Features, Cover Story

Although in the business of defence electronics, mv gowtama, cmd, bharat electronics ltd, is judicious, but not unforthcoming.

by jayashree kini mendes

Among the arguments for secrecy, one has obvious force. In cases involving defence contracts and materials manufacturing, national security could be at risk. And if you are an Indian PSU making strategic defence electronics for the country and abroad, stealth is of second nature, specially when you produce a range of equipment in fields such as defence communication, radars, naval systems, C4I systems, weapon systems, homeland security, electronic warfare, tank electronics, electro optics, solar photovoltaic systems, not to forget the civilian products. But secrecy is not a trait that MV Gowtama, chairman & managing director, Bharat Electronics Ltd (BEL), has cultivated. He had honed himself for the job on hand since he completed his M.Tech. in Advanced Electronics and joined BEL in 1983.
Specifically in India, defence manufacturing has undergone a sea change last few years from the cloak and dagger days of government contracts. Today’s fast evolving technologies and, more recently, the Make in India initiative, is compelling defence firms to seek out a wider base of local suppliers and train them to manufacture as per specifications. Moreover, the authorities have time and again indicated that it would like defence manufacturers to showcase their best that have commercial value. It was time that India stepped up to be at par with global companies.
Keeping up with developing world-class products and systems built with cutting-edge technology modules along with in-depth R&D is the homegrown firm Bharat Electronics Ltd. Gowtama says, “In our business, errors can be fatal. Hence, R&D is our key focus area and that has contributed significantly to our growth and self-reliance in the field of defence electronics and other chosen areas of professional electronics.” The significant contribution can be seen from the fact that since setting up shop in 1954, BEL has made giant strides and last year reported a stellar increase in revenue in the first half of the current fiscal year (FY18) of 58%, mainly boosted by execution of large projects. The growth momentum and order book of nearly Rs 42,000 crore should see the company comfortably achieving its revenue target of Rs 10,000 crore in FY18. But Gowtama is not resting on his laurels.

Back to its roots
As a Navratna PSU and India’s foremost defence electronics manufacturer, BEL is required to pursue various categories of R&D projects, such as in-house development projects, joint development or ToT (transfer of technology) projects with DRDO/other national design agencies and ToT with foreign OEMs. This helps it accrue about 87% of its turnover from products developed in-house or with DRDO, while the remaining is gained from products/systems for which technologies were acquired through collaborations. Gowtama says the company allocates 8-9% of its sales turnover on R&D and slated to increase every passing year. There are plans to set up a product development and innovation centre in Bengaluru for building products in various technology segments, position Chief Technology Officers (CTOs) to carry out more focused R&D, and form collaborative R&D by enhancing ties with companies, institutions, academia and experts. In all this, BEL has not forgotten young engineers and scientists and has set up an exclusive Academy to orient them for futuristic technologies.
In order to enhance the company’s pre-eminence, Gowtama adds that BEL has cultivated a 3-tiered R&D structure. The Central Research Laboratories works on futuristic technology areas, the Central D&E and Product Development and Innovation Centre (PDIC) works on specialised technology modules while the SBU level D&Es works on new products/systems, upgrades and customisation. BEL’s Software Technology Centre at Bengaluru has the recognition of CMM Level 5 rating from Software Engineering Institute (SEI).

The case for defence
Even if you are not at war, countries are prone to build up a defence inventory that calls for mammoth investments. If one is to believe some of the astronomical data that consultants come up with, defence electronics opportunities in India alone will total more than $70 billion over the next decade and a half. Considering the huge opportunities, it is not for any reason that the entire supply-chain of defence projects hinges on R&D and testing and validating. A typical gestation period span 2-3 years from concept to deployment. “The products/systems undergo a series of rigorous testing and evaluation before induction to the services. This includes tests on performance (ATP), ESS, EMI/EMC, internal evaluation and field trials. For new products/systems, stringent qualification tests and user evaluation tests are carried out by the customer. Gowtama says the company has developed a strong system for inspection of inward goods as well as process inspection.
The need for constant evaluation is a byproduct of the changing business model since it evolved from a supplier of components/standalone products to a supplier of larger systems and graduated to a role of a total solutions provider. “The component of IT and networking has increased drastically in projects with software playing a major role of up to 80% of the cost in some projects,” says Gowtama.
The manufacturing infrastructure at BEL is tuned to carry out both low-value-high-volume and high-value-low-volume products and systems. Traditionally, BEL went into manufacturing after receipt of order, requiring concurrent engineering of its products and systems. However, the change in business environment has compelled the company to streamline orders through a multi-vendor route. Here, the system integrators are required to prove the product on NC-NC basis as part of tendering process and only then move into production. Proactive development is the key, which is based on market needs and helps shorten the cycle time to market.
There is also a constant exploration for offset opportunities in RFPs of Ministry of Defence with a focus on ‘Build to Print’, ‘Build to Spec’ and ‘Buyer Nominated Equipment’. Gowtama says, “We continuously invest in capacity enhancements and creation of state-of-the-art manufacturing facilities to address the precision requirements of defence grade components, products and systems. The manufacturing facilities and special processes can appear complex to a layman. It begins with a design simulation software for improving the cycle time from designs to prototype making that include 3D modeling, RF and microwave, thermal analysis, EMI/EMC, FEA, etc. There is also a dedicated IC design facility for SoC.”

Matters of excellence
The manufacturing facilities include state-of-the-art automated SMT facility, PCB manufacturing facilities with automated testing lines, automated assembly and testing facility for RF & microwave components with Low Temperature Co-fired Ceramics (LTCC) facility, robotic welding facility for shelters, IC wafer fab manufacturing facility like Low Pressure Chemical Vapour Deposition (LPCVD), state-of-the-art manufacturing facility for Diffraction Optical Elements, Diamond Turning Machine, Aspheric Generators, DLC, etc.
Reliability & statistical software tools are used by the company to demonstrate, predict and measure quality and reliability characteristics of products during design, development, manufacturing and life cycle stage. It has set up extensive validation and testing facilities for Near Field Test Range (NFTR) for AESA based antenna calibration, antenna far field test range, autoclave machine, environmental stress screening (thermal, vibration, etc), HASS, HALT chambers/MEOST, EMI/EMC/EMP facility, test range for missile systems, test labs for simulation and validation of C4I systems, and high-end X-ray inspection facility for testing/troubleshooting complex PCBs.
Gowtama says that the PSU has adopted CII-EXIM Bank Business Excellence Model to improve its overall strategic and operational excellence, and an in-house calibration facility certified as per ISO 17025 standards by NABL.
With product cycles getting shorter, it is natural for OEMs to share the risk with a trusted set of supply-chain partners. In this respect, Gowtama has enhanced thrust on core areas and prefers to outsource all non-core activities. Outsourcing is an effective tool to achieve cost competitiveness and reduce time to market. He is firm that the company lay greater emphasis on quality and continuously upgrade processes and systems to meet global standards. Having worked to establish a stringent vendor selection process, BEL has an approved vendor base of more than 11,000, which is updated year on year. Vendor ratings are carried regularly and steps are taken to broaden the base by formulating a long-term outsourcing and vendor development policy, implementing online vendor registration and e-procurement processes.
The vendor base is effectively used and included in the supply chain of BEL for both procurement as well as sub-contract works. BEL supports MSMEs and ancillary units and also provides training and monetary supports to them to work as partners. “We have long-term partnerships with niche technology companies for design and manufacturing. Besides this, we have engaged large private sector companies as partners under PPP model for executing turnkey projects. Then there are the OEMs with who we have ToTs for critical items,” he adds.
BEL has identified exports & offsets as one of the thrust areas to ensure sustenance and growth. Exports of $65.5 million in the 2016-17 and a robust export order book of about $80 million only invigorated them. In the future, it wants to increase the share of exports and accrue 5% of its turnover.
“In order to achieve such targets, we have strengthened the backend processes of procurement. We manage sourcing through an e-procurement portal and SRM portal of SAP system through a transparent tendering process. The centralised manufacturing system helps consolidate the raw material requirements common across projects. Each SBU has its own procurement department to carry out the activities exclusive to the projects of that unit,” adds Gowtama. Incidentally, BEL has created overseas procurement offices at Singapore and New York for identifying OEMs and vendors abroad.
The competitive environment demands developing technology and infrastructure capability as a necessity. The company is planning to spend around Rs 2,500 crore over 3-4 years as part of capacity expansion and modernisation of its facilities. As an OEM, its designers continuously explore adoption of technologies and materials for enhancement in performance, environmental, SWaP requirements, etc. It has moved from GaAs based to GaN based RF and MW designs and has a roadmap to move to SiGe, etc. It has begun adopting Mg alloy and other composite materials in electro optic products to meet weight requirements. Besides this, BEL is working with chalcogenide glasses as lens material to allow transmission across a wide range of the infrared electromagnetic spectrum and as low cost replacements to Germanium. Then there are the composites required for manufacturing lightweight shelters and masts. The carbon fibre composite shelter designed by BEL is one such example.
Other moves are setting up a Defence Systems Integration Complex at Andhra Pradesh to expand its missile systems business by enabling manufacturing, integration and testing of upcoming projects in the area of surface-to-air missile systems and network centric systems. There is also the expansion of electro-optics facilities through a plant in AP to make IR seekers, night vision devices and thermal imaging cameras, besides upgrading the Image Intensifier technology based tubes fabrication facility at its fully owned subsidiary BEL Optronics, Pune, from XD-4 to XR-5 technology with an investment of about Rs 200 crore. All expansions are funded from internal accruals.
The story only goes on to tell you how transparent Gowtama is and why there is no guile about him.


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