This article explores the indispensable role of independent verification activities specific to the safety-critical aerospace domain, drawing insights from pivotal guidance documents like DO-178C for airborne software and its supporting document DO-248C. By outlining a few effective implementation strategies, this discussion aims to highlight the vital contribution of independent verification in developing safe and dependable technologies in this crucial aerospace domain.

The Necessity of Unbiased Scrutiny

Any deviation from intended functionality can have severe consequences in high-stakes and safety-critical systems like aerospace, underscoring the absolute necessity for unwavering reliability. Independent verification, an objective verification conducted by individuals or specialised verification teams independent from the original development of a software lifecycle artifact, is a vital and indispensable requirement of this highly regulated industry.

This separation is not just sheer procedural compliance but stresses the fundamental principle carefully and consciously designed to eliminate inherent biases that can, often unintentionally, be overlooked during the development process. Independent verification provides a critical assurance of unbiased scrutiny, a crucial check that ensures a far more thorough and dependable evaluation of a given lifecycle artifact. This commitment to independence finally serves to significantly improve the trustworthiness and overall integrity of these safety-critical systems, promoting confidence in their safe, dependable, and predictable operation.

DO-178C: The Gold Standard for Aviation Software

In the world of aviation, where even minor errors can lead to serious consequences, independent verification is not only a good practice but is very much essential. DO-178C, the industry guidance for developing safety-critical software systems, provides guidance on the objectives to be satisfied to meet the intent of independence in verification. Annex-A to 178C specifically calls out these objectives that require independent verification, making it clear that development and verification need to be handled by separate individuals or teams to maintain objectivity.

Further, Section 6.0 of this guidance defines the verification process, stressing the essential role of independence in verification activities to ensure the accuracy and completeness of verification activities. This guidance document offers the foundational principles and provides practical implementation guidance. This enables organisations to incorporate independence within their software development lifecycle right from the planning phase of the project, thus cultivating a culture rooted in safety, objectivity, and rigorous quality assurance.

DO-248C: Illuminating the Path to Independence

DO-248C serves as an indispensable companion to the DO-178C guidance document, providing additional supplementary guidance, clarifications and insights into the software systems development and verification process objectives.

The DO-248C discussion paper #19 (DP #19) provides detailed guidance on the need for independence and practical insights for developing safety-critical software systems in aerospace with the DO-178C and DO-278A guidance documents. This discussion paper (DP #196 ) highlights that the principal practices of independence in verification activities are universally essential in the safety-critical aviation domain.

The technology supplements associated with DO-178C guidance, which facilitates the use of more advanced technologies in software development, such as DO-331 (for model-based development), DO-332 (for object-oriented technology), and DO-333 (for formal methods), provides specific guidance that adds to or modifies the guidance of DO-178C on independence in verification.

Meeting Regulatory Expectations: A Non-Negotiable Requirement

Aerospace regulatory bodies worldwide have set clear expectations on the topic of the independence of the verification process in safety-critical systems.  It is a fundamental and non-negotiable requirement to achieve the regulatory compliance and certification of airborne software systems based on the widely accepted DO-178C guidance document and its associated technology supplements. Failure to demonstrate compliance with this can have a significant impact and delays in certification, project cost, time to market, and potential grounding of aircraft. Hence, meeting these regulatory requirements is critical to aerospace organisations. This further helps the organisations get public trust in the safety and reliability of these critical technologies and systems. 

Navigating the Challenges: Best Practices in Implementation

Implementing independent verification processes in the domain of safety-critical aerospace systems, which requires adherence to DO-178C, presents several critical challenges. Below are some more frequent examples of hurdles faced by the industry, but not an exhaustive list:

Resource Allocation: Hiring and retaining adequately skilled team members who specialise in verification processes poses a significant challenge, especially for smaller project teams.

Budgetary Constraints: Projects are usually run on shoestring budgets, which might lead to staffing issues like employees’ conflicts of interest, which may hamper the true nature of effectiveness and independence in verification processes.

System Complexity: The exponentially increasing complexity of modern avionics systems demands that verification engineers required to have a deep understanding of the complexity of the architectures and interdependencies of the sub-systems. This puts a stress on providing specialised training to the engineers and their continuous professional development which further adds to the cost of talent retention.

Maintaining Objectivity: Maintaining objectivity might be affected by overlooked issues and can influence the verification engineer’s objective judgment, such as employee/human issues, like workload, reporting structures, and other biases. This may necessitate the organisations to look for external vendors to ensure no inherent biases and genuinely ensure impartiality, which could add to costs and other administrative and compliance issues.

These challenges emphasise that it is not just about hiring independent people for verification tasks. It needs good plans, a strong will to be fair, and the right set of tools and methods to deal with the tricky part of independence in the verification of complex aviation systems.

The Power of Qualified Tools

Tools that can automate some of the verification activities outlined in Section-6 of DO-178C can play a key role in eliminating human bias, saving cost, and improving the quality and objectivity of the verification process. At the same time, they can add trustworthiness and reliability to the verification results.

If qualified, such tools, as per the guidance enumerated in DO178C, which calls out DO-330 (Software Tool Qualification Considerations), can be a great value addition to substantiate the validity of independence in the verification process. Such qualified tools, in turn, replace human verification and may eliminate the need for deployment of independent personnel or organisations, leading to substantial cost and time savings to the organisation.

Such qualified tools help significantly improve the thoroughness and coverage of verification activities which are to be based on software requirements (high-level and low-level) as mandated by DO-178C and help in ensuring a more comprehensive end-to-end verification of the given software. Qualified tools can improve the efficiency and repeatability of verification process activities, making them more reliable and consistent.

The use of a qualified tool that can automatically generate adequate documentation to show compliance with relevant verification objectives of the standards further helps enhance confidence and trust in the verification outcomes among all the stakeholders, especially the regulators.

The Tool Challenges

Despite the unparalleled benefits  such qualified tools can bring to organisations, they come with a few challenges that need to be considered right from the planning phase. Some of the key challenges that we can mention here are the initial investment, recurring costs of tool maintenance/updates, and the need for specialised training for the verification personnel.

Multiple tool vendors in the industry, like LDRA, provide specialised and integrated COTS tool suites specifically designed to support independent verification activities mapped to the software development lifecycle activities, distinct in standards like DO-178C.

Such COTS tools with tool qualification support packages add great value to the independent verification teams in an organisation as they provide crucial support all through the development, verification, and maintenance phases of a given project with required documentary evidence to meet the intent of DO-178C objectives on independence.

Conclusion: A Foundation of Trust

In the world of safety-critical systems, where the stakes are really very high, showing compliance with the objectives of independent verification stands as a fundamental requirement on which trust, and reliability are built. Diligent adherence to the established guidance of DO-178C and DO-248C, supported by DO-330, and strategically leveraging the advantage of using qualified tools, organisations can reap the benefits of unbiased and thorough verification activities that are not a mere necessity but are essential to ensure safer software systems.

The necessity for rigorous, independent, and unbiased verification is not limited to aerospace. It is a non-negotiable requirement to establish a robust foundation of trust in technological deployments within various safety-critical areas, which include, but are not limited to, systems in nuclear power plants, mission-critical military systems, autonomous driving systems, and life-sustaining healthcare and diagnostic systems. Robust independent verification is an important requirement to ensure safety and reliability in each domain.

The post AVIATION SOFTWARE – Independent Verification of Safety-Critical Software appeared first on IMR.

The World Health Organisation (WHO) declared the outbreak of the disease COVID-19 due to Corona virus as a Public Health Emergency of International Concern on 30 January 2020. On 11 March, COVID-19 was declared as a pandemic. The UN Department of Economic and Social Affairs (DESA) has analysed that the global economy could shrink by up to 1% as opposed to a growth of 2.5%3 before this crisis hit the world. There is high possibility that it may reduce even further if restrictions such as lockdown continue, and governments do not provide financial support.

The Ministry of Finance, on 8 April 2020, released an order listing spending and cash flow management of each ministry. For the Ministry of Defence (MoD), the order has put a cap of 20% to defence capital, defence services and defence pensions. This means that only 20% of the budget can be spent in the first quarter of 2020-2021 (April to June).

On 27 March 2020, Society of Indian Defence Manufacturers (SIDM) organized a webinar with MoD for the Indian industry. The panel included Defence Secretary, Secretary (Defence Procurement), Directorate General (Acquisition), CMDs of the nine defence public sector undertakings (DPSUs) and Master General Ordnance (MGO) amongst others. In the webinar, DG Acquisition shared that a general order for all capital acquisitions has been published for extension of submission of bids, RFI, EoI, etc. MGO stated that all trials have been frozen and no new trials shall begin until the situation changes for the better. DPSUs were advised to ensure Industry that payments are made to all industry with preference to MSMEs. MoD urged the industry to support in fighting COVID-19 by providing ventilators, personal protective equipment and any other products for the same.

Indian Armed Forces and civil administration have been running quarantine and isolation facilities in the country. In order to speed up the procurement of supplies for these facilities, MoD has invoked emergency powers which will provide three important exemptions in the existing procurement rules. These are exemption from long-drawn bidding procedure, dispensation of procurement from Government e-Marketplace (GeM) and making 100% advance payment to suppliers after due diligence – to procure necessary supply in the fastest possible manner.

An amount of Rs 50,000 crore has been provided to National Bank For Agriculture & Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and National Housing Bank (NHB) to meet the needs of agriculture and the rural sector, small industries, housing finance companies, NBFCs and MFIs. RBI has announced that Non-performing Assets (NPA) norms of 90 days have been relaxed. The period of moratorium will be excluded from the 90-day classification norms of NPAs for those accounts, which would avail the moratorium facility. Non-Banking Financial Companies (NBFCs) have been given flexibility for relief to their borrowers.

Impact on Indian industry

Since the lowdown period in India has started, no production or less than 10% production is being done on the shop floor so far. Even with relaxation from 20 April 2020, return of workers and staff who have gone to native places or are unwilling to travel will be difficult to manage. Workforce limitation is major challenge as industrial areas are away from housing areas and people have to consider their safety of travel. At the same time, migrant workers/ labour will re-join after 3-4 months and there is a chance of skillset loss and deviation in quality of products in the initial period before everything streamlines.

Many Indian companies keep inventory for 3 months of future production, thus the challenge of limited supply is currently addressed. However, if the global situation does not ease by June, then manufacturing industry will start to feel the burden of raw materials and bought out items necessary for production.

There is significant insecurity in the industry as budget priority, policies and strategy focus will change for at least next two years and many on-going capital acquisition plans will be deferred indefinitely. As economy dips, health and infrastructure will get priority over other sectors. Specifically, for the Aviation industry, this will either be a short term “V-rise” or a long term “U-recovery”. With thorough applications of stringent A&D quality standards, with BCP being a critical requirement, maintenance and upkeep of facilities is manageable remotely with minimum human intervention. By July-Aug production/ utilisation levels may reach 70% and only after September it is expected that there will be 90-100% utilisation. This is subject to rate of growth of Covid-cases.

Aerospace demands long cash flow cycle (at least a 6-month credit cycle). Presently, finance institutions are providing support only for 2 months. There needs to be an extension to match the cycle of the sector for at least 6 months if not more. Additionally, lower rate of interest for borrowing is vital for achieving international competitiveness. Similar sized company in Thailand may borrow at 7-8% vs. aerospace MSME in India which borrow at around 12%.

While the outbreak of Corona virus has created a situation of uncertainty and apprehension for every organisation, Micro, Small and Medium Enterprises (MSMEs) are the worst affected. Then nation is striving to follow prime minister’s appeal of not dismissing employees and continuing paying salaries. However, MSMEs, especially those with weak balance sheets, are finding it difficult to retain employees.

Key issues that MSMEs in India are facing today are tabulated in table above.

Anticipated post lockdown scenario in India

Discussions with Indian industry involved in defence manufacturing has also brought out the following projections:

•             It is anticipated that due to complete halt of all activities, the problems of cash flow, raw material prices and logistics problems will arise after lockdown is over.

•             It appears that complete revival of any MSME shall require at least 6-12 months.

•             Most of the MSMEs are very disturbed and there is feeling that 40% of the MSMEs will be wiped out in three months’ time unless Government comes out with a major package.

•             Prices of raw material are expected to increase. Already suppliers have started reaching out for price increase due to low supply high demand situation on certain consumables or raw material.

•             Raw material prices, due to dependency on China are bound to increase and as always would be passed on to the end users.

•             Marginal increase in prices of products (approximately 3-4%) unless imported.

•             Transportation will not be a problem after lockdown.

•             Most of the factory workers are migrants from villages or other states. Many of them may not return after the lockdown. So MSMEs will have to recruit fresh employees and train them. Cost of wages and salaries will rise. Labour unrest can also be a threat. Hence, getting raw materials shortage can hamper production.

•             Increase in cost of all raw materials, labour costs and import costs will increase final product cost, reduce profits and many MSMEs will be out of business if government doesn’t give encouragement and incentives.

Other industries such as tourism and aviation are also at a standstill since almost 100 countries have closed national borders in the last month. Even after these restrictions are lifted, the demand for new aircrafts will be low since practice of social distancing will continue. People will refrain from travelling unless very essential.

The entire world is putting in efforts in any and every way possible to restore normalcy slowly and gradually. It has become prudent for governments to shift their focus inwards. Countries will concentrate on reviving their economies and restrain from nefarious activities. Since conflict will reduce, demand for military arsenal will also reduce. As a ripple effect, global trade will reduce, export of defence products will not increase because of reduced demand.

Exit Strategy

Today, though the world might debate on Covid-19 being a conspiracy, it is unified against China for not containing the Corona virus and lack of information it provided to the world. Consequently, international trade towards China will experience a dip but the sum total trade will remain the same. According to US-India Strategic and Partnership Forum (USISPF), around 200 companies are seeking to shift their manufacturing from China to India. USISPF also said that to attract these companies, India needs to introduce reforms, be more transparent in the process and engage more. Other countries like South Korea and Japan are also seeking to move their factories to India from China. Andhra Pradesh is under consideration by companies like POSCO and Hyundai Steel. Japan has also been reported to spend $2.2 billion help companies to shift out of China.

These series of event present themselves as a golden opportunity for India to become a leading manufacturing hub and attract large foreign investments. This will also aid India to accelerate the revival of its economy in the near future along with giving a boost to Make in India. India has lost a window for abundant development when USSR split. India did not capture the moment like shipyards such as Fincantieri and Daewoo which came up since they employed jobless people and tapped into the market in the right time. Ruble fell to unprecedented low and India did not cash on it. Therefore, India cannot miss this prospect. The Industry ministry, Finance ministry and Commerce ministry are in process of developing a package to attract companies planning to exit China. Tax and duty incentives, fast track clearances both at central and state levels with single window clearances where possible, easier availability of land, relaxations from too many regulations if the planned factory is in a SEZ are a few suggestions to be included in this package.

To take full advantage of this situation India must focus on quality, cost effective products in an innovative way. Companies need to focus on digital strategy, embrace change, build strong digital fluency, focus on automation and establish single interface for multiple function for agile response. If a company is not online, it is time to have a digital presence. This is the time organisations have to know more about their clients, their buying patterns, why are they buying from a particular source and what is the unique value that source is creating or selling. As of now, it is unclear, how many companies have reviewed their sales pattern data by demography, channel etc. Any organisation needs to understand the customer, and this is the right time to take up this task by conducting interviews/calls and asking their opinion about the products and identifying the gaps based on their feedback. Introducing key team members to customers especially sales, marketing, finance and support leads is another need of the hour. This is the time where companies need to establish metrics and start measuring. They need to create product awareness, new leads, new signup, referral programs and identify churn rate.

There is no contention in the fact that government is the single buyer of defence products in India. MoD needs proactively engaging with industry by placing orders. If this is not done, problems like cash flow and unemployment will rise leading to a hungry work force and in turn an angry work force. Problems in hinterland is the last thing a government wants.

As far as the issue of financial resources for procurement from industry is concerned, it is important to realise a way so that military modernisation does not take a hit. Capital defence budget consists not only of modernisation but also land, construction work etc. The 20% cap should be enforced on the budget outlay for such segments without hampering military modernisation. On the revenue side, a 30% cap has been indicated. In these times, there is no troop movement hence less fuel consumption, no military/international exercises. The only major negative impact is that no training can be conducted. However, this loss of training in quarter 1 and 2 of 2020 will be offset by rapid training schedule fitted in the curriculum in the next 2-3 quarters. Hence, operational efficiency shall not be affected.

If India wants to save its MSMEs, MoD should ensure placement of direct offsets on MSMEs and give up wasting offset credit value to be given to OEMs abroad for non-productive items like buying land in Defence Corridors, establishment of test facilities, ToT, etc., (and most of them with offset credit multiplication factors). Direct offsets should only be resorted to and not indirect offsets as has been proposed under new DPP-2020.

Courtesy: E&Y Report

The post Impact of COVID-19 on Aerospace & Defence MSMEs appeared first on IMR.

                “Indian industry must build MRO capability with reverse engineering” said Air Marshal RKS Shera, the then Air Officer Commanding-in-Chief, Maintenance Command, IAF while addressing an industry association event on 21 January. The IAF has challenges to maintain ageing aircraft and Indian industry needs to build capability, he added.

                Military aviation overhaul is quite different from civil aviation with depth of overhaul in the military being much higher. Shera said that about 700 vendors were engaged with IAF Base Repair Depots (BRDs) and, therefore, industry had far more opportunities before it. He emphasised that industry, R&D and academia need to come under one roof to find path-breaking solutions in MRO. Upgrades of Mi-17 helicopters offered huge opportunities to Indian industry, he said. The ‘life enhancement programmes, which are a continuous requirement of the IAF, will be critical to stimulate the MRO Industry.

                JD Patil of Larsen & Toubro Ltd highlighted that policy reforms by the Ministry of Defence (MoD), such as delicensing of many items, gave a level-playing field to the private sector with defence public sector undertakings (DPSU) and global OEMs. Announcement of defence corridors and access by the private sector to test ranges and government labs to pursue their R&D efforts would help start-ups and established MSMEs, he added. Meanwhile, domain experts were of the opinion at Aero India 2019 that MRO and simulator opportunities would be the growth drivers of Indian military aerospace industry.

Civil Aviation Growth and MRO Demand

                Currently, North America is the largest MRO market, accounting for around 40 per cent of the world market. Asia-Pacific, China and India combined represent 22 per cent of the market. However, India handles only 1 per cent market of the global MRO business. Total MRO spend is expected to rise to US$ 116 billion by 2029, up from US$ 81.9 billion in 2019 as per the Global Fleet & MRO Market Forecast 2019-2029 by Oliver Wyman’s Aviation Competitive & Market Intelligence team. China, with its 300 MRO companies, generated over US$ 3.0 billion of its nearly US$ 7 billion MRO requirement in 2019. China offers tax breaks, better infrastructure, cheaper labour and a bigger market. China’s fleet of commercial aircraft stands at 3,376, which is over five times India’s fleet of 604. These numbers will grow to 7,209 and 1,547 respectively by 2029. The Indian MRO market will grow from current US$ 2 billion to 4 billion.

                Currently only 10 per cent of the MRO work for domestic scheduled carriers is done in India. Up to 100 per cent Foreign Direct Investment (FDI) has been permitted for MRO industry. Singapore has had a viable MRO industry and spare parts base for many global civil aircraft players. Thailand is also emerging as an MRO base. Indian industry has good models to emulate in Asian neighbourhood. The revenue from aircraft heavy maintenance and modifications has the second highest share. In India, very few companies provide heavy maintenance service. If the defence MRO industry to come of age, the civil MRO has to succeed too.

Military MRO Market

                The revenue generated from defence aircraft MRO has finally started going up. The prime reason facilitating this has been IAF’s large fleet size. Moreover, navy and army have their independent fleets, which further increases the size and demand for aviation MRO. Hindustan Aeronautics Ltd (HAL) provides aircraft MRO for Kiran variants, Jaguar, Mirage-2000, MiG-21 Bison, Dornier Do-228, HS-748, An-32 and Advanced Light Helicopter (ALH), Cheetah and Chetak helicopters. The revenue generated from engine overhaul has the highest market share.

                In view of the military flying risks involved, the militaries focus more on the periodic maintenance of the fleet. Technology advancement is rapid in military aviation, with several upgrade contracts, which is also propelling the growth of the military aviation MRO market. Engine MRO is an extremely important part of MRO and also the most expensive one. The increasing complexity of the engine and it parts gets high priority and the militaries focus on frequent engine maintenance and periodic checks, irrespective of whether it is flying or on the ground.

Public Sector Defence Aerospace Industry In India

                Indian aerospace industry today is on the threshold of entering into a new era with self-reliance in defence production. The Indian manufacturing sector is internationally competitive with international quality standards, efficiency and manufacturing facilities. Major aerospace companies are setting up manufacturing facilities in India. HAL has played a major role in the defence aviation of India through design, manufacture and overhaul of fighters, trainers, helicopters, transport aircraft, engines, avionics and systems. HAL is now ranked 34th in the list of world’s top 100 defence companies. HAL has made supplies to almost all the major aerospace companies in the world like Airbus, Boeing, IAI, IRKUT, Honeywell and Ruag, etc. Defence Research & Development Organization (DRDO) is a network of 52 defence laboratories in India and has great unfulfilled potential. BEL manufactures a wide repertoire of products in the field of radars, naval systems, defence communication, electronic warfare, optical electronics, among others.

Private Sector Aerospace MRO Players

Boeing, Airbus and Air India have MRO facilities at Nagpur. MRO services for GE aviation engines are at Mumbai. HAL and Pratt &Whitney Canada have engine overhaul facilities at Bangalore. Air Works India (Engineering) Pvt Ltd provides aviation services. The company offers line maintenance, aircraft cabin interior, commercial aircraft asset management and safety management solutions. Air Works is CEMILAC and Directorate General of Aeronautical Quality Assurance (DGAQA) certified for MRO services and provides maintenance and warranty support programmes on behalf of OEMs to defence establishments in India for airframe-related MRO. Max Aerospace & Aviation Ltd at Juhu airport and Hyderabad Aircraft Maintenance Company (HAMCO) at Hyderabad overhaul avionics and electrical and airframe services. Taneja Aerospace & Aviation Limited (TAAL) is part of the Pune-based Indian Seamless Group. TAAL was established in 1994 as the first private sector company in the country to manufacture general aviation i.e. non-military aircraft.

CEMILAC Clearance

                Airworthiness is the continued capability of the aircraft/equipment to perform satisfactorily and fulfill mission requirements, throughout the specified life in the prevailing environments with acceptable levels of safety and reliability. All airborne items need to be certified and approved for airworthiness before use on military aircraft. CEMILAC, is the regulatory body under DRDO located in Bangalore whose primary function is certification and qualification of military aircraft and airborne systems. It has 14 regional centres located across the country. It is the single window for quality certification. Military systems MRO will require CEMILAC clearance.

Maintenance Command (MC) & Base Repair Depot (BRD)

                MC is responsible for maintenance of IAF equipment. MC plans for repair agencies including inventory management of spares. It also coordinates with supply agencies. Various BRDs come under MC. BRDs are the IAF agencies that carry out major repairs and overhaul. Since the BRD is responsible for repair, it does its material planning and storage of spares required for repairs. BRDs carry out provisioning and storage of 3rd and 4th line spares, and also of 1st and 2nd line in a few cases. They transcript unfulfilled demands to HQ MC/Air HQ. MC and BRDs greatly support indigenistaion and interface with domestic industry and for sourcing many items for its own overhaul tasks. The government has decentralised provisioning and procurement to Equipment Depots (ED) under MC in coordination with BRDs. A manual of indigenisation has been issued by HQ Maintenance Command.

IAF Overhaul Requirements

                It is a challenge to maintain old aircraft and legacy systems. Each aircraft and system has a finite life and needs either overhaul or replacement. Overhaul schedules are different. Industry will have to take mostly the major overhauls. Overhaul processes require special jigs and tools. They also require expertise. The quantum of flying being undertaken in each fleet is known and requirement of overhauls can be predicted. There is, therefore, some amount of clarity in the task and job required for overhaul. It will make it is easier for industry to do logistic and economic planning based on such predictions. Industry would have to be competitive and ensure time and cost savings vis-a-vis overhauls carried out abroad. Success of the industry could also relieve the IAF of some non-core activities. Foreign manufacturers will also benefit by setting facilities with Indian partners in terms of cost savings and supporting their other global customers for similar systems.  The depth of military aircraft overhauls is much higher.  IAF operates nearly 240 Mi-17 variants. There are civil variants of this platform. This could be  a great starting point.

Rotable Repairs

                Rotables is a term used in IAF for items which are capable of being economically repaired and reused. These can be replaced at an IAF field unit or by an appropriate repair/overhaul agency for repair/overhaul. The sub assembly must be removable and replaceable. The items have a reasonable turnover, and have a defined life that is based on ‘Time Between Overhaul’ or ‘Mean Time Between Failure'(MTBF). Line Replaceable Units (LRU) not fulfilling the above criteria may still be considered as a rotable based on the criticality of the item. This is important for electronic equipment where there is a high rate of obsolescence.

IAF Spares Requirement

                In the absence of significant local aerospace industry, for decades IAF had no choice but to import spares from OEM. There also was not much flexibility as the OEMs were unsure and unwilling to either set up shop or tie up with local manufacturers for want of expertise and quality control. Indian industry is today making international grade systems for the space and automobile sectors. Manufacturing is of exacting standards and tolerances and there is significant civil and military sector demand. There is, thus, scope for tie ups to manufacture and repair spares locally.

Cat D Repairs

                State of all items is designated by Category. Cat ‘A’ being fully functional and Cat ‘E’ being beyond economical  repair. Repair of Cat ‘D’ items require relatively more industrial processes. Sending items to foreign OEM takes a long time and entails larger inventory. Also, it costs significant foreign exchange. There is, thus, great scope for local industry to try and identify and indigenously repair these items even if it means seeking OEM expertise in some cases.

Door-to-Door Repair

                High serviceability of any aircraft and system is crucial for optimum operational utilisation. World over, the concept of door-to-door repair has evolved. The manufacturer signs a contract to pick-up the item requiring repair from the user airbase and delivers/replaces with the serviceable item at the airbase. Such contracts greatly save time and improve item availability. The cost of collection and delivery and float management is factored into the contract. There is great scope if MRO facilities are set up in India.   

DPP – Make In India Push

                The Defence Procurement Procedure (DPP) 2016, which came into effect from April 2016, focuses on giving a boost to ‘Make in India’  initiatives by promoting indigenous design, development and manufacturing of defence equipment. A new category of procurement ‘Buy Indian-IDDM (Indigenously Designed, Developed and Manufactured)’ has been introduced and accorded top most priority for procurement. Preference has been accorded to ‘Buy Indian’ and ‘Buy and Make Indian’. Requirement of indigenous content has been enhanced or rationalised. The ‘Make’ procedure has been simplified with provisions for  funding of   80 per cent of development cost by the government to Indian industry and reserving projects not exceeding development cost of Rs. 10 crore (government funded) and Rs. 3  crore (industry funded) for MSMEs. The responsibility of quality assurance of raw material used in aerospace defence products rests with DPSUs, DGAQA. etc.  All these and armed forces have their own laboratories or test facilities at various locations across the country to check the defence products. The strategic partner route will open up manufacture and procurements of aircraft and systems  made in India. Production of parts will get technological fillip. The setting up of aircraft production will certainly create MRO opportunities.

Ease of Doing Business & Economy of Scale

                The government is constantly working towards ease of doing business and setting up industry. De-licensing of many items has given a level playing field for the private sector. The creation of more defence corridors will help industry get facilities at more geographical locations and exploit local labour and engineering pools at places that are more favourable. Access to  government testing facilities and test ranges will help startups and MSMEs who cannot afford to create such facilities. IAF is currently the fourth largest air force in the world. IAF has or will have large fleets of Su-30MKI, Jaguars, LCA, An-32, Mi-17s, etc. Larger fleets offer greater scope for indigenisation and MRO in India. There are also commonality of items in some fleets.

Opportunities and Challenges

                Availability of low-cost MRO manpower has given India an added advantage from the rest of the MRO hubs in the world such as USA, Europe, Singapore and others. One of the biggest growth restraints for the market has been high taxes and custom duties levied on the MRO sector, which has made them comparatively costlier in India than abroad. MRO services in India incur 18 per cent GST compared to zero in Sri Lanka, and 7 per cent in Singapore and Malaysia.  For an industry with 6-7 per cent operating margins, combined with 15 to 30 per cent airport royalties and hangar rentals, it makes poor economic sense. This needs immediate review.

The Way Ahead

                The National Civil Aviation Policy (NCAP 2016) and the opening up of defence MRO sectors needs to be harnessed. MRO providers are also turning to state-of-the-art technology such as automation to offer high-quality maintenance, thus, keeping their competitive edge. India has the potential to become a major MRO hub. Initiatives to set up MRO facilities are aligned fully with the ‘Make in India’ drive of the government. Significant manufacturing, maintenance and repair facilities have already been set up by some OEMs in India in partnership with Indian firms. These include Lockheed Martin, Boeing, BAE Systems, Thales and GE among others. They are already sourcing many items from the Indian private sector. Technical wherewithal, manufacturing expertise and skilled human resources are well established. IAF fully supports indigenisation and setting up MRO facilities at all levels. The government must support setting up MROs by giving tax (GST and import duty) concessions to local investors, to make it cheaper to do MRO in India. Many air forces in South East Asia operate similar aircraft to IAF’s, such as the Su-30. Rafale is operated by Egypt and Qatar. India must translate the changes into reality, to become a game-changer hub for the MRO industry in Asia.

The post Aircraft Maintenance : MRO Industry – Indian Military Aviation Market appeared first on IMR.

State Industries Promotion Corporation of Tamil Nadu (SIPCOT) Limited has identified 500 acres of land near Sulur and Karanampettai to set up a defence corridor. SIPCOT will provide the compensation for patta lands to be acquired.

SPICOT plans to conduct talks with the landowners to acquire the land from them to set up industrial units in the defence corridor. It was also trying to identify 500 more acres of land in the same locality.

SIPCOT would bear the land acquisition cost and later the acquired land will be sold to industries willing to start their units in the defence corridor in Coimbatore.

The Tata Group has approached SIPCOT seeking land in the defence corridor in Coimbatore. Hindustan Aeronautics Limited (HAL), Bangalore, was also planning to establish its unit in Coimbatore defence corridor.

Uttar Pradesh to Provide Subsidy for Defence Industry

The Uttar Pradesh government, on 3 December, decided to provide 25 per cent subsidy and 100 per cent stamp duty waiver for setting up defence industry in the state. The decision was taken at a cabinet meeting chaired by Chief Minister Yogi Adityanath.

Now, the companies that will set up defence industries will be provided all facilities including power, road and fencing of land, according to Industrial Development Minister Satish Mahana.

F-16 Wings by Tata-Lockheed to be Ready by October 2020

TATA Lockheed Martin Aerostructures Limited (TLMAL), a joint venture between $50 billion Lockheed Martin and TATA Advanced Systems Limited (TASL), is gearing up to roll out the first F-16 wing by October 2020 from its Hyderabad facility. The company is currently building the prototype for the wings of the aircraft, which flies in 26 countries.

TLMAL will have a capacity to make 3-4 wings a month in the steady state. It has completed the 3D modelling for the F-16 wings.

The company will be roping in MSMEs in the country to supply structural components such as wiring and harnesses.

Hyderabad has a strong defence ecosystem for manufacturing. TLMAL in its Adibatla facility near Hyderabad will focus on composites, metal-to-metal bonding and assembly. Using these, the company is going to bid for multiple areas and structures catering to defence, commercial and transport sectors.

The company which has created the metal-to-metal bonding facility in Hyderabad is getting ready now to cater to aircraft makers such as Boeing and Airbus.

TLMAL is also looking at building Bulk Fuel Tank Transport (BFTT) to transport fuel or oil (up to 5,000 gallons) for vehicles through C130J at times of medical emergencies or natural disasters. This is the first design and build programme in India by the private sector. There is demand in India, Africa, Indonesia, Canada and Netherlands. The first prototype will be ready by February-March 2020.

Going forward, TLMAL is also looking at structural repair, electronics, system and integration repair and harnesses for not only Indian Air Force but for the global defence forces.

Reliance Buys 51.78% Stake in Asteria Aerospace

Reliance Industries said, on 13 December, that its wholly-owned subsidiary Reliance Strategic Business Ventures Ltd (RSBVL) has acquired over 51 per cent stake in Asteria Aerospace for Rs 23.12 crore. The said investment represents 51.78 per cent holding in the equity share capital of Asteria.

RSBVL proposes to make a further investment of up to Rs 125 crore, subject to Asteria achieving agreed milestones, and is expected to be completed by December 2021.Post the further investment, the shareholding of RSBVL will increase to 87.3 per cent of the equity share capital of Asteria.

Asteria, incorporated in India in June 2011, is a full-stack drone technology company with in-house drone manufacturing capabilities, and also offers software solutions to provide actionable insights from aerial data, intending to deliver “drone-as-a-service” digital platform.

An early stage company, Asteria had a turnover of Rs 1.96 crore in 2018-19.

Hurdles Cleared for HAL’s Goa Helicopter MRO Project

The Hindustan Aeronautics Limited’s proposed project of helicopter maintenance, repair and overhaul (MRO) in Goa would become functional soon as all the hurdles have been cleared now, Union minister Shripad Naik said on 8 December. The project is meant for maintenance, repair and overhaul of engines that are fitted on HAL-designed and manufactured helicopters.

The HAL and French company, Safran Helicopter Engines, had entered into a joint venture – Helicopter Engine MRO Private Limited – to set up this helicopter maintenance plant at Honda village in North Goa.

Manohar Parrikar, as defence minister, had announced the project in October 2016. As per the plan, the facility was expected to have a total investment of Rs 170 crore, to be invested by both the parties in a phased manner.

The engines of advanced light helicopters of various versions, light combat helicopters and future light utility helicopters that are common between HAL and Safran would be maintained at this facility.

With a fleet of over 1,000 engines, including 250 TM333 and 250 Shakti, India’s armed forces are one of the largest operators of Safran-designed helicopter engines.

Arms Sales of Top Indian Firms Drop

The combined sales of three Indian companies that figure among the world’s 100 top arms suppliers stood at $5.9 billion in 2018, a drop of 6.9% compared to the previous year, according to the latest data released by Stockholm International Peace Research Institute (SIPRI), published on 9 December. The sales fell during the one-year period because of fewer orders from the Indian armed forces.

The three Indian companies on SIPRI’s list of top 100 global arms firms are Hindustan Aeronautics Limited (HAL), the Indian Ordnance Factories and Bharat Electronics Limited (BEL); their global ranks last year stood at 38, 56 and 62 respectively.

They accounted for 1.4% of the arms sales of the top 100 companies. “All three are state-owned and are dependent on domestic demand. Arms sales by Hindustan Aeronautics and Bharat Electronics increased in 2018 – by 3.5 and 5.9% – respectively. However, these were offset by a 27% fall in the arms sales of Indian Ordnance Factories,” the report said.

The overall sales of the defence sector’s top 100 companies totalled $420 billion in 2018, an increase of 4.6%. The top 100 firms exclude Chinese companies “due to the lack of data to make a reliable estimate”.

Strategic Electronics

Factory by HAL

Strategic Electronics Factory (SEF) of Hindustan Aeronautics Limited (HAL) at Kasaragod, Kerala is established for assembly, testing, repair & manufacturing of various types of airborne computers.

HAL has allocated Rs. 67 crores for setting up the facility of SEF at Kasaragod in 2008, out of which Rs 66.31 crore has been incurred so far.

SEF, Kasaragod has so far produced 1210 and repaired 2237 airborne computers like Mission Computers, Radar Computers & Display processors for various types of fighter aircraft.

PSU Status of BEML

The Government had given ‘in-principle’ approval for strategic disinvestment of BEML Ltd. to the extent of 26% out of the Government shareholding of 54.03% with transfer of management control to strategic buyer.  Thereafter, Transaction Advisor, Legal Advisor and Asset Valuer were appointed by the Government as per the procedure and mechanism laid down for this purpose. The Expression of Interest & Preliminary Information Memorandum document have been prepared by the appointed Advisors and submitted to the Government.

Some organisations have made certain representations against the aforesaid disinvestment proposal of BEML Ltd, but they were disregarded since disinvestments through strategic sale are considered based on recommendations of NITI Aayog after taking into consideration, all aspects of the matter.

Corporatisation of Ordnance Factory Board

Raksha Rajya Mantri Shri Shripad Naik gave the following information in the Parliament on 2 December regarding corporatization of the Ordnance Factory Board (OFB).

During the past two decades, several High Level Committees like TKA Nair Committee, Vijay Kelkar Committee & Raman Puri Committee have recommended that Ordnance Factories should be converted from a Government Department into a Corporate entity.

The OFB is an attached office of Department of Defence Production, Govt. of India.  There is no plan at present for strategic tie-up between private sector and OFB.

In respect of non-core items, OFB can still participate in RFPs of the users, i.e. Armed Forces on competitive basis.  Decision to declare items as non-core was taken in consultation with all the stake holders and was done to enable OFB to focus on core areas and complex systems like artillery guns, tanks, ammunitions etc.  The above position has been adequately explained to the employees of OFB through various meetings in the Ministry.  Further, in order to ensure smooth transition from non-core to core areas for production, re-training of workers of non-core factories has also commenced to enable them to work in the core areas.

New Defence Projects

Raksha Rajya Mantri Shri Shripad Naik gave the following information in the Parliament on 4 Decemebr, regarding special measures undertaken to promote new and innovative defence production projects under the “Make in India” programme in Tamil Nadu and other States:

•             A new category of procurement ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ has been introduced in Defence Procurement Procedure (DPP)-2016 to promote indigenous design and development of defence equipment.

•             The ‘Make’ Procedure has been simplified with provisions for funding of 90% of development cost by the Government to Indian industry and reserving Government funded Make-I projects not exceeding development cost of Rs. 10 Crore & procurement cost Rs. 50 Crores per year for MSMEs.  Industry funded Make-II Projects not exceeding development cost of Rs. 3 Crore & procurement cost Rs. 50 Crores per year have also been reserved for MSMEs.

•             A separate procedure for ‘Make-II’ category has been notified to encourage indigenous development and manufacture of defence equipment including provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc.

•             ‘Innovations for Defence Excellence (iDEX)’ was launched in April, 2018 to create an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia including grants/fund.

•             The ‘Strategic Partnership (SP)’ Model for establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, enabling tie up with global Original Equipment Manufacturers (OEMs) for technology transfers to set up domestic manufacturing infrastructure and supply chains was notified.

•             FDI Policy has been revised to allow FDI under automatic route upto 49% and beyond 49% through Government approval for technology acquisition etc.

•             A ‘Policy for Indigenisation of Components and Spares used in Defence Platforms’ was notified in March, 2019 to support indigenization of imported components (including alloys & special materials).

•             ‘Mission Raksha Gyan Shakti’ was notified in November, 2018 to support Intellectual Property Rights (IPR) culture in indigenous defence industry.

•             Defence Products list requiring Industrial Licences was rationalised and initial validity of the Industrial Licence granted under the IDR Act increased from 03 years to 15 years with provision of extension by 03 years.

•             112 items were notified under Public Procurement Order 2017 of Department for Promotion of Industry and Internal Trade (DPIIT) whereby Defence PSUs/OFB give preference to deomestic manufacturers in procurement.

•             Government announced two defence industrial corridors to promote defence industrial base in the country in Tamil Nadu and Uttar Pradesh (UP).

•             In the last five financial years i.e. from 2014-15 to 2018-19, Government has accorded Acceptance of Necessity (AoN) to 204 proposals worth Rs. 4,04,880 Crore approximately under ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Strategic Partnership Model’ or ‘Make’ categories of capital procurement as per Defence Procurement Procedure (DPP) – 2016, in which Request for Proposal (RFP) is issued only to Indian Vendors.

Contracts Signed Since 2014 With Domestic Industry

The Ministry of Defence has signed more than 180 contracts valued at over Rs 1,96,000 crore with the Indian Industry since 2014 while a few are in the pipeline to be signed in near future.

A contract for manufacture of Frigates under Project P 17A was signed in February 2015 with Mazagon Dockyards Limited (MDL), Mumbai valued at Rs. 45,000 crores while 02 Frigates under Project P1135.6 are slated to be manufactured by Goa Shipyard Limited (GSL) under a contract signed in Oct 2018 valued at Rs. 14,100 Crore. Further, contracts for manufacture of 41 Advanced Light Helicopters for Indian Air Force (IAF) and 32 ALH for Indian Navy (IN) have been signed with Hindustan Aeronautics Limited (HAL) in March 2017 and Dec 2017 with a combined value of Rs. 14,100 crore. This is in addition to procurement of 14 Dornier 228 aircrafts from M/s HAL valued at Rs. 1100 crore through a contract signed in February 2015.

Seven Squadrons of Akash Missile System are being procured from BEL through a contract of October 2019 valued at Rs. 6,300 crore as also the Integrated Advanced Command and Control System (IACCS) Nodes valuing Rs. 7,900 crore. OFB has been tasked to supply 464 T-90S/SK tanks worth Rs. 19,100 crore for which indent has been placed on it by the Ministry as recently as November 2019. Also 100 Nos. of 155x52mm cal Self-Propelled Guns are being procured under the ‘Make in India’ initiative of the government from Ms/ L&T valued at Rs. 4,300 crore. Also Contract for Modernization of Airfield Infrastructure (MAFI) to be executed through Indian vendors is under final stages of contracting.

Further, Services have also placed a number of contracts on the Private Sector vendors like Titagarh Wagons Ltd, Force Motors Pvt Ltd, Tata Power SED, Tech Mahindra Ltd, Tata Motor Ltd, Ashok Leyland Ltd, Bharat Forge Ltd, MKU Ltd, SMPP Delhi, Alpha Design for items like 1000 Tons Fuel Barges, Light Strike Vehicles, Portable Diver Detection Sonar (PDDS), RFID based SMART Card, 6×6 and 8×8 High Mobility Vehicle with Material Handling Crane, Dual Technology Mine Detector, Ballistic Helmet, Bullet Proof Jacket (BPJ) and Integrated Gunnery.

Three of the cases, viz, P-75(I) Submarines, Naval Utility Helicopters (NUH) and 114 Fighter Jets for IAF, shown as stuck in the long-winded procedures are the cases which are being progressed under SP Model [a procurement procedure, which in itself has been promulgated in May 2017 as part of DPP-2016]. However, even the cases under SP model have been processed expeditiously as evident from the fact that the responses to EOIs [Expression of Interest] have been received in respect of P-75(I) and NUH cases and are under final stages of selection while SQRs are being finalized in respect of 114 Fighter Aircrafts case.

In addition, under Make-II, 44 projects have been given approval. Under Innovations for Defence Excellence (iDEX). Forty plus startups are working in new technology-related products. Make-II and iDEX reflect new level of active engagement with industry where not only manufacturing but technology development for defence is being taken up.

The post Defence Industry : Industry News appeared first on IMR.