Lt Gen. Ashok Shivane (retd)

Indian ordnance factories are the oldest and largest industrial set-up which function under the Ordnance Factory Board (OFB) with the primary objective of achieving self-reliance in equipping the armed forces with state-of-the-art battlefield equipment. The first factory was the Gun and Shell Factory, Cossipore, which was set up in 1801. On the eve of Independence, the country had 18 ordnance factories (OFs). Nearly half the factories that the country possessed at the time of Independence were created to sustain the allied war effort and, hence, owe their existence to World War II. The rest had been set up at different points of time, particularly after realisation of the neglect in Indo-Sino conflict 1962 and security imperatives post 1971 conflict. Today, there are 41 OFs organised under five-line functions and four staff functions each headed by an additional DGOF / Member under the DGOF and Chairman OFB. The OFB was last restructured in 1979 and assigned the role of dedicated manufacturing base for military hardware, indigenisation and transfer of technology (ToT) absorption, maintenance of ‘War Reserve’ capacity and life cycle support. It was expanded to cover Quality Management including input material inspection (2005) and focus on in-house R&D resulting in role of Lead Integrator (2006).

The OFB has responded creditably to challenges in times of national security crisis and supplied critical military ware in all wars fought by India, including the Kargil crisis and the recent surgical strikes. The OFB being an integral part of the government, is obliged to make all types of equipment with life-time warranty as demanded by the army, irrespective of its number or value commercially viable or not.

Perception and Realities of OFB 1.0

The main perception of OFB 1.0 was that it is operating in a sellers’ market with captive clients and, therefore, it enjoys the freedom of choosing what to deliver, when to deliver and at what cost. The market pressures, which motivate the private entities to innovate, adopt best practices, and deliver value to the end customers, are missing in the case of the OFB. It is these market pressures which bring in a culture of constant feedback and performance evaluation with a view to ensure survival in a competitive market. The OFB, on the other hand, is always assured of government support despite sub-optimal performance. As there is no threatening pressure, there is a lack of resolve to modernise, adopt industry best practices and raise the workforce quality threshold. Issues related to product quality, responsiveness to the demands of the Services, cost-effectiveness, industrial productivity and capacity utilisation have also been flagged by the Comptroller and Auditor General (CAG). This, even with limited truth and causative factors even beyond the OFB, mandated a transformation with times and change of government policies, to rejuvenate the organisation and give it a competitive edge and a credibility uplift.

Challenges and Transformation Drivers for OFB 2.0

The defence ecosystem in India has been given a major fillip in the recent years with major government policy initiatives under ‘Make in India’. This has rightly given a boost to defence private sector to compete on an equal platform to the erstwhile captive players like the OFB and defence public sector