IMB 305

U DINESH KUMAR, ARUN MANOHAR AND G N SRIPRIYA

DELIVERING DOORS IN A WINDOW: SUPPLY CHAIN MANAGEMENT

AT HINDUSTAN AERONAUTICS LTD.

Yogindra, Deputy General Manager (Exports), responsible for the aircraft door export project to leading aircraft
manufacturers, knew that this project initiated in the early 1990s was a significant milestone for Hindustan
Aeronautics Ltd. (HAL). In June 2009, HAL bagged an order from the Airbus Industries for supply of 2,000 door
sets for its single aisle family of aircraft. The order worth around $150 million involved supply of 2,000 ship sets of
forward passenger doors for the A-318, A-319, A-320, and A-321 aircraft. He replayed in his mind what
Chandrasekharan, General Manager of the Aircraft Division of HAL, had told him just that morning, “This program
is critical for the division because it will be our stepping stone into the area of global exports. Once we get
recognized as a reliable supplier in terms of quality, on-time delivery, flexibility and cost, we will be able to get
more such export projects.” Yogindra understood the importance of this project for the future growth of HAL and
realized that he had the formidable task of turning this vision into reality. He had to ensure that delivery schedules
were met in the most cost-effective manner without compromising on quality.

In fact, Chandrasekharan had reiterated the importance of establishing a good reputation saying:

Word-of-mouth spreads quickly among the few players in the aerospace industry. Hence we
would like to improve our reputation for on-time delivery and gain a greater share of the global
aircraft parts manufacturing business. The effectiveness of the word-of-mouth can be gauged
by the fact that we have been awarded the contract for manufacturing doors for a new Embraer
jet purely on the basis of our reputation for delivering quality parts to Airbus and Boeing.

The assembly of aircraft doors is labor intensive and involves long procurement lead time for parts used in the
process. Each aircraft door has around 1,200 parts to be assembled using complex manufacturing and assembling
processes. Manufacturing cycle times are random because of the uncertainty associated with the availability of
manpower, parts and machines. Aircraft manufacturers practise lean manufacturing and try to eliminate any
wastage from their manufacturing process. Delays in delivery of aircraft can result in a huge loss to the aircraft
manufacturers and hence they expect all their suppliers to adhere to a strict delivery schedule. The aircraft
manufacturers provide a delivery window for each door and suppliers such as HAL have to deliver the doors at the
aircraft manufacturer's facility during that window period (usually around five to eight days). Non-delivery of doors
can result in a penalty cost that can easily wipe out the profit earned from the sale of each door.

Yogindra's immediate concern was the door project C600 recently signed with one of the leading aircraft
manufacturers. The C600 door had 1,222 parts; many of these parts were either manufactured by HAL or procured
from suppliers mostly located around Bangalore. Few critical parts were also imported from other countries.
Yogindra explained:

Delivering the door within a window period is a challenging task. We have to deal with large
number of uncertainties such as availability of parts, absenteeism of staff, processing time
variability and shelf life associated with some of the parts. We have to manage inventory of 1222
parts, plan the manufacturing schedule for each door so that the door can be delivered on time.

U. Dinesh Kumar, Arun Manohar and G. N. Sripriya prepared this case for class discussion. This case is not intended to serve as an endorsement,
source of primary data, or to show effective or inefficient handling of decision or business processes.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 2 of 17

HINDUSTAN AERONAUTICS LTD.: THE ORIGINS

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.

HAL EXPORT DIVISION

The Aircraft Division forayed into the field of exports by supplying spares in the form of detail components and
sub- assemblies of military aircraft. Gradually, HAL entered into the export business related to commercial aircraft
by manufacturing and delivering sheet metal components and mechanical sub-assemblies. By 2010, exports
contributed to around 5% of HAL's total turnover and this segment was expected to grow rapidly. HAL's client
portfolio included big players in the industry such as Boeing, Airbus, BAe Systems, and Rolls Royce.

The Aircraft Division's first commercial export business was to supply detail components and link mechanism
assemblies to Boeing, USA from 1988 to 1989. With the experience gained from supplying materials in accordance
with international quality standards, cost and delivery schedules, the Aircraft Division focused on supplying bigger
aero structures to leading aircraft manufacturers such as the Boeing and Airbus industries. Gradually, the Aircraft
Division not only improved its export business to supply more value-added parts, but also increased its client
portfolio. Some of its successful projects include the supply of the following parts.

Landing gear components for Airbus, Nantes (1988)

Machined beams for Latecoere, France (1988)
Machined items for Boeing, USA (1991)
Sheet metal package for Boeing, USA (1993)
Horizontal stabilizer for Fokker, Netherlands (1994)
Tornado Pylons, BAeS, UK (1994)
B757 over wing exit doors for Boeing, USA (1997)

Chandrasekharan said that the Aircraft Division earned recognition as a reliable sub-contractor to major aircraft
manufacturers because of its ability to manage large work packages in the face of strong international competition.
This was possible only by all-round cost reductions, zero-defect performance and timely deliveries. The Aircraft
Division had a major breakthrough when it signed a contract with Airbus Industries of France for supplying forward
passenger doors for the A318/319/320/321 aircraft in April 1990 at a value of approximately US $53 million. This
was a major turning point in HAL's export drive. Another contract with Boeing Commercial Airplane Group, USA,
was signed in October 1998 for the manufacture and supply of 300 sets of Boeing 777 landing gear up-lock box 1.
Export business was further enhanced by a contract with Israel Aerospace Industries in May 2002 for the supply of
main deck cargo door and its associated kit of parts for the B737-300 conversion program. With the success of this

1
The up-lock box is used to secure the main landing gear of the aircraft in the closed position.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 3 of 17

program, Israel Aerospace Industries signed another contract with the Aircraft Division for supply of G-150 aircraft
aft (rear) fuselage in December 2006.

C600 DOOR EXPORT PROJECT

2
HAL's Aircraft Division entered into a contract with a leading aircraft manufacturer (here onwards referred as “the
customer”), for the manufacture and supply of single aisle forward passenger doors for the aircraft C600 model for
600 ship sets (one ship set = 1 left door + 1 right door).

Yogindra recalling the successful interaction with the customer said:

As per the contract, the customer supplied the first 15 sets of doors in kits; it transferred
technical data; trained HAL technicians in the areas of manufacturing, assembly and quality;
and also approved special processes for the surface treatment.

HAL carried out the design and fabrication of assembly jigs and detail tools and supplied the first ship set for the
first article inspection in September 1991 and completed deliveries of 15 sets of Phase I by April 1994. From the
same year, it started Phase II production from the raw material stage (Exhibit 1 gives the number of door deliveries
made over the years). Until September 2004, HAL had delivered 460 ship sets against a contract of 600 ship sets.
Based on HAL's performance in terms of meeting the quality standards and door delivery schedules, in July 2004
the customer invited HAL to sign a new contract for 1000 ship sets which came into effect from October 2004. This
new contract envisaged production of doors to meet the requirement of 50% of aircraft production of the customer.

C600 DOOR PROJECT: GETTING THE ACT TOGETHER

The drawings and design for the C600 forward passenger door were provided by the customer (Exhibit 2 gives the
broad production flow chart, that is, the value chain from the signing of the contract till delivery). HAL's
engineering department studied the design and developed the corresponding manufacturing and assembly processes.
The customer had specified the number of ship sets to be supplied by HAL and the supply rate over the duration of
the contract. Explaining this process, Yogindra said:

Every month, the customer sends us the yearly as well as long term production estimates and
expected delivery schedules. Currently, their production rate is fairly stable with 34–38 aircraft
manufactured per month; and we in turn have to meet their requirements of about 17–19 sets
per month.

C600 DOOR MANUFACTURING

Once the door design was specified by the customer, HAL's engineering department studied the design and
developed the corresponding manufacturing and assembly processes. The manufacturing of C600 aircraft doors
required three kinds of parts: standard parts, detail parts (these were manufactured specifically for the C600 door
according to the required specification), and consumables (explained later). There were 371 standard parts and
bought out items such as bolts, nuts, rivets, washers, electrical harnesses, bearings, control rods, etc. for each door
set. In addition to the standard parts, for each door set, 786 types of detail parts are manufactured, for which, 163
kinds of raw materials such as rods, bars, billets, etc. made from steel, titanium and aluminum alloys, and 46 types
of precision castings and forgings are used. The detail parts can be classified as machined parts 3 and sheet metal
parts4. The C600 door comprised of 569 machined parts and 217 sheet metal parts. Exhibit 3 gives a summary of
the different number of parts required for manufacturing a C600 door set.

Another category of parts, known as ‘‘consumables'', were also used for door manufacturing. The 65 consumables
used had a shelf life (time till first usage) of 6 to 60 months. The consumable kit once opened had a useful life of a

2
The name of the customer and the project is not disclosed to maintain the confidentiality.
3
Machined parts – manufactured components from bar stocks and materials
4
Sheet metal parts – manufactured from sheet metals
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 4 of 17

few hours to a few days 5. The interesting feature is that once these consumables are applied and used in the
manufacturing, they do not have any expiry and work for the entire life of the aircraft. The consumables come in
different sizes, and the unit cost of a large can is less than that of a small can. Once opened, the consumables should
be stored in a deep freezer at as low as –70o C.

Procurement

HAL initiated procurement action for raw materials, castings and forgings, standard parts and consumables such
that the material required for 240 door sets was procured in four installments every year. Also, an inventory level of
parts required for 20 sets of door was maintained every month.

Raw materials Raw materials were used to manufacture the detail parts. The customer negotiated with the suppliers
of raw materials for the total requirement of their project. The prices of materials were fixed by the customer and
HAL had to buy materials such as aluminum, steel and titanium from these identified suppliers at the negotiated
prices. HAL projected its annual requirements to the customer and placed orders on a yearly basis for 240 sets
every year in four installments.

Castings and forgings 46 types of castings were procured under tri-partite agreements between HAL, the customer,
and the suppliers. The customer fixed the prices after negotiating with the supplier and HAL procured the items at
the negotiated prices.

Standard parts HAL procured these items from the suppliers approved by the customer. Out of 371 types of
standard parts, tri-partite agreements existed for 187 types of standard parts and HAL procured them at the price
negotiated by the customer. Balance standard parts were purchased at suppliers' prices, which in turn led to price
fluctuations.

Consumables 65 kinds of consumables used in the manufacturing process were procured in four installments to
meet the annual requirements of 240 sets.

As a result of a contract signed in 2009, there was an increase in demand for raw materials and parts. Hence, some
of the detail parts were sub-contracted and not manufactured in-house and were outsourced.

Yogindra clarified:

With the increased workload of other projects, NC (numerical control) machining capacity had
become a major bottleneck. Capacity constraints for other operations like broaching and
grinding were also a major problem. As the current capacity of Aircraft Division was
inadequate to meet the increased rate of door production, we identified components which
could be machined at sub-contractors' facility.

However, sub-contracting was not an easy task as Chandrasekharan remembered, “Initially, I was doing 100% of
the production in-house. But I started outsourcing to meet capacity requirements and increase cost efficiency. It
took more than 15 to 20 years to develop the sub-contractors because we need to ensure quality and train them to
interpret designs.” However, these were not the only challenges. There were other issues also with outsourcing.
Chandrasekharan elaborated:

Aircraft parts suppliers like HAL are given a manual by the customer. One of the requirements
is that suppliers should be able to accelerate or decelerate the production. The customer gives
us the monthly indication of the requirement. But in the Indian scenario it is not easy because
we outsourced 80% of the components. If we plan our procurement for say 15 sets, it is not
possible to reduce it to 10 sets because the vendors are not willing to reduce their production.

5
Shelf life of a consumable is the life of that consumable before its kit is opened and usually ranges from 6 months to 1 year for most of the
consumables. Once the kit is opened, the consumable must be used within the next few hours (remaining life after first use). For instance, a
consumable may have a shelf life of 6 months and a useful life of 72 hours once the consumable kit is opened.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 5 of 17

Despite these drawbacks, outsourcing was highly effective, both in overcoming the capacity constraints and
bringing in higher cost efficiencies. Some of the major developments in external sourcing included:

Manufacturing of beams The doors had 14 beams which involved NC machining and vendors for
these beams were developed.
Broaching components For broaching, only one source, that is, Hindustan Machine Tools was
available. As part of vendor development, dual sources were identified, tried and established so that
the broaching components were available to meet production schedules.
Post-broaching operation and NC components Vendors who could carry out all the post-broaching
operations of aluminum materials were identified; the same vendors catered to a number of NC
machined components.
Spline cutting Earlier, for spline cutting, the Aircraft Division depended on the Engine Division. It
experienced delays in delivery because of clash of priorities. To avoid these delays, a vendor was
identified and developed.
Resharpening of broaching Earlier, the broacher was resharpened in the Engine Division. Owing to
lack of capacity, there were significant delays in getting the broach tool resharpened. Again, an
exclusive vendor was identified for this task.

HAL made extensive efforts to develop vendors for manufacturing by providing tools, gauges, and technical
assistance. Quality requirements for the manufacture of aerospace standard parts were explained to vendors and
they were assisted in implementing the same. Periodical audits were carried out at vendors' places to monitor the
quality system. As Chandrasekharan said:

With the initial successful delivery of quality products, vendors gained confidence to take up
the manufacture of other parts as well. They also invested in increasing their capacity by way
of procuring new machines. On our part, we too entered into long-term business agreements so
as to provide a continuous workload.

In all, HAL sub-contracted 461 detail parts and 70 sheet metal parts. The remaining 108 detail parts, 147 sheet
metal parts, and all the sub-assemblies and assemblies were done in-house. All the parts were surface treated (such
as protection treatment, painting, etc.) at HAL's facility, as these were special processes approved by the customer.

Manufacturing and Assembly

The entire process involved 101 sub-assemblies and 98 assemblies for each door set. The main assembly of the door
set and the corresponding cycle time for each stage is shown in Exhibit 4. The total cycle time for the final
assembly was 18.5 days, after which it was shipped to the customer. However, there were variations in the
processing time6 at each stage as manual labor was involved. The summary of the variations in the processing time
for the years 2008 and 2009 are shown in Exhibit 5.

Besides variation in the processing times, there can be delays even in the final stage of loading. Exhibit 6 gives a
summary of the total delay 7 at each stage. Yogindra explained that one of the major reasons for the delays was the
unavailability of the critical parts:

The delay in delivery of finished doors at the customer's plant is one of our foremost concerns.
There are several reasons for this. But most of the times it is because of the unavailability of
critical components. Though we try to maintain an inventory level for 20 sets at any point in
time, we don't get some critical parts on time. All these critical parts are manufactured in-

6
The processing time is defined at the time taken from the loading (beginning of a particular stage) till the completion of that stage. The
variability in the processing times is thus solely because of the variation in the time taken for the work involved in that stage. This is because
most of the stages use manual labor. Other delays such as delay in starting the new stage after the previous stage is completed are not part of the
processing time variations.
7
The total delay for a stage is defined as the difference between the scheduled time when the stage was supposed to be finished and the actual
time when it was finished. Thus total delay incorporates processing time variations as well as other delays in starting or loading a stage. The
scheduled time for a stage to start processing is decided by subtracting the cycle time of the stage and its subsequent stages from the delivery
schedule of the door set.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 6 of 17

house. However, plants and machinery are shared for our other projects as well and usually we
see a clash of priorities. Hence, due to a cascade effect even the subsequent stages get delayed.
We are looking at different ways to address this. We could outsource the manufacturing of
critical components so as to receive them on time; but this is not a simple decision.

DELIVERY

The delivery schedule of each door set was given to HAL by the customer as per SHEHAL (Schedule HAL). The
SHEHAL indicated the door-set number and the delivery date required for that set at the customer's plant. The
customer also provided a window for the delivery schedule as +5/–2 days. This meant that the door sets could be
delivered maximum in an advance of five days and not later than two days of SHEHAL dates. Exhibit 7 gives the
number of days of delay (outside the window of delivery) for the deliveries made in 2009. Once each door set was
delivered by HAL, the actual delivery date was informed by the customer to HAL. There was a penalty (certain
percentage of door cost) clause for early/late delivery which was charged for each day of early/late delivery from
the window period. Further, whenever there was a change in the requirements, an updated SHEHAL was given by
the customer to HAL. The SHEHAL also gave the customization requirements for the doors which are:

Specific paint for the component, for example, silver white paint
Customization grit bar
PAD (protective) for arm support

Once the delivery was made, the doors were inspected by the customer to check if the quality specifications were
met. The quality was measured by the number of snags reported on doors during inspection by the customer. Also,
the contract indicated that the delivery was ‘‘delivery duty unpaid'') at the place specified in the purchase order.
Accordingly, the delivery window considered was for the final delivery at the customer's plant that was located
outside India. However, in 2010 HAL delivered the doors only up to the nearest international airport to the
customer's plant. The customer managed the shipment from the airport to its assembly line. This part of the delivery
was not under the control of HAL.

THE CHALLENGE

In order to truly reach the status of a world-class manufacturer, HAL wanted to aim for all-round cost efficiencies
and reliability, both in terms of quality and delivery. One of the major issues was meeting the delivery schedules.
Although, the delays were caused by unavailability of critical parts or manpower, according to Yogindra, there was
another reason for the delays:

Our aim is to achieve more than 95% on-time delivery. The customer currently takes the final
delivery of the door sets at its plant as the delivery date. But in reality our control over delivery
is only till the airport. Beyond the airport, it's their local vendor who takes charge of the freight.
Some of the delays are because of delay of delivery from the airport. We are trying to sort this
issue in our next meeting with them.

Although, meeting the delivery schedules was his chief priority, Yogindra also wanted to improve the overall cost
efficiency of the project. This would involve managing the manpower, inventory of over 1200 parts and
consumables. As Chandrasekharan explained:

There are several areas where we can still improve the efficiency. One of the things we want to
look at is to reduce the inventory levels and make the system more flexible. But this is not so
easy. We will need more cooperation from our vendors.

‘‘Consumables'' is another area where we need to focus (Exhibit 8). Consumables are basically
special type of glues that act as sealants. Due to their characteristic shelf life, once opened, they
tend to get wasted. Currently we don't have any system where we can take a decision whether
to open a can for a door set now or wait for the other sets to arrive. Due to our delivery
schedule being a window period which is also staggered, we should have a leeway to delay the
opening
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 7 of 17

of the cans so that we can utilize them to the maximum extent. But we have difficulties in
bringing in more flexibility for their procurement because there are only 2–3 carriers in the
whole world which are approved to carry these materials and we procure all our consumables
from France. Consumables also come in different sizes and we can buy a mix of small and
large cans, but unit cost of large cans is usually cheaper than that of small cans.

Personnel management was one of the other areas of concern. During union elections,
absenteeism is rampant. However, the union elections are not a regular feature and are held
once in few years. Also, workers tend to take their annual vacation during the months of March
and April, which is when their children would also be having their yearly vacation ( Exhibit 9
shows the monthly delivery performance in 2009).
 Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 8 of 17

Exhibit 1 Number of Ship Sets Delivered from 1992–2009

Quantity of shipsets produced over a period of time
Year No. of shipsets delivered Year No. of shipsets delivered
1992–93 06 2000–01 58
1993–94 08 2001–02 68
1994–95 04 2002–03 75
1995–96 13 2003–04 80
1996–97 17 2004–05 90
1997–98 19 2005–06 136
1998–99 37 2006–07 186
1999–00 43 2007–08 234
2008–09 240
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 9 of 17
Exhibit 2 Production Flow (Value Chain) of C600 from Contract till Delivery for HAL

CONTRACT

Release of purchase order for procurement of materials (3 months)

Receipt of materials (8 months)

Receiving inspection and storage (1 month)

Detail parts manufacture (3 months)

Door assembly (18.5 days)

Customs clearance and dispatch by air to customer's nearest airport (2 days)

Transport from airport to customer's assembly plant (5 days )

Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 10 of 17

Exhibit 3a Manufacturing and Sub-contracting

Sub-contract
Detail parts Involved In-house No. of parts No. of vendors

Machined parts 569 108 461 20

Sheet metal parts 217 147 70 2

Total detail parts 786 255 531 22

Sub-assemblies 101 101 0 0

Assemblies 98 98 0 0

Exhibit 3b Cost Breakdown

Cost breakdown
Details %
Labor 45%
Materials 51%
Others 4%
Total 100%

Material cost (100%)

Absolute in 51%
Forgings and castings 34% 18%
Raw materials: 24% 12%
Bought out and standard parts. 34% 18%
Consumables (USD) 7% 4%
Total 100% 51%
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 11 of 17

Exhibit 4 Main Assembly Production Flow (C600 assembly line)*

*
The processing time (in days) allocated to each stage of the assembly is given within the bracket. The total allocated processing time for the
entire stage is 18.5 days.
 Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 12 of 17

Exhibit 5 Variability in the Processing Times* (in Days) in the Main Assembly Process

Process name Mean SD

C1 sub-assembly** 1.0 0.16
C4–C5 sub-assembly** 3.35 0.35
C6–C7 sub-assembly** 2.92 0.40
Edge member** 1.0 0.22
Cylinder fitting** 2.50 0.60
Assembly 20007 stage 3.9 0.68
Riveting stage 3.3 0.96
PRC, paint stage 1.1 0.37
Mechanism stage 3.0 0.25
Equipping stage 4.95 1.31
Integration stage 1.0 0.00
Post-integration stage 6.0 1.92

*
The processing times in the above table have been calculated for the years 2008 and 2009. The processing time is defined as the time taken from
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 13 of 17
the loading of a stage till the completion of a stage. It does not include the idle time or delays between the completion of a stage and beginning
of the next stage.

**
C1, C4–C5 and C6–C7 sub-assemblies, edge member, and cylinder fitting are parallel processes and together called sub-assembly stages of the
main door assembly.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 14 of 17

Exhibit 6a Delays in Stages

Statistics listed below are taken from scheduled dates and actual dates for different
manufacturing activity of ship-sets for the years 2008 and 2009. The delay thus
involved both the idle time before starting the stage and the processing delay.
The delays shown have cascading effect, that is, a few days delay in the first stage will
cause delays in the subsequent stages.
Few stages are combined to calculate the values.

Mean delay (in days) Standard deviation of the time

Stage between scheduled start date taken between scheduled start
and actual start date date and actual start date

Sub-assembly -7.54* 4.75

Assembly 20007 stage -2.52* 2.52
Riveting stage 4.07 1.33
PRC, paint stage 2.24 1.32
Mechanism stage 7.26 1.11
Equipping stage 6.39 1.28
Integration stage 9.02 0.89
Post-integration stage 7.48 1.11

Exhibit 6b Statistics on Time Spent in a Stage

Mean of time (in days) spent Standard deviation of time spent

in a stage (process time + in a stage (process time +
Stage additional delays) additional delays)
Sub-assembly 4.5 1.04
Assembly 20007 stage 3.48 2.10
Riveting stage 4.12 1.30
PRC, paint stage 1.65 0.14
Mechanism stage 4.24 2.24
Equipping stage 5.41 1.05
Integration stage 2.72 0.51
Post-integration stage
(including pack and dispatch) 7.43 1.67

Exhibit 6c Statistics for Deliveries Scheduled between 5-Jan-09 and 29-Dec-09

No. of deliveries 227

No. of late deliveries (after 2 days) 56
No. of early deliveries (before 5 days) 22
Total no. of late deliveries outside stipulated delivery window 78
Mean delays in delivery 1.32
Standard deviation of delays in delivery 3.38
Mean days from Bangalore airport to the customer plant 6
Standard deviation of transportation time from Bangalore airport to the customer
plant 2.63

*
The negative sign indicates that the process started ahead of the scheduled time.
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 15 of 17

Exhibit 7 Number of Days of Delay

No. of days of delays No. of deliveries

0 149
1 18
2 19
3 15
4 11
5 11
6 2
7 1
8 1

The data in Exhibit 7 is calculated based on 227 deliveries made in 2009. Here the delay includes both early (early
by more than 5 days) as well as late (late by more than 2 days) deliveries.

Exhibit 8a Cost Breakdown of Critical

Consumables Shelf life is six months from the manufacturing date.
Usually by the time items are received at HAL, the left over life will be around 4 to 5
months.
The reason for lesser shelf life is the delay in air lifting (as it categorized under hazardous
goods).
Order for one year requirement (for 240 sets) will be placed every year and deliveries are
made four times in a year.

% in
Required per consumable
Type of sealants door set Shelf life after mixing cost
27.4 kits of 100
PR 1771 B2 ml 72 hours after mixing in deep freezer at –70°C 15.18
10 kits of 250
PR 1771 B2 ml 72 hours after mixing in deep freezer at –70°C 9.24
PR 1773 B2 3 kits of 100 ml 72 hours after mixing in deep freezer at –70°C 2.06
PR 1776 A2 8 kits of 100 ml 1 week after mixing at –0°C 4.04
PR 1782 B2 2 kits of 100 ml 72 hours after mixing in deep freezer at –70°C 1.16
 Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 16 of 17

Exhibit 8b The Quantity and Stages Where the Critical Consumables are Used per Door Set
PR 1771 PR 1776 PR 1773 PR 1782
B2 A2 B2 B2
Sl. No. Stage description Qty in ml Qty in ml Qty in ml Qty in ml
1 Edge member 300 100 X X
2 C6–C7 assembly 200 100 X X
3 C1 assembly 100 100 X X
4 Cylinder fitting LH 400 100 X X
5 C4–C5 assembly 150 100 X X
6 Assembly 20007 stage 1000* 200 X 100
7 PRC, paint 800* 200 X X
8 Riveting 400* 400 X X
9 Mechanism 200 100 100 X
10 Equipping 200 100 200 X
11 Post-integration 1000 200 100 40
Total 4750 1700 400 140
*
(PR 1771 B2) 250 ml is used, others are in 100 ml kit
Delivering Doors in a Window: Supply Chain Management at Hindustan Aeronautics Ltd. page 17 of 17

Exhibit 9 Numbers of Doors Delivered on a Monthly Basis as Against a Steady Requirement of 19 Door Sets per
Month
30
27 27
25
22 22
21
20 20
19
18 18

or
15
12
10
9
7
5

0
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