In export sectors such as automotives, TVs, white goods and clothing, the production models are dependent on imports. The chemistry of production, its basic structure, is changing. This is bringing the ‘renewal of the production paradigm’ onto the agenda. The leading companies in Turkey are taking global competition onto a different platform. Despite disadvantages such as labour, energy and tax, the progress that global producers have recorded in production models over the last ten years have enabled them to maintain their presence on global markets
The strength of the modern Turkish economy is based on the export sectors. The use that export sectors such as automotives, white goods, television and clothing make of imported intermediary goods makes it looks as if they are dependent on the outside world. But in the last ten years these sectors have virtually skipped an era in the production models to counter their dependence on imports,.
Even in the furniture sector, which until recently survived by using workshop production, is now using less labour and producing and exporting using automated systems. The clothing sector, which is trying to keep pace with global changes, has secured an edge over the Far East in terms of the speed with which it can deliver. In automotives many giant firms are choosing Turkey as a base. In addition to the main sector, even the supply industry has begun to export.
But global circumstances and changes in supply chains as a result of globalization give the Far East an advantage in terms of the production of intermediary goods. Production models in Turkey are being remodeled in compliance with this change and the search for value-added goods is gathering speed.
Transformation In White Goods
The white goods sector has been on the rise for the last ten years. In 2006 the sector had total exports of US$2 billion and today it exports 65 percent of its total production.
The changes which have enabled the sector to reach its current state began in the 1990s, since when the sector has been producing solely with its own technology. An indication of this change is the increase in the number of patents the sector has taken.
Dilek Temel, the Board Chair of the White Goods Producers’ Association, explains this change as follows: “There have been several grouping investments since the mid-1990s and the production of parts has been turned over to the supply industry. Apart from those parts which, because of volume and technology, are used directly from raw materials in production and which do not go outside the factory almost all the parts and groups are delivered from the supply industry.”
Automotives Competing With Europe
A change in models and strategies has resulted in the Turkish automotive sector beginning to become a production base for Europe. This development is the result of the change in production models. It is generally agreed that this change dates from the time of the Customs Union agreement with the EU.
Ford Otosan Assistant General Manager and Kocaeli Factory Manager Nuri Otay notes that the basic development of the sector, which up until the agreement was producing mainly for the domestic market, can be traced to the investments that took place at the same time as the agreement. Otay says that the customer focused quality and lean strategies subsequently introduced by the sector enabled it to become one of the sectors best able to compete with Europe. Today the European, American and Far Eastern brands can manufacture the same products to the same production standards in Turkey.
In Televisions The Change Has Come With Model Technology
The production model in televisions, which are the main category in the electronics sector, is completely different to the situation 10 years ago. One indication of this is the investments of Turkish producers abroad. What drives the change in production models in the sector is technological change. Profilo Holding General Coordinator Göksen Körezlioğlu says that the most radical change was the transition from production using cathode ray tubes (CRT) to panel type TVs (LCD and Plasma). Another radical change in broadcasting and production technology was the transition from analogue to digital broadcasting. Göksen Körezlioğlu says: “The development of digital technology resulted in an increase in demand for and production of Home Cinema products. This resulted in the design of products such as the television DVD-home cinema combo.”
Global Change In Clothing
Clothing is another area where there has been a transformation in production. Aynur Bektaş, the president of the Turkish Clothing Industrialists’ Association, says that the most important change in the sector was the increase in the proportion of imported fabric as the basic input in the sector. Aynur Bektaş explains that: “The growth in the use of imported fabric which began at the beginning of the 21st century and has accelerated in the last few years is a result of changes in the global clothing industry.”
Bektaş says that the conditions of production and trade have now changed completely. She explains this change as follows: “The share of quality specialist goods is expanding rapidly and they are being produced flexibly and in small quantities. Collections and designs have played a decisive role in the increase in the number of seasons to 8-12. Speed and rapid delivery (2-4 weeks) have become the most important competitive factors.”