Let me add with an analogy.Kartik wrote: BTW, Philip had posted in another thread that the LCA's piddly 8-12 per year production line pales in comparison to LM's nearly 1 F-35 per day production line. I wanted to comment on that and it basically relates to the order that is committed to by the IAF. If the IAF had placed an order for nealry 2000 LCA's HAL would've had no option but to go berserk trying to ramp up. We know that it's not possible for that to happen. But if the IAF places orders for 8+20+20 piecemeal wise, then HAL cannot do anything more than set up assembly lines that produce 8-12 per year. It makes no sense for HAL to produce more (like 15-20 per year) when that would mean that its possible that if the IAF doesn't order more, the line would go cold within 2 years itself. Why would HAL spend on so much tooling only for it to be used for 2 years ?? HAL will only spend as much as it economically feasible based on firm orders. if the IAF wants quicker deliveries, it'll cost more. Its the same logic that applies to the Dassault Rafale production line that produces just 12 Rafale's per year. They can easily produce more if required, but why will Dassault pay for the additional tooling and manpower if the Adl'A is happy with the rate at which its getting the current Rafales?
To a housewife, it doesn't matter if she buys 1Kg or 2Kg of tomatoes, the vendor is there tomorrow and day after tomorrow and next week as well. And he will always have a 1Kg/2Kg that that housewife might need.
A 5-star hotel or some big-shot caterer serving exclusive organic food is different. They have a set menu pre-planned and they have few reliable suppliers/growers who they can depend on to deliver the select goods no matter what. It becomes pretty exclusive at this stage and in some cases the hotels may have to even keep them happy with orders even when temporary fall in demand.
Our babudom sometimes reacts to a 5-star hotel scenario with housewife-tricks at saving. Now its a chicken egg problem.
(a) Since big numbers were not approved, production rates will be small.
(b) Even though LCA might meet our requirements pretty well tomorrow, since the production rate is too small, IAF has to go with external vendor.
Here is the tail wagging the dog scenario that defense industries in the West have perfected!!
Hypothetically, what IF, HAL stops the conservative number crunching and ramps up production to 20 birds per year (because IAF needs them ASAP and patriotic HAL loves the IAF)?
They would be done in 2.5 years and then be idle. What happens to MRCA if it is still in the churn? Would we still put "all the money" outside instead of pushing it into an already established production line that can churn out more improved birds?
Coming from another angle, after 2.5 years, would we let the production line go idle or add incremental orders with line churning out a squadron every year? Ofcourse, this assumes there are continuous improvements going into the LCA so newer birds keep IAF hooked.
So, I would say, HAL should stop asking for firm orders and focus on expanding production line. Tomorrow when it is idle, put MOD in the dock for leaving the production line idle
. Maybe give an exclusive to Business standard on how the production line is empty!!
Check the Pak-Fa Thread for your answer. This was answered previously in there. NO!
