Make in India : a case study in defence sector.

Abstract

Thales Belgium provides 70mm air-to-ground rocket system all around the world. More than 99% of its turnover is realized in the international market. The international market is complex and especially for the military products. On this market, the offsets are more and more used especially by the emerging country. India is one of this emerging country and makes an important place to the offsets with its “Make in India” politic. Thales Belgium has to deal with in the context of its contract with India. This master thesis will introduce the concept of offset on a well-known example, the Rafale contract in France. Then, the notion of joint venture, offshoring and temporary association of enterprises are detailed. After, Thales Belgium market is briefly introduced thanks to a SWOT and PESTEL analyses in order to give an overall of the situation. Afterwards, Thales Belgium offset is described and the methodology to achieve it is also detailed. Based on this methodology, a cost model is developed and the results are analysed. The cost model has to take into account two different scenario: the assembly in Belgium and the assembly in India. Thanks to this cost model, a cash-flow evolution can be given along the production of the rocket launcher in India. The cost structure is also studied in order to see the advantage of the “Make in India” on the different launcher costs. Then, a sensibility study is performed in order to analyse deeper some parameters of the model and to isolate different effects. After that the managerial structure required to achieve the creation of a new supply chain in India is discussed by taking into account the difference of culture between Europe and India. Finally, the integration of the new supply chain in the strategy of Thales and of Thales Belgium is also discussed.