Excerpt: … Though India imported military hardware and software worth 10.5 billion US $ in last 3 years, hardly any product falling in core activity area of Ordnance Factories figures in the import basket. However, the organization is aware of the requirement of Defence Forces to acquire smart weapons and ammunitions to manage modern warfare. The technology for the product manufactured in Ordnance Factories used to flow either from DRDO, the designated Defence R&D organization or from overseas Defence industries chosen by the user.
The R&D infrastructure in Ordnance Factories was limited to production technology leading to process improvement. Since Defence business management doctrine has undergone change and today Ordnance Factories have to secure order even from Defence Forces through competition, development of new products and upgrades has become a matter of paramount importance for sustained growth. Graduation from present miniscule scope on R&D to product development is an arduous task and requires specialists as well as infrastructure. Ordnance Factories are aware that this cannot be accomplished over night and delay in development will affect growth.
A two-fold approach has therefore been taken, viz, develop through (i) in-house R&D wherever possible and build infrastructure for future and (ii) collaboration with advanced technology provider. This has started yielding result. During last 3 years Ordnance Factories have supplied products worth Rs. 814 Cr. developed through in-house R&D. Further supply of products developed through collaboration is likely to commence in 2007-08.
The above efforts are the fruits of the strategy adopted in last GM Conference. These now need further tuning based on experience gained and change in Defence acquisition process. Moreover today Ordnance Factories are expected to function like a commercial entity and yet to remain committed to meet planned objective of Govt., like meeting requirement of Defence Forces without considering whether production of such items is economically viable, social obligation to develop backward areas (as Ordnance Factories are mostly set up in backward/remote areas). These issues are slated to be deliberated in ensuing GM Conference to evolve a strategy for managing changes. (full text).