DRDO, PSU and Private Defence Sector News

[Bhadra]

What quantity of 155mm Ammunition is manufactured by OFB ?
What quantity of 105 ammunition is made by OFB ?
What quantity of 21 item of ammunition is made by OFB.
How many numbers of clothing, web and other equipment was made by the OFB.

It is very astonishing to find out. Most of the items are in huge quantities unthinkable for a foreign / private vendor.
So much so that the orders are never fully met in terms of quantity.
And the prices of those item - exorbitant. Almost above international prices.
The quality - worst in the word.

That much about your "Economy of Scale"..
Chale aate hain lecture jharane !

 

[Advaidhya Tiwari]

Haldiram ji,

A factory set up to produce 10 units can never produce 500 units. This is in the realm of imagination.

The factory set up to produce 100 units can perhaps produce 10%-20% more.

In the case of defence PSU, the production has been way below installed capacity in most cases. Even when firm orders are there, production remains well below 50% of installed capacity.

The reasons are politicization, trade unions, corruption, apathy etc. It is like nobody cares if it is government money.

Effective leadership does change things as has happened to railways where some factories are producing above capacity. Even technology in railway has improved due to local development.

Defence industries have also improved but long way to go.

No, that is not the case. A machine can be made to run in 3 shifts by hiring 3 times the people. So, even a factory which is made for manufacturing 100 units can be directly used to make 300 items. The cost of labour alone will come much below the cost of setting up entire factory logistical chain etc.

Also, the machines can never make items in 10-20s a month as that amounts to less than 1 a day. How can a machine produce just 1 item a day? Did you see how the factory line works? The items are made in hundreds every hour.

Then, how is the number of weapons made so low? Why the orders are in such small quantity? The answer to this lies in the politics and technology deficit.
Political reason:
If India starts making 1000 plane a year, then other countries will get alarmed and can trigger a arms race. So, weapons manufacturing is intentionally kept low to avoid panicking the enemies and triggering a premature war.

Technology reason:
India does not have complete technology for the latest and most advanced gadgets. So, India prefers to wait it out and allow for development of the technology. In the mean time, the employees are given roles in other things like maintenance, innovations etc.

So, import is never cheap. It is just the accounting reasons that can at time make it appear cheap. But it is never cheap on its own

 

[Bhadra]

THEIR ECONOMY OF SCALE
https://cag.gov.in/sites/default/fi...Chapter_VII_Ordnance_Factory_Organisation.pdf​

​

 

[Advaidhya Tiwari]

THEIR ECONOMY OF SCALE
https://cag.gov.in/sites/default/fi...Chapter_VII_Ordnance_Factory_Organisation.pdf​

View attachment 34541 ​

I hope you understand that OFB has massive capacity to make things but is underutilising these. As a result, the cost is high. Scaling is compulsory for reduction in cost

 

[Bhadra]

ECONOMY OF SCALE OR LOOT​

Stores account for 56 per cent of the cost of production in the Ordnance Factory Board. Overheads at 30 per cent of the cst of production are particularly high in the Ordnance Factory Board as depicted in Chart-12. The cost of prodouction during 2014-15 at `16475 crore was a marginal increase over the figures of 2013-14. The composition of costs varies across operating groups (Annexure-IX) with the Armoured Vehicle Group and the Ammunition and Explosive (A&E) Group being most material intensive. The Ordnance Equipment Group which manufactures clothing and general purpose items was the most labour intensive among the Factories. The Cost of Overheads accounted for 30 per cent of the cost of production. The high overheads are a consequence of high committed cost on a workforce that is not directly deployed for production. Material and Components Group with some of the oldest factories of the Board reported the highest levels of overheads: fixed overheads and variable overheads being 25 per cent and 11 per cent respectively, a total of 36 per cent being the overheads as percentage of the cost of production. Ordnance Factories rely mainly on sister factories for input stores, such stores being called Inter-Factory Demand: (IFD). The inefficiencies of IFD production as reflected in losses in their issue, are offset by surplus generated by the assembling factories. Together, IFD issues reported a loss of `83 crore in 2014-15, 11 per cent over the loss in 2013-14.

 

[garg_bharat]

No, that is not the case. A machine can be made to run in 3 shifts by hiring 3 times the people. So, even a factory which is made for manufacturing 100 units can be directly used to make 300 items. The cost of labour alone will come much below the cost of setting up entire factory logistical chain etc.

Also, the machines can never make items in 10-20s a month as that amounts to less than 1 a day. How can a machine produce just 1 item a day? Did you see how the factory line works? The items are made in hundreds every hour.

Then, how is the number of weapons made so low? Why the orders are in such small quantity? The answer to this lies in the politics and technology deficit.
Political reason:
If India starts making 1000 plane a year, then other countries will get alarmed and can trigger a arms race. So, weapons manufacturing is intentionally kept low to avoid panicking the enemies and triggering a premature war.

Technology reason:
India does not have complete technology for the latest and most advanced gadgets. So, India prefers to wait it out and allow for development of the technology. In the mean time, the employees are given roles in other things like maintenance, innovations etc.

So, import is never cheap. It is just the accounting reasons that can at time make it appear cheap. But it is never cheap on its own

I believe you are making up arguments. Production capacity is for finished product. Dhanush gun capacity at the factory is only 10 units per month. I believe not half is achieved yet.

Why is it so - your need to ask OFB general manager.

Ammunition production like bullets is done by automated machines. Even there running machines 24x7 is impossible. Machines are run by people and machines need maintenance.

Making artillery shells is NOT AT ALL automated. Most processes for shells and rockets are labour intensive.

Even clothing has to be made by vendors outside OFB as OFB production is way below capacity. I know one such contractor who makes uniforms.

I believe you have no idea of actual situation. Theoretical arguments do not work.

 

[Bhadra]

I hope you understand that OFB has massive capacity to make things but is underutilising these. As a result, the cost is high. Scaling is compulsory for reduction in cost

Bullshit !
OFB is not able to meet demand particularly in ammunition what capacity are you talking of.
Capacities are there only to pay overhead cost, have large labour force on roaster but very less on ground and pocket the money.
And who is charged this overhead - Indian Army.

Why do you all guys shout "Economy of Scale" as a union slogans - Lal Jhanda, gate crash, gate block, tool down ... you all are union leaders. How can there be "Economy of Scale".?

 

[Advaidhya Tiwari]

Bullshit !
OFB is not able to meet demand particularly in ammunition what capacity are you talking of.
Capacities are there only to pay overhead cost, have large labour force on roaster but very less on ground and pocket the money.
And who is charged this overhead - Indian Army.

Why do you all guys shout "Economy of Scale" as a union slogans - Lal Jhanda, gate crash, gate block, tool down ... you all are union leaders. How can there be "Economy of Scale".?

First I need to know real reason why ammunitions can't be made enmasse by OFB. Which part is lacking? If one ammunition can be made, then many can also be made same way. So, which factor is hindering? Definitely it is not related to economy of scale and has to do with political problems, unionised laziness etc

 

[Aaj ka hero]

Bullshit !
OFB is not able to meet demand particularly in ammunition what capacity are you talking of.
Capacities are there only to pay overhead cost, have large labour force on roaster but very less on ground and pocket the money.
And who is charged this overhead - Indian Army.

Why do you all guys shout "Economy of Scale" as a union slogans - Lal Jhanda, gate crash, gate block, tool down ... you all are union leaders. How can there be "Economy of Scale".?

Hey first answer my question is YOUR ATHOS IS ABLE TO GET 60KM or not?
Defence Professionals jiiiiiiiiii.

 

[Bhadra]

I believe you are making up arguments. Production capacity is for finished product. Dhanush gun capacity at the factory is only 10 units per month. I believe not half is achieved yet.

Why is it so - your need to ask OFB general manager.

Ammunition production like bullets is done by automated machines. Even there running machines 24x7 is impossible. Machines are run by people and machines need maintenance.

Making artillery shells is NOT AT ALL automated. Most processes for shells and rockets are labour intensive.

Even clothing has to be made by vendors outside OFB as OFB production is way below capacity. I know one such contractor who makes uniforms.

I believe you have no idea of actual situation. Theoretical arguments do not work.

I belive production capacity for Dhanus would be barely three guns per month and 36 in a year. The current order will materialise in three - four years. By then the OBF technology will be obsolescent !!

 

[Aaj ka hero]

I belive production capacity for Dhanus would be barely three guns per month and 36 in a year. The current order will materialise in three - four years. By then the OBF technology will be obsolescent !!

Yes, and your army is responsible for it.
First they said no gun is available and when available "no no no no we wanted 52 one"
NO 52 Caliber issue was hard pressed at that time"That INDIAN ARMY NEED 52 one only, No 45 caliber is needed".
Woh toh humlog ko bhi malum tha tumlogon ko 52 chahiye toh us time money kyon kharch kiya gaya 45 mein.
Toh, keh rahe ho kya ki "DHANUSH 45 TUMLOG PAR DAAL DIYA GAYA HAI".
YOU want technology then why not go to mass production for ATAGS.
Nooooooooo sirji ATHOS IS CORRECT can't even cross 45 km range and it now became perfect gun.

 

[Advaidhya Tiwari]

I belive production capacity for Dhanus would be barely three guns per month and 36 in a year. The current order will materialise in three - four years. By then the OBF technology will be obsolescent !!

Can you tell me which machine makes 1 part in ten days that it takes such large amount of time? There is capacity but order limit is the reason why slow production happens. CVRDE, for example stated that it can make 1 tank a week if there is need

 

[Haldiram]

I belive production capacity for Dhanus would be barely three guns per month and 36 in a year. The current order will materialise in three - four years. By then the OBF technology will be obsolescent !!

Artillery never becomes obsolescent. The fire control unit is a small computer which can be replaced at will, at minimum cost, the rest of the gun remains the same for decades. Bofors FH77 is a cold war era gun, designed in 1978, it is still relevant with minor electronic enhancements.

The OFB ammo will always appear expensive but that extra cost, since it is paid in local rupee currency, is all returned back to the exchequer so net net it's still cheaper.

The govt. gives funds to the Army to buy from OFB, the Army transfers it to the OFB, the OFB then buys land, steel and fuel from the govt. and the money is back in govt. coffers. In this whole round tripping, the cost of land, steel, and local resources is purely abstract and decided by the govt. The govt. can markup or markdown these prices and control what % profit margin they want the OFB to be left with so the OFB cannot loot the govt.

Compare that to buying from the US, using foreign currency. All of the margin is pocketed by the foreign firm, and we can't just print $ like we can print rupees. These $ are earned painstakingly and the US is able suck that money back in a lumpsum manner when we place huge orders for American weapons. Yudh ke samay, hamari autonomy chali jaati jaati hai wo aalag syapa.

 

[Bhadra]

Out of nearly 200 countries and several dozen prominent defence contractors, which one of them have managed to make a towed howitzer with APU that weighs 12 tons and can fire a 155 mm round out to 60 km.

If you know one please share.

Any comparison between ATHOS and any other gun is futile unless atleast one of them satisfies IA's requirements, unless IA specified in RFP that winner will be one who is the closest.

The RFI for 155/52 Towed Howitzer as issued by Indian Army is here :
https://indianarmy.nic.in/writereaddata/RFI/158/RFI-ARTY.pdf

It does not specify any range let aside 60 km. Where has that 60 km come from and which 155/52 Howitzers fires at that range ? ATAGS has claimed 47.2 km with ERFB and zone 6. What will be EFC equivalant of Zone 6 or charge 6.
There are a lot of Mobility questions asked in RFI - nothing about APU. For a towed gun specially for mountains, it APU that important? Of course now Indian Army Artillery seems to be interested in separate system which can move guns after detaching it from FTA to manage guns turning on road bends.
I belive Dhanus and ATHOS have some kind of a auxiliary mover with them. .

 

[Bhadra]

Artillery never becomes obsolescent.

Then why do not we make use of Babur guns? I hope every gun system of WWII era have been replaced. How about 75/34 How. 25 Pnr etc. barrels mount, recoil system all have a life.

The fire control unit is a small computer which can be replaced at will, at minimum cost, the rest of the gun remains the same for decades. Bofors FH77 is a cold war era gun, designed in 1978, it is still relevant with minor electronic enhancements.

Hmmm.. it has a big cost.

The OFB ammo will always appear expensive but that extra cost, since it is paid in local rupee currency, is all returned back to the exchequer so net net it's still cheaper.

The govt. gives funds to the Army to buy from OFB, the Army transfers it to the OFB, the OFB then buys land, steel and fuel from the govt. and the money is back in govt. coffers. In this whole round tripping, the cost of land, steel, and local resources is purely abstract and decided by the govt. The govt. can markup or markdown these prices and control what % profit margin they want the OFB to be left with so the OFB cannot loot the govt.

Compare that to buying from the US, using foreign currency. All of the margin is pocketed by the foreign firm, and we can't just print $ like we can print rupees. These $ are earned painstakingly and the US is able suck that money back in a lumpsum manner when we place huge orders for American weapons. Yudh ke samay, hamari autonomy chali jaati jaati hai wo aalag syapa.

Absolutely irrelevant.

Book Debit is the system of intera govt transactions.and nothing comes back. As per AG's audit report OFB has been overcharging the Army and pocketing that money.

OFB is the largest DEA land holder amongst defence services which is uneconomical used.

Can you come back to Guns ?

 

[Bleh]

Artillery never becomes obsolescent. The fire control unit is a small computer which can be replaced at will, at minimum cost, the rest of the gun remains the same for decades. Bofors FH77 is a cold war era gun, designed in 1978, it is still relevant with minor electronic enhancements.

The OFB ammo will always appear expensive but that extra cost, since it is paid in local rupee currency, is all returned back to the exchequer so net net it's still cheaper.

The govt. gives funds to the Army to buy from OFB, the Army transfers it to the OFB, the OFB then buys land, steel and fuel from the govt. and the money is back in govt. coffers. In this whole round tripping, the cost of land, steel, and local resources is purely abstract and decided by the govt. The govt. can markup or markdown these prices and control what % profit margin they want the OFB to be left with so the OFB cannot loot the govt.

Compare that to buying from the US, using foreign currency. All of the margin is pocketed by the foreign firm, and we can't just print $ like we can print rupees. These $ are earned painstakingly and the US is able suck that money back in a lumpsum manner when we place huge orders for American weapons. Yudh ke samay, hamari autonomy chali jaati jaati hai wo aalag syapa.

Yes, and your army is responsible for it.
First they said no gun is available and when available "no no no no we wanted 52 one"
NO 52 Caliber issue was hard pressed at that time"That INDIAN ARMY NEED 52 one only, No 45 caliber is needed".
Woh toh humlog ko bhi malum tha tumlogon ko 52 chahiye toh us time money kyon kharch kiya gaya 45 mein.
Toh, keh rahe ho kya ki "DHANUSH 45 TUMLOG PAR DAAL DIYA GAYA HAI".
YOU want technology then why not go to mass production for ATAGS.
Nooooooooo sirji ATHOS IS CORRECT can't even cross 45 km range and it now became perfect gun.

You know why... Because Israel knows how to play the game!! Elbit probably keeps extra money set aside for kickbacks of corrupt officials & DRDO doesn't have any to spare.
But that's the only way you'd win, otherwise they can simply bend the requirements a bit for their guy's product...

If ATAGS was a 155×52 caliber with 45km range & 15t weight, so you think it'd be having orders for hundreds??
No!
They would simply say they need 14 ton gun, or the name needs to have a "h" in it to fit Athos.

You can see their mentality...!

@Bhadra is (very cleverly) asking crap like "what was the need for 50km range or 6 round mag or APU" because he knows the RFP wouldn't be easily found.
But as both the competitors made their guns with exact same specs, it can be safely assumed that it was specifically asked for... so that, either DRDO backs out due to those ridiculous expectations, or the gun would turn out heavier & costlier. And army can have a ground to successfully reject it.

No matter how much you try to not drag in Arjun, but this is Arjun all over again.

 

[Bhadra]

You know why... Because Israel knows how to play the game!! Elbit probably keeps extra money set aside for kickbacks of corrupt officials & DRDO doesn't have any to spare.
But that's the only way you'd win, otherwise they can simply bend the requirements a bit for their guy's product...

Still their gun is good and their price lowest. Who has stopped DRDO / OFB from emulating them. After all they are in the sphere of "Business". They are not imperial masters.

If ATAGS was a 155×52 caliber with 45km range & 15t weight, so you think it'd be having orders for hundreds??

No!
They would simply say they need 14 ton gun, or the name needs to have a "h" in it to fit Athos.

You can see their mentality...! [/quality]

Mentality being displayed here is atht in spit of being given orders people are chasing other asses.

@Bhadra is (very cleverly) asking crap like "what was the need for 50km range or 6 round mag or APU" because he knows the RFP wouldn't be easily found.

Then find it and "crap" after that.

But as both the competitors made their guns with exact same specs, it can be safely assumed that it was specifically asked for... so that, either DRDO backs out due to those ridiculous expectations, or the gun would turn out heavier or costlier & army can have a ground to reject it.

Which both were developed ?
What was asked for ? By whom ? Show me..

No matter how much you try to not drag in Arjun, but this is Arjun all over again.

I really hope it is not ... shoooo Arjun !

 

[Bleh]

Still their gun is good and their price lowest. Who has stopped DRDO / OFB from emulating them. After all they are in the sphere of "Business". They are not imperial masters.



Then find it and "crap" after that.



Which both were developed ?
What was asked for ? By whom ? Show me..



I really hope it is not ... shoooo Arjun !

Just read these "counter-arguments" people (all already covered in last post)... I rest my case.

Army had deliberately clearly set much higher requirements for ATAGS, causing it to be costlier & heavier.
But if DRDO downsized it to the exact specs of ATHOS on its own intiative for same price, Bhadra's friends would say "The name needs to to start with A.. oh wait we meant, it needs to end with S... No, it needs to have... ah.. H within it. Yess that it.. The name should have an H!!"

That's what is being dealt with here....

 

[Bhadra]

another posting .....
https://www.thehindu.com/news/natio...-enter-next-stage-by-june/article25791046.ece

 

[Bhadra]

If anybody noticed, ATAGS resembles M46, the most numerous Russian origin gun in Indian army.
I guess proving ATAGS will take quite some time. Obviously 10 guns will be tried by Army for an extended period of time.

Till then Dhanush and ATHOS will roll out in numbers.

Do not express any unbiased opinion about ATHOS in the forum..

Many take that as an attempt in taking away their "Gaddi" or "Thiya" from Harishchandra Ghat of Varanasi.

Then they will start what they are best at - Cuss, curse and give you Shraap.

They are typical Congress type gang who start shouting "Chor Hai"... just at the drop of the hat.