encouraged by the Kingdom of Mysore, especially by the

Diwan, Sir Mirza Ismail and it also had financial help from the Indian Government.

Mysore was favored because of the availability of cheap electricity.[2] The

organization and equipment for the factory at Bangalore was set up by William D.

Pawley of the Intercontinental Aircraft Corporation of New York, an exporter of

American aircraft to the region. Pawley managed to obtain a large number of

57

http://en.wikipedia.org/wiki/William_D._Pawley

http://en.wikipedia.org/wiki/William_D._Pawley

http://en.wikipedia.org/wiki/Hindustan_Aeronautics_Limited#cite_note-1

http://en.wikipedia.org/wiki/Mirza_Ismail

http://en.wikipedia.org/wiki/Kingdom_of_Mysore

http://en.wikipedia.org/wiki/Royal_Indian_Air_Force

http://en.wikipedia.org/wiki/Walchand_Hirachand


machine-tools and equipment from the United States. In 1943 the Bangalore factory

was handed over to the United States Army Air Force but still using Hindustan

Aircraft management. The factory expanded rapidly and became the centre for major

overhaul and repairs of American aircraft and was known as the 84th Air Depot.

After India gained independence in 1947, the management of the company was

passed over to the Government of India and was renamed as Hindustan Aeronautics

Limited (HAL) on 1 October 1964 when Hindustan Aircraft Limited was merged with

the Aircraft manufacturing Depot, Kanpur. Though HAL was not used actively for

developing newer models of fighter jets, the company has played a crucial role in

modernization of the Indian Air Force. In 1957 company started manufacturing jet

engines (Bristol Siddeley Orpheus) under license at new factory located in Bangalore

During the 1980s, HAL's operations saw a rapid increase which resulted in the

development of new indigenous aircraft such as HAL Tejas and HAL Dhruv. HAL

also developed an advanced version of the MiG-21, known as MiG-21 Bison, which

increased its life-span by more than 20 years. HAL has also obtained several multi-

million dollar contracts from leading international aerospace firms such

as Airbus, Boeing and Honeywell to manufacture aircraft spare parts and engines. By

2012, HAL was reportedly been bogged down in the details of production and has

been slipping on its schedules

CORPORATE STRATEGY

Aviation major Hindustan Aeronautics Limited (HAL) and global leader in

aerospace and defence, EADS inked a Memorandum of Understanding (MoU) to

further develop long-term cooperation and define joint strategies on different market

segments. The MoU was signed on Friday, September 1, 2006, by HAL Chairman Mr

Ashok K. Baweja and EADS CEO Dr Tom Enders.

With this MoU, the two groups will expand their cooperation into new market

segments. A joint analysis of mid-term and long-term strategies on the key segments

of aerospace business will be conducted in the coming months to determine how both

58

http://en.wikipedia.org/wiki/Honeywell

http://en.wikipedia.org/wiki/Boeing

http://en.wikipedia.org/wiki/Airbus

http://en.wikipedia.org/wiki/MiG-21


http://en.wikipedia.org/wiki/HAL_Tejas

http://en.wikipedia.org/wiki/Bristol_Siddeley_Orpheus

http://en.wikipedia.org/wiki/Jet_engine

http://en.wikipedia.org/wiki/Jet_engine


http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/United_States_Army_Air_Force


groups could team up and benefit from each other’s expertise to develop their

activities. “HAL and EADS are already long-term partners, working together to

manufacture helicopters and passenger jets,” said Dr Tom Enders, CEO of EADS.

“We appreciate the excellent level of skills in design and manufacturing, which make

HAL a valuable partner for global cooperation in aerospace and defence. During my

visit to HAL facilities in Bangalore, I was impressed by the quality of the production

and technological capabilities,” he added.

HAL is rapidly developing into a major player in the aerospace sector.

Nevertheless, HAL could benefit from teaming with a global player like EADS to

accelerate its development and gain access to export market through joint marketing

agreements. This memorandum will define the products for which HAL and EADS

will join their efforts.

Lasting bond

Euro copter, the helicopter manufacturer owned by EADS, has been cooperating

with HAL for over four decades. The most recent fruit of this long-term relationship is

Euro copter’s decision to subcontract airframe production for all Ecureuil type

versions to HAL.

India was the first nation with which Euro copter signed a license agreement

for technology transfer. The Fennec, the military version of the Ecureuil series, is one

of the two helicopters short-listed by the Ministry of Defense for replacing the current

Cheetah/Chetak fleet of the Indian Army in the near future. In the past, Euro copter

59


was associated with HAL in the development of the Advanced Light Helicopter

christened Dhruv, for which Euro copter initially supplied rotor blades.

Euro copter is willing to team with HAL for the development of 10T

helicopter, which HAL plans to co-develop with a foreign partner to meet the

requirements of Indian Armed Forces and also to satisfy requirements of global

customers.

Passenger jet manufacturer Airbus, is where EADS owns 80%, and HAL has

been cooperating for more than 15 years. In 1988, HAL was chosen to build passenger

doors for the A320. HAL has a contract to provide 600 aircraft sets of the doors, and

has delivered over 300 till date. A new batch of A320 doors has been ordered recently.

HAL has also produced parts for the A320 nose undercarriage. The production of

A340 emergency doors is due to start in the near future.

About HAL

HAL is the largest aeronautical company in South and South East Asia, engaged

in design, development, manufacture and maintenance of fighters, transport aircraft,

trainers and helicopters apart from their engines, accessories and avionics. The

company’s star product, Advanced Light Helicopter (Dhruvs), has been hitting

headlines with its stellar performances at air shows, impressing customers. Other

programmes including the Intermediate Jet Trainer (IJT) and Light Combat Aircraft

(LCA) are cruising ahead in full steam while the licence manufacturing projects of

SU-30 MK-I and Hawk AJT are also on the right flight path.

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23. OFFICIAL HIERARCHY

MANAGINGDIRECTOR

EXECUTIVE DIRECTOR

GENERAL MANAGER

AGM

CHIEF MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ENGINEER

ASSISTANT ENGINEER

TECHNICIAN

24. MARKETING STRATEGIES

Marketing is the relation between costumer and organization. When the

customer contacts the organization then it is seen that the request is of our capability

or not. If not then regret order is send. Else request is judged under various points of

cost, terms and conditions, time duration etc. and the decided conditions are send to

the customer now if the customer agree then order is placed for further process.

Firstly HAL had only defense sector as the only customer, but now it has

decided to expand it capabilities to earn more and more profit.

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Marketing mainly includes two units of marketing. They are Civil and Export.

It mainly deals with the defense requirements, but besides this there are many other

costumers in India and outside India.

Marketing

Civil export

(ISRO, Sahara Airlines, kingfisher (Oman, UA, England, kingfisher, JET airways, etc.) Romania, Zimbabwe,

Srilanka, etc.)

CIVIL- In civil unit it mainly deals with the costumers of India only. They

are different airlines and research organizations, army, navy, coast guard,

air force, etc. They may contact for repairing of parts and for requirements

of parts.

EXPORT- In this unit there are mainly customers of foreign they are

airways of England, Oman, UA, etc. There are very strict rules for the trade

between these organizations. These foreign organizations look to HAL as a

faithful organization. When customer contacts HAL then there are

predefined steps to be followed by the organization.

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These can be described in chart

25. FLOW CHART FOR MARKETING PROCESS

CUSTOMER

RFQ/RFP

MARKETING

ENQUIRY REVIEW

Preparation (export evolution, pricing committee, etc)

Vetting (finance)

Approval (competent authority)

26. ROLE OF MARKETING DEPARTMENT

Development of global market for TAD’s product and services.

Prepare a database of all potential customers and interact with them for

present / future need.

Planning the marketing strategies for all national and international

customers.

Negotiation and discussion with customer to obtain order.

Participation in Exhibition, Aero show to display TAD’s Products, services

and facilities.

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Techno/commercial proposal

Approved proposal


27. TOTAL NUMBER OF AIRCRAFTS DELIVERED

Product Period Qty HS-748 Aircraft 1960-83 89Gliders 1963-86 164Basant Aircraft (HA-31) 1975-78 19HPT-32 Aircraft 1983-98 142Dornier-228 Aircraft 1985 onwards 83ATP Tail plane(for Export)

1987-95 24

28. SWOT ANALYSIS

STRENGTH

HAL is headed by an excellent and extraordinary chairman

The technological knowhow are very confidential and the best suited for

preparing the aircrafts

HAL is a very good pay master to its employees and financially healthy due to

existence under the ministry of defense

Timely delivery of aircraft to customers for the best use of the same

WEAKNESS64


Recent air crashes of MiG aircraft and few others have caused problems

Foreign vendors are at times not in the position to deliver the raw materials on

time which causes financial losses

Machineries at times take abnormal time which causes delay in the normal

delivery of the products

OPPORTUNITIES

HAL is the only manufacturer of Defense aircrafts hence the job opportunities

and profit opportunities are more today and in the forthcoming years.

HAL has monopoly in manufacturing and overhauling of aircraft so it can

explore all advantages related to this field

HAL has developed its own R&D centers hence it would not have to depend on

Russia for the technical knowhow.

THREATS

HAL has fear to terrorists as it is a defense organization producing fighter

aircrafts

There is a fear of rejection or unwanted happening during the testing of aircraft

which may cause heavy losses

29. KEY COMPETITORS

RANK NAME OF THE COMPANY

1 LOCKHEED MARTIN, USA

2 BOEING, USA

3 NORTHROP GRUMMAN, US

4 BAE SYSTEMS, UK

5 RAYTHEON, USA

6 GENERAL DYNAMICS, USA

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7 EADS, NETHERLANDS

8 L-3 COMMUNICATIONS, USA

9 THALES, FRANCE

10 HINDUSTAN AERONAUTICS LIMITED (51st Position in 2003-04)

30. BUSINESS CHALLENGE

Compete in world market

Exports Markets

Domestic

Off set (US $ 4Bn)

Non Captive

Provide world class performance to all our customers

Cost

Quality

Lead Time

31. STRATEGY

• Clear case for change

• New business paradigm

Core competence

Design & development Assembly & testing

Noncore - Outsourcing

• Revolution

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External

1) New ways of working

2) Strategic outsourcing

Internal

Mindset / psyche (HR)

• Continuous improvement

32. INITIATIVES

Process and ways of working (External Revolution)

a. Lean Management

b. Outsourcing

c. Reality Check

People

a. Competency based practices

b. Team building

c. Leadership capability development

d. Internal revolution

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33. LEAN MANAGEMENT

LEAN ORGANISATION SYSTEM

Philosophy: to add value

Process: right process for right results

People: value addition by continuous Challenge

Problem solving : solving root problems drives organizational learning

LEAN AT HAL

World class aerospace companies started Lean journey in 1990s

• HAL embarked Lean journey - Dec. 2003

• HR to champion org. wide Lean initiative

• Leadership workshops on “Values & Behaviors” & PDMS: Ownership

& commitment

Change Process

• D x V x S > R

D = Dissatisfaction (Case for change)

V = Vision (Template of future plan)

S = Steps (Involvement in implementation)

R = Resistance (Communication / Dialogue)

34. LEAVE MANAGEMENT AT HAL

TYPES OF LEAVES

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VACATION LEAVE

Employees who are borne on regular rolls of the company are eligible for

vacation leave at the rate of 2.5 days for every 30 days of service. Vacation Leave can

be accumulated up to 300 days. There is a provision of encashment of earned leave.

The minimum en cashable vacation leave is 10 days. The maximum no. of days for en

cashable leave will be one half of the V/L at credit of the employees on date of

encashment. Leave encashment will be allowed only once during a calendar year.

The encashment will be at the rate of Basic Pay (including Service weight age pay in

respect of workmen and special pay and personally pay. If any, which are counted as

pay for all purposes) + Dearness Allowance drawn at the time of encashment.

Rate of Encashment = Basic Pay (monthly) + DA(per day)26 days

CASUAL LEAVE

Employees who are borne on regular rolls of the company are eligible for 12

days of Casual Leave in a calendar year. Casual leave can be availed up to a

maximum of 8 working days at a stretch, subject to the same being sanctioned.

Casual Leave can be availed for half a day also.

MATERNITY LEAVE

It would be available to regular married female employees for 12 weeks

inclusive Sundays and holidays.

SICK LEAVE

Entitlement of sick leave is 15 days in a calendar year.

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PROLONGED LEAVE

It is an ex-gratia payment. It is being provided to employees for long illness

e.g. T.B., Cancer like diseases. During first six months of leave employee is paid 50%

of his monthly basic salary. For next six months employee is not paid any amount.

Total duration of the prolonged leave is one year.

SPECIAL CASUAL LEAVE

It is being paid to sportsman, ex-serviceman for replacement / treatment of

artificial limbs, to office bearers of recognized Unions for attending conciliation

proceedings etc.

35. PRICING

Price is the amount of money charged for the product or service. Various methods of pricing are used in different industries as follows:

1. Cost Based Pricing

a) Mark up pricing

b) Absorption cost pricing

c) Marginal cost pricing

2. Demand based pricing

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a) Skimming pricing

b) Penetration pricing

c) What the traffic can bear pricing

3. Competition oriented pricing

a) Premium pricing

b) Discount pricing

c) Parity pricing

4. Product line oriented pricing

5. Tender pricing

6. Affordability based pricing

Pricing Policy in HAL:

The pricing policy in HAL differs from other industries. Earlier the pricing

policy used to be cost plus pricing but no longer now. It was applicable at the

beginning of HAL. Thereafter HAL adopted pricing on the basis of fixed price

quotation in 1980s. Between 1988-94, HAL adopted the price based on fixed price or

cost plus price whichever is less. 1995 onwards the system of price, which is adopted

by the company, is totally based on fixed price quotation. It is not based on

competition because the prices, which are charged by the customers, are based on

fixed price quotation. HAL has no competition with others. It has monopoly over the

market. There is no other firm in the market who can supply aircraft and accessories

to Indian Air Force or Space center so that the customer will pay whatever the HAL

demands. This is the main reason why HAL is running in profit in spite of decrease in

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productivity and increase in idleness of machine and workers. It is certain that HAL

will never run in loss until it holds monopoly over the market because management

knows that they will sell all that they will produce. It is the fact that what they

produce is on the demand of the customers only and for this they charges money in

advance for required functionality of the production. They have not to set up an

effective costing system in the organization and are not interested in reducing the cost

of production and finally not implemented an effective cost control tools and

techniques with the help of which the HAL will get the cost advantage and increase its

profitability. The price, which is charged, is decided on the basis of the man-hour rate

of the year.

Prices, which are charged from Air Force and other civil customers differ from

each other, because the man-hour rate is so calculated for IAF and others differs. First

of all total cost of sales is calculated and 10% of profit, this total profit is charged

from the customers.

Price catalogue and FPQ registers are maintained for the determination of

price. Small items are enclosed in the price catalogue, which amounts up to Rs.25

lakh and items costs more than Rs.25 lakh are kept in Fixed Price Quotation (FPQ).

AS PER THE CATALOGUE

Total Material Cost = Material Cost Import + Material Cost Indigenous

Hours are determined on the basis of percentage efficiency of the direct labors.

LOH Cost = S.M.H. x. M.H.R. / Efficiency %

Total Cost = Total Material Cost + L.O.H. Cost

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Material Procurement Procedure in HAL

Material procurement procedure follows these steps:

Issue of Material Requisition Note

Inquiry floatation

Receiving of Quotations

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Opening of Tenders / Quotations

Preparing Comparative Analysis Sheet

Selection of Best Quotation

Placing of Purchase Order

Receiving the Material from Transit

Preparation of R.D.R.

Payment through Finance Department

First of all it is decided that the product to be produced and quantity of orders

in hand is analyzed. These requirements are notices on the basis of Bills of Materials.

Net storage is calculated by deducting the SIT and orders in hand from total material

requirement. Procurement review sheet is prepared. Thereafter concerned authorities

review these requirements of materials. Then quotations/ tenders are called and

comparative price sheet (CPS) is prepared in order to compare the prices of tenders.

L1 tender is selected amongst all which shows less price than others. Proposal of

order is given to vendor, when he approves the order; thereafter order is placed to him.

This order is accepted according to terms and conditions implied by HAL insurance,

port of destination etc. After the follow up of order material is dispatched and

intimation is given by suppliers regarding it. Receipt of material is provided which

when passed for acceptance then only RDR is prepared by the department. Thereafter

payment is made.

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Accounting procedures for material procurement and use involve forms and

record necessary for general ledger. Financial accounting as well as those necessary

for costing a job, process or department and for maintaining perpetual inventories and

other statistical summaries. The purchase requisition, P.O., RDR, Material

Requisition, Bills of Material etc. used are some of the forms used for material control

under a cost system.

Purchase requisition includes quantity, item no., item description, unit price

and amount etc. of required material.

Purchase order is written authorized to a vendor to supply specific quantity of

described goods at agreed terms and at a designated time and place. It is prepared by

Purchase Department. As a matter of record and for accounting control, purchase

order should issue for every purchase of material, supplies. The P.O. has given the

vendor a complete description of the goods desired, the terms, price and shipping

instructions.

Receiving report will show P.O. No., account no., name of vendor, details

regarding transportation, quantity and type of goods received, and receiving

department keeps record of this report.

Material requisition journal are prepared by the material accounts department.

Bills of material are a kind of material requisition in form that lists all the material

parts.

36. COST CONTROL TECHNIQUES

Data relating to cost are vital for management to implement cost control

measures. Control can be conceptualized as the process of ensuring that action

conforms to plans. In other words, control as a function of management means that

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once a course of action has been decided, operational decision and activities of the

management should coincide the plans. The cost control techniques are used to

maintain cost efficiency. The cost control techniques, which are widely used, are as

follows:

1. Standard costing

2. Variance analysis

a) Cost variance

b) Revenue variance

3. Budgetary control

4. Cost audit

5. Responsibility accounting

6. Marginal costing and break-even analysis

In HAL all above mentioned cost control techniques are not adopted. The

techniques, which are adopted by HAL, are standard costing, variance analysis and

budgetary control.

In standard costing the cost standards are predetermined like Man-hour rate

(M.H.R.), Standard Minimum Hours (S.M.H.), Efficiency of direct worker. Price

standards are also maintained in Fixed Price Quotations (FPQ), Price Catalogue. The

profit so charged on standard cost is predetermined. It is fixed percentage of total cost

of sales.

Variance analysis is done on the basis of totality. Variance as a control device

are calculated to assign / fix responsibility for deviation from the standard cost and

thus to control the cost. It is the difference between standard cost and actual cost or

historical cost. It is calculated annually on the basis of sales.

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Budgetary control involves preparation of budgets and their application for

control purposes. Accordingly, there cannot be budgetary control without budgets and

mere budgets do not achieve the objectives of control unless the actual results are

compared with the targets laid down.

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37. BUDGETARY CONTROL

As per the definition, budgetary control is said to be “the establishment of

budgets relating to the responsibilities of the executives to the requirement of a policy

an continuous comparison of actual budgeted results, either to secure by individual

action the objectives of the policy or to provide the basis for revision”.

Preparation of budgets or budgeting is a planning function and their application

or implementation is a control function. The activity involved in both the functions

accomplishes budgetary control.

In HAL capital and performance budgets are prepared. Capital budgets are

prepared for those items, which given profit in long run like budget related to new

projects, running projects, replacement and welfare. Control measures are adopted

while preparing these budgets. Revised estimates (R.E.), Budget estimates (B.E.),

Forecast (F.C.) is prepared. It is then compared with actual budget and the deviation

between it is noticed and if adverse results are found it is tried to check the deviations

and take corrective measures. In the same manner control measures are adopted for

preparation of performance budget which includes – Production budget, sales budget,

purchase budget, manpower budget, training budget, salary and wage budget, welfare

budget, design and development budget etc. Estimates regarding all these are

prepared in advance and after their occurrence the real amount or actual amount is

compared with the estimations. If the variation between actual and estimation is

negative then corrective measures are taken. In the case of HAL it is been observed

that in most of the cases actual amount is more than estimations made.

For budgetary control to effective, it is necessary to develop a prompt and

timely communication and reporting system. A periodical comparison of actual

performance with the budgeted performance may reveal variances. These variances

should be reported by those responsible for execution to their superiors and in run get

instructions for correction of the deviations communicated to them. In HAL budget

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committee exists which deals with the controlling of budget. Budget is prepared by

responsible executives. It is able to fulfill the basic objectives like planning,

coordination and control.

38. VARIANCE ANALYSIS:Variance represents the difference between the actual and standards. If actual

cost is less than standard cost, this is a sign of efficiency and the difference is termed

as favorable variance. If the actual cost is more than standard cost this is a sign of

inefficiency and the difference is designated as unfavorable variance.

When actual performance are recorded and compared with standards set, some

deviations are observed. These deviations are popularly termed as variances. It is the

difference between the standard amount and the actual amount during a given period.

In HAL variance analysis is done in totality for a financial year. The following

represents the difference variances

1. Cost variance

2. Price variance

a) Direct material price variance

b) Direct wage rate variance

c) Variable overhead price variance

3. Usage variance

a) Direct material usage variance

b) Direct labour efficiency variance

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The above-mentioned variances are only relevant in HAL. Comparison and

analysis of cost is prepared in relation to:

1. Standard Minimum Hours vs. Actual Hours

2. Material quantity and material cost as per the standard and as per the

actual.

3. Labour cost as per the standard and as per the actual.

Price variance is not generally further analyzed but the usage variance is further

analyzed according to the causes of charge of consumption of hours of;

material.

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39. FINANCIAL HIGHLIGHTS

Hindustan Aeronautics Ltd has cruised past Rs 7500 crores mark for the first

time with sales turnover of Rs. 7783.61 crores during the financial year 2006-07. The

profit of the company soared up to Rs 1743.60 cores, which is an increase of 54.88%

over the previous year’s performance. Contracts worth Rs 17800 were concluded

during the year.

The Highlights are given below:

Rupees in Crores

Particulars 2005-06 2006-07 Growth over previous year

Sales 5342 7783 45.69%

VOP 5916 9202 55.54%

Profit before tax 1126 1744 54.88%

Profit after tax 771 1149 49.03%

Gross Block 1694 2081 22.85%

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40. INVENTORY AND MATERIAL MANAGEMENT

Inventory is “items of store or material kept in stock to meet future demands

for production, repair, maintenance, overhaul etc.” Department of Inventory and

Material Management (IMM) of HAL plays an important role in the overall

functioning of the company as well as finance and accounts department. It maintains

the stocks of accessories and releases it as and when required. ABC analysis is used

as sensitivity analysis of inventory. Lead-time for material is very high. HAL stores

the material one-year in advance.

Fundamental of working capital:

HAL follows that the fundamental of working capital is based on five R’s,

these five R’s represent –

Right Material

Right Place

Right Price

Right Quantity

Right Time

Right quantity of the right priced material should be reached at the right place at the

right time.

Three main components of the inventory:

The three main components observed in HAL are as follows –

1. Stock in Trade (S.I.T.)

2. Goods in Transit (G.I.T.)

3. Work in Progress (W.I.P)

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Stock in trade includes those items, which are ready for sale. Goods in

transit may be in the form of raw material, finished goods and semi-finished

goods.

Raw material is the major input, which gets converted to output. The

items are critical in nature, as any breakdown in supply will results in

production stoppage. Usage value is also quite high. Tightest inventory

control is called for so as to ensure uninterrupted supply with lowest possible

inventory.

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Defining the objective

Selection of the Data Collection Method

Ds

Selection of the Method of Analysis

Data Collection

Data Analysis

Reporting


41. RESEARCH METHODOLOGY

Proposed methodology for the project is as follows

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RESEARCH METHODOLOGY:-

The purpose of methodology is to describe the process involved is the research work.

This includes the overall research design, the data collection method sampling

procedure, and the field survey method & analysis procedures.

Meaning of Research

According to Redman & Mory:

“Research is a systematized effort to gain new knowledge”.

According to Clifford woody:-

“Research comprises defining & redefining problems, formulating hypothesis or suggested

solution, collecting, organizing & evaluating data making deductions & reaching conclusion

to determine whether they fit the formulating hypothesis or not”.

Objective of Research

The purpose of research is to discover answer to question through the application of

scientific procedure. The main aim of research is to find out the truth which is hidden

& which has not been discovered as yet. Though each research study has its own

specific purpose.

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Contact Methods

Once the sampling plan has been determined, the market researcher must decide how

the subject should be contacted.

I have carried out the direct survey method where I have contacted all post offices and

courier offices in several areas.

NATURE OF THE RESEARCH

The Research was exploratory in nature.

PLACE OF THE RESERCH

The research was conducted in marketing departments in HAL Accessories Division

Lucknow.

RESEARCH DESIGN:-

Research Design is a conceptual structure with research conducted. There is no unique

method, which can entirely eliminate the elements of under taking. But Research

methodology more than any other procedure can minimize the degree of uncertainty,

Thus it reduces the profit ability of making a wrong choice amongst alternative causes

of actions.

This is particularly significant in the light of increasing competitions & growing size,

which makes the task of choosing the best course of action difficult for any business

86


enterprise. It is imperative that any type of organization in the present information

coupled with tools of analysis for making sound decisions which involved minimum

risk.

Exploratory method of research was chosen for it helps the collecting summarizing,

analyzing interpreting & presenting data with new ideas & in effective manner.

The goal of exploratory research to gather primary data & to study the nature of

problem & to suggest possible solution for problem/come up with new ideas.

For this a structured questionnaire is the research instrument used for research works.

DATA COLLECTION:-

The collection of data is done both from primary & secondary sources.

Primary Data

The primary data has been collected through questionnaire, personal interview and

departmental analysis.

Secondary Data

Website of HAL.

Company monthly journals.

Training manual on cost reduction provided by HAL.

Accounting manual and Budget manual provided by HAL.

Pricing policy of HAL.

STANDARDS

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We shall strictly adhere to the standards, specifications stipulated in ISO-9001

Ensure that our products reflect the state-of-the-art technology and competitive

prices

Deliver our products as per the agreed delivery Schedules

Produce goods and services of the highest standards to fulfill all your requirem

ents

Declare that our products have gone through the strictest quality control norms

and guarantee the total technical life of the product.

Assure you of the highest standard of service and are ever willing to share

our knowledge and expertise with you

Acknowledge all correspondence from you within ten working days of its

receipt

Respond to all your communications within twenty working days of its receipt

Clear your financial dues within thirty working days from receipt of genuine

and bonafide claims

Strictly adhere to the delivery schedules committed by us to you

Work as an instrument of self-reliance in aerospace defense equipment

Strive to attain international standards to become globally competitive.

Our R&D efforts should enable us to be a strong force to reckon with in the

global scenario

Make sincere efforts in meeting all our social obligations towards the

community in general

Always strive to maintain cordial relations with the community.

Hindustan Aeronautics Limited (HAL) has cruised past the Rs.7, 500-crore mark for

the first time with a sales turnover of Rs.7, 783.61 corers ($1.82 billion) during the

88


Financial Year 2006-07, The Value of Production has also gone up by 55.54% to Rs.

9,201.88 crores, while the Profit of the Company (Profit Before Tax) soared to

Rs.1,743.60 crores, which is an increase of 54.88% over the previous year's

performance.

Types of Research: - Descriptive research design for the final survey.

Source of Data: - Questionnaire, Personal Interviews and Departmental Analysis.

Sample Design: - Probability sampling design.

Sample Size: - 50 people.

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42. TOOLS AND TECHNIQUES OF DATA ANALYSIS

1. The introduction of an online website for any company of today’s world is a

boon. Cause growth and expansion will be a promising factor as the internet

makes the world a smaller place to do business. This was introduced in the year

in the year 2000 by HAL.

Improvement of the division on introduction of a website

Table showing the improvement of the division on introduction of a website:

Feedback Percentage

Management level Yes 97%

Labor level No 3%

Bar graph showing the improvement of the division on introduction of the website:

0%

20%

40%

60%

80%

100%

Bar graph showing the improvement of division on in-troduction of a website

YES

NO

Percentage responses given at all levels.

Rat

e o

f im

pro

vem

ent.

ANALYSIS: 97% of the workers / employees are aware that the website has helped

the division to improve in its company’s dealings and has helped the company to

progress in the new economy of today’s world.

INFERENCES: The remaining 3% are those workers who are at the lowest cadre of

work who do not have sufficient knowledge about the website of the organization.

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2. The knowledge about the website should be fair among the people who work in

the organization to conclude that the workers are aware as to where the

company is heading to in the 21st century. HAL being a premier defense

industry in the field of aviation has to always keep up with the other nations

and therefore adopt new technology.

Awareness level of the web by the workers in the organization

Table showing the awareness level of the web by the workers in the organization:

Response / Levels Management level Labor level

Aware / Yes 98% 87%

Not aware / No 2% 13%

0%

20%

40%

60%

80%

100%

Bar graph representing the awareness level of website in employees

Mangt.

Labour

Awareness level

Perc

enta

ge o

f aw

aren

ess

ANALYSIS: Most of the workers in the organization are aware about the website at

both levels and know how it has improved the division, as the customers get to know

more about the division’s products and services worldwide which improves the

profitability and also helps the division to understand its customer’s background to

enhance the business.

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INFERENCES: Only around 2% at management level and 13% at labor level are not

aware of the website as they have poor knowledge and belong to the lowest cadre.

3. Website of the company helps the customers to keep in touch with the

company through the e-mail provided by the websites for various divisions.

This helps the customers, clients and vendors to have a continuous touch with

the company.

Customers who respond to the website

Table representing the customers who respond to the website:

Customers Percentage

Defense customers 85%

Foreign customers 45%

Corporate customers 6%

Civil customers 5%

0%10%20%30%40%50%60%70%80%

Bar graph representing customer who respond to the website

Defence cust.

foreign cust.

corporate cust.

civil cust.

Percentage of customers

Rate

of r

espo

nse

ANALYSIS: The major customers of HAL are the defense customers such as the

Indian Air force, Indian Army, Indian Navy, Coast Guard and Boarder Security who

often contact with the company over the net.

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INFERENCES: A very small percentage of the remaining customers such as the

corporate customers and civil customers including international customers contact

with the company through net.

4. The main intension of putting up a website by any company is to get

prospective customers and induce them to make contract with the company. It

is the same for HAL accessories division too, so that the customers can have a

continuous touch with the company.

Number of customers who respond voluntarily to the website

Table representing the number of customers who respond voluntarily to the website:

Options Response in percentage

Most of them 30%

All 40%

Few 90%

Very few 70%

0%

20%

40%

60%

80%

100%

Bar graph showing customers who voluntarily contact the company

Most of them

All

Few

Very few

Response of customers

No.

of c

onta

cts

ANALYSIS: From the above graph we can see that only few of the customers respond

to the website voluntarily. As most of the customers contact the company through

other means.

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INFERENCES: We see that almost all customers somehow come into contact with the

company for some enquiry, doubt or clarification but since HAL is defense oriented,

so mostly the customers are from defense.

5. The main objective of any company is to get enough customers to place an

order or contract with the company, although few of the customers come into

contact with the company through the net not all might be willing to place an

order or make contract with the company. The table below shows the number

of customers who placed order with the company:

Customers who placed order through net

Table showing customers who placed order through net:

Customers who contact Percentage


State government 20%


Civil customers 3%

Pie chart showing how many place order with the company over net

defence govt.

state govt.

corporate govt.

civil govt.

ANALYSIS: From the above data we can conclude that most of the customers who

placed order with the company through net are the defense customers in comparison

to others.

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INFERENCES: The customers belonging to the other group such as the civil and

corporate customers are very limited, therefore the company focus more on the

defense customers such as Indian Air Force, Indian Navy, and Indian Army etc.

In today’s economy we see that not only multinational companies are trying to

globalize but public sectors are also trying to globalize. And the best way to achieve

this is by obtaining many international customers. The table below shows the number

of international customers the division is able to get through the net:

International customers over the web

Table representing international customers over the web:

Customers In percentage

Many 10%

Few 20%

Very few 5%

0%

5%

10%

15%

20%

Bar graph representing international customers over web

ManyFewVery few

International customers

Perc

enta

ge

95


ANALYSIS: Few international customers are interested in making contact with the

company. From this we can conclude that HAL has opportunities of expansion in

international market.

INFERENCES: When international customers and corporate come into contact, the

company gets help in improving the technology for production.

Today’s business have made the “Customer the King” and have decided to give the

customers what they want through customization and customerization. The table

below shows the number of customers who seek such benefits:

Table representing importance of customization to customers:

Feedback Response

Very important 90%

Important 80%

To some extent 50%

Not important 5%

0%10%20%30%40%50%60%70%80%90%

Bar graph representing importance of customization to cus-tomers

VIP

Important

To some extent

Not applicable

Response of customers

Perc

enta

ge

96


ANALYSIS: Since engines are one of the most advanced machines that help in the

flying of air vehicles and customers always seek sophistication in their engines.

Therefore most of them seek customization.

INFERENCES: Mostly the defense customers have an in-depth knowledge and thus

seek sophistication in the aircrafts. As the world is getting more advanced thus

customization becomes more important but it is not much in the case of civil or

corporate customers.

6. Sales are a very important aspect for any company and to achieve maximum

sales is a goal of all companies. HAL is one of the leading manufacturers of

engines and its accessories. The table below shows how HAL is able to get a

sufficient amount of sales after the internet came into existence:

Table showing the sales of the division for the past 4 years:

Years Sales (in crores)

2001-2002 338.14

2002-2003 328.5

2003-2004 415.14

2004-2005 424.15

050

100150200250300350400450

Bar graph representing the sales of accessories division

Sales

Years

Sale

s (in

cro

res)

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ANALYSIS: From the above graph we can see that the sales of the company have

been increasing moderately in the past two years which is mainly because of the use

of web.

INFERENCES: Since the web was introduced in the division only in the year 2000

and the division have taken time to make complete use of it in the recent years.

Therefore we can expect sales to increase in the future.

Profit of any company determines its growth, expansion and development in all

directions. Therefore it is an important factor for public sector also such as HAL

which is a nonprofit organization. The table below shows the profit of HAL in past

years:

Table showing the profits of the division for last 4 years:

Years Profit (in crores)

2001-2002 46.5

2002-2003 65.9

2003-2004 62.55

2004-2005 51.66

98

010203040506070

Bar graph showing the profits of the di-vision

Pr...

Years

Profi

ts (i

n cr

ores

)


ANALYSIS: As HAL is a nonprofit organization, so we can see that profits in each

year are fluctuating. Therefore we cannot interpret whether internet will help the

company in making more profits or not.

INFERENCES: As mentioned earlier most of its customers are defense customers and

international customers who contact through net and a very few of them are civil and

corporate customers.

In order to grow it is necessary for every company that it must be able to find new

customers through new means and mode. As technology has grown to such an extent

that the world is no longer a huge place to trade. With the use of internet it is possible

for all companies to find new prospective customers.

Table showing new prospective customers over net:

Customers Percentage

Civil customers 10%


State government 20%


99


0%

20%

40%

60%

80%

100%

Bar chart representing new customers in each segment

Civil cust.Corporate cust.state govt.Defence

Percentage of customers

No.

of n

ew c

usto

mer

s

ANALYSIS: From the above diagram we can conclude that the new customers made

by the company in each segment are very less. As it is basically a defense oriented

company, so almost all the defense customers have dealings with the company.

INFERENCES: Although the company has limited range of new customers but it has

scope to get customers at international level also.

Customer relation is very important today. It is more effective only through the World

Wide Web and although it has so many plus points but there are certain drawbacks in

it. The table below shows the drawbacks in CRM over the web:

Table showing reasons for drawbacks in CRM over web:

Reasons for drawbacks Percentage of effect

Delay in reply 20%

Negligence 30%

Failure of system 40%

Other means 10%

100


0%5%

10%15%20%25%30%35%40%

Bar graph representing the drawbacks in CRM

Delay in reply

Negligency

Failure of system

Other means

Percentage of drawbacks

Rate

of e

ffect

ANALYSIS: Most of the reasons for the drawback of CRM are due to system failure

and it can be taken care of by providing for backup systems and better management in

replying to customers.

INFERENCES: CRM is gaining its importance in the current scenario and if more

importance is given it will prove more successful for the organization.

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43. FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS

In HAL cost reduction and cost control is done in following ways:

Quality is the strength of HAL. The company aims at best quality product at

lowest price. For this TQM is applied in whole organization so that cost

would be controlled.

In HAL standards are fixed for time consumption and also for cost incurred.

For time standards, the standard time is fixed for every process of job and

for cost standards, standard cost and fixed price quotation (FPQ) are defined

in advance to control time and cost.

It also implements the technique of classification and codification for cost

reduction and control. Under this technique, all the jobs are classified into

different categories and are codified, due to which we can identify that the

job belongs to which batch.

Process layout is used for the study of various operations included in

completion of job. Due to which standard time for completion of operation

is fixed and inspected periodically, so that cost and time can be reduced and

controlled.

Method study is implemented during production process and the method

which is less time consuming and having less cost is accepted.

In costing section, component costing is used for calculating the cost of

each component. By applying this method the total cost can be reduced and

controlled.

As the rate of machine hour rate (MHR) is very high in HAL so the work is

done on contract basis i.e. outsourcing is done so that cost can be reduced

and controlled.

Minimum inventory is kept in stores, so that there would be no wastage and

cost can be reduced.

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Efficiency of employees is approximately 100% due to which there is no

wastage and cost is reduced.

It is also implementing methods of 5S to control and maintain cost

effectiveness.

It has also implemented lean management and various tools like KAIZEN

for wastage removal so as to reduce the extra cost incurred.

It also aim at producing all accessories as first time correct and with Zero

error so that the cost incurred in rejection and rework processes can be

controlled.

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SUGGESTIONS

There should be facility of intranet so fax and such other things must be

done through it that can reduce time and money.

For attendance finger print system should be adopted so that actual person’s

attendance can be mentioned.

The time delay between rising of purchase order and preparation of RDR

should be reduced.

Wages to direct workers should be given through piece rate system.

Efficiency of indirect workers should be measured so that slackness can be

sorted out.

Employees should be included in brainstorming and also should be given

liberty and non-monetary incentives as appreciation.

Officers should be promoted only on the basis of performance and not on

the basis of number of years worked.

Workers who have talent and compatible with office grade but restricted to

work only at non-supervisory position, the policy should be such so that

grade promotion could be possible.

Profit calculation by project cell for project evaluation is different from

costing section. In this way project evaluation is not proper. So it must

frame its cost-benefit evaluation and focus on only licensing fee and other

DRE and framing of analysis should be done as per actual recoverable

profit percentage.

The company should give some stipend to Industry guide for summer

training due to which they will take more interest in providing guidance.

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CONCLUSION

HAL is one of the largest PSU under the department of defense production, GOI and

is a “NAVRATNA” company ranked 34th in the list of world’s top 100 defense

companies. HAL with its wide spectrum of expertise in design, development and

manufacture of aircrafts, helicopters, engines, accessories and avionics has emerged as

major aeronautical complex in Asia.

As herein, the projects and items need huge investments than any other organization

and confidential factor is also there too much extent but as much information is

extracted shows that cost control is being performed quite good that’s why it is in so

much profit.

In the organization, cost of inventory as well as labor is controlled very well by

implementing ABC analysis but there is also some scope for cost reduction by

reducing number of casuals to reduce labor cost and by implementing EOQ

(Economic Order Quantity) technique to control material cost.

Although for the organization’s betterment its executives are working hard and trying

to serve in the best possible manner with their colleagues and they all are very

qualified and experienced so organization must extract optimum from them.

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44. BIBLIOGRAPHY

During the preparation of project I took the help of various sources which are as

follows:

Books:

Paul Hague-A Practical guide to market research (e book)

Jawaharlal – Cost accounting

Paul Hague and Paul Harris - Sampling and statistics

Journals:

Accounting manual

Budget manual

Training manual on cost reduction

Company monthly journals

The Times of India

Internet:

http://books.google.co.uk/books

www.hal-india.com

www.wikipedia.org

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http://www.hal-india.com/

HAL Report Final

Documents

marketing management

chief manager marketing

growth of hal

objectives of hal

manager planning

large organization

stage of project work

chief manager cs