ASSIGNMENT
SUBBMITTED BY:
MOIN AHMAD
ROLL NO: 1250-FMS/BBAIT/S17
SUBMITTED TO:
SIR TAZEEM ALI SHAH
SUBJECT:
OPERATIONAL MANAGEMENT
WEEK # 14
INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD
DELIVERING DOORS IN A WINDOW: SUPPLY CHAIN
MANAGEMENT: AT HINDUSTAN AERONAUTICS LTD.
Company Background
The origin of HAL is traced to the Hindustan Aircraft Ltd., which came into existence
on October 1, 1940 because of the pioneering efforts of the late industrialist Seth
Walchand Hirachand to manufacture military aircraft for the Royal Indian Air Force.
The Government of India obtained a controlling stake in it and took over the
management in 1942. Its first division, the Aircraft Division, served as a repair and
maintenance base for the Allied forces during World War II. The merger of Hindustan
Aircraft Ltd. with Aeronautics India Ltd. and Aircraft Manufacturing Depot, Kanpur, led
to the establishment of HAL in 1964. In 2010, under the management of the Ministry
of Defence, Government of India, HAL was mainly involved in the aerospace industry
by way of manufacturing and assembling aircraft, navigation and related
communication equipment, as well as operating airports.
Since its inception in 1964, HAL grew from strength to strength, manufacturing
varieties of trainer, fighter, and transport aircraft and helicopters. It was not just on
account of licensed manufacturing agreements but also by indigenous product
development. HAL achieved another landmark when it diversified from manufacturing
just for the defense aviation sector to manufacturing for commercial airliners. In 2010,
HAL had 20 production units and 10 research and design centers in eight locations in
India, including the prestigious Aircraft, Accessories and Helicopter Divisions. The
company had an impressive product track record ± 12 types of aircraft manufactured
with in-house R&D and 14 types of aircraft produced under license. HAL planned to
manufacture over 3,550 aircraft, 3,600 engines and overhaul over 8,150 aircraft and
27,300 engines by 2010.
Question # 1: Identify the key issues and constraints in the supply chain system
of HAL’s door manufacturing unit. Compare the supply chain system of Hal with
Industries such as automobile and other consumer durables.
ANSWER: This case presents a supply chain management challenge faced by
Hindustan Aeronautics Ltd. (HAL) in one of their aircraft door export project to a
leading aircraft manufacturer located outside India. As per the contract, HAL has to
deliver each aircraft door in a period specified by the aircraft manufacturer. Delivery of
door outside this window attracts a penalty. The protagonist has to make decisions
regarding when exactly to start the door's main assembly to overcome variability in the
assembly of doors, how much inventory to maintain for 1222 parts that are used in the
door assembly, how to manage variability in processing times, how to handle
outsourcing, and how to manage parts with shelf life that are used in the door
assembly.
The delay in delivering finished doors in customer’s plant is one of HAL’s main
concerns. This is due to many reasons but most of the time this is due to unavailability
of critical components. For that they need to maintain inventory of those critical
components to avoid in delay in delivery of finished doors to customer’s plant.
Personal management is also a concern for HAL. During union’s elections, absentees
is rampant. Also, workers tend to take their annual vacations during the month of
march and April.
There are serval areas where they need more improvement in efficiency.one of the
thing they want to do is to reduce the inventory level and make there system more
fixable. For that they need to make strong relationship with vendors.
Question # 2: List various causes of uncertainty/variability in the entire supply
chain of the aircraft door assembly.
The entire process involved 101 sub-assemblies and 98 assemblies for each door set.
The total cycle time for final assembly was 18.5 days after which it was shipped to
customer however there is variations in the processing time at each stage as manual
labor is involved.
Beside variations in processing times, there can be delays in final time of loading as
well In order to truly reach the status of world-class manufacturer, HAL wanted to aim
for all-round coast efficiencies and reliability, both in the term of quality and
delivery.one of the major issue was meeting the delivery time and this happens due to
unavailability of critical resources.
Another thing which is more concern for HAL is outsourcing some of the components
to meet the schedule of delivery. This is important because the outsource vendors
should follow the quality standards and fulfill the need of customers and make HAL’s
product more satisfactory.
Question # 3: What strategy should be used for ensuring that the consumables
that are used in the assembly have shelf life as well as useful life after first use?
Answer: 65 kinds of consumables used in manufacturing process were procured in
four installments to meet the annual requirements of 240 sets As a result of contract
signed in 2009, there was increase in demand for some raw material and parts. So
some of the detail parts was out sources and not manufactured in- house. Sub-
contracting was not an easy task initially 100% of manufacturing was doing in-house
They start out-sourcing to meet the efficiency in cost and requirements as well.
The consumables had shelf life of 6to60 months’ time till the first use. The consumable
kit once opened had a useful life for few hours to few days. The interesting feature one
these consumables are applied and used in the manufacturing, they do not have any
expire and work for entire life of aircraft. The consumables are of different sizes unit
of large is less then of small once they opened the consumable should be stored in
deep freezer at low as -70 degree C.
