gündüz ulusoy1 an assessment of contributions of operations management to academia and practice in...
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Gündüz Ulusoy1
An Assessment of Contributions of An Assessment of Contributions of Operations Management to Academia Operations Management to Academia
and Practice in Turkeyand Practice in Turkey
Prof. Dr. Gündüz UlusoyProf. Dr. Gündüz Ulusoy
Faculty of Engineering and Natural SciencesFaculty of Engineering and Natural Sciences
Sabancı University, IstanbulSabancı University, Istanbul
Director, TÜSİAD-Sabancı University Director, TÜSİAD-Sabancı University
Competitiveness ForumCompetitiveness Forum
EUROMA 2007, Bilkent University, Ankara, Turkey
Gündüz Ulusoy2
CONTENTS
TURKEY:A BRIEF INTRODUCTION
COMPETITIVENESS PROFILE OF TURKEY
SOME OBSERVATIONS CONCERNING
MANUFACTURING INDUSTRIES IN TURKEY
AN ASSESSMENT OF OPERATIONS MANAGEMENT
IN TURKEY
CONCLUSIONS
TURKEY: A BRIEF INTRODUCTION
Gündüz Ulusoy4
SOME ECONOMIC INDICATORS
2000 2001 2002 2003 2004 2005 2006
GDP per capita, PPP (current int. $) 6.470 6.030 6.519 6.929 7.698 8.407 9.106
GDP PPP (current int. $, billions) 438,91 415,75 456,61 493,34 552,67 611,41 660,84
Rank in the World (GDP based on PPP) 20 21 20 19 18 18 18
Inflation, consumer prices (annual %) 54,92 54,4 44,96 25,30 8,60 8,18 9,59
Gross domestic savings (% of GDP) 17 19 20 19 20 18 ...
Foreign direct investment, net (current million $) 112 2.855 962 1.253 2.071 8.727 20.120
Gündüz Ulusoy5
DISTRIBUTION OF GDP AMONG SECTORS
0%
20%
40%
60%
80%
100%
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Manufacturing Agriculture Mining and Construction Service
Gündüz Ulusoy6
DEMOGRAPHICS
2000 2001 2002 2003 2004 2005 2006
Population, total (million) 67,42 68,53 69,63 70,71 71,15 72,07 72,56
Mortality rate, infant (per 1,000 live births) 38 ... ... ... ... 26 ...
Life expectancy at birth (years) 70 71 71 71 71 71 73
Urban population (%) 57,3 58,0 58,8 59,6 60,3 ... ...
Percentage of Age Group 15-64
58,4 57,1 55,2 54,1 53,8 54,8 56,1 58,260,7 63 64,9 66,6 68,4
61,9
0
10
20
30
40
50
60
70
80
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2025 2050
%
Gündüz Ulusoy7
EDUCATION
2000 2001 2002 2003 2004
School enrollment, primary 96 98 99 95 93
School enrollment, secondary ... 78 82 85 79
School enrollment, tertiary 23 23 24 28 29
Educational System
Ranking Country Index 0-1030 Poland 4.44031 Hong Kong4.41732 Turkey 4.41333 Portugal 4.33334 Thailand 4.165
Total number of students enrolled in universities:1.247.404 (2004)
In Open University: 695.591 (2004)
*
*Ultav, Panel Presentation at the National Innovation Initiative Meeting, Ankara, October, 2006
Gündüz Ulusoy8
EDUCATION
Math & Natural
Sciences Engineering Total
Undergraduate 9,7 17,4 27,1
Graduate (Master’s) 7,8 21,5 29,3
Doctorate (PhD) 11,4 23,3 35,7
Science Technology and YouthInterest of youthRanking Country Index 0-1017 Poland 6.72018 USA 6.59819 Turkey 6.58120 Philippines 6.35121 Spain 6.286
Percentage of Degrees Awarded in Mathematics, Natural Sciences and Engineering in Total
University EducationMeets needs of the economyRanking Country Index 0-1031 Portugal 5.00032 Spain 4.94333 Turkey 4.92134 Hong Kong4.91735 Thailand 4.738
* *
*Ultav, Panel Presentation at the National Innovation Initiative Meeting, Ankara, October, 2006
R&D AND INNOVATION: INPUT & OUTPUT
Gündüz Ulusoy10
FTE R&D PERSONNEL AND RESEARCHERS
13 1314
1011 11
1516
18 18
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004
Nu
mb
er o
f P
erso
nn
el
Number of R&D Personnel (per 10.000 people)
Number of Resarchers (per 10.000 people)
Gündüz Ulusoy11
FTE R&D PERSONNEL/RESEARCHERS
27 28 29
38
23 23 24
33 34
40
0
5
10
15
20
25
30
35
40
45
2000 2001 2002 2003 2004
Nu
mb
er o
f P
erso
nn
el (
x100
0)
FTE R&D Personnel FTE Researchers
Gündüz Ulusoy12
R&D INTENSITY
2000 2001 2002 2003 2004
R&D as a percentage of GDP 0,64 0,72 0,67 0,61 0,67
COUNTRYR&D INT.
(%)
Israel 4,72
Sweden 3,65
USA 2,72
Germany 2,48
Belgium 2,04
China 1,00
Spain 0,98
Portugal 0,80
Gündüz Ulusoy13
NUMBER OF JOURNAL PUBLICATIONS (SCI, SSCI, A&H)
208 238 433 577 694 1008 1080 14922333
3313
4491
288 313 394
17717
12492
7592
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
20.000
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Nu
mb
er o
f A
rtic
les
Gündüz Ulusoy14
RANK OF TURKEY IN THE NUMBER OF PUBLICATIONS (SCI, SSCI, A&H)
41
37 37
34
29
252525 25
22 22
2019
27
34 34
16
18
20
22
24
26
28
30
32
34
36
38
40
42
44
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Wo
rld
Ran
k
Gündüz Ulusoy15
APPLICATIONS AND REGISTRATION FOR UTILITY MODELS
183223
290 317
454
631
914
1206
1479
1896
2424
1665
964
678704
376257
145160141
113
0
500
1000
1500
2000
2500
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nu
mb
er
of
Uti
lity
Mo
de
ls
Application Registration
Gündüz Ulusoy16
PATENT APPLICATIONS
1577
2526
1690
902
1531
2483
3020
34333214
1152
5165
170 189 2031090
935685
490
414337277276207
28773156
2744
2276
1328
713
1520
4075
1460
662
3461
22621874
0
1000
2000
3000
4000
5000
6000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nu
mb
er o
f A
pp
licat
ion
s
National Foreign Total
FOREIGN TRADE
Gündüz Ulusoy18
EXPORTS AND IMPORTS
2000 2001 2002 2003 2004 2005 2006
Exports (million $) 27.775 31.334 36.059 47.253 63.167 73.476 85.502
Imports (million $) 54.503 41.339 51.554 69.340 97.540 116.774 138.295
020.000
40.00060.000
80.000100.000
120.000140.000
160.000
2000 2001 2002 2003 2004 2005 2006
Years
Vo
lum
e (
mill
ion
$)
Exports (million $) Imports (million $)
Ave Annual Increase in Exportser=%20,6
Ave Annual Increase in Imports ir=%16,8
Gündüz Ulusoy19
TOP 10 EXPORT DESTINATIONS (2005)
COUNTRIESEXPORT(1000 $)
SHARE OFEXPORT (%)
GERMANY 9.455.050 12,9
UNITED KINGDOM 5.917.163 8,1
ITALY 5.616.755 7,6
U.S.A 4.910.633 6,7
FRANCE 3.805.661 5,2
SPAIN 3.010.857 4,1
IRAQ 2.748.524 3,7
NETHERLANDS 2.469.547 3,4
RUSSIAN FEDERATION 2.377.002 3,2
ROMANIA 1.785.402 2,4
EU-15 35.872.276 48,8
Gündüz Ulusoy20
TOP 10 IMPORT SOURCE COUNTRIES (2005)
COUNTRIES IMPORTS BY
(1000 $)SHARE OF
IMPORT (%)
GERMANY 13.619.796 11,67
RUSSIAN FEDERATION 12.869.945 11,02
ITALY 7.561.056 6,50
CHINA 6.867.856 5,88
FRANCE 5.883.702 5,04
U.S.A. 5.371.536 4,60
UNITED KINGDOM 4.690.129 4,02
AUSTRIA 4.053.558 3,47
SPAIN 3.549.778 3,04
KOREA 3.478.865 2,98
EU-15 47.094.120 40,33
Gündüz Ulusoy21
Tourism
Articles of apparel and clothing
Road vehicles
Textile
Iron and steel
Fruit and vegetables
Telecommunications and electronic
equipment
Non ferrous metalsNon-metallic mineral
manufactures
Manufactures of metalsMiscellaneous manufacturing
Other transportequipment
Electrical machinery
Petroleum and products
Power-generating machinery
Rubber manufactures
Special machinery
Sanitary and lighting fixtures
Non-electrical machinery
Plastics
= 1 billion US Dollar
Cereals
Transportation
Furniture and bedding
Essential oils; toilet preparations
Tobacco and manufactures
Paper and articles of paper pulp
-2
0
2
4
6
8
10
12
14
16
18
20
-10 -5 0 5 10 15 20 25 30 35
Annual average change in world market share of Turkey (%) 2000-2005
An
nu
al a
vera
ge
gro
wth
of
wo
rld
tra
de
(%)
2000
-200
5
ChampionsUnderachievers
Growth for world trade, all products
Achievers in adversity
Champions Underachievers
Losers in declining markets
DYNAMIC TRADE PERFORMANCE OF TURKEY (2-digit SITC)
*Öz, Foreign Trade As An Economic Driver, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
Gündüz Ulusoy22
CHAMPIONS IN 2000-2005 PERIOD
PRODUCT GROUP2005
(million US Dollars)
World Rank(2005)
World Share(2005)
World Share
Increase (2000-05)
Average Annual
Increase(2000-05)
World Average Annual
Increase (2000-05)
676 - IRON, STEEL BAR,SHAPES ETC. 3,198 4 6.8 9.4 25.6 14.8
761 - TELEVISION RECEIVERS ETC. 2,934 5 5.1 9.6 28.7 17.5
057 - FRUIT, NUTS EXCLUDING OIL NUTS 2,470 5 4.9 8.6 19.7 10.2
658 - TEXTILE ARTICLES NES 1,952 4 6.8 2.8 14.4 11.3
775 - DOM. ELECTR, NON-ELEC. EQUIPT 1,663 11 2.7 19.7 33.2 11.3
793 - SHIP, BOAT, FLOATING STRUCTURE 1,241 12 3.3 37.3 60.0 16.6
661 - LIME, CEMENT, CONSTR. MATERIAL 1,186 3 6.3 14.4 26.2 10.3
897 - GOLD, SILVERWARE, JEWL NES 1,170 11 3.8 12.5 24.3 10.5
679 - TUBES, PIPES, ETC. IRON,STEEL 920 18 1.9 10.5 29.2 16.9
783 - ROAD MOTOR VEHICLES NES 892 11 3.7 14.9 26.9 10.4
713 - INTERNAL COMBUS PISTON ENGINE 876 21 0.8 16.2 27.4 9.7
672 - INGOTS ETC. IRON OR STEEL 819 10 3.2 10.7 29.5 17.0
058 - FRUIT, PRESERVED, PREPARED 810 2 7.9 13.6 25.9 10.8
699 - MANUFACTURES BASE METAL, NES 699 24 0.8 22.8 34.9 9.9
893 - ARTICLES, NES, OF PLASTICS 677 26 0.8 16.8 28.2 9.7
625 - RUBBER TYRES, TUBES, ETC. 641 18 1.5 7.9 19.3 10.6
812 - PLUMBNG, SANITARY, EQPT. ETC 590 4 5.4 19.4 39.2 16.5
691 - METALLIC STRUCTURES, NES 551 15 2.5 24.2 40.1 12.8
*Öz, Foreign Trade As An Economic Driver, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
Gündüz Ulusoy23
ACHIEVERS IN ADVERSITY IN 2000-2005 PERIOD
PRODUCT GROUP2005 (million US Dollars)
World Rank(2005)
World Share(2005)
World Share
Increase (2000-05)
Average Annual
Increase(2000-05)
World Average Annual
Increase (2000-05)
845 - OTHER.TEXTILE APPAREL, NES 4,387 4 4.6 5.7 13.0 6.9
781 - PASS. MOTOR VEHCLS.EXCL. BUS 4,373 17 0.9 35.4 47.4 8.8
842 - WOMEN, GIRL CLOTHNG, XKNIT 2,817 6 4.2 5.3 13.8 8.0
782 - GOODS, SPCL TRANSPORT VEH 2,500 10 2.8 78.7 94.6 8.9
841 - MENS, BOYS CLOTHNG, X-KNIT 1,829 6 3.7 11.1 15.7 4.1
784 - PARTS, TRACTORS, MOTOR VEH 1,508 23 0.7 15.9 27.0 9.6
844 - WOMEN, GIRLS CLOTHING KNIT 1,304 3 5.6 1.2 8.1 6.8
653 - FABRICS, MAN-MADE FIBRES 1,097 8 4.6 17.8 13.8 -3.4
651 - TEXTILE YARN 1,010 13 2.8 4.2 6.1 1.9
652 - COTTON FABRICS, WOVEN 871 9 3.9 12.2 16.3 3.7
846 - CLOTHING ACCESSRS, FABRIC 781 7 5.0 13.6 19.6 5.3
773 - ELECTR DISTRIBT. EQPT. NES 727 23 1.2 5.2 12.5 6.9
659 - FLOOR COVERINGS, ETC. 670 6 6.3 11.9 18.0 5.4
684 - ALUMINIUM 612 28 0.8 14.1 24.4 9.0
655 - KNIT. CROCHET. FABRIC, NES 571 8 4.1 18.5 22.0 3.0
054 - VEGETABLES 507 14 1.6 5.4 14.5 8.6
*Öz, Foreign Trade As An Economic Driver, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
Gündüz Ulusoy24
CHANGES IN THE EXPORT MIX*
Percent of Exports 1980 1990 2000 2005
Natural Resources
73.6 30.4 16.6 11.5
Low Technology
20.9 55.2 55.4 45.6
Mid Level Technology
4.7 10.0 16.7 29.7
High Technology
0.8 4.3 11.3 13.2
0
10
20
30
40
50
60
70
80
1980 1990 2000 2005
Nat.Res. Low Tech Mid. Tech High Tech
*Ultav, Panel Presentation at the National Innovation Initiative Meeting, Ankara, October, 2006
Gündüz Ulusoy25
MarketShare (%) 1995 2000 2005
Color TVs 5 25 55
Digital Devices
1 5 15
White Goods
3 10 18
Embedded Software
0 0 9
EU MARKET SHARE OF TURKISH COMPANIES IN CONSUMER ELECTRONICS*
0
10
20
30
40
50
60
1995 2000 2005
Color TVs Dig. Dev. W. Goods Emb.SW
*Ultav, Panel Presentation at the National Innovation Initiative Meeting, Ankara, October, 2006
COMPETITIVENESS PROFILE OF TURKEY
Gündüz Ulusoy27
PILLARS OF COMPETITIVENESS*
Key for
efficiency-driven economies
Key for
factor-driven economies
•Institutions•Infrastructure•Macroeconomy•Health and Primary Education
•Higher Education and Training•Market Efficiency (goods, labour, financial)•Technological Readiness
•Business Sophistication
•Innovation
Key for
innovation-driven economies
BASIC REQUIREMENTS
EFFICIENCY ENHANCERS
INNOVATION & SOPHISTICATIONS FACTORS
*The Global Competitiveness Report 2006-2007, World Competitiveness Forum, Geneva, 2006.
Gündüz Ulusoy28
GLOBAL COMPETITIVENESS INDEX RANKING
GCI GCI GCI
Country 2006 Rank 2006 Score 2005 Rank Changes 2005-2006
Switzerland 1 5,81 4 3
Finland 2 5,76 2 0
Sweden 3 5,74 7 4
Denmark 4 5,70 3 -1
Singapore 5 5,63 5 0
United States 6 5,61 1 -5
Japan 7 5,60 10 3
Germany 8 5,58 6 -2
Lithuania 40 4,53 34 -6
Hungary 41 4,52 35 -6
Italy 42 4,46 38 -4
Greece 47 4,33 47 0
Poland 48 4,30 43 -5
Croatia 51 4,26 64 13
Turkey 59 4,14 71 12
Romania 68 4,02 67 -1
Bulgaria 72 3,96 61 -11
Gündüz Ulusoy29
LIST OF COUNTRIES IN EACH STAGE OF DEVELOPMENT*
STAGE 1TRANSITION STAGE 1 2 STAGE 2
TRANSITION STAGE 2 3 STAGE 3
GDPpc US$ <2,000
GDPpc US$ 2,000 – 3,000
GDPpc US$ 3,000 – 9,000
GDPpc US$ 9,000 – 17,000
GDPpc US$ > 17,000
Angola Albania Algeria Bahrain United States
Armenia Bosnia and Herze. Argentina Barbados United Kingdom
Azerbaijan Colombia Brazil Czech Republic Belgium
China Ecuador Bulgaria Estonia Canada
Egypt El Salvador Chile Hungary Denmark
Georgia Jordan Croatia Korea Finland
India Macedonia, FYR Malaysia Malta France
Indonesia Peru Mexico Taiwan Germany
Morocco Suriname Poland Trinidad & Tobago Greece
Nigeria Thailand Romania Ireland
Pakistan Tunisia Russian Federation Israel
Philippines South Africa Spain
Vietnam Turkey Sweden
*The Global Competitiveness Report 2006-2007, World Competitiveness Forum, Geneva, 2006.
Gündüz Ulusoy30
RELATIONSHIP BETWEEN GDP PER CAPITA ($) (PPP) AND GCI SCORE
Latvia
Czech Republic
PolandTURKEY Romania
Bulgaria
Slovenia
FranceBelgium
IcelandAustria
Singapore
Sw itzerlandSw eden
Macedonia
EstoniaIreland
Italy
Spain
USA
Greece
Brazil
R2 = 0,7446
3,0
3,5
4,0
4,5
5,0
5,5
6,0
0 10.000 20.000 30.000 40.000 50.000
GDP per capita ($) (PPP)
GC
I Sco
re 2
006
Gündüz Ulusoy31
TURKEY IN RELATION TO EU 25
0
1
2
3
4
5
6
7
Institutions
Infrastructure
Macroeconomy
Health and primary education
Higher education and trainingMarket efficiency
Technological readiness
Business sophistication
Innovation
TR score EU 25 score EU Accession 10 score
*Öz, The Investment Environment, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
Gündüz Ulusoy32
TURKEY IN RELATION TO NEW MEMBERS
0
1
2
3
4
5
6
7
Institutions
Infrastructure
Macroeconomy
Health and primary education
Higher education and trainingMarket efficiency
Technological readiness
Business sophistication
Innovation
TR score Bulgaria score Romania score
*Öz, The Investment Environment, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
Gündüz Ulusoy33
EU-10 IN 1996 AND 2006
*Öz, The Investment Environment, The Global Competitiveness Report Turkey 2006, REF, Istanbul, November 2006
GCI AND INNOVATION
Gündüz Ulusoy35
RELATIONSHIP BETWEEN INNOVATION SCORE AND GCI SCORE
Estonia
Japan
Sw itzerland
Macedonia
BulgariaRomania
TURKEY
Spain
Iceland
Czech Republic
Germany
Sw edenDenmark
UK
IrelandLuxembourg
HungaryItalyCyprus
Latvia
Brazil
R2 = 0,8885
3,0
3,5
4,0
4,5
5,0
5,5
6,0
2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5
Innovation Score
GC
I Sco
re 2
006
Gündüz Ulusoy36
RELATIONSHIP BETWEEN R&D EXPENDITURE AS A PERCENTAGE OF GDP AND GCI SCORE
Bulgaria
Romania
Sw eden
FinlandSw itzerland
Italy
TURKEY
Czech RepublicSpain
Ireland
EstoniaAustria
Poland
Macedonia
IcelandJapan
Croatia
Singapore
BelgiumUK
France
Cyprus
PortugalSlovakia
Brazil
R2 = 0,7802
3,0
3,5
4,0
4,5
5,0
5,5
6,0
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0
R&D Expenditure as a Percentage of GDP
GC
I Sco
re 2
006
Gündüz Ulusoy37
RELATIONSHIP BETWEEN RESEARCHERS IN R&D AND GCI SCORE
Lithuania
Denmark Sw eden
Japan
Austria France
Romania
Bulgaria
Malta
Estonia
Czech Republic
Slovenia
GermanyNetherlands
Sw itzerland
Luxembourg
Poland
Spain
Finland
Iceland
TURKEY
Macedonia
Brazil
R2 = 0,7199
3,0
3,5
4,0
4,5
5,0
5,5
6,0
0 1000 2000 3000 4000 5000 6000 7000 8000
Researchers in R&D (per million people)
GC
I Sco
re 2
006
BUSINESS COMPETITIVENESS INDEX (BCI)
Gündüz Ulusoy39
BUSINESS COMPETITIVENESS INDEX
BCI RANKINGQUALITY OF THE
NATIONAL BUSINESS
ENVIRONMENT
COMPANY OPERATIONS
AND STRATEGY
COUNTRY 2006 2005 2006 2005 2006 2005
UNITED STATES 1 1 1 1 1 1
GERMANY 2 2 2 3 2 2
FINLAND 3 3 3 2 8 8
SWITZERLAND 4 8 4 8 4 6
DENMARK 5 4 6 4 6 5
NETHERLANDS 6 7 5 7 7 9
CYPRUS 45 34 43 34 67 47
TURKEY 46 49 46 49 41 38
GREECE 49 45 47 47 53 46
POLAND 53 44 53 46 49 40
BRAZIL 55 51 58 53 38 34
CHINA 64 54 65 54 69 53
Gündüz Ulusoy40
GCI RANK 2006 vs. BCI RANK 2006
TURKEY
Macedonia
BulgariaRomania
LatviaPortugal
Spain
PolandCyprus
Ireland
Estonia
Croatia
Slovenia
Italy
FranceAustria
Singapore
UK
Brazil
R2 = 0,9502
0
10
20
30
40
50
60
70
80
90
0 10 20 30 40 50 60 70 80 90
BCI Rank 2006
GC
I Ran
k 20
06
SOME OBSERVATIONS CONCERNING MANUFACTURING INDUSTRIES IN TURKEY
Gündüz Ulusoy42
EMPIRICAL STUDIES OVER A DECADE
The observations and remarks following will be based on several empirical studies distributed over a decade starting in 1997. Automotive Cement Electronics White goods’ suppliers Automotive suppliers (technology management) Electronics (NPD capability) Machine building Innovation in manufacturing industries (2004,2006) Innovation models in manufacturing and innovation
networks
Gündüz Ulusoy43
RANKING OF PRACTICES IN RELATION TO THEIR IMPACT ON THE SUCCESS OF THE COMPANY*
*Ulusoy, Moving Forward, TÜSİAD Report, Istanbul, 2003.Ulusoy, İkiz, "Benchmarking best manufacturing practices: a study into four sectors of the Turkish industry", International Journal of Operations and Production Management, 21, 1020-1043, 2001.
Gündüz Ulusoy44
RANKING OF OUTCOMES IN RELATION TO THEIR IMPACT ON THE SUCCESS OF THE COMPANY*
3,2
4
3,3 3,4
4,2
3,84,1 4,2
2,7 2,7
2,1
3
2,62,72,9
2,6
3,3
2,82,6
2,4
1,7
2,3 2,2
2,9
4,6
00,5
1
1,52
2,53
3,5
44,5
5
Electronics Automotive Cement Appliancesp&c suppliers
Average
Cost Quality Flexibility Timeliness Innovativeness
*Ulusoy, Moving Forward, TÜSİAD Report, Istanbul, 2003.Ulusoy, İkiz, "Benchmarking best manufacturing practices: a study into four sectors of the Turkish industry", International Journal of Operations and Production Management, 21, 1020-1043, 2001.
Gündüz Ulusoy45
COMPETITIVENESS STRATEGIES FOR MANUFACTURING FIRMS IN TURKEY*
In general, the manufacturing industry in Turkey had based its competitiveness strategy on low price rather than product differentiation.
But, rapid design change and rapid new product introduction were within the first five competitive priorities of all sectors involved.
Furthermore, decreasing the new product development time was within the first five manufacturing objectives.
The manufacturing firms were fully aware that in order to survive in the market process and product quality are necessary requirements.
There were areas open to improvement in quality issues of which companies seem to be aware. Consistent quality level was designated as the highest competitive priority.
*Ulusoy, Moving Forward, TÜSİAD Report, Istanbul, 2003.Ulusoy, İkiz, "Benchmarking best manufacturing practices: a study into four sectors of the Turkish industry", International Journal of Operations and Production Management, 21, 1020-1043, 2001.
Gündüz Ulusoy46
In line with these observations Total Quality Management came out to be the most popular action plan.
Based on these observations we can conclude that the Turkish manufacturing industry will increase the weight of product differentiation strategy against the low cost strategy within its mixed strategy.
COMPETITIVENESS STRATEGIES FOR MANUFACTURING FIRMS IN TURKEY*
*Ulusoy, Moving Forward, TÜSİAD Report, Istanbul, 2003.Ulusoy, İkiz, "Benchmarking best manufacturing practices: a study into four sectors of the Turkish industry", International Journal of Operations and Production Management, 21, 1020-1043, 2001.
Gündüz Ulusoy47
COMPETITIVENESS STRATEGIES FOR MANUFACTURING FIRMS IN TURKEY
The agenda of the Turkish manufacturing industry is to be able to manufacture quality goods at low cost and to increase their market share.
Firms also aim at introducing products with high added value in order to increase their profitability.
These strategies are consistent with the increasing emphasis on product differentiation and the increasing importance of new product development.
Gündüz Ulusoy48
COMPETITIVENESS
At the macro level, competitiveness in Turkey suffers from three weaknesses: Informal economy Macroeconomic and political instability Governmental ownership
Nonoperational profits were high.
Gündüz Ulusoy49
A TWO-TRACK ECONOMY*
SECTORTraditional Modern Average
Fast moving consumer goods 22 75 29
Residential construction 31 56 41
Dairy processing 27 93 50
Auto parts 22 89 68
Confectionary 18 69 35
Steel 28 91 76
Labor Productivity USA=100
*Baser, Farrel, Meen, Turkey’s quest for stable growth, McKinsey Quarterly, 74-95, Special Edition, 2003
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In the 11 sectors covered the labor productivity has been found to be at the 40% level of the labor productivity in USA.
In manufacturing sector labor productivity is 64% of that in USA.
In steel production labor productivity is 76% of that in USA.
In service sector labor productivity is 33% of that in USA.
In infrastructure services sector labor productivity is 48% of that in USA. In cell phone services sector labor productivity is 109%
of that in USA. In electricity distribution sector labor productivity is 21%
of that in USA.
Kaynak: MGI
PRODUCTIVITY*
*Baser, Farrel, Meen, Turkey’s quest for stable growth, McKinsey Quarterly, 74-95, Special Edition, 2003
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EVOLUTION OF MANUFACTURING INDUSTRIES IN THE LAST DECADE
Quality has preserved its position as the number one competitive priority through the last 10 years.
The same holds true for TQM as the most widely employed action plan.
Good performance in CIP, JIT delivery, JIT purchasing.
Innovation and particularly new product development emphasis is steadily increasing.
Weight of the product differentiation strategy against low cost strategy within firms’ mixed strategy is increasing.
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CHANGES IN COMPETITIVENESS STRATEGY*
Evolution of product strategy from focus on cost to focus on differentiation through product variety.
*Ulusoy, Yeğenoğlu, Innovation performance and competitive strategies in the Turkish manufacturing sector,QIK 2007, pp. 907-915, New Delhi, India, February 2007
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CHANGES IN COMPETITIVENESS STRATEGY*
Evolution of new product strategy from follower in the market to first in the market.
*Ulusoy, Yeğenoğlu, Innovation performance and competitive strategies in the Turkish manufacturing sector,QIK 2007, pp. 907-915, New Delhi, India, February 2007
PUBLIC SUPPORT FOR R&D AND INNOVATION
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PUBLIC SUBSIDIES FOR THE SCIENCE, TECHNOLOGY AND INNOVATION ACTIVITIES OF THE PRIVATE SECTOR
Year
Mill
ion
YT
L
CurrentPrices
2005 Prices
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PUBLIC SUBSIDY TO RESEARCHERS
Year
Num
ber
of R
esea
rche
rs
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DIRECT PUBLIC SUBSIDIES TO SCIENCE, TECHNOLOGY AND INNOVATION
Mill
ion
YT
L
Year
Current Prices2005 Prices
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APPLICATIONS AND REGISTRATION FOR UTILITY MODELS
183223
290 317
454
631
914
1206
1479
1896
2424
1665
964
678704
376257
145160141
113
0
500
1000
1500
2000
2500
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nu
mb
er
of
Uti
lity
Mo
de
ls
Application Registration
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PATENT APPLICATIONS
1577
2526
1690
902
1531
2483
3020
34333214
1152
5165
170 189 2031090
935685
490
414337277276207
28773156
2744
2276
1328
713
1520
4075
1460
662
3461
22621874
0
1000
2000
3000
4000
5000
6000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nu
mb
er o
f A
pp
licat
ion
s
National Foreign Total
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A PERSISTENT FAULT LINE
A persistent fault line among the firms is the lack of collaboration.
There is a distinct need for Turkish firms to establish networks and clusters.
The Turkish firms need to become part of the global supply chains.*
*Ulusoy, Moving Forward, TÜSİAD Report, Istanbul, 2003.
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WHAT NEXT?
Continuation of developing indigenous technology and products at increasing intensity.
A strong wave of innovative activities is expected.
Work on overcoming the barriers to collaboration of the Turkish firms.
AN ASSESSMENT OF OPERATIONS MANAGEMENT IN TURKEY
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A BRIEF HISTORY OF OPERATIONS RESEARCH IN TURKEY
The first OR unit in Turkey was established in the General Staff of Armed Forces under the title Scientific Consultation Directorate on August 19, 1954. Mainly reserve officers with suitable background served in this unit. Later in 1958 the R&D Laboratories in the Air Force were attached to this unit. It continued to serve in the General Staff of Armed Forces until 1970 when it was transferred to the Ministry of Defence.
In 1973, another unit, which was first called Defense Research Directorate and then Armament and Defense Directorate, was established in the General Staff of Armed Forces.
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A BRIEF HISTORY OF OPERATIONS RESEARCH IN TURKEY
In the civilian sector, the first attempt took place on September 1, 1965. The Operations Research Unit was founded within the Scientific and Technical Research Council of Turkey and continued to operate on the campus of Middle East Technical University until 1973. In 1973, it was transferred as a Unit to the Marmara Scientific and Industrial Research Institute in Gebze, Kocaeli. Later in 1992 it was dissolved.
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A BRIEF HISTORY OF OPERATIONS RESEARCH IN TURKEY
The first course on OR was offered in the Faculty of Mechanical Engineering at Istanbul Technical University in 1962-1963 academic year. Later two courses were initiated at the Middle East Technical University in 1964-1965 in the Mathematics Department. A graduate degree program was established in the same Department starting in 1965-1966 academic year.
Later OR courses became part of the fundamental course work in the Industrial Engineering Departments and Management Departments. Besides industrial engineering and management fields, OR courses are also included in the mathematics, statistics, econometrics, and regional and city planning curricula among others.
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A BRIEF HISTORY OF OPERATIONS RESEARCH IN TURKEY
Operations Research Association was established in 1975 and organized the first Operations Research National Conference the same year. Starting with the 15th National Congress in July 1993 the title of the Conference was changed to Operations Research and Industrial Engineering. National Conference. The 27th OR/IE National Conference will convene in İzmir during July 2-4, 2007.
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INDUSTRIAL ENGINEERING AND MANAGEMENT DEPARTMENTS IN TURKEY
Num ber of Departm ents in Turkey 2006
010
203040
5060
7080
Industrial Eng Management
Public Private
Placem ent 2006
0
2000
4000
6000
8000
10000
12000
Industrial Eng. Management
Public Private
Number Capacity PlacementRemaining
Capacity
Public 23 1464 1464 0
Private 17 1172 899 273
Public 51 8892 8850 42
Private 24 2315 1349 966Managem ent
Industrial
Eng.
Number of IE undergraduates: app. 9.200.
Number of Management undergraduates: app. 41.600.
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UNIVERSITY PLACEMENT TEST BASE ACCEPTANCE SCORE (Normalized over 100)
95
96
97
98
99
100
2000 2002 2004 2006 2000 2002 2004 2006 2000 2002 2004 2006
Boğaziçi Bilkent ODTÜ
Industrial Eng. Electrical and Electronic Eng. Computer Eng.
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90
91
92
93
94
95
96
97
98
99
100
2000 2002 2004 2006 2000 2002 2004 2006 2000 2002 2004 2006
Boğaziçi Bilkent ODTÜ
Management Economics International Relations
UNIVERSITY PLACEMENT TEST BASE ACCEPTANCE SCORE (Normalized over 100)
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JOURNAL PUBLICATIONS BY TURKISH RESEARCHERS (1990-2006)
JOURNAL 06 05 04 03 02 01 00 99 98 97 96 95 94 93 92 91 90 TOTAL
International Journal of Production Economics 5 3 6 2 5 2 5 7 9 2 3 0 1 2 2 3 0 57
International Journal of Production
Research 9 13 7 9 11 9 7 4 5 2 3 3 2 3 2 0 1 90
European Journal of Operational Research 20 9 7 11 5 14 10 12 12 6 10 2 9 1 2 3 1 134
IIE Transactions 2 5 3 4 3 3 5 3 3 5 1 1 0 0 0 0 1 39
Management Science 0 1 1 1 2 1 1 0 1 0 1 2 2 0 0 0 1 14
Operations Research 1 1 1 4 2 1 1 1 0 2 0 1 0 0 0 1 0 16
TOTAL 37 32 25 31 28 30 29 27 30 17 18 9 14 6 6 7 4 350
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JOURNAL PUBLICATIONS BY TURKISH RESEARCHERS (1990-2006)
JOURNALNO OF
PUBLICATIONS(1990-2006)
International Journal of Operations & Production Management 5
Journal of Operations Management 0
Manufacturing and Service Operations Management 4
Production and Operations Management 1
Production and Inventory Management Journal 2
Journal of Supply Chain Management 1
Decision Sciences 1
Interfaces 5
Decision Support Systems 5
Strategic Management Journal 0
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SOME OBSERVATIONS AND COMMENTS
The papers published are concentrated in a small number of journals all of them IEOR oriented.
We observe very few empirical work among the publications. OM displays some similarities to medical practice. Observations lead to models and theories. We lack in Turkey empirical research. Not much operational data is collected in Turkey.
Only very few case studies are generated by the Turkish researchers. Although few in number still the quality of work is established in the number of prizes given to these case studies by INFORMS.
There is a lack of university-industry cooperation and collaboration. This has some serious repercussions.
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SOME OBSERVATIONS AND COMMENTS
It is important in this phase of development that Turkish researchers concentrate on solving problems from practice. This implies doing more joint work with the industry. There seems to be a positive trend in this direction. This might be more rewarding than incremental improvements in methodologies well developed already.
In the selection of sectors a good guideline can be the productivity figures cited earlier.
One can easily observe that the number of publications in collaborationwith researchers based outside Turkey is small – mostly one’s PhD advisor. International joint work is needed not only to increase productivity but also for bringing Turkish researchers into the kitchen of events.
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SOME OBSERVATIONS AND COMMENTS
Collaboration among universities in Turkey is weak as well.
The fact that FDI in Turkey is steadily increasing can be seen as an opportunity to further improve OM practice here.
OM has a strong social science component. In Turkey I have not made any mentionable observation of cooperation between OR/OM researchers and social scientists.
Establishing strong relationships with social scientists is not only needed for interdisciplinary research but there is a lot to be learnt from them in terms of conducting empirical research.
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LOCAL GOVERNMENTS - CONSTRUCTION
Looking to the urban population ratio in Turkey and recalling that in advanced economies it is above 90%, it is obvious that Turkey has a long way to go. Urbanization is an important problem needing the attention of experts with OM background. At this point in time there seems to be only very limited interest in this issue in Turkey and that mainly around urban transporation.
Local governments need all sorts of guidance, which the OM people are capable of providing.
Construction is one of the internationally more competitive sectors in Turkey but with OM weakly represented in the planning and operation of this sector.
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TECHNOLOGY AND INNOVATION MANAGEMENT
Interest and need for technology and innovation management is growing in practice in Turkey. This is closely related to the increasing activities in Turkey for the development of indigenous technology.
The managers are not in a position to pinpoint their needs exactly. They need to be guided by OM practitioners.
Thank you...