Ponencia realizada en el marco de ADM Sevilla 2014

1. 1 UNCLASSIFIED
June 2014
TAI – Turkish Aerospace Industries Inc.
(TUSAŞ-Türk Havacılık ve Uzay Sanayii A.Ş.)
TAI STRATEGY FOR SUBCONTRACTING:
HOW TO BECOME A SUBCONTRACTOR
AND WHAT IS THE PROCESS

2. 2 UNCLASSIFIED
Procurement of Lockheed Martin / General Electric
shares (%49) by TUSAŞ
Establishment of TAI as a joint venture to manufacture F-16 aircraft
in Turkey
Merger of TAI and TUSAŞ

3. 3 UNCLASSIFIED
Aerostructures Integrated Systems
AeroenginesAerospace
TAI-GE Joint Venture
SSM
45.45%
TAFF
54,49%
General

4. 4 UNCLASSIFIED

5. 5 UNCLASSIFIED
CEO & President
Industralization and Procurement
İlhami TANYOLU
Facilites and Asset Management
İsmail ULUBAYRAM
Human Resources
Oya TANSU
Strategy and Technology Management
Bekir Ata YILMAZ (a)
Enterprise Management Systems
Orhan Veli KAYA
SupportDepartments
Flight and Flight Tests
Cemal Nadir SAYIN
Quality and Certification
Murat TAŞPINAR
Finance and Subsidiaries
Saadet KORKEM
Logistics
Muammer AKPINAR
Muharrem DÖRTKAŞLI
BusinessUnits
TAI BOARD
Genereal
Aerostructures Integrated Systems
Aerostructures
Naki POLAT
Unmanned Air
Systems
Serdar ÖLEZ
Aircraft
Özcan ERTEM
Helicopter
Metin SANCAR
Space Systems
Sinan ŞENOL
AeroEngine
JV with GE
Aerospace
Strategy & Corporate Governance
Bekir Ata YILMAZ

6. 6 UNCLASSIFIED
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2044
2406 2689
2995 3046
3541
3951
4269
4515 4633
General
0
200
400
600
800
1000
1200
1400
1600
1800
2005 2006 2007 2008 2009 2010 2011 2012 2013
ENGINEER DESIGN ENGINEER

7. 7 UNCLASSIFIED
DEFENSE NEWS TOP 100 : RANK #85th
TURKISH EXPORTERS ASSEMBLY ‘s RANKING :
# 1 EXPORTER OF THE INDUSTRY
* IFRS
(E)
0
100
200
300
400
500
600
700
800
900
1.000
1.100
'05 '06 '07 '08 '09 '10 '11* 12* 13* 14*
EXPORT DOMESTIC
General

8. 8 UNCLASSIFIED
TAI is accredited to the stringest quality standards in the aerospace business
General
BOEING
BOMBARDIER
NORTHROP GRUMMAN
LOCKHEED MARTIN
SPIRIT AEROSYSTEMS
SIKORSKY
LMMFC
MARVIN ENGINEERING
AGUSTA WESTLAND
AIRBUS D&S
FOKKER
ALENIA AERMACCHI
AIRBUS
PAG
IAMCO
TELESPAZIO
THALES
AIRBUS HELICOPTERS

9. 9 UNCLASSIFIED
 TAI meets the stringest quality standards in the
world satisfying :
 AQAP-2110
 ISO-9001 : 2008
 AS EN 9100
 AS 9110 Quality Management System for Maintenance
Organization
 Production Organisation Approval (POA)
 Production Organisation Competency Approval
(UrOYO)
 Design Organization Approval (DOA)
 Design Organization Competency Approval (TOYO)
 NADCAP
 ISO/IEC 27001
 OHSAS 18001
 ISO/IEC 20000
General

10. 10 UNCLASSIFIED
1984 20031986 1989 1993 2014
1984 20031986 1989 1993 2014
1995
1995

11. 11 UNCLASSIFIED
2014 2016 2021 20232018
2014 20212016 20232018
TFX
Turkish
Regional Jet
Aircraft

12. 12 UNCLASSIFIED

13. 13 UNCLASSIFIED
Infrastructure Target and
Recommendations
(see Transport & Communication
Strategy of Turkey, Ministry of Transport,
Maritime & Communications)
100 wide body, 450 narrow body, 200 regional
jet
(page 88)
Infrastructure Target and
Recommendations
(see Transport & Communication
Strategy of Turkey, Ministry of Transport,
Maritime & Communications)
Establishment of a regional jet aircraft
production organization
A/C Type /Capacity Around 100 passengers
Engine New generation engine
Market worldwide
1st prototype Within ~ 5 years after contract effectivity
Production facility In Turkey
TurkishRegionalJetAircraft
TRJA

14. 14 UNCLASSIFIED
Cruise Speed > 250 kts
G Limits +7g/-3.5g
Climb 15000ft in 5 min
Seating Configuration Stepped tandem
0/0 Ejection Seat Yes
First Flight 29 Aug 2013
EASA CS 23 Certification 2015
IntegratedSystems
Aircraft

15. 15 UNCLASSIFIED
 Day & Night, High & Hot” Performance
 Precision Strike Multi-Role Combat Helicopter
 New
 Avionics Hardware and Weapon Systems
 Generation Engine (LHTEC CTS 800-4A)
 Power Transmission
 Tail Rotor
 Several Fuselage Modifications
 TAI has T129’s global marketing and sales rights.
IntegratedSystems
Helicopter

16. 16 UNCLASSIFIED
Service Ceiling 30,000 ft
Endurance 24 Hours
MTOW 1750 kg
Payload
200 kg
EO/IR Camera
SAR/ISAR
Powerplant 155 HP
HEAVY FUEL
Autonomous
Take-Off & Landing
Integrated
Range 200 km LOS
(BLOS Optional)
IntegratedSystems
UAS

17. 17 UNCLASSIFIED
HIGHER
SPEED
SUPERIOR
LETHALITY
GREATER
AGILITY
WIDER
COMBAT
RADIUS
 Definition of a new aircraft to substitute the existing Turkish Air
Forces T-38 Trainer Aircraft and F-16 Fighter Aircraft.
 TAI is assigned as the Prime Contractor.
IntegratedSystems
Aircraft
F-16

18. 18 UNCLASSIFIED
 Prime responsibility to design, develop and manufacture a civil certified
light utility (5 ton) helicopter for military and commercial use.
 Program contract was signed in June 2013.
 First flight is expected to take place in 5 years.
IntegratedSystems
Helicopter

19. 19 UNCLASSIFIED
IntegratedSystems

20. 20 UNCLASSIFIED
IntegratedSystems

21. 21 UNCLASSIFIED
MLU & Falcon Star
Falcon-Up / Falcon-Star / MLUECM / Falcon-Up
TUAF RJAF
PAF
IntegratedSystems
Aircraft

22. 22 UNCLASSIFIED
 T-70 Utility Helicopter is being developed from
Blackhawk S-70i platform by TAI (Prime
Contractor) and Sikorsky (Subcontractor), to
meet the requirements of Turkish General Staff,
Land and Air Forces, Turkish Gendarmerie,
Turkish Police Department and General
Directorate of Forestry.
 109 “T-70 helicopters” and 2 different
configurations will be produced during next 10
years in TAI facilities.
IntegratedSystems
Helicopter

23. 23 UNCLASSIFIED
 Göktürk-1
High Resolution Earth Observation and
Reconnaissance Satellite
 Telespazio (Italy): Prime Contractor and
Ground Segment
 Thales Alenia Space (France): Space
Segment and AI&T Center
 TAI:
• Direct Participation to all engineering
activities
• Manufacturing of Mission Model Structure
Panels (completed in Sept 2013)
• AI&T Center
IntegratedSystems
SpaceSystems

24. 24 UNCLASSIFIED
IntegratedSystems
SpaceSystems
 Göktürk-2
Earth Observation and Reconnaissance Satellite
 Joint Design, Development and Manufacturing by
TAI and TÜBİTAK SPACE
 Launched on 18 December 2012 from China and
under operation for more than one year.
 Göktürk-3
SAR Earth Observation and Reconnaissance Satellite
 Prime Contractor: TAI
 Main Subcontractors: ASELSAN and TÜBİTAK
SPACE
 Preliminary-Design Phase (phase 1) initiated on 26
November 2013

25. 25 UNCLASSIFIED

26. 26 UNCLASSIFIED
…… -
2005
No indigenous production :
Generally Turkish Government (SSM …etc) signs contract directly
with foreign companies.
 Industrial Participation / Offset requirement
2005-2011
Indigenous Products
Turkish Govmt. & Turkish Prime Contractor
 No ındustrial participation / offset requirement from foreign
companies directly.
 Local Content Request from Turkish Prime Contractor (around
35 ~ 50% of total contract price) (in some case with export obligations)
2011 –
beyond
Indigenous Products
Turkish Govmt. & Turkish Prime Contractor
 Generally no offset requirement
 Industrial Participation & Offset requirement from Foreign
companies  minimum 70% of total contract price
 Local Content Request from Turkish Prime Contractor 
minimum 70% of total contract price
LocalContentRequestfrom
TurkishPrimeContractor

27. 27 UNCLASSIFIED
1984 -
2014
Subcontracting new work packages to local suppliers according to
outsourcing strategy without new investment and work force
improvement aerospace and defense capabilities in subcontractors
2014 –
2018
Transition period, defining the strategy  policy  outcome
2018 –
beyond
Wide Range of Indigenous Products (from civil to military); Hence
Export License Procedures,
Export to 3rd countries,
OFFSET Requirements,
Just-in-time requirement
Cost efficiency
HowtobecomeaSubcontractor

28. 28 UNCLASSIFIED
HowtobecomeaSubcontractor
 SYSTEM & EQUIPMENT PROVIDERS (REQUIRES INTEGRATION)
 Pilot Systems (Avionics, panels, communication solutions)
 Aircraft Systems (Hydraulic, Fuel, Landing Gear, actuators, ….etc)
 BUILT-TO-PRINT PARTS, ASSEMBLY OR SUB ASSEMBLY,
SPECIAL PROCESSES PROVIDERS
 Special Processes or Parts Made with special processes (Titanium
Forging, Forging …etc),
 Aircraft parts, components, tools, jigs, fixtures …etc
 RAW MATERIAL & COTS EQUIPMENT PROVIDERS
 Sensors, nuts & bolts, connectors, switches ….etc
 Raw Material (Composites, metal, chemicals, …etc)
BASIC REASON IS THAT SUCH SYSTEMS OR PRODUCTION
FACILITIES IS NOT COST EFFICIENT TO BE PRODUCED IN TURKEY

29. 29 UNCLASSIFIED
HowtobecomeaSubcontractor
 SYSTEM & EQUIPMENT (REQUIRES INTEGRATION)
Performed by Subcontracting Units under each Group
(Aircraft, Helicopter …etc)
 BUILT-TO-PRINT PARTS, ASSEMBLY OR SUB ASSEMBLY,
SPECIAL PROCESSES
Performed by Outsourcing Operations Management
 RAW MATERIAL & COTS EQUIPMENT
Performed by Procurement Management

30. 30 UNCLASSIFIED
PRE AWARD POST AWARD
PRE AWARD POST AWARD
CUSTOMER
SUPPLIER
PCM
Make/Buy
Contract
BUY
CONTRACT
Prime
Contract
Between TAI
and
Customer
CUSTOMER
(RFP)
S
E
L
L
I
N
G
B
U
Y
I
N
G
Business Planning
PROGRAM
ContractsBusiness
Planning
Purchase
Order (PO)
Metarial Planning and
Procurement
SUBCONTRACTS
RFP
TAI PROJECT
CONTROL OFFICE
SUBCONTRACTS SUBCONTRACTS
RFTIRFI RFQ
Planning
and
Strategy
MAKE
Outsourcing and
Operations
Purchase
Order (PO)
Production with drawings, tools , molds, etc.
Metarial , chemicals , consumable, etc.
Program
aaaaaaaaa
aa
Contracts
S
E
L
L
I
N
G
B
U
Y
I
N
G

31. 31 UNCLASSIFIED
1-
A soft copy of the company’s valid third-party Quality
Management System (QMS) certificate (ISO/AS)
2-
A soft copy of the company’s current Q-Manual established in
accordance with the requirements of the company’s QMS
certification
3-
A questionnaire filled by all potential suppliers submitted to TAI
PQA to ensure compliance with the approved QA requirements.
HowtobecomeaSubcontractor

32. 32 UNCLASSIFIED
HowtobecomeaSubcontractor
 Classical Supplier Rating Based on Previous Work Packages
TAI performs Supplier Rating for every supplier based on their delivery
performance and keep these records for future decision making
process.
 On time deliveries
 Low Rate of Return or No return
 Proper documentation suitable for certification .
 Supplier Rating for Complex System Developer
TAI also performs Supplier Rating with different criteria for System
Developers (a new design or modification of COTS equipment) and
also keep these records for future decision making process.

33. 33 UNCLASSIFIED
HowtobecomeaSubcontractor
 Depending on TAI’s & Turkish Industry workload more opportunities
exist between TAI and foreing suppliers.
 TAI advices suppliers to benefit from Turkish companies capabilities as
well and create a bilateral trade. Hence Turkish content gives TAI more
flexibility when selecting foreign suppliers.
 TAI advices suppliers to check opportunities for investment in Turkey.
Because of following opportunities for a win-win case:
 A new hub of aerospace companies is being generated in a new
industry zone in Ankara, TURKEY, next to TAI.
 Huge government incentives will be given for investors
 TAI prefers not to deal with export licenses for every order
 TAI’s business backlog and engagement in bigger projects are
giving TAI to order more in quantities and let suppliers become
more efficient every year.

34. 35 UNCLASSIFIED
35