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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)

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.

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

Marketing Management at HAL 2012

Table of Contents
MASTER OF BUSINESS ADMINISTRATION ...............................................................Error! Bookmark not defined. 1. 2. 3. 4. 5. 6. 7. COMPANY PROFILE ........................................................................................................................................ 7 INTRODUCTION ............................................................................................................................................ 10 HISTORY AND GROWTH OF HAL .................................................................................................................. 11 OBJECTIVES OF HAL...................................................................................................................................... 15 VISION OF THE COMPANY............................................................................................................................ 16 MISSION OF THE COMPANY......................................................................................................................... 16 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. 9. 10. 11. 12. ORGANISATIONAL STRUCTURE .................................................................................................................... 18 CORRUPTION FREE SERVICES ....................................................................................................................... 20 COMPLAINTS AND GRIEVANCES .............................................................................................................. 20 SYSTEM LAYOUT ...................................................................................................................................... 21 CUSTOMER PROFILE ................................................................................................................................ 22 DOMESTIC................................................................................................................................................ 22 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

Marketing Management at HAL 2012


LUCKNOW DIVISION ................................................................................................................................ 33 HELICOPTER DIVISION, BANGALORE ....................................................................................................... 36 14. 15. 16. PRODUCTS OF HAL .................................................................................................................................. 36 PRODUCTS OF HAL LUCKNOW DIVISION ................................................................................................. 40 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. 18. CONTRACTS ............................................................................................................................................. 48 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. 21. PRODUCT FLOW CHART........................................................................................................................... 55 COMPANY ANALYSIS................................................................................................................................ 57 BUSINESS DESCRIPTION ........................................................................................................................... 57 CORPORATE STRATEGY............................................................................................................................ 58 LASTING BOND ........................................................................................................................................ 59 ABOUT HAL .............................................................................................................................................. 60 22. 23. 24. 25. 26. 27. OFFICIAL HIERARCHY ............................................................................................................................... 60 MARKETING STRATEGIES ......................................................................................................................... 61 FLOW CHART FOR MARKETING PROCESS ................................................................................................ 62 ROLE OF MARKETING DEPARTMENT ....................................................................................................... 63 TOTAL NUMBER OF AIRCRAFTS DELIVERED ............................................................................................ 63 SWOT ANALYSIS ....................................................................................................................................... 64 STRENGTH................................................................................................................................................ 64 WEAKNESS ............................................................................................................................................... 64 OPPORTUNITIES ....................................................................................................................................... 64

Marketing Management at HAL 2012


THREATS .................................................................................................................................................. 64 28. 29. 30. KEY COMPETITORS .................................................................................................................................. 65 BUSINESS CHALLENGE ............................................................................................................................. 65 STRATEGY ................................................................................................................................................ 66 DESIGN & DEVELOPMENT ....................................................................................................................... 66 ASSEMBLY & TESTING .............................................................................................................................. 66 31. 32. 33. 34. INITIATIVES .............................................................................................................................................. 67 LEAN MANAGEMENT ............................................................................................................................... 67 LEAVE MANAGEMENT AT HAL ................................................................................................................. 68 PRICING ................................................................................................................................................... 70 PRICING POLICY IN HAL: .......................................................................................................................... 71 MATERIAL PROCUREMENT PROCEDURE IN HAL ..................................................................................... 73 35. 36. 37. 38. 39. 40. COST CONTROL TECHNIQUES .................................................................................................................. 75 BUDGETARY CONTROL ............................................................................................................................ 77 VARIANCE ANALYSIS: ............................................................................................................................... 78 FINANCIAL HIGHLIGHTS ........................................................................................................................... 80 INVENTORY AND MATERIAL MANAGEMENT .......................................................................................... 81 RESEARCH METHODOLOGY ..................................................................................................................... 83 RESEARCH METHODOLOGY:- ................................................................................................................... 84 RESEARCH DESIGN:-................................................................................................................................. 85 DATA COLLECTION:- ................................................................................................................................ 86 STANDARDS ............................................................................................................................................. 87 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 .......................................... 90 CUSTOMERS WHO RESPOND TO THE WEBSITE ....................................................................................... 91 NUMBER OF CUSTOMERS WHO RESPOND VOLUNTARILY TO THE WEBSITE .......................................... 92 CUSTOMERS WHO PLACED ORDER THROUGH NET ................................................................................ 93 INTERNATIONAL CUSTOMERS OVER THE WEB ....................................................................................... 94 42. FINDINGS, SUGGESTIONS AND CONCLUSION ....................................................................................... 101 FINDINGS ............................................................................................................................................... 101 SUGGESTIONS ........................................................................................................................................ 103 CONCLUSION ......................................................................................................................................... 104 43. BIBLIOGRAPHY ....................................................................................................................................... 105

Marketing Management at HAL 2012

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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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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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.

Marketing Management at HAL 2012

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 rawmaterials 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 RF300series-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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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, cooperation, 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

ORGANISATIONAL STRUCTURE

DESIGN

BANGALORE

ACCESSORIES

MIG

COMPLEX

COMPLEX

COMPLEX

COMPLEX

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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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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 griev ance 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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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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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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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). ONGC According 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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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 992000. 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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INTERNATIONAL

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BRITISH AEROSPACE HAL builds Hawks for British Aerospace. Public sector aeronautical giant Hindustan Aeronautics Ltd (HAL) is in relation with BAE Systems about an expanded role in building Hawk jet trainers for the global market. British Aerospace is the largest operator of the Hawk. Last year, while negotiating the contract for 57 Hawks, BAE Systems wanted to give HAL additional work in building Hawks in the future. BAE Systems retains the capability to build Hawk in the UK to manage any additional export orders which may arise and will also continue to work closely with HAL on both current and future Hawk activities. REPUBLIC OF MAURITIUS The Dhruv has become the first major Indian weapons system to have secured large foreign sales. HAL has entered into a partnership with Israel Aircraft Industries (IAI) to develop and promote the Dhruv, IAI has also helped develop new avionics and a glass cockpit for newer variants of the Dhruv. Dhruv has elicited interest in many countries, mostly from Latin America, Africa, and West Asia including Mauritius.

NIGERIAN AIRFORCE HAL transported 25 MiG-21MF and six MiG-21UM to the Nigerian Air force in 1975. One of them is preserved as a gate guard at Abuja air base.

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13.

DIVISIONS AT HAL

AIRCRAFT DIVISION, BANGALORE


Aircraft Division was established in the year 1940. Since inception, the Division has manufactured a variety of Aircraft both under license as well as indigenously designed and developed. Apart from 1st order of Hawk Mk132 Aircraft (66 Nos.), the division has signed contract with Indian Air Force and Indian Navy to supply additional 57 Hawk Aircrafts (40 Nos. Hawk for Indian Air force and 17 Nos. Hawk for Indian Navy). Currently, the Division is manufacturing The Hawk Mk.132, a transonic tandemseat 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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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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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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Marketing Management at HAL 2012

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 turnaround-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 components, Equipment and Systems to customer's specifications and ensures high quality, reliability and cost effectiveness.

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Marketing Management at HAL 2012

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.

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

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Marketing Management at HAL 2012

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 Aviation products and services

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Marketing Management at HAL 2012

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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Marketing Management at HAL 2012

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Marketing Management at HAL 2012

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Marketing Management at HAL 2012

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Marketing Management at HAL 2012

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. 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.

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Marketing Management at HAL 2012

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 Su27 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 Su30MKI 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.

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

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Marketing Management at HAL 2012

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 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.

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Marketing Management at HAL 2012

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-tosurface 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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Marketing Management at HAL 2012

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 airair 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 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.

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Marketing Management at HAL 2012

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).

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.

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Marketing Management at HAL 2012

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 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.

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Marketing Management at HAL 2012

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. 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.

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Marketing Management at HAL 2012

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 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; Paradrop /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.

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Marketing Management at HAL 2012

HAL in India Corporate Office Bangalore Liaison Offices Mumbai Delhi Chennai Vishakhapatnam

Manufacturing Units Bangalore Hyderabad Luck now Korwa Koraput Kanpur Nasik Design Centers Bangalore Hyderabad Nasik Liaison Offices out of India London Moscow

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Marketing Management at HAL 2012

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 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 PJC2 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

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Marketing Management at HAL 2012

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, 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 allweather, 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.

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Marketing Management at HAL 2012

20.

SERVICES AT HAL

ACCESSORIES DIVISION, Leo


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

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Marketing Management at HAL 2012

SUB-CONTRACT CAPABILITIES
The Division has comprehensive manufacturing capabilities for various Hitech 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.

CUSTOMER SERVICES
The division has established full fledge infrastructure, facilities & system for ensuring optimum level for customers 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.

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Marketing Management at HAL 2012

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 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.

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Marketing Management at HAL 2012

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 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

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Marketing Management at HAL 2012

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

Planning of steps

Assembly of materials

Manufacturing of units

Testing of unit under for conditions

Collecting and proper packing of unit

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Marketing Management at HAL 2012

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 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 multimillion 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
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Marketing Management at HAL 2012

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 groups could team up and benefit from each others 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.

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Marketing Management at HAL 2012

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 copters 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 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.

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Marketing Management at HAL 2012

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 companys 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.

23.

OFFICIAL HIERARCHY
MANAGINGDIRECTOR EXECUTIVE DIRECTOR GENERAL MANAGER AGM CHIEF MANAGER SENIOR MANAGER MANAGER DEPUTY MANAGER ENGINEER ASSISTANT ENGINEER TECHNICIAN

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Marketing Management at HAL 2012

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. 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 (ISRO, Sahara Airlines, kingfisher airways, etc.)

export (Oman, UA, England, kingfisher, JET Romania, Zimbabwe, Srilanka, etc.)

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Marketing Management at HAL 2012

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.

These can be described in chart

25.

FLOW CHART FOR MARKETING PROCESS


CUSTOMER
Approved proposal

RFQ/RFP MARKETING

ENQUIRY REVIEW
Techno/commerci al proposal

Preparation (export evolution, pricing committee, etc)

Vetting (finance) Approval (competent authority)

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Marketing Management at HAL 2012

26.

ROLE OF MARKETING DEPARTMENT

Development of global market for TADs 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 TADs Products, services and facilities.

27.

TOTAL NUMBER OF AIRCRAFTS DELIVERED

Product HS-748 Aircraft Gliders Basant Aircraft (HA-31) HPT-32 Aircraft Dornier-228 Aircraft ATP Tail plane(for Export)

Period 1960-83 1963-86 1975-78 1983-98 1985 onwards 1987-95

Qty 89 164 19 142 83 24

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Marketing Management at HAL 2012

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

WEAKNESS
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
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Marketing Management at HAL 2012

29.
RANK 1 2 3 4 5 6 7 8 9 10

KEY COMPETITORS
NAME OF THE COMPANY LOCKHEED MARTIN, USA BOEING, USA NORTHROP GRUMMAN, US BAE SYSTEMS, UK RAYTHEON, USA GENERAL DYNAMICS, USA EADS, NETHERLANDS L-3 COMMUNICATIONS, USA THALES, FRANCE HINDUSTAN AERONAUTICS LIMITED (51st Position in 2003-04)

30.

BUSINESS CHALLENGE

Compete in world market Exports Markets Domestic Cost Quality Lead Time Off set (US $ 4Bn) Non Captive

Provide world class performance to all our customers

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Marketing Management at HAL 2012

31.

STRATEGY

Clear case for change New business paradigm Core competence

Design & development Assembly & testing


Noncore - Outsourcing Revolution External

1) New ways of working 2) Strategic outsourcing Internal Mindset / psyche (HR) Continuous improvement

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Marketing Management at HAL 2012

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

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

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Marketing Management at HAL 2012

Change Process DxVxS>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 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 26 days

Basic Pay (monthly) + DA(per day)

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Marketing Management at HAL 2012

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.

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.

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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) b) c) Mark up pricing Absorption cost pricing Marginal cost pricing

2.

Demand based pricing a) b) c) Skimming pricing Penetration pricing What the traffic can bear pricing

3.

Competition oriented pricing a) b) c) Premium pricing Discount pricing Parity pricing

4. 5. 6.

Product line oriented pricing Tender pricing Affordability based pricing

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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 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).

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Marketing Management at HAL 2012

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

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

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Marketing Management at HAL 2012

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. 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.

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Marketing Management at HAL 2012

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 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. 2.

Standard costing Variance analysis a) b) Cost variance Revenue variance

3. 4. 5. 6.

Budgetary control Cost audit Responsibility accounting Marginal costing and break-even analysis

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Marketing Management at HAL 2012

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. 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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Marketing Management at HAL 2012

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 committee exists which deals with the controlling of budget. Budget is prepared by
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responsible executives. coordination and control.

It is able to fulfill the basic objectives like planning,

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. 2. Cost variance Price variance a) b) c) 3. Direct material price variance Direct wage rate variance Variable overhead price variance

Usage variance a) b) Direct material usage variance 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. 2. Standard Minimum Hours vs. Actual Hours Material quantity and material cost as per the standard and as per the actual. 3. Labour cost as per the standard and as per the actual.

Price variance is not generally further analyzed but the usage variance is further analyzed according to the causes of charge of consumption of hours of; material.

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39.

FINANCIAL HIGHLIGHTS

Hindustan Aeronautics Ltd has cruised past Rs 7500 crores mark for the first time with sales turnover of Rs. 7783.61 crores during the financial year 2006-07. The profit of the company soared up to Rs 1743.60 cores, which is an increase of 54.88% over the previous years 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 45.69% 55.54% 54.88% 49.03% 22.85%

Sales VOP Profit before tax Profit after tax Gross Block

5342 5916 1126 771 1694

7783 9202 1744 1149 2081

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Marketing Management at HAL 2012

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 Rs, these five Rs 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. 2. 3. Stock in Trade (S.I.T.) Goods in Transit (G.I.T.) Work in Progress (W.I.P)

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Marketing Management at HAL 2012

Stock in trade includes those items, which are ready for sale. Goods in transit may be in the form of raw material, finished goods and semi-finished goods. Raw material is the major input, which gets converted to output. The items are critical in nature, as any breakdown in supply will results in production stoppage. Usage value is also quite high. Tightest inventory

control is called for so as to ensure uninterrupted supply with lowest possible inventory.

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41.

RESEARCH METHODOLOGY
Proposed methodology for the project is as follows

Defining the objective

Selection of the Data Collection Method

Selection of the Method of Analysis

Data Collection

Data Analysis

Reporting

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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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Marketing Management at HAL 2012

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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Marketing Management at HAL 2012

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.

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STANDARDS

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.

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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 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 todays 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 Management level Labor level Yes No Percentage 97% 3%

Bar graph showing the improvement of the division on introduction of the website:

Bar graph showing the improvement of division on introduction of a website

100%
Rate of improvement.

80% 60%
YES

40% 20%

NO

0%
Percentage responses given at all levels.

ANALYSIS: 97% of the workers / employees are aware that the website has helped the division to improve in its companys dealings and has helped the company to progress in the new economy of todays 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 Aware / Yes Not aware / No Management level 98% 2% Labor level 87% 13%

Bar graph representing the awareness level of website in employees

100% Percentage of awareness 80% 60% 40% 20% 0% Awareness level


Mangt. Labour

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 divisions products and services worldwide which improves the profitability and also helps the division to understand its customers background to enhance the business.

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INFERENCES: Only around 2% at management level and 13% at labor level are not aware of the website as they have poor knowledge and belong to the lowest cadre. 3. Website of the company helps the customers to keep in touch with the company through the e-mail provided by the websites for various divisions. This helps the customers, clients and vendors to have a continuous touch with the company.

Customers who respond to the website


Table representing the customers who respond to the website: Customers Defense customers Foreign customers Corporate customers Civil customers Percentage 85% 45% 6% 5%

Bar graph representing customer who respond to the website

80%
Rate of response

60% 40% 20% 0%


Percentage of customers

Defence cust. foreign cust. corporate cust. civil cust.

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 Most of them All Few Very few Response in percentage 30% 40% 90% 70%

Bar graph showing customers who voluntarily contact the company

100%
No. of contacts

80% 60% 40% 20% 0%


Response of customers

Most of them All Few Very few

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 Defense customers State government Corporate customers Civil customers Percentage 70% 20% 7% 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 todays 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 Many Few Very few In percentage 10% 20% 5%

Bar graph representing international customers over web

20% Percentage

15%
10% 5%
Many Few Very few

0%
International customers

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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. Todays 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 Very important Important To some extent Not important Response 90% 80% 50% 5%

Bar graph representing importance of customization to customers

100%
Percentage

80% 60% 40% 20% 0%


Response of customers
VIP Important To some extent Not applicable

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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 2001-2002 2002-2003 2003-2004 2004-2005 Sales (in crores) 338.14 328.5 415.14 424.15

Bar graph representing the sales of accessories division

450 400 350 300 250 200 150 100 50 0

Sales (in crores)

Sales

Years

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ANALYSIS: From the above graph we can see that the sales of the company have been increasing moderately in the past two years which is mainly because of the use of web. INFERENCES: Since the web was introduced in the division only in the year 2000 and the division have taken time to make complete use of it in the recent years. Therefore we can expect sales to increase in the future.

Profit of any company determines its growth, expansion and development in all directions. Therefore it is an important factor for public sector also such as HAL which is a nonprofit organization. The table below shows the profit of HAL in past years:
Table showing the profits of the division for last 4 years: Years 2001-2002 2002-2003 2003-2004 Profit (in crores) 46.5 65.9 62.55

Bar graph showing the profits of the division

80

Profits (in crores)

60 40 Pr

20
0 Years

2004-2005

51.66

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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 Civil customers Corporate customers State government Defense customers Percentage 10% 15% 20% 100%

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Bar chart representing new customers in each segment

100%
No. of new customers
Civil cust.

50%

Corporate cust. state govt. Defence

0%

Percentage of customers

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 Delay in reply Negligence Failure of system Other means Percentage of effect 20% 30% 40% 10%

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Bar graph representing the drawbacks in CRM

40%
Rate of effect

30% 20% 10% 0%


Percentage of drawbacks

Delay in reply Negligency Failure of system Other means

ANALYSIS: Most of the reasons for the drawback of CRM are due to system failure and it can be taken care of by providing for backup systems and better management in replying to customers. INFERENCES: CRM is gaining its importance in the current scenario and if more importance is given it will prove more successful for the organization.

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43.

FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS
In HAL cost reduction and cost control is done in following ways: Quality is the strength of HAL. The company aims at best quality product at lowest price. For this TQM is applied in whole organization so that cost would be controlled. In HAL standards are fixed for time consumption and also for cost incurred. For time standards, the standard time is fixed for every process of job and for cost standards, standard cost and fixed price quotation (FPQ) are defined in advance to control time and cost. It also implements the technique of classification and codification for cost reduction and control. Under this technique, all the jobs are classified into different categories and are codified, due to which we can identify that the job belongs to which batch. Process layout is used for the study of various operations included in completion of job. Due to which standard time for completion of operation is fixed and inspected periodically, so that cost and time can be reduced and controlled. Method study is implemented during production process and the method which is less time consuming and having less cost is accepted. In costing section, component costing is used for calculating the cost of each component. By applying this method the total cost can be reduced and controlled. As the rate of machine hour rate (MHR) is very high in HAL so the work is done on contract basis i.e. outsourcing is done so that cost can be reduced and controlled. Minimum inventory is kept in stores, so that there would be no wastage and cost can be reduced.
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Efficiency of employees is approximately 100% due to which there is no wastage and cost is reduced. It is also implementing methods of 5S to control and maintain cost effectiveness. It has also implemented lean management and various tools like KAIZEN for wastage removal so as to reduce the extra cost incurred. It also aim at producing all accessories as first time correct and with Zero error so that the cost incurred in rejection and rework processes can be controlled.

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SUGGESTIONS

There should be facility of intranet so fax and such other things must be done through it that can reduce time and money. For attendance finger print system should be adopted so that actual persons 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 worlds 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 thats 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 organizations 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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