Organisational Study at Hindustan Aeronautics Ltd.

INTERNSHIP REPORT

An organizational study

At

Hindustan Aeronautics Limited

Engine Division, Koraput

Master of Business Administration

Submitted by

ANURAG MOHANTY

Reg. No. 10XQCMA013

Under the guidance of

Prof. Rohini G.Shetty

M. P. Birla Institute of Management

Associate Bharatiya Vidya Bhavan

No.43, Race Course Road,

Bangalore 1

M.P. BIRLA INSTITUTE OF MANAGEMENT, BANGALORE.

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DECLARATION

I, Anurag Mohanty (Reg. No. 10XQCMA013) hereby declare that the internship report, an

organizational study conducted at Hindustan Aeronautics Limited, Engine Division (Koraput)

submitted in partial fulfilment of the requirements of the Bangalore University for the award

of degree in Master of Business Administration is a bona-fide work carried out by me under

the guidance of Prof. Rohini G.Shetty, MPBIM, Bangalore.

This report has not been submitted earlier to any other university

or institution for the award of any degree.

The contents of this report are based on the data collected by me

at Hindustan Aeronautics Limited, Koraput under the guidance of Mr. B.senapati, Chief

Manager (Finance).

Place: Koraput Name of the student: Anurag Mohanty

Date: Reg. No. – 10XQCMA013


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ACKNOWLEDGEMENT

I take this opportunity to thank Mr. B.P. Lenka, ,manager (Training and Development) HAL

for allowing me to carry on my project work in this organisation.

I am also deeply thankful to Mr. P.K. Sahoo (In-plant training incharge ), HAL for his

guidance and support throughout this project.

I gratefully acknowledge the assistance to me by Mr. B.Senapati (Chief Manager, Finance),

Hindustan Aeronautics Limited, Engine Division (Koraput), for having faith in me by

providing me an opportunity to be associated with the organization under his kind guidance

and support.

I am also obliged to Mr. Mahesh Prasad Mohanty and other staff member of the book

keeping and other departments for their help and assistance.

I am also deeply indebted to Prof. Rohini G.Shetty (Faculty), MPBIM for the advice and

support in the preparation of this project report.

At last but not the least I thank my parents and friends whose continuous support made this

project successful.

Date: 18th

Aug.2011 Anurag Mohanty

Place: Koraput VT No. 6558

MBA (2010-12)


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CONTENTS

Chapter 1

Introduction

Background Study

Industry Profile

Company Profile

Vision, Mission and Objectives

Chapter 2

Organizational Structure

Corporate Organization Structure

Departmental Organization Structure

Authority and Responsibility Relationship

Chapter 3

Functional Areas

Finance Department

Marketing Department

Human Resource Department

Production Department

Quality Management Department

IT Department


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Quality Assurance Department

Purchase Department

Chapter 4

SWOT Analysis

Strength and Weakness

Opportunities and Threats

Problem Identification and Solution

Chapter 5

Observations, Suggestions and Conclusion

Major Findings

Suggestions

Conclusion

Annexure

Financial Statements

Bibliography


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CHAPTER 1

INTRODUCTION


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Background of the study

Organizational studies, sometimes known as organizational science, encompass the

systematic study and careful application of knowledge about how people act

within organizations. Organizational studies include the following disciplines: industrial and

organizational psychology, organizational behaviour, human resources, change management,

ethical and customer value management. Organizational studies encompass the study of

organizations from multiple viewpoints, methods, and levels of analysis. the study of "micro"

organizational behaviour — which refers to individual and group dynamics in an

organizational setting — and "macro" strategic management and organizational theory which

studies whole organizations and industries, how they adapt, and the strategies, structures and

contingencies that guide them.

OBJECTIVES OF THE STUDY:

To familiar with organisation’s mission, vision, values and objectives.

To familiar with the different departments functioning in the organisation.

To understand the services and utilities provided by the company to the society.

To understand the relationship between the higher authorities and the workmen in

order to achieve the organisational goals.

To understand the overall development of the HR departments.

To understand the key business process are carried out in the organization.

To bring out the integrated and coordinated efforts made by the different departments

to achieve the organizational goals.

To evaluate the efforts and contributions made by the employees towards the overall

development of the company’s reputation.

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

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



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


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INDUSTRY PROFILE.

The late Seth Walchand Hirachand set up Hindustan Aeronautics Limited at Bangalore in

association with the erstwhile princely state of Mysore in December 1940. The Government

of India become a shareholder in March 1941 and took over the Management in 1942. HAL

is fully concentrating in the field of repair and overhaul of military aircraft and engines to

support Second World War efforts to fulfil the fresh mandate of post independent India the

mission of the company has been redefined as:

―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 activities 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 material engine is

scheduled for delivery during the year 1982-83.

In august 1966, an agreement was signed with Soviet Union to set up overhaul project in

this division and the Govt. Was sanctioned in the year 1967. The factory started overhaul of

RF-300 series-JJJ engines from 1970-71 and the first overhaul engine was delivered in Feb,


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1971. The current overhaul programmed covers R11F2 series-JJJ, R11F series-JX and X and

R11F2S/F2sk series engines. A total of 1067 engines have been overhauled by the division

till the end of March, 1982 .

The division is currently engaged in setting-up of facilities for taking-up the overhaul of

R25 series engines from the year 1982-83 onwards. With signing of internal Government

agreement for the manufacture of MIG 17M aircraft on 19th march, 1982, this division would

involved in the manufacture of 285 numbers of R29B series of engines from the year 1984-85

onwards. In order to attain self sufficiency and to avoid difficulties regarding supply of raw

material and other bought out items from USSR, it was decided to provide indigenous

support to spares manufacturing for undertaking the task was received during 1977-78 and

the indigenous plan was formed to tackle.

INDUSTRY SCENARIO:

HAL DIVISIONS:

The following are the various divisions of HAL across India.


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EXPORTS:

COMPLEXES:

HAL has various complexes such as:

1- Bangalore complex

2- MIG complex

3- Accessories complex

4- Design complex


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1- Bangalore complex

a- Aircraft division - manufacturing jaguar aircrafts

b- Engine division - manufacturing jaguar engines

c- Helicopter division - manufacturing helicopters

d- Forge and foundry division - manufacturing high precision casting and forging

e- Overhaul division - overhaul of jaguar and other engines

f- Space division - manufacturing of launching of pads and common satellites

g- Servicing division - for common services to all divisions

2- MIG Complex

a- Nasik division - manufacturing and overhaul of air frames

b- Koraput division - manufacturing and overhaul of MIG engines


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3- Accessories Complex

a- Hyderabad division - manufacturing of electronics and navigational equipment

b- Kanpur division - manufacturing of passenger aircraft and gliders

c- Lucknow division - manufacturing of hydraulic pumps, fuel pumps and stator

. generator


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d- Korwa division - manufacturing of advanced navigational equipment

4- Design complex

a- Bangalore division- modification of any component or unit of an engine

The above are the various divisions of HAL across the country.


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Products of HAL

SL. NO. AIRCRAFT ENGINE INDEGENIOS NAME

01. MiG-21FL R-11-F2 BADAL

02. MiG-21M/MF R-11-F2S/F2SK TRISHUL

03. MiG-21-BIS R-25 VIKRAM

04. MiG-23MF R-29 RAKSHAK

05. MiG-23BN R-29B VINJAY

06. MiG-25 R-29B GARUD

07. MiG-27M R-29B BAHADUR

08. MiG-29 RD-33 VAJ

09. GNAT ORPHEUS-701 AJEET

10. HJT-16 VIPER-11 KIRAN

11. HF-24 ORPHEUS-703 MARUT

12. JAGUAR ADOVRMK-803 SHAMSHOR

13. HS-748(AVRO) DART-531 CHITRA

14. MIRAGE-2000 M-53 VAJRA

15. ALLOUTTE ARTOUSTE-IIIB CHETAKCHEETAH

16. AN-32 - SUTLUJ

17. MI-B - PRATAP

18. MI - AKBAR

19. HPT-32 PISTON ENGINE -


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HAL CUSTOMERS

INTERNATIONAL CUSTOMER DOMESTIC CUSTOMER

Airbus Industry, France

APPH Bolton, UK

BAE Systems, UK

Chelton, UK

Coast Guard, Mauritius

Corporate Air, Nepal

Corporate Air, Philippines

Cosmic Air, Nepal

Dassault Aviation, France

Dowty Aerospace Hydraulics, UK

EADS, France

ELTA, Israel

Gorkha Airlines, Nepal

Hampson, UK

Hoeneywell International, USA

Island Aviation Services, Maldives

Israel Aircraft Industries, Israel

Messier Dowty Ltd., UK

Mistubishi Heavy Industries, Japan

MOOG, USA

Air India

Air Sahara

Airports Authority of India

Bharat Electronics

Boarder Security Force

Coal India

Defence Research and Development

organisation

Govt. of Andhra Pradesh

Govt. of Jammu & Kashmir

Govt. of Karnataka

Govt. of Madhya Pradesh

Govt. of Rajasthan

Govt. of Uttar Pradesh

Govt. of West Bengal

Indian Air Force

Indian Airlines

Indian Army

Indian Coast Guard


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Namibian Air Force, Namibia

Peruvian Air Force, Peru

Rolls Royal Plc, UK

Royal Air Force, Oman

Royal Malaysian Air Force, Malaysia

Royal Nepal Army, Nepal

Royal Thai Air Force, Thailand

Smiths Industries, UK

Snecma, France

Strongfield Technologies, UK

The Boeing Aircraft Company, USA

Transworld Aviation, UAE

Vietnam Air Force, Vietnam

Indian Navy

Indian Space Research Organisation

Jet Airways

Kudremukh Iron company Limited

NALCO

Oil and Natural Gas Corporation

Limited

Ordnance Factories

Reliance Industries

United Breweries


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LIST OF SOME OF THE APPROVED SUPPLIERS:

Jayems Engineering Company Mumbai

Professional traders Panchakula

Bombay tools supplying agency Mumbai

Aero spares equipments Vishakhapatnam

Atul enterprises Kolkata

M.B.Corporation Vishakhapatnam

Bhatia tools and technology Bangalore

Mahr Gmbh Esslinger Germany

Hitech INSTRUMENTATION Mumbai

(India)pvt. Ltd.

Romada Engineering works Mumbai

Karthik Industries Chennai

J.S. Precisions Bangalore

M.H.M Tools Bangalore

Srinivasa industries Hyderabad

Metal cloth products Bangalore Bangalore

Kamala precisions Hyderabad

Aryan Aerospace tools Nasik

ECP Indian limited Bangalore

T.H.Habib & co. Kolkata


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Indian tools and instruments co. Mumbai

Empire machine tools Mumbai

Accurate sales & services pvt. Ltd. Pune

Tools and tools (India) Kolkata

Apex commercial corporation Kolkata

Jai enterprises Bhilai

K. Jagannadha Rao Vishakhapatnam

Makaram marketing Bangalore

Sri Sakti trading corporation Kolkata

Sri Hanuman electric and trading co. Kolkata

Belavadi tool room Bangalore

Fujiyana tool tech. Hyderabad

S.N. Tools Balasore

Kalyani Engineering works Ghaziabad

Titanium Tantalum products Chennai

Modern Engraves Mumbai

Pratibha industries Bangalore

Chanakya wire tools Hyderabad

Nagasai Hyderabad


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GROWTH OF HAL IN THE PAST DECADES

THE FIFTIES

In March 1950, the government entered into licence agreement with

DeHavilland of UK for the manufacture of Vampire fighter Aircraft. In August 1956, a major

design and development programmed was launched for HF-24(Marut) transonic jet fighter

was the Bristol Orpheus engine. Dr. Kurt tank, a renowned German designer responsible for

the Fockewulf-190 fighter of World War II was appointed as director of engineering, leading

composite design team of German and Indian engineers. The mass prototype flew on 17th

June 1961. In September 1956, the government entered into licence agreements with Follands

And Bristol Aero Engine Company of to undertake manufacture of grant aircraft and Orpheus

engines. Another major design and development project sanctioned December 1959 was-

16(Kiran) basis jet trainer aircraft. The chief designer for the kiran (as also the Puspak &

Krishna) was Dr. V.M Ghatage.

THE SIXTIES

Aeronautics India Limited was set up by the government India on 16th August

1963 to undertake manufacture of the MiG FL aircraft, for which the government entered into

collaboration agreement with the government of USSR in August 1962. Factories were set up

at Nasik for manufacture of the MiG avionics. The first 21FL aircraft was produced in July

1996.

Aircraft manufacturing depot was established at Kanpur January 1960 as an air

force unit for manufacturing of Haw Siddley HS-748 twin turbo prop transport aircraft fitted

with Rolls Royal Dart engines.

Hindustan Aircraft Limited was dissolved and its assembly merged with those

of Aeronautics India Limited on 1st October 1964 to form Hindustan Aeronautics Limited.

The Rail co. Factory at Bangalore continued to be a part of Hindustan Aeronautics Limited

until January 1965 when it was separated from HAL and merged with Bharat Earth Movers

Limited.

THE SEVENTIES

On the recommendation of Aeronautics committee (1969), separate division

for manufacture of Alouette III (chetak) lama (cheetah) helicopter was set up at Bangalore in

july 1969. Also on the recommendation of Aeronautics committee, Government decided to

set up facilities for manufacturing aircraft instruments and accessories at Lucknow.


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Avionics design bureau was formed in 1971 by merger the special project

Te-M(SPT) was established earlier at Bharat Electronics Limited, with the R&A department

of the Hyderabad division. A design bureau was set up at Lucknow in 1973, design and

development of accessories. A relatively MiG project for design and development of Basant

Agricultural Aircraft was undertaken between 1970 and 1974.

In April 1979, the government of India with BA entered into licence

agreement for manufacture of the Jaguar aircraft and with Royce-Turbomeca for manufacture

of the Adour engines fitted the jaguar aircraft.

THE EIGHTIES

The year 1980-81 was a bad year for the company as there was unprecedented pronged

strike of 77 days of the issue of the party with BHEL. Besides the order book position for

division of Bangalore complex and Kanpur division was very unsatisfactory. In March 1982,

an agreement was signed with USSR authorities’ license production of the swing-wing MiG

27M aircraft as a follow on project for the MiG 21 BIS.

In August 1980-81, government approved the proposal for setting up advanced systems

divisions at Korwa. A major milestone 1983 was the formulation of a design perspective

plan, which envisages design, and development of a portfolio of projects including the basic

turbo prop trainer, advanced jet trainer Hindustan Pressurized Light Transport (30-35 seats)

light component aircraft etc. in the period 1984 to 1994.

BUSINESS ALLIANCES

The aerospace industry requires a highly innovative technology which is evolving

continuously. HAL has products following from Russian as well as European collaborators

besides those developed indigenously. The company imports raw materials, system and

components from foreign suppliers. The company has adopted the strategy to conclude long-

term business agreement to ensure timely delivery of material at agreed prices.

The company has formed 10 joint ventures companies (JVCs) with international

major viz. BAe system plc. (UK), RAC MiG (Russia), Snecma (France), Elbit systems

(Israel), CAE (Canada), Edgewood Venture LLC (USA), Rolls Royce, UK & India majors

including the TATA group, InfoTech enterprises & samtel group with a view to develop

indigenous capabilities and product.


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UNIQUE ACHIVEMENTS:

HAL’s supplies/services are mainly to Indian Defence

Services, Coast Guards and Boarder Security Forces. Transport Aircraft and Helicopters have

also been supplied to Airlines as well as State Government 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 and National Awards for

achievement in R&D, techno logy, managerial performance, exports, energy conservation,

quality and fulfilment of social responsibilities.

HAL was awarded the ―INTERNATIONAL GOLD MEDAL AWARD‖ for

corporate achievement in quality and efficiency at the international summit

(Global Rating Leaders 2003), London, UK by M/s Global Rating, UK in

conjunction with the International Information and Marketing Centre (IIMS).

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).

The company scaled new heights in the financial year 2004-2005 with a turnover of Rs. 4534

Crores and exports over Rs. 150.05 Crores.


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COMPANY PROFILE

ORIGIN AND HISTORY OF HAL (KORAPUT DIVISION):

An agreement was signed in August, 1962 with the Soviet Union for manufacture of

MIG-21 E7FL Aircraft under license the Aero engine factory at Koraput (Orissa), the Air

frame factory at Nasik (Maharashtra), and the Avionics factory at Hyderabad (Andhra

Pradesh) have been set up to meet this requirement on the name of Aeronautics India Limited

which was formed on April 1964 and new company under three name of Hindustan

Aeronautics Limited was formed.

The Government sanction for the first phase of construct of the aero engine factory

at Sunabeda (Koraput) was accorded March 1964 and the factory started manufacture of

R11F2 Series-JJJ engines for the fitment of MIG-21FL Aircraft from 1969 onwards. The first

engines of imported category manufactured in December 1968 and various category of

engines were produced during the subsequent years. The first raw material engine was

produced in February 1971.

The production programmes for the factory also include manufacture of forgoing

and casting required for MIG-Aircraft.

To meet the Air force requirement for improved fight interceptor Aircraft, an

agreement was signed with USSR in August 1976 for manufacturing MIG-21BJS Aircraft.

The power plant of this Aircraft is the R25 Turbojet engine. The government approval for

setting up capital facilities was accorded in October 1977. The first engine of imported

category delivered to HAL, Nasik Division in the year 1978-79. The FJ raw material engine

was delivered during January 1983.

With signing the inter Government agreement for manufacture of MIG 27M Aircraft

on 19th

March 1982. This Division would be involved in the manufacture of R29b series of

engine from the year 1984-85.


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In order to attain self-sufficiency to avoid difficulties regarding supply of raw material

and other layout items from USSR, it was decided to provide indigenous supply of spares

manufacturing for overhaul/maintenance of the fleet. The government approval for

undertaking the tax received during 1977-78 and the indigenous plan was formed to tackle.

ARS and first moving spares

Metallic Material

Non-metallic material

Ready-made articles.

The activities towards this area being progressed as per the approved time frame.

A corporate plan of this division for the next 10 years has been worked out basing on

his delivery/production tasks indicated to us. The total man power of this division has

increased from 378 during 1965-66 to 3522 as on 31st March 1982. The man power potential

of this division will go further ahead in the years to come in light of corporation plan.

GEOGRAPHICAL LOCATION OF HAL, KORAPUT

While installing an industry, the entrepreneur has to choose the location properly,

considering the pre-requisite like availability of land, labour, power, raw materials and

communication facilities. if these factors are taken as unit of measuring rod the company

(HAL), Koraput Division is located in a very advantageous position. This company is

situated in sunabeda IN Koraput district, Orissa that is about 130 KM from Vizianagaram.

The river ―Karandi‖ which act as a perennial source for supplying water is flowing from

northern side to HAL, Koraput division and Sunabeda. More over the factory is adjacent to

the national highway no.-43 linking Vishakhapatnam- Raipur. The nearest railway link is at

Koraput (16 KM from Sunabeda). An airfield is located at Jeypore, 39 KM from Sunabeda.

There is a helipad facility at HAL Township and also a proposed for construction of a

preeminent airfield is under progress.

The location of the factory has got many advantages. The hilly area of Koraput district

is highly strategic from defence point of view. The dense forest provides the factory from

aerial view from the thick angle on enemy plane. May this be the location of the plant,

supply of power from Orissa Electric Board, which has a separate grid.


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HAL harbour is available at cheap rate. The atmosphere of Sunabeda is cold and is

less populated and less polluted which is an extra advantage.

CORE BUSINESS OF HAL (KORAPUT DIVISION):

HAL’s core business is as follows:

Design and development of fixed and rotary wings aircraft, avionics and accessories.

Export of aero structures to leading world Aircraft manufactures for their Aircrafts.

Manufacture of structural components for satellites, launch vehicles and missiles.

Design consultancy.

Design and extension of military, civil updates.

Modernization, manufacture, maintenance, repair and overhaul of fighter and trainers

aircrafts.

Commercial and transport Aircrafts, Helicopters, Aero engines, Industrial and marine

gas turbines.

Ground support equipments (GSE)

Accessories (Mechanical/Electrical/Fighter control/Fuel)

High technology castings, forging fiber composite parts, Aircrafts transparencies,

powered metallurgy.


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PRODUCT LINES OF HAL (KORAPUT DIVISION):

SL. NO. ENGINES AIRCRAFTS INDIGENIOUS NAME

01. R-11-F2 MiG-21FL BADAL

02. R-F2S/F2SK MiG-21M/MF TRISHUL

03. R-25 MiG221BIS VIKRAM

04. RD-33 MiG29 VAJ

MAIN CUSTOMERS OF HAL (KORAPUT DIVISION)

The Indian Aircraft is HAL’s principal customers. Around 95% of the total of

the total sale is to Indian Air force. The other customers for Aircraft & Helicopters produced

by the company are

Indian Navy (Kiran- Jet trainer indigenous developed): chetak- Helicopters &

advanced light Helicopters etc.

Indian Airlines (HS-7481-Transport Aircraft produced under licence.)

Others (HS-7481 to BSF,DGCA etc., HT Puspak to Civil Clubs, Basant- Agriculture

Aircraft indigenously produced to directorate of agricultural aviation, chetak

helicopters to state Govt. coast guard, private firms ONGC etc.)

Overseas customers – supplies sub-contracted work to world leaders like air bus

industries, Boeing and Rolls Royce. Besides these other export customers are like

UK, France, Italy, Nepal, Malaysia, Mauritius, Canada, Chile and Iraq etc.

MITSUBISHI HEAVY INDUSTRIES, Japan is a prestigious addition to this list.


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VISION, MISSION AND OBJECTIVES

VISION:

―To make HAL a dynamic, vibrant, value-based learning organisation 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 organisation. ‖

MISSION:

Achieving excellence in the manufacture of aero engines and spare parts.

Offering matchless overhaul and repair services

Providing total customer support through continuing pursuit of technical excellence,

outstanding product qualities, reliability and services.

Striving constantly for self-reliance and self-sufficiency in all operation.

Becoming the Asian leader in aero-engines production, ready to share technically

knows how for setting up project abroad.

Maintaining and developing a team of highly motivated trained professional.

Making frays into the export market as an ISO-9002 company.

OBJECTIVES:

In April 1971, the board of directors of HAL appointed committee known as

review committee as review committee of HAL to review the functioning of the company and

make its recommendations. Committee formulated a statement of basic objective adoption by

HAL, as details below:

To serve as an instrument of the national policy to achieve self-reliance in the design,

development and production of aircraft and aeronautics equipment to meet the counter

changing and growing needs with special emphasis on millet requirement.

To ensure availability of total quality people to meet the organizational goals and

objectives.


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To have a continuous improvement in knowledge, skill and competence (managerial,

behavioural and technical.)

To promote a cultural achievement and excellence with emphasis on integrity,

credibility and quality.

In fulfilment of these objectives, the company shall regard its fundamentally

responsible for design and development, rely however, upon such relevant facilities as

are available into national institutions, but always holding itself basic a responsible

for the growth and furtherance of the counter aeronautics capabilities.

To conduct its business economically and efficiently it can contribute its due to the

national effort achieving a self-reliant and self-generating economy.

Towards this end, to develop and maintain an organisation which will readily respond

to and adopt the changing matrix of socio techno-economic relation and where in a

climate of grow professional competence, self-discipline, mutual understand deep

commitment and a sense of belonging will be fostered and each employee will be

encouraged to grow n accordance with potential foe the furtherance of the

organisation.

The recommendations of the review were subsequently approved by the board of

directors in September 1972 and forwarded to the Government, who informed the

company in May 1973 that they might adopt these objectives. These objectives

remain essential unchanged to date except that they have been amplified in 1983

through the medium of MD’s date 14th 1983 emphasizing the following:

1. That our products are of the highest quality and reliability.

2. That our products are fully supported after sale to customer,.

3. That the capacity utilization is optimised, restoring which is necessary

to diversification and export.

4. Greater thrust towards indigenization of materials and product to

improve self-reliance.

To maintain a motivated workforce through empowerment of individual and team-

building.

To enhance organisational learning.


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STRATEGY:

To be in total alignment with corporate strategy.

Maintain Human Resource at optimum level to meet the objectives and goals

of the company.

Be competent in mapping, analysis and upgradation of knowledge and skills

including training, re-training, multi-skilling etc.

Cultivate leadership with shared vision at various levels in the organisation.

Focus on development of core competence in High-Tech areas.

Build cross-functional teams

Create awareness of mission, values and organizational goals throughout the

company.

Introduce / implement personal policies based on performance that would

ensure growth, rewards, recognition, and motivation.

VALUES:

Integrity- Every employee of HAL shall deal on behalf of the company

with professionalism, honesty, integrity as well as high moral and ethical

standards.

Excellence- HAL shall be committed to supply goods and services of the

highest quality standards. The company seeks to scale the height to

excellence in all that it does.

Responsibility- HAL shall be committed in all its actions to benefit the

economic development of the countries in which it operates and shall not

engage in any activity that would adversely affect such objective.

Understanding- Employees of HAL shall be treated with dignity and

respect. Employees’ policy and practices shall be administered in a manner

that would create a harmonious relationship between the employees and

management.

Agility- HAL shall be able to respond to customer’s needs with speed.

This would involve continuous reduction in cycle time of various

processes.


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CHAPTER 2

ORGANISATIONAL STRUCTURE


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CORPORATE ORGANISATIONAL STRUCTURE

MANAGING DIRECTORS

GENERAL MANAGER

DEPUTY GENERAL MANAGER

CHIEF MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

SUPERVISORS

WORKERS

BOARD OF DIRECTORS


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DEPARTMENTAL ORGANISATION STRUCTURE

EXECUTIVE MANAGER

GENARAL MANAGER

CHIEF MANAGER

Senior Manager

(P&A)

Senior Manager

(Training)

Manager (P&A)

ESIT

Manager (Legal)

Manager

(Training)

Asst. Training

Officer

Secretariat

Official Language

Cell

Printing Press

Deputy

Personnel

(Recruitment)

Personnel Officer

(Recruitment)

Asst. Personnel

(Disciplinary)

Engineer

(Transfer)

Manager

(Township)

AAO Russian

Enclave

AAO Guest

House

Asst. Legal

Officer

Personnel

Officer

(Policy &

statistics)

Personnel

Officer

(Establishment)

Asst. Personal

Officer

(Establishment)

Manager

Industrial

Relation

Industrial

Relation

Officer

Asst.

Industrial

Relation

Officer

AAO Officer

(HACCS)


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Authority and Responsibility:

Board of directors:

The board of the directors of the company has the following responsibility-

- To ensure that the company’s goals, values and objectives are clearly described and

communicated to the employees.

- Determine the goals and objectives of the company based on the needs of the

stakeholders (creditors, government, customers, employees, shareholders etc.).

- Appoints and regulates the general director to coordinate the workings of the

organization.

- Board of directors, general managers are solely responsible for the formulation of

rules, regulations and policies of the company.

Managing Directors:

- Coordinate and communicate with the general and deputy general manager of each

department to formulate the strategies and plan of actions to achieve the

organisational goals.

- During the decision making process, the valuable suggestions and viewpoints of the

low level employees are also taken into consideration by the higher authorities.

- Manager Directors on a continuous basis keeps a review on the working of different

departments.

- Managing directors address the joint consultant meeting, management training

meeting, and MD coordination meeting.

General Manager:

- Responsible for the arrangement and development of training programs at HAL.

- Responsible to report the managing directors about the progress rate of the respective

departments.

- Issues orders and instructions to the low level management.


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Deputy General Managers:

- Acts as a communication channel between the top management and low

management.

- Responsible for encouraging the employees by promotional and reward scheme.

Senior Manager and Chief Manager:

- Responsible to communicate the workings, policies and plan of actions to the

supervisors and workers.

Supervisors:

- Guide the workers in the workplace.

- Solve or communicates the issues of the workers.


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CHAPTER 3

FUNCTIONAL AREAS


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FINANCE DEPARTMENT

Finance is the lifeblood of every organisation. Finance is the basic foundation of all kinds

of economic activity. Therefore, efficient management of every organisation is closely linked

with efficient management of finance. It expresses the strength and weakness shows through

financial performance of every business organisation. But in HAL government in favour of

nation welfare takes everything which related to finance decision. The decision like capita

budget, dividend decision, working capital management, and investment to fixed assets and

other financial decision which corporate office has established under preview of government

and also aims to meet the requirement with its product, supplying mainly to the defence

organisation of our nation,

HAL is running as a cash rich government sector undertaking. Government itself holding

the entire HAL share capital and major financial activities are organised by its corporate

office and also controlling all division of HAL.

The engine division being carrying a 300 crores turnover in every year that 80% finance go

into purchasing of materials from foreign countries. 20% of profit declared as a dividend in

the year 2002-03.

The finance department of HAL is divided in different sections namely:

Material accounting section

Book keeping section

Cash section

Bills payable section

Bills receivable section

Costing section


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MATERIAL ACCOUNTING SECTION:-

The main function of this section includes

Maintenance of material ledger for all material held in the stores.

Reconciliation of the balances with general ledger.

Quality reconciliation of the bin-card balances material ledger balances.

Maintenance of loan register for material issued as loan and follow up for return.

Scrutiny of slow, non moving and redundant inventories.

This section reviews various documents and sends the same to computer/data

processing section for processing and obtaining necessary accounting output

statements.

RECEIVING REPORTS (RR):- This section takes the pricing of RR on its copies priced by

their bills payable section and sent the same for processing on day to day basis. These priced

RR form the basis for accounting receipts to various inventory accounts.

MATERIAL ACQUISITION (MR):- This section receives the MA/Issue vouchers are

scrutinised and sent for processing and pricing at weighted average rates.

STORES CREDIT NOTES (SCN):- SCN in respect of return of excess materials drawn, are

received from stores department for scrutinizing and then processing. Items manufactured on

stock orders and credited to the stores are not priced by quantity records are maintained since

the values of these items help under WIP.

ACCOUNTING PROCEDURE: - The accounting of the receipts of material by various

issues thereof to various work orders and expenses accounts is done by the generation of the

following output statement received by the computer section-

Material issue analysis statement

Stock transfer/stock re-classification statement.

Stock verification statement

Samples/condemned stores statement

STOCK VARIFICATION NOTES:-SVN received from the stores are similar in their

accounting procedure to ST/SR


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BOOK KEEPING SECTION:-

The functions of book keeping section are as follows:

Maintenance of journal and general ledger.

Preparation of trial balance, P/L accounts, balance sheet.

Maintenance of capital assets ledger and allocation register.

Preparation of fixed assets and depreciation schedules.

Furnishing data for determination of income tax liability.

Disposal of surplus/condemned plant and machine and other assets.

Reconciliation of control accounts of the divisions/corporate office.

Liaison with audit authorities.

ACCOUNTING PROCEDURES: - The accounting aspects of book keeping comprises of the

accounting of capital assets:-

Depreciation

Maintenance of journal and general ledger

Preparation of trial balance, O/L accounts, balance sheet

Furnishing data for determination of tax-liability

Disposal of surplus/condemned plant and machinery and other assets

Reconciliation of inter-divisional control accounts

Accounting of semi-perishable equipment/miscellaneous equipment.

CASH SECTION:-

This section is responsible for all payments of Cash/Cheques and accounting of its

books. The main functions of this section are:-

Receipts of cash, postal orders, cheques, bank-drafts etc. and issue of official receipts

of the same.


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Banking of all receipts.

Drawing of cash from bank to carter for daily needs.

Payments of vouchers by cash/cheques.

Writing of cash/bank books.

Preparation of bank reconciliation statement.

Safe custody of cash, cheques books, bank guarantee, fixed deposit receipts and other

investments etc.

BILLS PAYABLE SECTION:-

Bills payable (Inland)

This section deals with the aspects of supplies and services rendered by inland

vendors and contractors to the company:-

Inland vendors-

Payments and accounting of advances to other vendors.

Payments and accounting of final bills.

Bank dealings with relation to suppliers.

Adjustment/recovery of advances.

Accounting/adjustment of earnest money and security deposit from supplier.

Accounting and pricing of receipts vouchers.

Bills payable (Foreign)

This section deals with the aspects of supplies and services rendered by foreign

vendors and contractors to the company.

Foreign vendors-

Payments and accounting of customer duty, freight bills, agency commission bills etc.

Payments and accounting of advances to suppliers and services obtained fom

collaboration and others.

Adjustments/recovery of advances.


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Accounting and pricing of receipt vouchers

Opening of LC and dealing with banks for obtaining foreign exchange release and

payment thereof.

Maintenance of deferred liabilities and commitment register for budgetary purpose.

BILLS RECEIVABLE SECTION:-

This section is responsible for preparing and submission of invoices to customers for

supplies made and services rendered and follow up of recovery of amount and its accounting.

The functions of this section are:-

Scrutiny of sales orders including expert sales.

Preparation of invoice for work done/to be done and services rendered.

Review of closed work-orders for which invoice are to be prepared.

Recording of invoice rendered.

Accounting for sales equipment and services rendered.

The following are the registers and subsidiary registers maintained in this section:-

Sales journal for manufacture of equipment, overhaul of equipments, manufactures of

spares, miscellaneous.

Invoice register.

Stage payments register for manufacturing, overhauling, RMS orders.

Dispatch advices register.

Sundry debtor’s ledger.

Claims/accounts received ledger.


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COSTING SECTION:-

The system of cost accounting followed in HAL is batch costing. It is designed for the

purpose of carrying work in HAL. The others are standard costing.

Batch costing:- In this system all the components minor assembly, sub assemblies etc.

require for batch of aircraft/engine/equipment are manufactured on batch orders. Though

job costs/job tickets are issued for manufacture of individual components cost is recorded

separately and labour and material costs are booked on work orders. In this system the cost

relation to all components in a completed batch determined by dividing total cost

recorded on the batch work order by the number of units produced in the batch.

Job costing:- This system is followed in the case of repair/overhaul of aircrafts:

Engineers, equipments etc, and for manufacture of spares of HAL/IAF stores, RMS

orders and miscellaneous jobs. In this system individual work order is issued for overhaul

of each project and for manufacture of each item of spares.

Standard costing:- It is a technique for control of cost, it should be extended to

manufacturing project, including fabrication of detailed components, sub-assemblies,

major assemblies and final assemblies. It can be extended for periodical overhaul of

major products like air frames, engines avionics, wheel assemblies and high value

notables where work schedules are available. Standards for labour and material should be

fixed for the purpose of deriving variances under each category for control.


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MARKETING DEPARTMENT

Marketing is an important activity for any organization irrespective of its nature, size

and type of industry in which it operates. Marketing and selling are often mistaken as

synonyms but hold a complete different meaning individually

FUNCTIONS:

a- Exploring new customers:

One of the important functions of marketing department is to find new customers

for the products. This is mainly done through browsing the net. Through internet,

the department tries to identify new customers, who are interested in the company

products and services and influence them to contract with the company. The other

means of exploring new customers is through answering verbal enquires from the

prospective customers.

b- Expansion of the business

The company is widening its scale of operation with its new and prospective

customer for domestic as well as export business. It is also finding new means to

expand business by diversifying into different fields in recent years. The main

area in which it has diversified is in the software field. It has started a software

company in collaboration with British aerospace in the year 1999-2000 to take

advantages of the opportunities available for the software companies in the

Aeronautics. It has also diversified into Industrial and Marine Gas Turbine

business

c- Receipts and screening of Enquiries from customers

The activity involved in the receipts and screening of enquires from the

customers include the following:-

Manufacturing department receives the tenders/enquires issued by the customers and

details of defence, civil and export customers are recorded separately.

The prices are prepared as per the approved guidelines in case of items covered in the

approved price lists. But delivery of the items shall be verified from production

engineering before sending.

If items are not covered in the approved price lists, the enquiry is forwarded to the

respective production engineering to confirm that the requirements are adequately

defined and also to ensure that they are within the capability of the division.


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d- Customer Support

One of the important functions of the marketing department is to provide customer

support. The main purpose is to establish a procedure for carrying out after sales servicing

function. Along with this, the department provides after sales service function for both Indian

and overseas customers.

The main objectives of marketing department regarding customer support are:-

To provide technical and logistics support through the ―exploitation‖ of HAL

products ensuring high quality reliability.

Identifying the needs of the customer by the way of requirements of

publication, spares, repair/overhaul, ground support and test equipment and

updating to improve the efficiency of the product.

Understanding the areas of concern on the products and taking prompt action

to assist the customers to the extent possible.

Having a system of information feedback from the customer and take prompt

corrective action to resolve customer complaints.

e- Preparation of Estimates-

Supply of spares

The production engineering furnishes the raw material require for

fabrication and also the lead time. In case of items that could be spare from stock/work in

progress, the same will be indicated. The material planning group of IMM indicates the cost

of raw material. The management service section gives HAL-fabricated items.

Repair and Overhaul of Engine and Rotables

The production engine department (overhaul and assembly) furnishes

estimated work content (material requirement and labour hours), which is generally done

after receipt of the item and strip examination.

Supply of Tooling Items

The tool planning department furnishes the standard man hours required to

fabrication and delivering lead items.


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Miscellaneous Services

The respective department furnishes the estimated work content in terms of

material and standard man hours including man days in case of field services.

f- Submission of Quotations-

The procedures involved in case of submission of quotation are:-

The marketing section computes the price based on the above inputs and the standard

man hours rate in accordance with the formula.

The price proposed is then put to the competent authority for approval and the

quotation is forwarded to the customers.

g- Follow up on Quotation and negotiations for orders-

The marketing department after the submission of quotations keeps contact with the

customers to influence them to place the orders with the company. The department therefore

responses to any further queries placed by the customer and make sure that the customer is

satisfied with the information provided and explained him about the details furnished

regarding his clarification. Thus the department tries to negotiate with the customers to

contact with the company. The company also participates in the negotiation meeting held by

the customers to clarify the terms and conditions to get the orders.

h- Receipts of orders and vetting order (contract review)

Once the formal order is received, the deputy manager scrutinized the order to check

whether it confirms the terms and conditions of the quotations.

The procedure involved in the contract review is:-

The review is documented in contract review form.

If there are any deviations, it is brought to the notice of the customer for the remedial

actions and issue of amended sales order.

If there are no deviations, the order is acknowledged consisting a contract.

In case order received without quotation, the same is scrutinized as in case of enquiry.


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In case of RMS order placed by IAF, Navy and army, it is governed by GOI and

ministry of defence.

i- Issue of sales order

The authority for approving the various sales proposals is governed by the delegation

of powers approved by the Board of Directors and circulated by the corporate office at

divisional levels. GM has sub-delegated the powers to approve price proposals. A sale order

is issued by making an entry into sales order register and the date is maintained.

j- Attending customer’s complaints

The marketing department after executing sales order received feedback from the

customers regarding the items supplied queries or complaints if any. In case of complaints

from the customers, it verifies as to what aspect the customer is dissatisfied and tries to take

suitable corrective action and assure the customers that he will be supplied with items as

expected by him.

k- Providing after sales service

The marketing department with the coordination customer support department provided

after sales service to the customers so as to retain them and to maintain the company’s image

and also to build the confidence in the company. The after sales service include-

Supplies of spares, technical snag rectification, repair party arrangement etc.

Providing technical advices to the customers.

Providing bulletin or technical letters issued by the original designer or manufacturer.

Providing for inspections, overhaul of engines of certain schedules.

Sending technical expert teams to war fields for providing necessary repair and other

help during war times.

Providing training to technicians of the customers.


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l- Follow up for payments-

The marketing department should see that the customer to whom the items are supplied

makes payments within the stipulated time. It should keep contact with the customers and

send reminder letters to those customers who fail to pay the amount in coordination with the

finance and customer support department.

Some secondary functions of Marketing Department-

Disposal of surplus and scrap material (if not handled by central salvage)

Issue of sales bases and also facilitate withdrawal of necessary items.

Obtain advances CCPS/license for duty free importing of raw material against export

orders and discharges of export obligations.


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HUMAN RESOURSE DEPARTMENT

The strategic goal of HR department of HAL is to create an atmosphere of technological

and managerial excellence to become globally competitive aerospace industry. With the

changing environment, rapid technological changes characterized by a paradigm shift from

licensed production to R&D based production duly balanced with co-development

technological, up-gradation etc, greater customer demand focused diversification to civilian

and expert market. The overall objective of the HRD plan is to build a vibrant and learning

organisation, so as to meet the challenges of quality & excellence; recruitment and retention

of competent human resources and develop high commitment and a sense of belongings to

the company.

Focus of HR policy

Competence building

Commitment

Motivator

Employee relations

In the backdrop above, the focus of HRD initiatives at HAL emphasize the following:-

HR planning- Outsourcing of low tech and medium tech jobs

Fresh induction only in critical/highly specialised areas based on requirements due to

increase in work load and super annuation profile (Annexure2) in the workmen cadre,

induction will be restricted to direct workmen only.

Improving the existing qualification profile by focusing on induction of professionally

qualified personnel and diploma holders, hence focus of recruitment would be to

recruit people with a combination of knowledge, skills experience and attitude in line

with the organisational requirements through appropriate man power plan both short

term and long term programme.

Training and development-

Training is one of the most important tools for developing human resource. Hence,

identification of training competency profile in terms of vision mission of the company

would be the strategic point of the training and developing strategy of the company. The

following objectives have been set in this regard.


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To provide training to all employees at regular intervals in a plan period of 5 years.

Training to become an integral component of individual professional by:

Updating knowledge to avoid obsolescence.

Enhancing professional creativity.

Enables employees to shoulder higher responsibility

The goal of training will be to progressively achieve 7 days training per employee per year

with a budget of 2% of annual wage bill, keeping in view the organisation requirement and

goals and objectives of training, the following have been identifies as the key, focus area of

the training- technology, tooling, quality, information technology.

Performance Appraisal-

Approving people for meeting the company goals would be the prime focus of

performance management. The new performance appraisal system based on work planning

and commitment (mutually agreed tasks) self-review and performance analysis, performance

review and feedback would ensure that the focus would be on value adding activities rather

than on routine activities which bear no relationship with the organisational goals and

objectives. Identification of low performers and resultant corrective action throughout the

company would be given priority. Similarly faster career growth opportunity would be

provided to high performers.

Reward Systems-

The focus of the reward system in the country is to promote team work and cultivate a

sense of achievement and excellence in the organisation. This is in addition to the existing

scheme of reward for an individual who innovatively and creatively makes exemplary

contributes in the key through area of company that would lead to its achieving overall

excellence.

Scheme for Learning and Certification for Executives-

A learning organisation is essential for survival in the present era of liberalisation and

globalisation. Therefore knowledge is the only core competence of organisation for coping

with changes. Since individual knowledge is the starting point for organisation knowledge, it

is only the employee who can convert knowledge into efficient action.


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In the above lines the philosophy among other initiatives like institutionalising learning

counters in division etc. HAL has also introduced the scheme for learning and certification

for executive as starting point for building individual knowledge. The scheme provides an

opportunity for the junior and middle management cadre executive to broaden the perspective

by not only learning about all functions and procedure in their respective discipline but also

in related areas and overall knowledge about the organisation and its environment. So far

approximately 45% of executive have been certified. It is proposed to expand the coverage of

this scheme further, if required, by linking, the scheme to some kind of reward mechanism.

Lastly the HRD plan will also include time to time OD inventions to address specific

requirements of the company.

Incentives scheme-

Wage incentives are one of the means of sharing directly the benefits of higher

productivity. The scheme has been designed basically to motivate employee in three stages

based on performance of individual shop and division.

The benefits of the schemes are-

Increased production.

Reduction of waste of all type of employees.

Reduction in unit labour cost.

Improved quality.

Reduced down time of machinery and equipment.

Less accident and improve safety.

Reduced absenteeism.


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PAY-ROLL SECTION:-

The main function of pay-roll covers the following:-

Placements of time punching cards in the time care racks for recording attendance.

Maintenance of leave records and filling of attendance data to computer with

reference to the documents received, where applications are sent directly to time

office by respective departments.

Receipts of approved leave applications, OT authorities, attendance sheets, and

employees’ gate pass.

Pay-roll

Disbursement of salaries and wages.

Payment and recovery of advances.

Recovery of dues from employees.

Payment of travel and LTC advance and adjustment thereof.

Remittance of amounts recovered from employees to various agencies.

Accounting of pay-roll transactions.

Maintenance of employee card.

PROVIDENT FUND SECTION:-

This section mainly deals with the transaction preparing to PF such as:

Account of provident fund transaction.

Remittance of amounts recovered from employee to a fund called provident fund trust

fund.

Providing refundable & non-refundable loan & adjustment thereof.


54

PRODUCTION DEPARTMENT

The engine division’s production department is conducting with activities of

production, planning and control. This states the manufacturing, repair and overhaul of aero

engines and their components. It includes spares, accessories, ground handling equipments,

tools and test equipments and also services includes technical assistance and training of

customers personal in operations and maintains of aircraft and other engines.

The main objective of this department is projecting the future production task in

accordance with available direct man power machine capacity and monitoring performance in

shop floor activities. It ensures effective and monitoring performance in shop floor activities.

It ensures effective utilisation of production facilities and inventory control.

This department is equipped with three types of manufacturing process, they are;

Production based production is used in the pipe line, gear shop and blade shop etc.

Process based production is used in the heat treatment etc.

Transfer line based production is used in continuous process designed activities.

The management of task of production department through following steps, they are:

Centre planning

Shop scheduling

Shop progress

Store credit

Dispatch

Offloading sub contract

Annual physical verification.


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OBJECTIVES:-

1- To determine the most efficient and economical method of proving a component or

assembly.

2- To ensure the requirements of production tools.

3- To ensure availability of plants and machineries suitable for manufacture of

components.

4- To identify the requirements of all type of material in time to time meet delivery

schedule.

5- To identify availability of required heat treatment, protective treatment facilities.

6- To satisfy necessary inter-changeability requirements.

7- To ensure availability of ground test equipments and special tools required for

manufacture.

8- To satisfy the customer needs by way of technical vetting/furnishing cost quantities

for spare requirements.

OPERATION PROCEDURE:-

1- Input documents. 9- Production permit.

2- Preparation of drawing breakdowns. 10- Process Sl. No. Summary

3- Allotment of rationalised code

number.

11- Final material summary.

4- Preparation of process sheets. 12- Planning breakdown.

5- Special process. 13- Shop-floor planning.

6- Quality betting of master process

sheets.

14- Processing of modification.

7- Drawing discrepancy reports. 15- Equipment rotables servicing.

8- Production query. 16- Preparation of cost estimates.


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FUNCTIONS:

1- Resource planning:-

Planning and procurement of plant and machinery, ground handling, testing and

inspection equipment etc. is a part of function of method department. A separate group

assigned with this task.

2- Capital Budget:-

This budget is meant for planning and commitment for various capital facilities

that is plant and machinery, civil works and other infrastructure services needed to achieve

performance objectives. The expenditure to be incurred for the commitments that are likely to

materialized during the budget. All capital requirements along with the justifications by the

various departments will be sent to planning and material procurement group who in turn

project the same at the time of capital budget proposal to the management annually:-

Plant and machinery are procured under the following capital head:-

New project

Improvement/rationalization

Replacement

Welfare

Technology improvement/development

3- Manufacturing Facilities:-

CNC shop- The division has extensive manufacturing facilities consisting of

conventional machines as well as CNC facilities. Some of the CNC facilities are as

follows:-

Seven axis automatic CNC NGV grinding centre with facilities like an auto

loading and uploading by robotics and integrated CMM.

Double axis machine centres both single spindles and twin spindles.

Four axis and three axis machine.

Vertical torrent lathes with line spindles.


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Disc lathe with touch probe facilities.

Twin spindles vertical grinder.

Jig boring.

Turn mill centre.

CNC Gear Grinder.

4- Engine test facilities:-

Besides capabilities in design and commissioning of engine test beds on turnkey

basis, test facilities for testing of the aero-engine component have been established-

compressor, combustion chambers, and turbines. An online data acquisition is being used to

augment testing and performance analysis in real time.

5- Other facilities cover fabrication, coating, welding machineries and non-conventional

machines facilities. Few of these are:-

Electron beam welding.

Robotic plasma sprays facilities.

CNC electrical discharge machine.

Wire EDM.

Electro chemical forming.

Chemical size reduction.

Segmental and other coatings.

And all types of electroplating.

The division can manufacture varieties of parts ranging gears, castings, blades, impeders,

stators for each type of product assembly line and test cell exist. Thus facilities uninterrupted

supports to all customers.


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QUQLITY MANAGEMENT SYSTEM DEPARTMENT

General requirement: HAL has established, documented, implemented & maintains as

QMS to continually improve its effectiveness by:

Identifying the processes needed for the QMS & their application through the

division.

Determining the sequence & interaction to these processes. The interaction of the

processes identified in the respective process procedure & as flow chart as under.

Determining criteria & methods needed to ensure that both the operation & control of

these processes needed are effective.

Monitoring, measuring & analyzing the processes.

Implementing actions necessary to achieve planned results & continual improvement

of these processes, this is achieved PDCA approach in each procedure & by the

identified procedure for this activity.

HAL’s QMS comprises of the core & support business processes, which take inputs

& converts them into value added outputs that satisfy customer’s needs &

expectations. Every business process is aligned to deliver the business goals & is

linked to key performance indicators, which are used to monitor the achievements.

The core business process represents how market opportunity is turned into profitable

outcomes through satisfied customers. Its effectiveness is maintained & enhanced by

support processes. The core & support processes cross original boundaries, which

enable everyone to have a clear focus on the requirement that have to be satisfied for

business to be successful. Each process has an owner who has the prime

responsibility for ensuring that the process.

Achieves its objectives.

Is under continual review for improvement.

The structured documentation of the management system identifies what activities are

carried out in the business & provides as base line from which improvement can be identified

& best practices implemented. Special purposes are not outsourced.


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Management Responsibility:-

HAL’s top management defines, develops & implements the Quality Management

System. The G.M. is the head of the division ensures that employees at all level within their

groups understand the goals & objectives of programmes & circulars.

Planning QMSP:-

When a new product, project or contract is evaluated for adoption into engine division-

HAL’s quality system, the appropriate staff members meet to define & document how the

requirements for quality will be met. The integrity of the QMS is maintained, when changes

to QMS are planned & implemented.

Internal Communication:-

HAL communicates the effectiveness of its QMS to staff through:

Departmental meetings.

Notice boards.

Management Review Meetings.

Resource managements:-

1- Provisions of resources: - HAL has determined & provided resources needed.

To implement & maintain the QMS & continually improve its effectiveness &

To enhance customers satisfaction by meeting customer requirements.

The resources could be man, machine, material & method apart from accessibility to

information & time for performing the activities. Provision of resources is taken up as a core

business process, namely management process vide process procedure.

2- Human Resources: - HAL determine the necessary competence for personnel

performing work affecting product quality, by periodic reviews by the concerned

departmental heads/ group’s in-charge. Based on the requirements & introduction

of any new processes, equipment & technology, whenever required, training is

provided or actions taken to satisfy those needs, after which effectiveness of actions

taken is evaluated. It is ensured that our employee is made aware of the relevance &


60

importance of their activities & how they contributed to the achievement of the quality

objectives.

3- Work environment: - HAL determines & manages the work environment needed to

achieve conformity to product/ overhaul/ repair requirements. The products are

properly handled & stored & environmental & other safety requirements for

products & processes are ensured. These are addressed under process procedure for

product realisation process.

4- Infrastructure: - HAL determines & maintains the infrastructure needed to achieve

conformity to product requirements, including the supporting services for

transportation & communication.

Quality measurement, analysis & improvement of the products: -

HAL determines the monitoring, measurement, analysis & improvement processes,

including methods such as statistical techniques that are needed to: -

Demonstrate conformity of the product.

Ensure conformity of the QMS.

Continually improve the effectiveness of the QMS. This process is carried out as a

product process namely monitor, measurement & improvement process provide

process procedure & detailed procedures are also available in the departmental

procedures.


61

IT DEPARTMENT

HAL has decided to take up IT as business initiatives with its existing expertise in

IT and rich domain knowledge in servicing and allied areas, HAL can leverages itself to

diversify into the new economy section of Info Tech IT enable services. The company is

strengthen its IT linkages within the organisation and is evaluating its approach towards

emerging opportunities in IT, including e-business which is fast transforming the traditional

ways of transitory business.

With this strategic initiatives and continuous effort to enhance its competitiveness by

reducing cycle time and costs, improving quality opportunity in the environment, HAL is on

its way to achieve its vision of being world class innovation, competitive and profitable

enterprise providing total business situation. Computerisation in HAL commenced at the very

inception of the company in the series. Initially the manufacturing units were depended on

the technology transferred from the collaboration supplied system/procedure and computer

programs with suitable adaption. The system and procedure formulated. Days laid a strong

foundation for the development of IT base in the years that followed.

Over the years, technology was gradually upgraded in line with the functional needs of the

company and suitability adapted to the changes in the scenario. Today, computerised system

base supported by state of art IT. The major units have centralised mainframes computers;

whereas minor ones have got mini-computer system. The front end user friendly desktop

personnel computers are used in each of the units extensively.

In the data communication area, all the units are linked up through wide area corporate

data network. Each of the major units have set up its campus wide backbone network

supported by LAN for inter office/department connectivity for system integration.

The company has a professional outlook towards IT strategies and strengthens in IT

infrastructure in line with the future business required. A core group of IT personnel is

available in each of its unit with proper support and direction from a similar apex body at the

corporate level. The enterprise wide computerised system, web enabled technology, e-

commerce concepts, collaborative and concurrent engineering simulation modelling and

video conferencing are some of the newer areas considered for absorption today for meeting

the business challenges of the future.

ERP systems are being introduced on whole divisions, which are under process in engine

division, after the success achieved in the other divisions like Aircraft division, Helicopter

division and corporate office that ERO is already established. IFS one of the top fortune 500

companies is doing the installation and designing for engine division.


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QUALITY ASSURANCE DEPARTMENT

OBJECTIVES AND FUNCTIONS

Manufacturing Inspection:-

This department is responsible for inspection and sub assemblies manufacture in

house/ outsource including indigenised items. The type of inspection carried out is-

Dimensional inspection

Non-destructive testing

Process inspection and protective treatment

Calibration of instrumental and gauges

Leasing with customer inspection (military, civil and export) for approval acceptance

and certification of components

Coordinating with design liaison for disposition of non conforming components

Providing inspection support to indigenisation activity.

Assembly Inspection: -

The assembly inspection is presently carrying out the following tasks;

inspection of transmission components for production CAT-B engines,

major servicing, rotables and RMS order belonging to both military,

civil and export orders,

defect investigation and transmission components of military,

civil and outside agencies,

defect investigation of structural components and systems,

accidents/incidents investigation,

servicing, categorisation of accident engines and components repair/overhaul

at operating units

Steps for quality improvement: -


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Annual quality improvement plans.

Internal quality audits.

Quality cost consumptions.

Advance quality system

Supplier control.

Future Strategies: -

Analyzing internal failure cost to minimise refection and rework.

Plans to minimise external failure costs.

Enhance investment on prevention costs by-

o Training and development

o Process control

o Quality improvement project

o Vendor development

o Better inspection and test facilities.

Steps in corrective and preventive action response-

Description of defect finding

Correction of defects

Finding of root cause

Corrective action verification plan

Follow up.


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PURCHASE DEPARTMENT

The purchase department plays an important role in an organisation. The main

objectives of the purchase department is timely procurement and supply of material to the

departments on time as non-receipt of material in time may result in production hold-ups and

receipt of material ahead of time would be a burden to the cash flow of the company, as the

opening cycle would become longer and realisation from such projects will be less as

compared to what estimated and at to the inventory carrying cost. It is important to have the

right source who is well equipped to meet the requirements of the company as an when the

need arises, to achieve that each department in HAL engine division shall carry out intensive

market survey and prepare a register of approved supplies.

OBJECTIVES: -

To buy competitively and wisely authorised supplies to desired specifications from

approved/reliable sources at the reasonable prices within the time schedule to support

production plans and other requirements.

To ensure that fair & open purchase practices are followed and a healthy & good

relationship develops with suppliers to foster the commercial interest of HAL in the

local, national and international market.

To ensure timely formulation and commitment of purchase budget, including foreign

exchange requirements.

To serve as information centre on materials knowledge – prices, source of supply,

specification etc. to all other departments.

To ensure that investment made on inventory is at an optimum level.

Training of purchase personnel in the latest techniques of materials management.

FUNCTIONS: -

Creation of a comprehensive & continuously updated register of selected reliable

vendors.

Maintenances of vendor evaluation & rating records.

Market survey with a view to establishing/ developing new reliable & better sources

of supply by providing information on latest products/ development.

Analysing bids/ offers for decision-making by the competent authority.


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Arranging negotiations with the parties when necessary.

Issue of purchase order in time.

Timely release of foreign exchange, obtaining technical clearance & import license

when required.

Follow-up of purchase orders till the arrival of materials at destination & to ensure

after sales service during warranty & post-warranty periods.

To work out periodically procurement lead time for various categories of items from

international & local markets and advice the same to user department so that they take

timely action in initiating purchasing request.

Maintaining library of product catalogues & manufactures/distributors price list etc.

Maintaining up to date information regarding sales tax, excise & custom duty-rates

etc.

Submit MIS reports on performance of purchasing organisation.

Entering into service contracts for Transportation, Customers clearance and other

miscellaneous services like repairs to capital equipment/plant, advertising, printing,

packing, tailoring, maintenance service contracts, material handling services etc.

Entering information contracts for sub-contracting prototype development, trial orders

etc.

Finalisation & operation of license agreement.

To ensure that objective of purchase are realised & exceptional cases are brought to

the notice of divisional heads/management.

To be alert & responsive to the changes in production programmed & change in

requirement of material.

CLASSIFICATION OF MATERIALS: -

For efficient purchasing it is necessary that the relevant classification of

materials are properly understood, so that purchasing methods may be adopted for the

purchase in question. Broadly, the following classifications are pertinent to HAL purchases:


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Capital equipment- Capital equipment consists of machine tools, plant, test

equipment, workshop/ office furniture, vehicles etc. The requirement of capital items

for the division is sanctioned by the Board in the annual capital budget. Purchase

department is responsible for ensuring timely commitment of annual purchase budget.

Production material- Production materials are those which are directly consumed in

production. These are raw materials, consumables, components, spares and

accessories, castings and forging etc., which go into the manufacture/ repair/ overhaul

of aircraft/engines and other systems.

Commercial materials- All other types of materials which are directly used in

production but are required for the functioning of the organisation are classified as

commercial materials. Those may be future sub-categorised.

The different kinds of requisition raised by different departments:

MRP: Material Purchase Request.

CRP: Capital purchase Request.

MSR: Material Sub-contracting Request.

UFR: Urgent Purchase Request.

PPR: Petty Purchase Request. (If it is less than Rs. 200.)


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CHAPTER 4

SWOT ANALYSIS


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STRENGTHS:-

MONOPOLY: - HAL enjoys monopoly over the producers of aircrafts, engines and

helicopters in India to support defence and transportations. Since HAL stands with

huge investment, this is a big strength to the company and the country. HAL also

fetches huge returns to the nation.

TECHNOLOGY: - With increased sophistication in design and configuration of

aircraft machinery has also taken a very high technology leap. CAD/CAM features

will be extensively used thereby reducing manufacturing cycle time.

HAL can be considered as an embodiment of the nation’s aspiration to attain

self sufficiency in modern technologies as represented by production of aircraft and allied

equipment, while progressively building up the capabilities to undertake the Nova design and

development of aircraft’s engine and system.

JOB SECUTITY: - HAL offers employment opportunities for thousands of people

and raises the living standard of the people. Job security is one of the blessings

bestowed by HAL on its employees.

DEFENCE MARKET: - HAL with its products and services, fully engaged in proving

backbone around which the IAF has built tough physical presence well able to take

care of the multifarious tasks demanded of it. So Indian Defence market can be

considered as the main strength of HAL.

SKILLED AND DEDICATED MANPOWER: - Induction of young technicians in

multi skills and transferring the skills from highly skilled technicians before they

retire.

NAVARATNA COMPANY: - HAL is one of the Navaratna Companies. So it has

goodwill and market image.

WEAKNESS:-

ABSENCE OF MARKET STRATEGIES: - Through HAL produces a wide range of

products, it is yet to be backed by effective marketing strategies. It can be seen as an

obstacle for future prospects in the aerospace market.

LICENSE DEPARTMENT: - It is largely dependent on its license in international

business transaction.

ENCUMBARANCE:- HAL too faces the problems which are common to public units

like strict government regulation in technical upgrading etc.


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Investment made in R & D is inadequate.

As in other government organisation, excess of manpower than required in the

organisation.

OPPERTUNITIES:-

GROSERY MARKET: - The aerospace market has the growing in a rapid pace and

there are untapped areas and markets to be explored further. This opens a level plain

field for HAL.

TIE-UPS: - HAL has been associated with the technological advancements in the

industries and has brought tie-ups with majors like Rolla-Royce and various others.

HIGH PENETRATION POTENTIAL IN THE FOREIGN MARKETS: - The

foreign market for the products like ALH and LCA are found to be expanding and it

creates a room for HAL to penetrate the foreign markets.

HAL has entered into a licensed agreement with U.K for servicing of DART engines

in South East Asia.

New initiatives in R&D like ALH (advanced light helicopter), LCA (light combat

aircraft) MIG and JAGUAR update programs provide scope for further expansion of

the business.

THREATS

GOBAL COMPETITERS: - Competitors like Boeing air bus, lock head martin etc

has potential edge and they are established in the design and development of aircrafts

and others are having high aircraft technologies.

LOW PRODUCTIVE: - As it takes six months for engine to complete manufacturing,

this long process tells of its low productivity.

LOW MOTIVATION: - The employees are not motivated to perform the gap most

efficiently, as they are not identified, appreciated and reinforced.

THREAT FROM MNC’S: - Ever since Mr. P.V Narsimha Rao has signed LPG, after

globalisation, trade and commerce has lead to the flooding in MNC’s into Indian

economy. They provide huge salary and amenities that the government could not

afford. This may attract the efficient employees into those companies.


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CHAPTER 5

OBSERVATIONS, SUGGESTIONS AND CONCLUSION


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OBSERVATIONS

The following are the major observations derived from the organisational study of

Hindustan Aeronautics Limited, engine division (Koraput):-

The company’s product are stable efficient with proper inventory and working capital

management.

The workers are committed to their work and duties.

There have been good initiating measures undertaken by the company to upgrade the

quality and efficiency of its products and machinery.

The finance position of the company is good though there are some indirect losses.

There is a good coordination among all the departments of the company.

The company’s commitment towards its customers, employees and other share

holders and society in general are tremendous.

Absence of some HR terms like job specification, job distribution, job rotation etc.

SUGGESTIONS

The suggestion for effective growth is an attempt to provide better management

solution from the available resources. The suggestions below should not be a criticism over

the existing system.

The profits generated by the organisation can be utilised to improve the work life of

the employee by providing better infrastructure facilities within the organisation.

The subsidised canteen facilities have resulted in high expenditure which reflects the

cost and ultimately profit, therefore a recession of canteen charges can be considered.

It can be though to discontinue by the way of outsourcing.

The organisation structure must be flattened for quick decision making which will

result in high profit ability.

Define individual goals to achieve the corporate objective.

Long procedure has to be reduced.

Proper incentives schemes for the efficient work of efficient must be introduced.


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The company should implemented and practice TPM philosophy in all departments of

the factory, which is currently being maintained in few lines of the factory.

The company should go for job rotation in the factory where in the employee is

rotated to another job where similar skills are required in the factory. This would

enable an employee to familiarise with different work system in the factory and

subsequent help to the management in filling the emergency vacancies at any time

besides uninterrupted career growth for such job rotated employees.

Registering slow growth. It should concentrate on three critical factors:-

o Powerful consumer insight

o Intense focus

o Top quality innovation

The suggestion can be validated and adopted if it in accordance with the company’s policies.

CONCLUSION

The objective of this study is to assume and learn the various functional aspects of the

organisation and possible comments on its activities.

In the context of this report, it can be said that the production of the company’s product

is stable and efficient with proper inventory and working capital management.

The workers are committed to their work duty. There have been good initiating measures

undertaken by the company to upgrade the quality and efficiency of its products and

machinery. The firm’s commitment towards quality is worth appreciating. Good coordination

among all the department of the division. Financial position of the organisation as whole is

sound. The commitment of the company towards its consumers, employees, shareholders and

society as a whole is very high.

If you are willing to work diligently towards your goal, you will surely succeed. The good

things in life can be yours if you have truly a strong motivation for achieving them. One’s

attitude determines one’s future. This is what every one learns from a good corporate like

HAL.

Work is the key to happen. We line in deeds not in years, in thought not in breath, in

feelings and not figures on the dial. This moral I learnt in HAL.


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ANNEXURES

PRODUCT PROFILE:-

ADOUR MK 811: GARRETT 331_5:

Artouste IIIB DART 533-2

536- 2T

ORPHEUS 70105


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ADOUR MK 804E

AVON

GNOME 1400_IT


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FINANCIAL STATEMENTS

Profit & Loss A/C for the year ended 31st March 2009, 31

st March 2010 and 31

st March 2011

of Hindustan Aeronautics Limited, Koraput Division (Rs. In Lakhs)

PARTICULARS 2009 2010 2011

INCOME

Sales

Transfer to Inter Divisional Units

Charges in WIP/SIT/Scrap

Other Income

Charges received on inter divisional transfer

140992

754

36767

4749

75

133541

59

62722

4337

6

176196

424

30647

2667

42

Total 183337 200666 209976

EXPENDITURE

Consumption of Raw Material, Components

Amortisation

Salaries & Wages

Other expenses

Charges paid on Inter Divisional Transfers

Interest

Depreciation

Provisions

Inter services/ common services

123734

15215

21105

8462

3

1

3686

9219

1586

139591

14943

18003

9368

18

1

4242

5914

940

140420

12459

22521

11711

24

-

4324

10061

1127

Total 183011 193021 202647


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Less: Expenditure relating to capital A/C

Net Expenditure

11643 5290 4911

171368 187731 197736

Profit of the year

Less: provision for current taxation

Provision for deferred taxation

Provision for taxation of earlier years

11969

0

0

0

12935

0

0

0

12239

0

0

0

Profit after tax 11969 12935 12239

Balance brought forward from last year 0 0 0

Profit available for appropriation 11969 12935 12239

APPROPRIATION

Debenture redemption reserve

Research and development reserve

Proposed dividend

General reserve

Balance carried to balance sheet

0

0

0

0

11969

0

0

0

0

12935

0

0

0

0

12239

Total of appropriation 11969 12935 12239


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Balance Sheet as on 31st March 2009, 31

st March 2010 and 31

st March 2011of Hindustan

Aeronautics Limited (Rs. In Lakhs)

PARTICULARS 31ST

March2009 31st March2010 31

st march2011

SOURCES OF FUNDS:

Share holder’s fund:

Head office control A/C

Reserve & Surplus

4712.75

11968.86

166992.37

12934.88

-107457.42

12239.46

16681.61 29927.25 -95217.96

Loan Funds:

Secured Loans

Unsecured Loans

259.75

-

364.54

-

95.11

-

259.75 364.54 95.11

Deferred Liabilities 0.44 0.12 -0.18

Total sources of Funds 16941.80 30291.91 -95123.03

APPLICATION OF FUNDS

Fixed Assets:

Gross Block

Less: Depreciation

60432.55

23502.14

67432.44

27738.48

70371.36

32056.39

Net Block 36930.42 39693.96 38314.94

Capital work-in-progress 7143.75 3147.59 2519.11

44074.16 42841.55 40834.08

Special tools & equipments

Investments

113380.82

-

115159.33

-

113164.02

-


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Current Assets, Loan & Advances:

Inventories

Sundry debtors

Cash & bank balances

Loan & advances

154197.27

14655.86

11.95

89141.87

256533.47

23918.95

16.88

95198.45

311483.61

24198.85

8.97

40860.92

258006.95 375667.75 376552.35

Less: Current liabilities & provisions

Liabilities

Provisions

408546.14

22538.14

508682.10

26051.52

634488.75

33297.00

Net Current Assets 173077.33 159065.87 291233.40

Intangible assets:

Gross carrying amount

Less: cumulative amortisation &

impairment loss

44467.53

11903.38

46904.69

15547.79

60364.03

18251.77

Net carrying amount 32564.15 31356.90 42112.26

Total application of funds 16941.80 30291.91 -95123.03


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BIBLIOGRAPHY

BOOKS:

Kotler Philip & Keller Kevin Lane, ―Marketing Management‖ Twelfth Edition 2006

Krishnaswami O.R. & Ranganatham mM, ―Methodology of research in social

sciences‖

Management Accountancy by Sharma & Gupta.

WEBSITES:

www.hal-india.com

www.managementparadise.com

www.defence-discovery.com

REPORTS, MAGAZINES & JOURNALS:

Corporate Plan (Draft)

Employee Handbook

ISO 9000:2001 Manual of Management service department

Annual book report of HAL

http://www.hal-india.com/

http://www.managementparadise.com/

http://www.defence-discovery.com/


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Organisational Study at Hindustan Aeronautics Ltd.

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