ODETTE 2017

RECAI ISIKTAS – LOGISTICS MANAGER

Ford Otosan – MPL 4.0 Smart Supply Chain Projects

Recai Işıktaş – Logistics Manager

AGENDA 2

Turkish Automotive Industry

Ford Otosan Overview

Ford Otosan MP&L 2016 Innovation Projects

Packaging Test Center

Smart Weighing System

Ford Otosan Digital Vision

Connected Supply Chain and RFID

EUROPEAN & TURKISH AUTOMOTIVE INDUSTRY 3

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Production Trend of Turkey (*Total Auto Industry)

Europe Turkish Production Share

X 1000

2009

Global

Crisis

TURKISH AUTOMOTIVE INDUSTRY 4

0%

5%

10%

15%

20%

25%

30%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Turkey & Ford Otosan Production

OTHER FO RATIO

2001

Crisis in

Turkey

FO Gölcük

Plant

opened in

2001

2009

Global

Crisis

FO started to

export Transit

Connect to US

FO Yeniköy

Plant opened in

2014

5

6

Key Indicators 2016

Koç Group

Ford Motor

Co.

Free Float

Ford Otosan

18%

41% 41%

Paid-in Capital: TL 350,910,000

Revenues $6.1 billion

Export Revenues $3.8 billion

EBITDA $519 million

Profit Before Tax $321 million

Net Profit $317 million

ROE 30.2%

EBITDA margin 8.6%

Annual Production Capacity 415,000

Gölcük (Transit & Custom) 290,000

Yeniköy (Courier) 110,000

İnönü (Cargo) 15,000

Total Employees 10,261

Blue Collar 7,561

White Collar 2,700

COMPANY PROFILE

PLANTS AND FACILITIES 7

Black Sea

İstanbul PDC

Honda Hyundai

Toyota

Tofaş-Fiat Renault

Kocaeli Plant

Sea of Marmara

Inonu Plant

●Eskisehir

●Bursa

●İstanbul ●Kocaeli

●Sakarya

Sancaktepe Engineering Center- 2015

Industrial Center of Turkey: Marmara Region

İnönü Plant - 1982

Sancaktepe Parts Distribution Center- 1998

Yeniköy Plant - 2014

Gölcük Plant - 2001

KEY PLAYER IN FORD MOTOR COMPANY 8

Güçlü satış

performansı

En büyük ticari araç

üretim merkezi

Ar-Ge ve

mühendislik gücü

Robust sales

performance

Leading

manufacturing

hub

Engineering and

R&D power

Global hub for Cargo heavy trucks and related powertrains

Global support for Light Commercial Vehicle Development

Global support for Diesel Powertrain Engineering

Highest commercial vehicle market share of Ford in Europe

Among Ford’s top 5 markets in Europe (Britain, Ireland,

Hungary, Turkey, Finland)

Lead manufacturing plant of Ford Transit globally

Single source of Ford Transit Custom & Tourneo Custom

Single source of Ford Transit Courier & Tourneo Courier

One of the two production centers globally for Ford Cargo

heavy trucks

FORD OTOSAN AT A GLANCE 9

Liderlik ve ölçek

avantajları

Strong value

contribution

Pioneer of

Turkish

automotive

Leadership and

scale

First Turkish passenger car Anadol (1966)

Turkey’s first domestic diesel engine Erk (1986)

Turkey’s first private R&D center in automotive (1961)

First export of Turkish automotive to the US (2009)

Turkey’s export leader

Turkey’s 2nd largest industrial enterprise

Highest employment in Turkish automotive

22% of Turkey’s total

automotive production

62% of Turkey’s total

commercial vehicle production

65% of Turkey’s total

commercial vehicle exports

Market leader in Turkish commercial vehicle industry with 30%

share

Widest product range in Turkish automotive

Highest installed production capacity in Turkish automotive

PRODUCTS, CAPACITY AND PRODUCTION

10

Production at 2014

244.000 units

Production at 2015

334.000 units

Production at 2016

333.000 units

Production Plan of 2017

359.000 units

11

TURKEY’S EXPORT CHAMPION

Export breakdown (units)

W. Europe 13%

UK 31% Germany 18%

France 8%

Spain 6%

Belgium 3%

Italy 7%

Other 5%

2016

E. Europe 9%

Turkey’s CV exports

Ford Otosan

65%

2016

12

FORD IS EUROPE’S BEST-SELLING CV BRAND

Jan YoY growth

in Ford’s CV sales

Ford Otosan’s share in

Ford Europe’s Transit Sales

2011 2012 2013 2014 2015 2016 2017

Ford’s European CV Market Share

#7 #6

#3 #1 #7

#1

8.5% 10.0% 11.5% 12.6%

8.6%

13.2% 14.0%

#1

13

FORD OTOSAN’S 2016 MP&L

INNOVATION PROJECTS

PACKAGING TEST CENTER

SMART WEIGHING SYSTEM

14 1) PACKAGING TEST CENTER

1) PACKAGING TEST CENTER- SAMPLE PACKAGING TEST

Vibration and Road Simulation Tests

15

This test method is used for determining the ability of packaging to withstand the

vibration during transport and the dynamic compression forces resulting from stacking

in the vehicle.

Data could be collected from desired road profile according to customer usage

conditions and simulated on equipment.

1) PACKAGING TEST CENTER- SAMPLE PACKAGING TEST

Compression Test

16

This test method is used for determining the ability of packaging to withstand the damages

occurring during handlings. It also gives the results about the packaging strength and loading

capacities.

Wooden Pallet

Compression Test

Carton Box

Compression Test

1) PACKAGING TEST CENTER- SAMPLE PACKAGING TEST

Enviromental Conditional Simulation Test

17

This test method is used for determining the ability of packaging to withstand under specific

enviromental condition such as extreme temperature, humidity, sun effect etc.

Wooden Pallet

Enviromental

Conditioning

Carton Box

Enviromental

Conditioning

1) PACKAGING TEST CENTER- SAMPLE PACKAGING TEST

Drop Test

18

This test method is used for determining the ability of packaging to withstand impacts caused by

dropping or throwing.

1) PACKAGING TEST CENTER

19

Advantages of Packaging Testing

Validation processes of features identified by specifications, global regulations and contracts

Design validation and design development processes in packaging development

Data input for meeting Safety and Quality standards

Addressing the issues occur during transportation

Identify cost reduction oppurtunities for packaging products

20

Daily 950 shipping unit controlled with Smart Weighing System

21 2) SMART WEIGHING SYSTEM 21

Smart Weighing System implemented at Ford Otosan Part Export Distribution Center where we consolidate

parts from 132 different Turkish suppliers and ship them to Ford North America, Ford Sollers Russia , Ford

South America, JMC China.

Safety of Life at Sea (SOLAS)

Secure Supply Chain & C--TPAT (Customs-Trade Partnership

Against Terrorism)

Prevent quantity claims (missing, wrong or more part shipments)

Customer Satisfaction

Where in Use?

Purpose of the Project

2) SMART WEIGHING SYSTEM

22 22

Weight Barcode

Label

OK NOK

• Part packaging info

• Part weight info

• Packaging weight info Label Reading Process with RF

System

• Part no (Master Label)

• Customer code (Master Label)

• Quantity (Master Label)

• Weight Barcode Label

OPTIMIZATION QUARANTINE

23

FORD OTOSAN’S

DIGITAL VISION

DIGITAL VISION LINKED TO FORD OTOSAN STRATEGIES

Be the most preferred brand across a

full line of products by meeting the

needs and expectations of customers

Be the number one automotive brand in

customer satisfaction for sales and

after-sales products

Provide innovative products and

services by keeping creativity at a

high level across the business

Be the most preferred company by aiming at for

perfection in human resources processes and

so deliver an ideal working environment for all

people

Grow organically and inorganically by

developing new products and new

markets

Brand

Customer

Growth

Innovation

People

Ford Otosan Strategic Vision

DIGITAL VISION FOR 2020+

Brand

Customer

Growth

Innovation

People

Ford Otosan gets awarded additional manufacturing contracts from Ford

due to the high manufacturing efficiency driven by data-based efficiency

and quality programs and automation

Ford Otosan has established a “Digital workspace” with employees working

in innovative offices, remotely from home or mobile, supported by digital tools

Connected

Employee and

Organization

Connected

Supply Chain There is automated real-time end-2-end data flow along the supply chain

Connected

Manufacturing

Ford Otosan captures new development contracts from Ford and externals

because of high efficient in its PD organization

Connected Vehicle Ford Otosan is running the largest fleet of connected trucks in Turkey with

profitable fast growing business providing services to truck owners and

ecosystem partners

Ford Otosan uses big data analytics

to understand customer needs and

offer customized products

Dealerships are fully digitized

with digital sales tools and direct

link to the Otosan CRM

Connected

Customer/Dealer

Forecasting

is based on big data analytics

All data and knowledge is

centrally available and leveraged

with analytics capabilities

Ford Otosan Digital Vision

CONNECTED SUPPLY CHAIN

CONNECTED SUPPLY CHAIN

1A ) SUPPLIER STOCK AND PRODUCTION PLAN TRANSPARENCY 28

CMMS

Stock PVS

Ford Otosan

Supplier

Supplier

Carrier

Supplier

Stock

Intransit

Stock

Real Time Planning and

Shipment Traceability Carrier

Extend the digitalization to suppliers

Decrease the production loss based

on the supplier

Real time planning & shipment, backlog

and critical parts tracking.

Increase the flexibilty : Reaction time

descrease

Operational time saving (SCM, Logistic,

PP team)

Integration with Vehicle Tracking System

Goal; to build a cloud platform to integrate

the systems of both suppliers’ and Ford

Otosan’s stock level and production plan.

CONNECTED SUPPLY CHAıN

1B) INBOUND LOGISTICS VEHICLE TRACKING AND MANAGEMENT 30

Vehicle Tracking System

GPS Position

Info GPS Time Info

ASN Content

Loading Plan

Time Window

Maps

Control/ Check Points

Systematical follow up

Rapid and insant information

Traceability

Early warning

Secure Supply Chain

CONNECTED SUPPLY CHAıN

1C&D) REAL TIME STOCK MANAGEMENT & TRACKING OF CONTAINERS 32

Racks with RFID Tag Forks with RFID Antenna

CONNECTED SUPPLY CHAıN

1E) JIS DELIVERY 34

Current Material Flow (non sequenced)

34

Ford Otosan Assembly Line

• Short term program

fluctuations

• Higher inventory level at

plant and suppliers

• Inefficient stock areas

Ford Otosan

Supplier Network

Sequencing Material Flow

• 3 days production sequence fixed

• Lower inventory level at plants

• More efficient storage areas

Ford Otosan Assembly Line

• 3 days production

sequence fixed

• Lower inventory level at

plants

• More efficient stock areas X

Thank You...

“The one who manages Logistics better will be one step

ahead of the other.”