Dear BEYSAD readers,
We are delighted to share with you the following interview which we believe you will all find useful. We are also pleased to introduce an official from a main industry firm which has always provided BEYSAD with the necessary support. Mr. Hakan Akıncı, Purchasing Director of Vestel, was kind enough to accept our invitation and share his opinions and experience about the industry from the perspective of a young professional. We would like to extend our profuse thanks to Mr. Akıncı for sparing his time in his busy schedule.
Could you please briefly tell us about yourself and your past experience?
I am a senior mechanical engineer. I worked as an academics at the Mechanical Engineering Department of Dokuz Eylül University for five years and have been working for Vestel Beyaz Eşya for almost 12 years.
Where are you located in the management scheme?
I am the Assistant General Manager leading the organization which carries out the purchasing operations of all product groups within Vestel Beyaz Eşya. I am reporting directly to the General Manager of Vestel Beyaz Eşya.
What are your evaluations about the current position of the white goods industry in the Turkish market? What is the role of Vestel in this development?
In view of the current climate, we can say that the Turkish appliance industry is going through its golden age. As you all know, Turkey has now become the largest white goods manufacturer of Europe. As players in the industry we have all spent much effort and made great contributions to ensure Turkey's potential is utilized in the most efficient manner and this development takes place. Therefore, we feel very proud today. Moving even further is very important in order not to lose our position. For this purpose, all the professionals in the industry must be aware of their responsibilities as well as targets so that actions can be taken accordingly.
We believe Vestel has given a major acceleration and diversity to the Turkish white goods industry in the last decade. Our current position which we have achieved in 12 years is an apparent evidence of Turkey's industrial potential. We desire to maintain our current position and continue to be a locomotive in the industry.
It is best to learn from your experience about the industries of different countries. Can you please make a comparison of the Turkish and overseas appliance industries?
What differentiates Turkey most from other countries is its qualified labor force and higher dynamism. The reason why we can still have the upper hand over other potential competitors where government incentives and advantages are higher is that Turkey has a dynamic and qualified labor force.
Where are Vestel's plants located worldwide? What products are manufactured there?
Vestel Beyaz Eşya has production plants in Turkey and Russia.
Our plants in Turkey are as follows:
Refrigerator Plant with a capacity of 2,800,000 units
Automatic Washing Machine Plant with a capacity of 2,350,000 units
Cooking Devices Plant with a capacity of 1,350,000 units
Dishwasher Plant with a capacity of 600,000 units
Air-conditioner Plant with a capacity of 600,000 units
Thermosiphon (water heater) Plant with a capacity of 400,000 units
The plants in Russia are as follows:
Refrigerator and Washing Machine Plants with a capacity of 500,000 units each
How much of your production output in Turkey is exported and to which countries are they exported? May I learn your opinions about competition conditions? Please do answer my second question from the perspective of countries and brands that you see as competitors both in the Turkish market and overseas.
We export almost 80% of our production output in Turkey. 85% of our export is made to European countries. France, Germany, Spain, England and Italy are the primary export markets. As we are an ODM (original design manufacturer), we compete strongly against Chinese companies. We face competition from local manufacturers in the Turkish market, but as we cannot make sales with our own brand in foreign markets, we are amidst an indirect competition with brands for whose name we make production.
Can you please tell us a little bit about Vestel's long-term objectives? In order to allow supply industry firms to anticipate new developments, can you please also mention about new product ranges?
Vestel aims to take even further its product development level and provide its customers with the best product and service at the most reasonable pricing on building on its value and advantages. Meeting customer expectations in terms of product range is one of the main goals of the white goods division. For this purpose, we have been continuing our investments without pause.
I know Vestel cares a lot about sustainable development, innovation and energy efficiency. Can you please inform us about recent developments in this area?
Nearly 30% of our R&D staff focuses on innovation topics, while remaining personnel works on planned product development projects. Utilization of alternative energy resources and offering new facilities to the users are among Vestel's priorities. Each year we double our patent portfolio, thus, we have ranked in top positions in the contests of the Turkish Patent Institute recently.
What are recent developments about your R&D activities?
Majority of our R&D activities concentrates on areas that would enhance resource utilization efficiency. Products with high resource utilization efficiency include those products with lower electricity consumption as well as those that consume less water and detergent and give out less waste and noise to the environment. Moreover, projects are carried out for major manufacturers of the industry who are known as "A Brand".
Is the entire purchasing procedure for all Vestel plants operated from Turkey? What is the operational structure?
The entire purchasing procedure for all Vestel products is carried out from our headquarters in Turkey. Local purchase requests of our Russian plant are met by the purchasing team based there in coordination with the Turkish team.
What was your global purchasing volume in the world in 2010 including Turkey?
Our global purchasing volume including Turkey amounted to approximately EUR600 million in 2010.
Is an increase expected in this figure in 2011?
Increase in commodity prices combined with our rising production volume will result in a global purchasing volume of circa EUR700 million in 2011.
What is the main expectation of Vestel from supply industry firms in the scope of purchasing processes and what are your criteria? How purchasing processes are managed?
As Vestel, we are one of the firms that face the industry's competitive challenges most. Therefore, we expect supply industries to support us with cost efficient projects. We expect supply industry firms to possess certain quality standards, production technologies and production planning and logistics advantages. The components whose specifications are defined by our plant are communicated to the firms via the purchasing department and samples received from them go through approval processes at our plants. If the sample is to be received from a new supplier, all the units make a preliminary review of the firm before sample ordering.
At what point do you mostly encounter problems with your suppliers? Can you please answer this question from quality, logistics and pricing perspectives?
We desire to cooperate with our suppliers starting from the outset, design phase. However, the number of supply industry firms who can assist and guide us at this stage is limited. We believe designs that are created as a result of early cooperation would yield to most favorable cost structures. We also expect our suppliers to perform improvement activities with respect to their efficiency. They should make efforts to find out how they can work more efficiently and flexibly and reduce scrap and leakage ratios. They must ultimately aim at continuous improvement.
May I ask you to make a comparison of your foreign and local suppliers? If there is a superiority on country basis, where does it stem from and what exactly are they?
Turkey's labor force is a well trained one. We are working with young, dynamic and hardworking personnel. This is a major superiority of the Turkish market. I believe we will always be successful, once we can accurately manage this labor force. However, I cannot say we are usually open to innovation, we are not inquisitive enough. Moreover, due to high population figures in the Far East there is a considerable market there and this offers certain advantages for manufacturers located in the Far East. In economies of scale this aspect makes them very strong in terms of cost.
Does Vestel carry out joint works with its suppliers and at what level are they conducted?
As I have already told above, we desire to cooperate with our suppliers at the early stages of the project; however, number of suppliers that can work with us in this fashion is limited. Therefore, we prefer to work with the firms who can assist us starting from the R&D phase.
How do you make sure your suppliers are aware your expectations? Do you give any assurances for encouraging them to make investments? How do you support your supply industry, in particular Turkish supply industry?
We have been making regular meetings with our supply industries and visit their facilities to follow up their latest operations. We expressly tell about our expectations in these meetings. We all work in an industry where cut-throat competition exists; therefore, we support firms which support us as well. There are some projects which we support on the basis of win-win strategy in the scope of investment activities.
Are there any foreign suppliers which have based their operations in Turkey upon request by Vestel?
There are a few companies which have invested in Turkey upon our incentives and guidance. We are still working with some other companies to ensure they invest in Turkey.
What is the ratio of local and foreign suppliers in Vestel's manufacturing activities? If the ratio of Turkish manufacturers' products is lower, what can be done to increase their share?
Although each plant has different distribution ratios, the ratio of local products versus imports is 50% in general terms.
What are your policies towards your suppliers? Are there any messages that you would like to share with them?
We expect our suppliers to improve themselves continuously. They should keep abreast of new trends and new technologies. It is our biggest dream to work with supply industry firms that can run as fast as we do and support us with their activities.
We have been regularly consulting your opinions for the preparation of the Strategy Paper for White Goods Supply Industry, but I will ask you to share these with our readers as well. What are your expectations from the Strategy Paper? Which topics should certainly be included in it?
In this golden age of the Turkish white goods industry, we care a lot about the Strategy Paper and do our best to offer the necessary support since the outset in order not to lose this acceleration and make our industry a sine qua non for the development of the national economy. This paper should thoroughly and accurately present us the potential of Turkey, opportunities as well as shortcomings. In today's world where competition is really intense, future steps should be taken very carefully. Correct analyses will pave the way for setting correct targets afterwards. I expect the Strategy Paper to clearly define the requirements that Turkey should meet in order to become a leader of the global white goods industry in terms of product development.
What are your opinions about BEYSAD and what do you expect from BEYSAD? What can BEYSAD do for main industries in addition to Strategy Paper?
BEYSAD occupies a vital position in the current white goods industry. Stronger supply industries enable main industry to become stronger and create advantages for both sides. BEYSAD is assuming a critical role in ensuring that not just one supply industry, but all the supply industries offering services in the sector improve themselves and achieve higher standards. BEYSAD's involvement in some industry-specific topics is high and I believe creation of project teams would be more efficient for carrying out specific activities.