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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)
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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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.
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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
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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.
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Marketing Management at HAL 2012
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).
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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
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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
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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.
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8. ORGANISATIONAL STRUCTURE
18
ORGANISATIONALSTRUCTURE
DESIGNCOMPLEX
BANGALORE
COMPLEX
ACCESSORIES
COMPLEX
MIGCOMPLEX
Marketing Management at HAL 2012
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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.
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Marketing Management at HAL 2012
INTERNATIONAL
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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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.
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Marketing Management at HAL 2012
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.
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Marketing Management at HAL 2012
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.
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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.
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Marketing Management at HAL 2012
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
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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.
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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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.
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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.
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Marketing Management at HAL 2012
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
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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.
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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
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Marketing Management at HAL 2012
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).
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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
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Marketing Management at HAL 2012
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.
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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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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
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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,
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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
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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.
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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
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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
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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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Marketing Management at HAL 2012
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
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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
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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
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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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Marketing Management at HAL 2012
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 Management at HAL 2012
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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Marketing Management at HAL 2012
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
Marketing Management at HAL 2012
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
Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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.
83
Defining the objective
Selection of the Data Collection Method
Ds
Selection of the Method of Analysis
Data Collection
Data Analysis
Reporting
Marketing Management at HAL 2012
41. RESEARCH METHODOLOGY
Proposed methodology for the project is as follows
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Marketing Management at HAL 2012
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
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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
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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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Marketing Management at HAL 2012
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
Defense customers 70%
State government 20%
Corporate customers 7%
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
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Marketing Management at HAL 2012
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
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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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
)
Marketing Management at HAL 2012
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%
Corporate customers 15%
State government 20%
Defense customers 100%
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Marketing Management at HAL 2012
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%
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Marketing Management at HAL 2012
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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Marketing Management at HAL 2012
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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