There is something fascinating about a dark horse- they are only thrust into the limelight when they truly achieve something no one expected them to. In business, many corporate makeovers have been credited to people who could boost morale, drive innovation and execute solutions that make the impossible possible.
Retired Commodore Hemant Khatri is a select group of leaders who’ve earned their worth. When he assumed office on September 1, 2020, Hindustan Shipyard was a sick PSU with a loss of Rs.595.16 crore and the dubious distinction of a shipyard known for inordinate delays and cost escalations, requiring government grants just to stay afloat.
Hemant’s task was cut out- identify the causes of delays, boost operational inefficiencies and improve employee morale to get things going. After understanding the issues plaguing the company, Hemant laid out the company’s transformation with his ‘Magic of Five’ reform initiative.
‘Magic of Five’- The Secret Revival strategy
- Operational Excellence: HSL started implementing round-the-clock shifts along with the ‘Mega Block’ concept, where large sections of the ship were produced individually and assembled when done, significantly lowering time and costs.
- Digital Transformation: The company implemented SAP’s S4/HANA ERP, helping it track real-time construction progress. Collaborating with IIT-Tirupati, the yard implemented an AI-aided weld defect analysis tool and robotic welding technology wherever possible, reducing the risk of human error and boosting operational efficiency. The company has also introduced innovative cybersecurity measures to safeguard its digital assets.
- Financial Discipline: With a greater emphasis on cost-cutting mechanisms, internal and external costs were scrutinised and deployed where it mattered the most
- HR Reforms: The yard has worked to enhance its employees’ skills and offered everyone comprehensive insurance and benefits, including contract workers.
- Strategic Partnerships: The yard signed an MoU with Indian Maritime University (IMU) to develop shipbuilding technology while strengthening its MSME vendor base from 130 in 2020 to 564 in 2024.
Aligning production to urgent needs
Hindustan Shipyard’s revival couldn’t come at a better time. With the government actively promoting Indigenous technologies through Aatmanirbhar Bharat, the yard’s newfound efficiencies have helped it gain contracts both from the Navy and private parties. With increasing geopolitical threats, the Navy and other allied countries are looking for advanced support vessels and other auxiliary ships to meet requirements. The company also works to repair or refit older vessels to increase the ships’ lifespan.
The company has achieved a significant milestone by delivering India’s first Ocean Surveillance ship and Diving Support Vessels with about 80% indigenisation.
The massive demand for ships has also helped the company secure contracts from foreign navies of Vietnam, Myanmar and the Philippines.
The shipyard’s revival has even attracted the attention of foreign shipyards. South Korea-based Hanhwa Ocean Co. recently sent a delegation to scout for tie-ups with Indian shipyards as they have high backlogs of orders. Hindustan Shipyard has proven its mettle to take on increasingly challenging orders, and reports suggest Hanhva may offload some of their orders here.
The Road Ahead
As per the company’s Strategic Vision 2025-2034 document, they have set a goal of achieving a Value of Production (VoP) of Rs.3,500 crore and focusing its efforts on enhancing its indigenization efforts in shipbuilding to meet the increasing demand for reducing emissions and higher efficiencies.
With the support of the Ministry of Defence, HSL is now moving toward a future where it aims to integrate robotics, AI, and IoT into its offerings while reducing its dependence on military contracts. After years of being a loss-making and almost irrelevant shipbuilder to the government, India now has a renewed hope of boosting its maritime prowess with HSL’s remarkable turnaround. All of this wouldn’t have been possible without Commodore Hemant Khatri’s persistence in motivating his staff and implementing change.
