By Bharat Heavy Electricals Limited for vendors
TIRUCHI: Bharat Heavy Electricals Limited (BHEL), Tiruchi, has decided to put in place a system of performance-based loading for vendors with effect from this year.
A vendor who performs well in a month will get further orders.
The system will create a motivation to perform better, thereby facilitating speedier growth of performers and transforming non-performers into performers, A.V. Krishnan, Executive Director, BHEL, Tiruchi, said, addressing the ‘Business Partners Meet 2010' here on Thursday.
As BHEL's outsourcing target keeps increasing to reach 7.5 lakh tonnes in 2010-11 and 10 lakh tonnes in 2011-12, sub-contractors will have to inevitably expand their capacities through technology up-gradation. A vendor unit that does not ensure a monthly output of a minimum of 1,000 metric tonnes was likely to vanish in five year's time.
BHEL, he said, has the option of outsourcing jobs to companies in countries like Thailand, Korea and China if the vendors in the country failed to rise up to expectations, he said cautioning that if delivery schedules are not met with, foreign companies will step in.
With the country planning an addition of one lakh MW in each of the next two five-year plans, the demand was huge. The future growth rate of BHEL and its vendors has to be exponential. In his key-note address, Mr. Krishnan wished at least 25 to 30 per cent of local vendors to use own materials for conversion as in the case of away centre vendors, and suggested institution of an award for best performing vendor in this category from this year.
These factors will be incorporated into the new model for long-term relationship that BHEL will have with vendors. Mr. Krishnan urged vendors to invest on people, train and re-train them. They must be rooted in the basics: quality, safety and process control, for smooth take off.
The breakthrough initiatives should start with technology. Vendor units must excel in all aspects including processing, heat treatment, welding, fabrication and machining, he emphasised.
Speaking earlier, Rajappa Rajkumar, president of BHEL Small Industries' Association, spoke of the initiatives taken by the member units to rise up to the expectations of the BHEL. Vendors were taking to automation, and BHELSIA intends to tide over power shortage by adding 3,000 kvs with diesel generator sets.
For addressing manpower shortage, BHELSIA was in the process of sourcing work force through local employment exchanges, by way of offering apprenticeship training for ITI candidates, and bringing labourers from Bihar.
G. Ramakrishna, General Manager - Outsourcing; M Kannappan, General Manager - Piping Centre, Chennai; T. Jambunathan, General Manager - Finance, D. Krishnamurthy, General Manager - Valves, and S. Gopinath, General Manager - Operations (Boiler Shops), spoke of the progress made so far on the outsourcing front and the challenges ahead.
The ‘Outsourcing-Best Business Partner Awards 2010' were presented under 21 categories. A cultural performance encompassing the rich facets of the country's tradition preceded the meet.