New Route for ASELSAN DST’s TORK 2017: From Indigenous Design to Efficient Manufacturing
“New Route for ASELSAN DST’s TORK 2017: From Indigenous Design to Efficient Manufacturing” titled special coverage published in the 40th issue of MSI Turkish Defence Review (TDR) is below:
The 3rd Design Solutions Partners Conference (TORK), organised by ASELSAN’s Defence Systems Technologies (DST) Vice Presidency, was held on May 24 in Ankara. During the DST TORK 2017, which was held as a full-day event with the theme “From Indigenous Design to Productive Manufacturing”, an award ceremony titled “Successful Solution Partners” were held, in addition to two panels and the presentations given.
The topics on the agenda of this design and production-related conference were as follows:
– Allowing Small and Medium-sized Enterprises (SMEs) to focus on design work, in addition to their production activities; and
– Increasing the share obtained by medium-sized enterprises from production.
Delivering the opening speech of the event, Mustafa Kaval, Vice President of Defence Systems Technologies at ASELSAN, shared his views about their participation to IDEF exhibition, which was held in May, as follows: “Another first for us in this exhibition was that we had a separate section where our company’s representatives from the industrialisation and procurement units had the chance to meet with you, our solution partners. We facilitated meetings for you to come together with our procurement and industrialisation staff in the meeting halls and private meeting rooms at the exhibition area. And this was really helpful. We are intending to adopt the same approach, with more focus on it, in the upcoming exhibitions as well.”
Concerning their expectations from the subcontractors, Kaval commented as follows: “We receive feedback from the surveys we conduct; what should we do to improve ourselves and to proceed further altogether? There is a concept called quality management system, and we all need to take into consideration the definitions, rules and procedures associated with this concept. Sometimes, discussions may arise, claiming that the process is very strict and challenging. But the fact is that the systems we produce are also operating under very stringent conditions. Maybe they will not be used at all during their lifetime, or maybe they will be used only once. But they have to duly perform their task at that specific time of use. That is why we attach importance to quality-related issues… We will trust each other and work in cooperation. By using our knowledge, which we are increasing every passing day, and by working productively, we will be developing products in a shorter time and at lower costs. As you know, due to the extraordinary situation in our country, the demand for defence systems has recently increased in number, and in addition to this increase, the users, especially the Undersecretariat for Defence Industries (SSM), is putting great pressure on us with regard to the delivery schedules. So have to respond to such requests dynamically.”
Medium-sized Enterprises Should Fill the Middle of the Pyramid
Kaval continued his statements by noting that “Sometimes you may also need to work with a subcontractor. We prefer you to work with ASELSAN-approved firms and establish our own network of subcontractors for your portfolio.” Kaval also shared the following views about medium-sized enterprises: “I had a chance to participate in the general assemblies of both the Defence and Aerospace Industry Exporters’ Association (SSI) and the Defence and Aerospace Industry Manufacturers Association (SASAD). There is a significant point, which was also raised by our Minister [of National Defence] in his speeches: The need to fill the Middle of the Pyramid with Medium-sized Enterprises. To put it differently, we already have large companies such as ASELSAN, TAI, ROKETSAN, HAVELSAN, and other private companies. In addition, we also have numerous companies under the SME category. We do have such companies in the medium catogory; but perhaps, we need to increase their number, so that we can distribute them to the relevant levels of the pyramid, and fill its mid-level. Once you produce certain components, we ask you to assemble them and to focus on the integration aspect as well. There are already such companies, with which we are working like this. But we want to have more of such companies. And of course, to ensure the development of our industry, we will grow together. I am asking for your support in this regard.”
Kaval also shared the following figures: “Currently, we, at ASELSAN DST, have 339 candidate companies waiting to be assessed as solution partners. We are now conducting design and development activities with 126 of these companies. According to ASELSAN DST’s quality requirements, 50 solution partners have been approved in 96 areas of expertise. We have signed strategic cooperation agreements with 11 companies. On the other hand, in the context of our framework contracts, we have agreed with 17 companies for a total engineering work load of 250,000 hours. We have already spent some 100,000 hours of this, while there are still 150,000 hours remaining.”
Company Mergers to be Pushed
Bilal Aktaş, Head of Industrialisation Department at the Undersecretariat for Defence Industries(SSM), took the floor after Kaval, starting his speech with the following words: “Our country is now capable of carrying out system-level designs in accordance with the procurement approaches of the SSM. When launching tenders, unless it is about something urgent, we definitely put a condition that the project should be conducted by a local contractor and with an indigenous design. The current environment we are in requires such an approach. It seems that in the coming period, we will need to focus more on basic and advanced technologies.”
Aktaş also mentioned the issue of strengthening medium-sized companies, which had been discussed at the General Assembly of SASAD: “We are preparing a new sectorial strategy document in which we will emphasise this point. Perhaps 95 percent of the country economy is dependent on SMEs… But when we look around the world, we see that there are lots of subsystem producers. And the turnover of some of these producers is much higher even than Turkey’s total defence exports. Regardless of who is manufacturing the tank, the oil pump will be supplied by the sub-system producers; and regardless of who manufacturers the aircraft, the fuel pump, actuators, and DC engines will again be provided by these companies.” He added: “If we can only strengthen these system producers, they will see that there are thousands of systems they can develop. And there is space for everyone. We will be focusing on this issue in the next five years. I will be pushing for company merger processes. The approach about SMEs should be “Let it be big and ours” rather than “Let it be small but mine”. We should encourage the SMEs to adopt this approach. Mr. Mustafa [Kaval], instead of working with 1,000 companies, if you work with some 150 subsystem companies approved by ASELSAN or SSM, and if you also engage Tier 2 and Tier 3 suppliers, we can expand this family much further.”
Aktaş also announced a contest they are planning in November: “We will organise an unmanned land vehicle contest where systems of various sizes will compete. Probably there will be three categories to include amateurs, semi-amateurs, and professionals… We have designed the competition to address the defence and security needs. We will organise it in the course of this year, perhaps in November.”
Concerning the clusters, Aktaş shared his views as follows: “The companies in the teknokents and the ones making production formed separate clusters. But real synergy is something that will come out when these two come together. That is why, I advise you to design your cluster activities based on a team spirit. If you come to us with such projects, it will be much easier for us to find funds and opportunities for them. Clusters should serve as a platform where design companies, production companies, and even universities work in collaboration. They should not be structured as a platform where people meet quite often and host each other.
Finally, Aktaş described SSM’s expectations as follows: “From now on, we should be shifting from production to design. And you should promote yourselves. In other words, you should say ‘We are a company which specifically produces this and that. We are not the kind of company ready to do any kind of business. This is our product and its NATO stock number is that’… As the demand of the defence industry may decrease, make sure you allocate some of your resources in the civil industry. Explore the opportunities in the civil area.”
Machining Won’t Earn You Money
Orhan Aydın, Chairman of the Board of OSTİM, took the floor after Aktaş. He pointed out that all stakeholders in the industry are responsible for the limited number of medium-sized companies. He criticized SMEs as follows: “I keep criticizing SMEs, especially the ones operating in the defence industry, when I attend their meetings. I tell them ‘You’re not actually doing anything. Do you? ASELSAN or TAI designs the product and bring you the materials. You only have a CNC machine to do machining work. In other words, you are only scraping objects, which isn’t something that earns you money.’ And really, they aren’t earning much anyways.”
ASELSAN SARP Draws Framework for Relations with Subcontractors
Following the opening speeches, ASELSAN officials gave several presentations:
- Ali Rıza Kılıç, Director of Central Purchasing at ASELSAN, provided information about their financing model addressing the suppliers: “In this model, we first send an agreement with a bank and then announce it. After that, the suppliers submit our purchase orders to the bank and are offered loans on easier terms when compared with the market conditions, without giving anything as a pledge or providing any collateral. As of today, we have signed such agreements with five banks and we are still in talks with two-three other banks. We have already mediated the lending of a total of some 100 million lira credit to 42 companies. To date, we have not received any negative feedback, neither from the banks nor from the suppliers. That is why this model has started to draw the interest of the industry. We are thinking of taking this model a little further. Our intention in the new model is to allow suppliers to receive their letters of guarantee – if required by us – in return for a purchase order. Accordingly, if the purchase order includes a note saying that an advance payment will be made, the supplier will go to the bank; show the purchase order; and get the letter of guarantee on much easier terms when compared with the market conditions. Then, in exchange for that letter, we will make the advance payment. We have not finalized this model yet. We will make an announcement as soon as we finalize the related work.”
- Adil Baktır, Head of Business Line for Air and Missile Defence Systems at ASELSAN DST, mentioned about the contracts signed by ASELSAN’s DST Vice Presidency, and their ongoing projects. Regarding the SARP remote controlled stabilised weapon system, he said: “We are going through very extraordinary times. Especially in the field of remote controlled land weapon systems, we have to offer very fast and very cost-effective solutions. In the period of 2016-2017, there is a strong demand, especially for the SARP systems, and we are trying to deliver them on time. We have these solutions be integrated by various platform providers. We are working with a lot of subcontractors and a lot of subsidiary industry companies. We are also trying to expand the resources of subcontractors. Because what is expected from us is to double or triple our current performance.”
- Cenk Tunay, Purchasing and Procurement Director at ASELSAN DST, shared the information given in Figures 1, 2, and 3. He addressed the solution partners regarding the SARP weapon system: “We are also willing to shift from component-based production to system-level production. When we started one and a half year ago, we were manufacturing the turret only mechanically. But now, we have subcontractors that are capable of assembling other units on the turret, furnishing cabling, and carrying out the related tests to a certain extent. And we expect to see an increase in their number and strength.”
- Tuncay Ergün, Head of Engineering at ASELSAN DST, mentioned the following about technology planning: “All related technologies should be used in order to develop a new product. While some of these technologies were already gained in the past and are easy to access, some others may not have reached the required level of maturity yet. If the technologies are not mature at the beginning of the respective projects, the time required for the product design increases, and certain risks and uncertainties arise. Thus, work on all technologies to be used in products planned in the medium to long term should be launched prior to the technology acquisition activities.”
SSM, TSSK and ASELSAN Talked about Design
Prof. Dr. Mehmet Çelik, Vice President of Technology and Strategy Management at ASELSAN, who moderated the first of the panels held during the conference, delivered a speech before the panel started. He first shared general statistics about the R&D activities conducted in Turkey, and then reminded that in 2016, the total R&D expenditures of Turkey was $18 billion, while the same figure was $450 billion in the US. Prof.Dr.Çelik said: “Which one is important? The amount spent on R&D from these sums of $18 billion or $450 billion? Or the extent to which the amounts spent on R&D have been commercialised? We need to focus on this point.” and added: “The reason I gave these figures here is to highlight the fact that R&D and innovation can be carried out and commercialised not by factories, machines, structures and organisations, but by qualified work force. Therefore, we need to cover considerable ground in regard to raising qualified work force.”
Prior to the panel, Prof. Dr. Çelik finally told the following: “Concerning innovation, we see that the companies across the world no longer carry out their innovation activities behind closed doors. The world is now focusing on open innovation. And open innovation lies in cooperation and the joining of forces.”
Following his speech, Prof. Dr. Çelik moderated the ‘Indigenous Design and Localisation Panel’ by addressing questions to the speakers.
- Bilal Aktaş, Head of Industrialisation Department at SSM, touched on the subject of antiterrorism, saying: “To date, we used to make our operations and industry related plans so as to be prepared for a possible pitched battle where we will have a regular force to fight against. We always made our plans in order to be ready against the elements that may resist against our aircraft, tanks and guns. We always worked on how to carry out an operation or landing, and how to use our AWACS aircraft to see their aircraft earlier. But the changing global conditions show that nobody gives priority to pitched battles… And this process showed us that we need to review and revise our operations plans as well as our plans about the defence industry. In my opinion, we should not leave this issue only to the user… Concerning the operational plans, we, at the Undersecretariat, would like to discuss the situations where certain needs may arise together with the user.”
- Fatih Ünal, Chairman of the Board of Teknokent Defence Industry Cluster (TSSK), gave the following information about the TSSK member companies: “If we look at the total R&D income in 2016, we see that it is ₺1.1 billion and $96 million of this comes from exports. Although Turkey’s market size is relatively small, there is a serious volume of achievement here when compared with the other players in Turkey… Let me share some brief information with respect to the relations with ASELSAN. I don’t have any direct statistics about DST but I can say that in the last decade, a business volume of $100 million has been created with ASELSAN in general. During the last TSSK Project Market activity we conducted in 2016, a total of some 30 new contracts were signed for the commencement of new work between ASELSAN and TSSK member companies.” Ünal commented on TSSK’s role as: “In fact, we see our role as indigenising the subsystems and technological products of the companies that are producing the main systems. When we say indigenisation, we mean a real indigenisation based on local and unique design.” Ünal then listed some examples of the best practices they conducted with ASELSAN’s DST Vice Presidency as follows:
- Tachometer Product Family: This product family, indigenously designed and developed by ETA company, is used in the SARP weapon system and it can also be integrated to various different applications. The product family has recently created a business volume of $8.5 billion. The orders to be received are expected to be valued at around half of this amount.
- Air Defence Systems Remote Control Send and Receive Unit: Developed by SDT company, together with ASELSAN’s DST Vice Presidency, the system provides high speed data communication between the platform and the tower in the case of weapon systems with mobile tower. The reason why such a system needed to be developed is that transferring high resolution images, sound signals, and data in various protocols is both very difficult and too costly in the currently and commonly used mechanical slip ring technology.
- Serkan Özgün, Design Director at ASELSAN DST, shared the following information about the indigenisation projects they have been currently conducting:
- SARP Weapon System: Many of the system’s components including the slip ring, ring gear, computer, and handles have been developed in the country and their production is underway.
- TUFAN Electromagnetic Launch System: The work on the indigenisation of condensers with high energy capacity, which are among the most important components, by a team of the relevant companies, universities, and research institutions, is going on.
- Indigenous Processor Development Project: ASELSAN has launched this project with its own resources. In the context of the project, teams are formed with the participation of universities and research institutions.
- Real Time Operating System: This system, which has been developed by The Scientific and Technological Research Council of Turkey (TÜBİTAK), is used in the SARP system.
ASELSAN and Industry 4.0
Prior to the second panel of the conference, titled Industry 4.0: The New World Ahead of Us After the Digital Transformation in the Industry, Alper Gerçek, Senior Lead Engineer at ASELSAN, and the moderator of the panel, gave a presentation, sharing the following information about Industry 4.0: “This revolution is rather interesting. We haven’t experienced it yet; we are going through it together, fashioning it together in the process. We believe that this revolution is necessary, and the world is slowly starting to live with it. In this sense, this [revolution] is more interesting than the previous versions. So we, as Turkey, are also at the beginning of the road, just like the rest of the world. In fact, we’re not missing anything.”
Following Gerçek’s presentation, speeches were delivered and presentations were given by the officials listed below, from a broad perspective covering all other industries in addition to defence and aerospace:
- Özden Özben, Senior Consultant at SSM,
- İbrahim Güzel, Production Technologies Specialist at Arçelik,
- Senih Başol, Defence Solutions Director at Karel, and
- Murat Koç, Business Development Manager at Altınay.
The last activity of the conference was the Award Ceremony of Successful Solution Partners. During the ceremony, the awards for the successful designs of 2016 were delivered to the representatives of the respective companies by ASELSAN officials. The event ended after the award ceremony.
Mustafa Kaval, Vice President of Defence Systems Technologies at ASELSAN, presented the Achievement Award for Component Design to Atila Koç, General Manager of ARTI Industrial Electronic.
Tuncay Ergün, Head of Engineering at ASELSAN DST, presented the Achievement Award for Mechanical Design to Sertaç Köksal, Senior R&D Engineer at Ekinoks-AG.
Serkan Özgün, Design Director, ASELSAN DST, presented the Achievement Award for Software Design to İsmail Bıkmaz, Deputy General Manager at Simsoft.
Emre Ayazoğlu, Systems Test Manager at ASELSAN DST, presented the first of the Achievement Awards for Special Field Designs under the category of Test Systems Design to Çağrı Murat Karapıçak, General Manager of KUASOFT Information Technologies.
Emre Ayazoğlu, Systems Test Manager at ASELSAN DST, presented the second of the Achievement Awards for Custom Field Designs under the category of Test Systems Design to Sedat Alantar, Business Development Manager at DEICO Engineering.
Hasan Kobakçı, Director of Quality Management at ASELSAN DST, presented the Special Prize for Quality to Dursun Öner, Mechanical Design Director at ANOVA.
İhsan Özsoy, Design Subcontract Manager at ASELSAN DST, presented the Special Prize for Communication to Ateş Berna, Managing Partner of Electra IC.
Murat Ertek, Electronic Design Manager for Power and Control Systems at ASELSAN DST, presented the Special Prize for Indigenous Product Design to Köksal Özdemir, R&D Director at Akana Engineering.
Ayşegül Pişkin, Manager, Production and Procurement QA at ASELSAN DST, presented the Special Prize for Design Incentive to Sercan Aydoğmuş, General Manager of AYDUO.
Fatih Say, Military Computer Design Manager at ASELSAN DST, presented the Special Prize for Design & Promotion to Hakan Aydın, General Manager of LİNERA.
İlhan Başçuhadar, Manager, Mechanical Technologies Design Department at ASELSAN DST, presented the Special Prize for Design & Promotion to Alper Canmert, General Manager of MEG
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