Technical- Business write-up

Spares & Services Every business understands the importance of spares and after sale services. Product sale is a one-time activity, whereas spares and services are perennial repetitive business during the service life of the product. The margins during initial are lower in a competitive market, but the margins on spares are always higher. BHEL management had understood the importance of this business and a created a separate division named “Power Project Spares & Services” (PPS&S) division around 1975. Persons with maintenance experience were recruited to man the servicing function.  Spares in a Capital Goods industry are categorised as  • Vital  • Essential  • Desirable They are also identified as • Capital • Insurance • High cost • Overhaul  • Wear and Tear  During the contract stage every bidder specifies spares as • Commissioning spares • Essential spares • Recommended spares Commissioning spares are part of original supply and order for ess...

The first manufacturing unit of BHEL was established at Piplani, Bhopal in 1956. Subsequently in 1964 manufacturing units were established at Haridwar, Hyderabad and Tiruchirapalli. At that time, Tiruchirapalli was connected by Meter Gauge railway and a separate broad-gauge line was laid in 1929 from Erode to Tiruchirapalli for transport of equipment from BHEL plant. In view of poor road infrastructure, equipment from plants was transported by railway to the project sites. Project sites developed railway siding to receive the equipment and coal. For the Hydro projects, railway siding was not feasible and the equipment had to be transported by road only from the nearest station with siding. For this the equipment was sent in dismantled condition and site engineers had to virtually manufacture the sets at site from first principles. Apart from the difficulties in transportation of equipment, the sites suffered from poor infrastructure. Unreliable power supply was a major issue, in addi...