Project Eryilmaz Karaman

Manufacturing an
Industrial Machine:
Telling Untold Story
[Drilling Machine for Furniture]
Emre Eryılmaz
Ömer Karaman
Supervisor: Gürdal Ertek

0. The Product
This project is a drilling machine manufacturing project. Here are some images of similar
machines and patents to our machine:
Figure 0.1 drilling machine

(http://www.google.com/patents?id=6507AAAAEBAJ&dq=combined+insertion+and+dr
illing+machine+furniture)
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Figure 0.2 Drilling Machine (http://www.gatha.com/prod073.jpg)
Figure 0.3 Drilling Machine (http://www.global-b2b-

network.com/direct/dbimage/50248414/Medium_Size_Drilling_Machine.jpg)
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0.1 Why drilling machine?
We have decided to produce this machine in the first place because it has a very big market in
Turkey. It is a drilling machine for furniture industry; which Turkey is very good at. There are
three major and numerous small furniture producers in Turkey and drilling machine is one of
their indispensible equipments. Drilling accurate holes in accurate angles in wood without
making defects around the hole is very important for furniture manufacturing. Making this
operation with small hand drills generally result with defects and inaccurate dimensions. So
there is high demand for this kind of drilling machine.
Moreover; this is just complicated enough for the limits of this project. Very complicated
machines would make this project impossible to finish at given deadlines. Also very simple
ones would not contribute to our learning in making a project.
0.3 Competitors
There are a lot of firms producing drilling machines locally and globally. There are
some major firms in Turkey which are Himsan, Turanlar Makine and Uysal Makine. Globally
China has the biggest producer in the world and we will examine 4 of them which are
specialized on drilling machinery production and the companies we will examine are Foshan
Shunde New Mas Wood Working Machinery & Equipment, Guandong Shunde Yujiang Wood
Working Equipment Factory and Nantong Guoquan Wood Working Machinery
Manufacturing Company and Renqiu Yongmao Wood Working Machinery Company.
0.3.1 Prices of the competitors:
All of the firms do not mention their prices on their internet sites but we sent an e-mail
to each of the foreign producers that we selected and called local producers to learn some
details about the machine like price. The price of the driller that Himsan produced is almost
$8000. Uysallar Makine is newly produced driller machine and they sell their product $17000.
This machine has 3 heads. The price of the driller that Turanlar Makine produced is $6500. In
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addition to these Foshan Shunde New Mas Wood Working Company sells the machine at
$6301 for each unit. Guandong Shunde Yujiang Wood Working Equipment Factory sells their
driller at $6500, Nantong Guoquan Wood Working Machinery Manufacturing Company sells
at $6300 and Renqiu Yongmao Wood Working Machinery Company sells at $7000.
0.3.2 Lead time of the competitors:
Of course the lead time of the product is much shorter if the producer is in Turkey than
outside of the country, however it takes relatively long time when we choose a producer from
China. Himsan is located in Ankara and has a retailer in Istanbul; hence it takes 1-2 days to
lead the given order if the machine exists in the inventory. If they has not the machine at the
inventory, it takes 45 days to produce a new machine and the lead time will be 46-47 days.
Turanlar Makine has a factory in Ankara but it has an export center in Istanbul. For this
reason, they can lead the given order in 1-2 day if they have the machine. They can produce a
new one in 30 days. Uysal Makina is located in Ankara and also it takes 1-2 days to lead a
given order. They can produce a new machine in 60 days. Foshan Shunde New Mas Wood
Working Machinery & Equipment is located in Foshan city. Guandong Shunde Yujiang Wood
Working Equipment Factory is also located in Foshan. Nantong Guoquan Wood Working
Machinery Manufacturing Company is located in Nantong city and Renqiu Yongmao Wood
Working Machinery Company is located in Renqiu city. All cities are in China leading times
changes according to the shipment way such as by an airplane or a ship. If you use airplanethe
order may lead in a week but for the industrial machines generally seas are used to transport
because of transportation costs and it takes 30-40 days to lead the order in Turkey. Generally
they have inventory on hand and a buyer do not wait for the production.
0.3.3 Reliability of the competitors:
Himsan is established in 1978 and the firm aims to provide best quality to the
consumers and they claim they are using high technology. The firm is still producing
pneumatic, hydraulic and special mechanic machines. The firm has 8 retailers in Turkey and
gives importance the reliability of its equipments. Himsan gives 1 year guarantee to its
products and provide service opportunity. Turanlar Makine is established in 1958 and the firm
is one of the first firms in this sector. They have 80.000 square meter factory area that
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includes 20.000 square meter closed area. Factory provides also service opportunity. They are
one of the leading Turkish firms in this industry and have market reliability. They provide 2
years product guarantee and they are capable to reach every point of Turkey in 1 day. They
also provides service opportunity to outside of the country. Uysallar Makina is established at
1981 and besides the market of Turkey; they also export their products to a lot of country.
They gives 1 year guarantee to their product and there is service opportunity. Foshan Shunde
New Mas Wood Working Machinery & Equipment claims that they used qualified and high
technological equipments. They have over 100.000 square meter factory area. They sell their
products in the intercontinental area and make above US$ 100 million trade. The company
has taken the ISO 9001 -2000 quality system certification and was awarded hi – tech
enterprise. They say “Sharp toolsmake good work” and have different scientific tests on their
equipments. They gives 6 months guarantee and service opportunity. If the product is
defected, the buyer has a chance to change the product or defected part can be changed.
Guandong Shunde Yujiang Wood Working Equipment Factory is also has ISO 9001 -2000
quality certification and claims that they have after sale service system opportunity. They call
themselves “king of drill” and take trustworthiness as a basis. They gives 1 year guarantee to
their products. Nantong Guoquan Wood Working Machinery Manufacturing Company also
claims they have qualified materials and use high technology to develop its products. They
say they specialized in R&D. Also they have ISO 9001 -2000 quality certification and CE
certification. They give 1 year guarantee to their product. They have a huge network in world
wide. Renqiu Yongmao Wood Working Machinery Company also considers equipment
reliability and has own quality department. They have China quality center certification and
ISO 9001 quality system. They gives 6 months guarantee to its products.
0.3.4 Regular maintenance costs of the competitors:
Drilling machine has not very complex systems and has not very expensive
components. If the equipments are reliable, the maintenance cost will be lower. The most
important part of the machine is the engine and drillers. Himsan Makine suggests
maintenance in 4-5 years period besides monthly maintenance which is lubrication. The
former maintenance cost is almost $1000 and the latter’s cost is $30 in a year. Uysallar
Makina suggests only lubrication which causes $30 in a year. Similarly, Turanlar Makine
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suggests only lubrication which causes $30 in a year. Other 3 Chinese firms have the same
idea with Turanlar and Uysallar Makine.
Another cost may be the electricity cost. All machines have a standard features which
are suitable to European standards. They use engines with the power 2.2 kW and this engine
spends almost 5 kW in a day. In a year the electricity cost reach to 6060 kW if the driller has
only one engine.
Workers salary may be another maintenance cost. This is almost $500 in Turkey but
with the insurance this cost increase almost $650 to a firm for a month and this makes $7800
in a year.
0.3.5. Irregular maintenance costs of the competitors:
Irregular maintenance cost exits if a breakdown occurs. The most usual breakdowns
are pneumatic and head breakdowns. Pneumatic breakdown costs $15 – 20. If the head
breakdown occurs, it causes almost $100 for a head which consists only 1 spindle but this cost
changes according to number of spindle the machine exists.
If a breakdown occurs, the service team of the firm may be called and this cause an
irregular cost to the firm. This cost changes according to the firm. Himsan Makine provides
this service almost $ 250, Uysallar Makine provides $150 and Turanlar Makine provides this
service almost $120.
Other irregular costs may be the raise of the cost of raw material, cost electricity, increase of
the legal salary amount.
0.3.6 Energy type used:
All of the products of the all firms need electrical energy.
0.3.7. Past References of the supplier:
Himsan Makine also has export channels besides local sellings. Gazi University and
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Bilkent University uses the products of Himsan Makine. Uysallar Makine has references of
locally and globally. The most known local company is Istikbal Mobilya which uses the
products of Uysallar Makina. Moreover, Alfemo Mobilya, Kontur Limited, Beyza Mobilya
and some other local firm also uses this company’s machines. Also, Eurl Polymeuble in
Algeria, Eser Company in Uzbekistan and some other countries. Turanlar Makine exports its
machines to 53 countries that include England, Mexico, Russia, Porto Rico, South Africa,
United States etc. In Turkey, there are lots of firms that use this company’s machines such as
Vona Mobilya, Nur Ahşap etc. Foshan Shunde New Mas Wood Working Machinery &
Equipment gives an example of famous Taiwan factory which imports machines before but
now they use Foshan’s machines. The company’s name is Chensen Wooden Products
Company. Nantong Guoquan Wood Working Machinery Manufacturing Compans sells its
products highly to in the United States, Greece, Russia, Malaysia and to the most of places in
the world. Guandong Shunde Yujiang Wood Working Equipment Factory do not mention
about their exports or references. Renqiu Yongmao Wood Working Machinery Company sells
its products to United States, Ukraine, Romania, Madagascar and Tanzania.
0.3.8 Estimated life time of the supplier:
Himsan is 30 years old company in this industry and aims to be one of the leading
company in this area. They have many retailers and trying to spread their products in to the
industry. It seems that there will not be a big problem with the continuity of the factory at
least 5 years. Turanlar Makine is almost 50 years old and exports their machines over 50
countries and they are trying to enlarge their influence area. They give importance on research
and development and develops new machines according to new technology and consumer
needs. Also they aim to be the one of the biggest in this area. Hence we estimate that the
company’s life will not be less than 10 years and we believe that Turanlar Makina will live
another 50 years. Similarly, Uysal Makina is trying to be a global member of this industry and
has exports to many countries. We estimate that this company also has a life more than 10
years. Foshan Shunde New Mas Wood Working Machinery & Equipment has a huge revenue
and may be the most global firm in this industry. They aim to increase their market share and
we believe that their life will not be less than 15 years. Nantong Guoquan, Guandong Shunde
Yujiang and Renqiu Yongmao also has similar aims to Foshan Shunde and has similar markets
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in the world. We believe that there will be big competition between these firms and the
lifetime of these firms will not be less than 10 years.
0.2 - 4 How and where is the machine used?
This machine is used in furniture manufacturing industry. It is used for drilling holes
accurately without making defects on the material in different angles and sizes.
Drilling is one of the most basic and frequently used operations in the furniture manufacturing
industry. Also, it is critical to perform this operation exactly without defects. First reason is
the proper use of the furniture. If the holes are not exact, it will twitch or break easy. The
second reason is appearance of the product. It is the one of the most important motivators for
the consumers to buy furniture. Defects will make a bad appearance. So furniture producers
need machines that can perform this operation exactly. Small hand drillers will not be enough
for that. So, our machine will handle their needs.
Moreover, this machine can be used for drilling purposes in similar materials like cork bone
hard rubber and hard plastic. These materials have similar toughness and hardness
characteristics with wood. Thus, our machine will be in the purchasing portfolio of these
industries too.
How does the machine actually work?
It basically works by the swing of spindle at generally 1500-2000revolutions/minute. This is

the proper spindle speed for woodwork. Both lower and higher speeds will be inefficient by
increasing electric consumption. Also too high speeds will cause defects on material.
This machine has 5 main components: a work piece support (displayed as number 3 on figure
below), motor (5), a guide column (2), a gear block (4), and a frame (1).
The gear block (4) and the motor (5) can move on the guiding column (2). This makes the
movement of spindle. Also it makes possible to work on different size of materials. This
movement is made by a lever (6).
The height of the guiding column will be 70cm. so it will be possible to work on materials
40cm high at most. The remaining 30cm is for motor, gear block and spindle.
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There also is spindle carrier (8). Different sizes of spindles can be attached to it, so it makes
possible to drill holes in different size and length. Three standart spindles will be supplied to
customers. They are:
Length(cm
) Diameter(cm)
1 8 0.5
2 12 1
3 16 1.5
We will manufacture 9 more types of spindles however the customers will have to pay for
them if they want to purchase them. Here are their length and diameters:
Length(cm
) Diameter(cm)
4 8 1
5 8 1.5
6 8 2
7 12 1.5
8 12 2
9 12 2.5
10 16 1
11 16 2
12 16 3
13 16 4
Some customers can need special purpose spindles. This will be an option too. We will
manufacture them after making a cost analysis for the demands of customers.
Apart form these, the work piece support is rotatible. So this makes possible to drill hole on a
material in different angles (3). Also, the workpiece support will have attachment tools on the
sides so that material can be held stable when working in different angles.
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Figure 0.4 Parts of drilling machine
(http://www.google.com/patents?id=m7M0AAAAEBAJ&pg=PA1&dq=drilling+machine
+furniture)
Figure above is taken from a patent similar to our product. We eliminated some of the parts in
our project. (e.g. 13, 15) other parts are explained above the picture.
1. Selecting the Manufacturing Type and Equipment
1.1
We selected “job shop” production system to produce the drilling machine because
this system has characteristics which the drilling machine needs to be produced. The general
properties:
- Flow: Jumbled flow
- Flexibility: High
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- Products: Many
- Volume: Low
- Capital investment: low
- Variable cost: High
- Labor need and skill: High
In a job shop activity we can do several jobs at the same time and all processes do not
need to do to all equipments. Moreover, job shop process allows us to sell our capability and
provide us to compete with other producers in the market.
1.2.
We need to use some significant industrial equipment to produce drilling machine
because each important part of the machine we will produce, we need another equipments
(machines). Basic components of our machines are driller, legs, engine, cylinders, adjustable
platform and cover.
1.2.1
Casting machine:
Casting is a manufacturing process that based on the solidification of molten model in
a given mold to get a needed shape of materials. For the drilling machine, suitable driller must
be used for each operation according to the depth or width of the hole. For this reason, we
need a head to hold each driller.
Figure 1.1 Casting Machine
1.2.2
Forging Machine
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Forging is the shaping a metal piece into a satisfied shape by using comprehensive
force. We need forging process to get a hard piece of metal that can drill woods. We can get
the latest shape by casting but the strength of the driller is very important. For this reason we
selected to use forging and more specifically we determined to apply hot forging because we
are planning to add some minerals such as carbon to increase the strength and lifetime of the
driller.
Figure 1.2 Forging Machine
1.2.3.
Milling Machine
Milling operation is basically chip cutting procedure. We need milling because we
need arcs on the drillers to make easier drilling procedure and we cannot get these arcs by
forging procedure. Also, we are not using forging to produce spindles because we want to be
sure about the strength of the material.
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Figure 1.3 Machining Machine
1.2.4
Extrusion Machine
Extrusion is a manufacturing process to generally create long objects. While making a
drilling machine, we need to apply this procedure to obtain cylinders. Cylinders resemble to
backbones because these parts provide to machine stand and adjust the height of the main part
and material platform.
Figure 1.4 Extrusion Machine
1.2.5
Bending Machine
To protect the equipment like engine part of the machine from chips or impacts we
will need the cover these parts and we will need a metal bending machine. We will bend sheet
metals that we will buy from outside.
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Figure 1.5 Bending Machine
1.2.6
Metal Sheet Cutting Machine
To get the shape we needed properly, we will need to cut some parts of the sheet metal
according the shape we wanted and according to size we need.
Figure 1.6 Metal Sheet Cutting Machine
1.2.7
Power Generator
We need a power generator to continue the production if the electricity cut occurs. We
need this equipment indirectly, because there is no direct use of this machine.
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Figure 1.7 Power Generator
1.3
1.3.1
1.3.1.1
Die Casting machine:
One of the worldwide supplier of casting machine is a Taiwan firm which’s name is
Chen Feng Machinery Company. The target market of the company is the entire world. The
cost of this machine is $90000. Another global producer is Shangai Halixun Die Casting
Machine Company. The price of their machine is $105000. We could not find a local casting
machine producer.
1.3.1.2
Forging machine:
One of the important supplier of this machine is Dieffenbacher which is located at
Germany. The second hand price of the model 1000-A is 185000 Euro. Another German firm
is Grabener and the second hand cost is 44000 Euro. Also, there are several Chinese firms that
produces forging machine.
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1.3.1.3
Milling Machine
Kitamura is one of the leading companies that produces machining machines that is
located in Japan. Generally the price of their products is almost $70000. Also there are more
economical machines such as CNC vertical machining machine that is produced by Monarch.
The price for the second hand product is $16700. Also there are some Turkish firms that
produce machining machines. Gökmasan is one of the leading companies in Turkey. The price
of their product is $18000. Tamiş Makina sells this product almost $15000.
1.3.1.4
Extrusion Machine
Waldrich-Coburg is a leading company in this area and producing extrusion machines.
The firm is located in Germany and the price of the product is $80600. Another important
firm is Voronezh Machine which is a Russian firm. The price for the second hand of the
product is $70700. We could not find a local producer.
1.3.1.5
Bending Machine
VSS is a bending machine producer and a second hand bending machine is enough for
us because we will use this machine to cover the important parts of our machine. The price of
the machine is $10300. The location of the machine is Czech Republic. Another bending
machine producer is Strojaren Piesok. The cost of their machine is $12000. Haseller is a local
producer of this machine. The cost of the machine is almost $11500.
1.3.1.6
C-T is a local producer of cutting machine. They use different methods such as laser
and plasma. The cost of machine laser machine is $85000. Another laser cutting machine
producer is Mazak. The second hand of their production is $139000. But we do not need
complex and expensive laser machines. Adige produces pneumatic cutting machines and the
cost of their product is $1120.
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Birliksan is a local producer of mechanic sheet cutting machine and the cost of their product
is $3600.
1.3.1.7
Power Generator
Yamaha is a well known power generator producer. There are various models of
Yamaha but 2300 watt is enough to keep the work of the driller. The price of this generator is
$749. Another global generator producer is Mitsubishi which provides 2500 watt. The price of
this product is $825. Locally, Aksa is a famous power generator producer. The cost of 3kw
power generator of Aksa is $980.
1.3.2
1.3.2.1
Chen Feng is a located at Taiwan and it takes 30-40 days to deliver the product to
Turkey. If they do not have the product it takes 30-35 days. Shangai Halixun Die Casting
Machine Company leads the given order within 30 days. They generally hold inventory.
1.3.2.2
Forging machine:
Dieffenbacher is located in Germany and it takes 7-14 days to lead a given order in
Istanbul. Grabener is also located in Germany and similarly it takes 7-14 days to lead the
given order.
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1.3.2.3
Milling Machine
Kitamura has 3 centers in the world. The main center is in Japan, one in USA and the
last one in Germany. If we give them an order, the machine will come from Germany and the
lead time takes 7-12 days. Monarch Machine is located in USA and it takes 3-4 weeks to lead
the given order in Turkey. Tamiş Makina is located in İzmir and it takes 1-2 day to lead the
given order if they has the machine. If they has not the machine it takes 21-25 days to produce
new one.
1.3.2.4
Extrusion Machine
Waldrich-Coburg is a German firm and it takes 3-5days to deliver the product.
Generally they hold inventory on hand. Voronezh Machine is located in Russia and it takes 4-
7 days to edliver the given order. If they have not the product on hand they can produce a new
machine in 21 days.
1.3.2.5
Bending Machine
VSS is a Czech firm and it delivers the product in a week and if they have nopt the
product on hand, they can produce the new one in 10 days. Strojaren Piesok is also a Check
firm and has similar properties about delivery. Haseller is a Turkish firm and located in
Kocaeli. It takes 1-2 days to deliver the product.
1.3.2.6
C-T machine is located in İstanbul and it takes 1-2 days to deliver the given order.
Mazak Machine is located in USA and it takes 14-21 days to deliver the product. Birliksan is
located in Konya and it takes 1-2 days to deliver the product.
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1.3.2.7
Power Generator
The factory of Yamaha power generator is located in USA but it has some sellers in
Turkey like Aksa Jeneratör that is in İstanbul. For this reason it takes 1 day to get a Yamaha
power generator. Similarly Mitsubishi power generators are located in USA but a lot of dealer
in Turkey like Alimar Jeneratör and 1 day is enough to get a Misubish power generator. Aksa
is a Turkish firm that is located in İstanbul and similarly 1 day is enough to get an Aksa
generator.
1.3.3
1.3.3.1
Chen Feng is founded in 1976 and acquired the certificate of qualification of the
Douglas Aircraft Company, Good Design, Excellence and Award for Industrial Technology
certificates from MOEA. The firm acquired Chinese National Laboratory Accredition
Certificate and CE certificate. The firm also has ISO9001: 2000 & AS9100 certificate.
Shangai Halixun is a new company in this area and sells its product to entire of the world. The
firm has 15000 square meter area.
1.3.2.2
Forging machine:
Dieffenbacher is internationally active and they export %70 of their production. They have the
certificate ISO 9001 and VDA 6.4. The company is 130 years old and highly reliable. They
provide online support for 24 hours and 365 days in a year, quick service deliveries to Europe,
America and Asia, maintenance and modernization opportunity. Grabener also has worldwide
operation capability and provides service to its customer. They also provide service in the
field of electricity. The company has huge history that established in 1924. We could not find
a local producer.
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1.3.3.3
Milling Machine
Kitamura provide service acroos the world. The firm founded in 1933 and has 10
awards like Japan Industrial Chairman Award. Tamiş Makine has a good R&D. They
developed two techniques in their area and have CE standards. Monarch Machine has 55
years of experience and provides complete service opportunity.
1.3.3.4
Extrusion Machine
Waldrich – Coburg is founded in 1920 and provide service to its customers. It has
worldwide market power and developed ValueTec technique which increases production
efficiency. They gives 2 years guarantee. Voronezh Machine offers good quality even the
second hand of their products has a good market.
1.3.3.5
Bending Machine
Haseller gives importance and R&D and they claim the fastest laser cutting. They
offers haig quality and they have CE certificate. They provide service opportunity. Strojaren
Piesok also provides service opportunity. Second hand of this product is also valuable at the
marketplace. VSS also has service opportunity and high second hand demand in the market.
1.3.2.6
C – T is specialized about cutting machines and they have different methods such as
waterjet, plasma and laser. The plasma technique that they use can cut any material in the
world if the thickness is between 0,1 mm to 1,1 mm. They can cut 25 mm materials by using
laser technology. They provide service opportunity and has many qualifications like ISO 9001
and CE. Mazak is a worldwide company that provides 2D and 3D laser cutting systems. They
provide support if need and has service opportunity. They also provide technical support on
internet. If a part of the machine is needed, the customers do not need to wait for a long time
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because they always keep inventory. Birliksan produces mechanic sheet metal cutting
machine and exports %85 of its production. They made production by using CNC machines to
provide high quality to the customer.
1.3.3.7
Power Generator
Yamaha is a well known company in all over the world and has various generator
types. They have a lot of dealers in all over the world and provide worldwide service
opportunity. The firm has CE and all ISO certificates. Mitsubishi has very similar features to
Yamaha. Aksa Jeneratör provides service about the establishment of the generator and detects
the generator you needed. The firm has EN ISO 14001:2004, OHSAS 18001:1999 and TSE
certificates. The firm exports its products to lots of countries like Russia and Saudi Arabia.
1.3.4.
1.3.4.1
Chen Feng suggests 3-4 years of regular maintenance and this costs $800. Besides this
lubrication and clarification of some parts is needed and this makes $40 for a year. Shangai
Halixun suggests only lubrication and clarification is enough which makes $40 for a year.
Electricity may become another cost for maintenance. At most the machine has total power
42,4 kW for the product of Chen Feng. However, this is 37,2 kW for Shangai Halixun.
1.3.4.2
Forging machine:
Dieffenbacher claims that only lubrication is enough for the maintenance and this cost
is almost $40 for a year. Grabener thinks similar to Dieffenbacher. The power of Granaber is
46 kW and Dieffenbacher has 42 kW total power.
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1.3.4.3
Milling Machine
Kitamura do not suggest a regular complete maintenance. They think lubrication is
enough to keep the machine in proper situation. Tamiş Makine claims if the machine is used
proprley there will be no problem due to lack of maintenance exept from lubrication. Monarch
Machine suggest regular service check and claims this application will raise the lifetime of the
machine. The service check price of the Monarch Machine changes according to location. For
Europe it is almost $300 exept from travelling cost. Kitamura’s product’s power is 65 kW.
Tamiş Makine uses horse power as a power measure and their machine’s power is 10 hp.
Monarch Makine’s machine has 45 kw.
1.3.4.4
Extrusion Machine
Waldrich – Coburg give importance to clarification of the each part after the
production and suggest lubrication. They claim if these were done there will be no irregular
maintenance costs because of the product. Voronezh thinks similarly but they suggest a
regular check in 2-3 years. Total power of the product of the Waldrich – Coburg is 45 kW and
the power of the product that Voronezh produced is 38,4 kW.
1.3.4.5
Bending Machine
Haseller suggests only regular lubrication for mechanical part and systems. Strojaren
Piesok has the similar idea with Haseller. VSS suggests just lubrication and proper use. The
power of Haseller’s product is 4,4 kW. The power of Strojaren Piesok is 6 kW. The total
power of VSS is 7,5 kW.
1.3.4.6
C – T suggests just only regular lubrication for mechanical part and do not try to
lubricate or clear the laser system. Mazak has the similar idea. Birliksan suggests regular
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complete maintenance. C-T uses 2 kW total power and Mazak has the 2,5 kw total power and
Birliksan has 2,2 kw total power.
1.3.3.7
Power Generator
Yamaha says there is no need for any kind of maintenance such as lubrication. Mitsubishi
Aksa Jeneratör suggests the same policy like Yamaha. Yamaha consumes 0,5 lt fuel per an
hour. Also, it uses 0,32 lt oil but this is for a full tank. The maximum power the generator can
produce is 1 kW. Mitsubishi consumes 0,62 lt per an hour. It has 0,45 lt oil tank. The
maximum power the generator can produce is 2,9 kW. Aksa Jeneratör has a model that has 15
lt fuel tank and 0,6 oil tank. The generator consumes 1.1 lt per an hour and produces 6,5 hp.
1.3.5.
1.3.5.1
The most common irregular maintenance cost is caused by the breakdown of the
machine and for a casting machine the most usual failures are deformation of the tank because
of wear and fracture. If this failure occurs the possible remedy is changing the tank according
to Chen Feng company and this cost to the buyer is $12000. For the similar problem and
remedy the price of Shangai Halixun is $13200.
1.3.5.2
Forging machine
The most usual breakdown types of the forging machine are fracture of the part that
the machine apply press. Dieffenbacher suggest changing that part because if this breakdown
occurs, the piece of metal you worked on can not get a proper shape and the fractures
increases according to use of the machine. If you repair this part, the lifetime of it will not be
longer. For this reason Dieffenbacher suggest changing this part and the price for it is $24000.
The price of Grabener is $16000.
24
1.3.5.3
Milling Machine
Deformation of the spindle of the machine is most possible breakdown and Kitamura
sends a new one if the machine is under guarantee and there is no user fault. Besides this they
can send if the firm offer and the price is $11000. Tamiş Makine’s price is $5000 and
Monarch Machine’s cost is $7000.
1.3.5.4
Extrusion Machine
Deformation of the cylinder mold and tank are two usual breakdowns. Waldrich-
Coburg suggest changing these parts instead of repair and the prices of the parts are $5000
and $8000. Voronezh Machine thinks similarly and the prices of them are $4600 and $6200.
1.3.5.5
Bending Machine
The breakdown of the engine is most usual mistake and VSS changes this part $4200,
Strojaren Piesok’s price is $3200 and Haseller wants $3600.
1.3.5.6
The most expensive and usual breakdown of the laser machine is laser system
breakdown C-T changes the laser system $44000 and Mazak’s price is $58000. If service
needed without changing any part C – T wants $300 and Mazak’s price is $550 except from
travel costs for the Europe. For the hydraulic machine of the Birliksan, the common
breakdown is the wear of the blades and the changing cost is $900. The repair of this part is
$200 but the lifetime will not be longer as the new one.
25
1.3.5.7
Power Generator
The most common breakdown of the power engines is oil burning and the changing cost of oil
tank is $48 for Yamaha, $60 for Mitsubishi and $58 for Aksa. Moreover, engine deformation
is another usual breakdown and changing price of Yamaha is $219, $230 for Mitsubishi and
$280 for Aksa. Dealers of these firms also provide service but this includes of a cost between
$40 - 60.
1.3.6
All of the macines of all of the firms uses electrical energy axept from power
generators. They use fuel and produce electrical energy by burning the fuel. Additionally,
casting machine can use natural gases to produce energy.
1.3.7
1.3.7.1
Chen Feng is a global player of this industry and exports its product to all of the
continents such as America and Europa. The most importance reference of the Chen Feng is
famous German firm Schoen. The made a deal about production, marketing and design.
Similar to Chen Feng, Shangai Halixun exports to its machines to all of the world but the
company is 1 year old and has not a famous firm to be shown as a reference.
1.3.7.2
Forging machine
Dieffenbacher has service centers and sale offices around the world such as USA,
Brasil, Russia, India, Malaysia, Australia and China. Volkswagen is a famous car firm that
uses Dieffenbacher’s machines. Grabener is also a worldwide producer. The most known
company that uses this firm’s machine is the famous car firm Ford.
1.3.7.3
Milling Machine
26
Kitamura is maybe the most important player of this area in the world. There are lots
of firms that works with Kitamura such as Samkrish Sachine Tools and Packard Machinery.
Tamiş Makine is one of the leading firm in Turkey in this area but they did not mention a
specific name of a firm that it can be a reference. However, the firm exports the significant
amount of its products. Monarch Machine is a American firm and most of its work in USA.
Washington municipality can be shown as a reference for Monarch Machine.
1.3.7.4
Extrusion Machine
Waldrich-Coburg is a well known German company and there are a lot of firms that
uses the products of this company such as GMW/HPT Burg and Berthold Hermle. Voronezh
Machine is anold company and there are lots of firms that uses this company’s products but
the company did not show any references.
1.3.7.5
Bending Machine
Strojaren Piesok, Haseller and VSS did not mention any specific firm’s name but they
share the information that they export significant amount of their production.
1.3.7.6
Some of the references of C – T are KMT, Kjellberg, GE Fanuc and Fagor. Mazak is a
global player and has many factories such as in Italy, Germany and Japan. Roosen Group and
Machine Toolworks Inc. are only two of the references of Mazak. Birliksan exports %85 of its
production but they did not mention about any of their customers.
1.3.7.7
Power Generator
Yamaha power generators have worldwide usage like Leafplan. Mitsubishi generators
are being produced more than 100 years. There are a lot of firms that uses Mitsubishi
27
generators such as Akbank and Avivasa. John Deere, Power Generation and Newage AVK are
references of Aksa power generators.
1.3.7
1.3.7.1
Chen Feng is established at 1976 and have many awards that were mentinod in part
1.3.3.1. The firm has a strong R&D department and aims to be the leading company in this
area. The estimated lifetime of the firm is not less than 10 years. Shangai Halixun has a
worldwide market even it is a new company. If the company can stand 2 years, we think that
the estimated lifetime of the company will not be less than 10 years.
1.3.7.2
Forging machine
Dieffenbacher is a located most of the strategic places in the world. They have a huge
market and they are one of the leading companies in this area. We estimate that their lifetime
will not be less than 15 years. Grabener is working on different and important areas such as
automotive industry and shipping industry. They are one of the leading supplier of these areas
and estimated lifetime of the firm is not less than 10 years.
1.3.7.3
Milling Machine
Kitamura is founded in 1933 and has more than 200 patents that reflects the strong R
& D department of the firm. The company’s motto is “Limitless Creativity”. They are a lot of
areas such as automotive industry to medical machinery industry. The estimated lifetime of
the firm is not less than 15 years. Tamiş Makine is established in 1989 and has strong export
channels. They also give importance to R&D and they use a new technology “Finger Jointing
System” which they developed. The estimated lifetime of the company is not less than 7
years. Monarch Machine has a strong distribution and service network in all over the world
28
and gives important to be a leading company that make innovations in this industry. The
estimated lifetime of the company is not less than 15 years.
1.3.7.4
Extrusion Machine
Waldrich-Coburg is founded 1920 and one of the biggest company in this area. The
history of the firm makes it stronger and provides market advantage. We believe that the
lifetime of the firm is not less than 20 years. Voronezh Machine is also an old firm but
nowadays the firm is not very active. So, we believe that the estimated lifetime of the firm is
around 5 years.
1.3.7.5
Bending Machine
Strojaren Piesok has a good history but they are not very active in the marketplace. For
this reason we think that the estimated lifetime of the firm is less than 10 years. Haseller is a
growing firm and developing new technological equipments. They have good export channels
and we think that their lifetime will not be less than 8 years. VSS has similar characteristics to
Storajen Piesok. For this reason the estimated lifetime of the firm is 4 years.
1.3.7.6
C – T is an important player of this area. They use and develop high technological
products and has good export opportunities. For this reason, we believe that the expected
lifetime of the firm will not be less than 10 years. Mazak is a worldwide operating company
and has strong marketing opportunity. Lifetime of Mazak will not be less than 15 years.
Birliksan exports %85 of the its production. They have good export channels and give
importance on R&D. For this reason, we believe that the estimated lifetime of the firm will be
more than 5 years.
29
1.3.7.7
Power Generator
Yamaha and Mitsubishi are 2 of the leading company in this area. There are also other
important producer like Honda. These firms have good market opportunity, many dealer in
many countries even have dealers in most of the cities. The estimated lifetimes of Mitsubishi
and Yamaha are more than 15 years. Aksa is the most important local power generator
producer. It has good export channels and trying to enlarge its market size according to
company’s policies. The lifetime of Aksa will be more than 10 years.
2. Raw Materials and Subcomponents
2.1
1- Electrical motor
2- sheet metal
3- Slab metal
Here is the BOM graph. All the components are explained below the graph.
Figure 2.1 Bill of Material
30
2.2 And 2.3
Electrical motor:
Electrical motor is a subcomponent of our drilling machine. This will be a small or medium
size AC/DC motor, because it must be powerful enough for woodworking and also it mustn’t
be too heavy for the column. If we choose a heavy motor, then we will have to make the
carrying column stronger which means extra cost. So 3 – 4 kW power and medium speed
motors will be suitable for our project.
We will purchase motors from suppliers who specialized on that area. Because producing
these motors will require so much equipment cost. Also, we won’t be able to reach the quality
of other motor suppliers; because we do not have the experience they have in the area.
Here are some electrical motor suppliers:
a – Tesla motor
b - Zhejiang Jialile Electrical Machinery Co., Ltd.
c – Elsan
d – LeroySomer
Broad analyses of these suppliers are below.
1 - Tesla Motor:
Tesla Motor Asenkron Motor Ltd.Şti. was established as Turkish partner of Shanghai Techtop
Motor Co.Ltd. Shanghai Techtop is not a major producer in the field. They are one of the
biggest electrical motor producers in China and also getting bigger. For instance, a co-
partnership is expected with Siemens. Moreover, Tesla is an experienced producer because
they have been this field with their other brand Sun for over 25 years. Also, they have enough
variety of products. Their prices are a bit higher than domestic producers but they are likely to
31
be preferred because of their quality and reliability. So they are a strong firm and there is no
concern about any future collapse if a purchasing agreement is made with them.
They produce nearly 20 motors which are suitable for our project. Here are some of them.
These are the ones with 960rpm (revolution per minute) speed and 3kW power.
MODEL POWER SPEED CURRENT EFF. TYPE SERIE

MS132S-6 3 960 7,21 79 THREE-PHASE MS Series
MSB132S-6 3 960 7,4 81 BRAKE MSB Series
MSC 132 S-6 3 960 7,4 81 THREE-PHASE MSC Series
And these are the ones with 1440rpm speed and 3kW power.
MODEL POWER SPEED CURRENT EFF. TYPE SERIE

ML100L2-4 3 1440 17 79 SINGLE-PHASE ML Series
MS100L2-4 3 1420 6,47 82,6 THREE-PHASE MS Series
MSB100L2-4 3 1410 6,78 82 BRAKE MSB Series
MSC 100 L2-4 3 1420 6,8 82 THREE-PHASE MSC Series
MY100L2-4 3 1440 17,1 78 SINGLE-PHASE MY Series
MYT100L2-4 3 1400 17,83 77 SINGLE-PHASE MY Series
There are 750rpm and 3000rpm models but 750 are too slow. Also 3000 is unnecessary for
our project so we won’t prefer it because of the extra cost.
Here are the price and delivery times for order amounts of 10 – 25 and 100 for MSC 100 L2-4
model.
product price per average delivery

amount unit($) time(days)
10 200 3
25 195 10
100 185 30
2 - Zhejiang Jialile Electrical Machinery Co., Ltd.:
32
This is a Chinese firm. They are in the field for more than 20 years and they are one of biggest
Chinese producers currently. It has more than 500 staff. So it is a big firm which can be
trusted about its future. However there are concerns about quality of its products. We could
not get any information about their past references.
Their biggest advantage is their prices. They supply 3kW motors with more 2500rpm speed at
the price of 1500rpm motors of other firms. So, if we purchase their product, we will increase
our machines quality without changing the price. Furthermore, they are very flexible about
producing motors for special needs. So this will be an advantage for us if we make
innovations and try to change our products design in the future.
However, reliability and quality is still an issue. We look forward to get more information
about their products in coming weeks.
Here are the price and delivery times for order amounts of 10 – 25 and 100 for 3kW and
2500rpm model.

10 193 30
25 193 30
100 175 45
3 - Elsan:
Elsan is the biggest Turkish producer in the field. They are a producer since 1964. They have
a variety of products. They have a very good service system. This is their biggest advantage.
Also delivery time of their products takes less time than foreign producers. So if we choose
them, we will need less storage area in our factory; because we will be able to purchase
motors from them quickly in any amount we want. This is a very big advantage.
1500rpm model.
33
10 210 3
25 210 6
100 200 20
4 - LeroySomer:
LeroySomer is one of world leading companies at electrical motor production. Most

significant characteristic of LeroySomer is their quality. Their product is significantly
qualified from Chinese producers which supply cheap product. Also LeroySomer is one of the
most reliable companies in the field. There are nearly no concerns about their future and
product quality. Also they have the widest product variety.
So if we cannot be sure about qualifications of cheaper products, we will purchase form

LeroySomer without any doubt.
1500rpm model.

10 245 15
25 245 15
100 245 15
To sum up;
There are similar producers in the field. They can be grouped into four. First group is Turkish
firms which have foreign partners. They use the quality of their partners and supply that with
domestic service and interaction. Tesla Motor is an example to these companies. Second
group is Chinese producers. Their products are cheaper than others. However there are
concerns about quality. Third group is domestic producers. They are generally produce higher
34
quality products than Chinese firms but they are more expensive. Elsan is the biggest of these
firms. The final group is world leader companies. They have the highest quality products but
they are expensive.
When comparing these firms, we decided to eliminate Tesla first. They had a Chinese partner.
However that Chinese firm was the fifth biggest producer in china. Instead of buying from
them, we could buy from bigger Chinese firms which will probably be more reliable and
qualified. We will probably get less service than Tesla but the product will be more reliable
and qualified.
Than we passed comparing Chinese firms with Turkish ones. Chinese product was cheaper.
However domestic ones (especially Elsan) had very good service. Also Chinese firms were
new on the market and finding past references about them was hard. So we could not trust
Chinese producers. Also there was good reference about Elsan. So we eliminated Chinese
firms too.
LeroySomer was always a good option but we had concerns about the prices. We were sure
that using their product will increase our product’s quality. However price was important for
us. We started this project in the goal of producing cheap domestic drilling machines with
good service. So we investigated more about Elsan and its products quality. Our search
resulted in more trust in Elsan.
So we finally concluded to purchase electrical motors from Elsan.
Sheet and slab metal:
Erdemir is the only company for sheet and slab metal purchase in Turkey. So we will either
buy metal from Erdemir or foreign suppliers.
There are nearly 30 companies like Erdemir around world especially in India and China. We
learned that transportation costs are an important part of metal industry, because metals are so
heavy. So, buying slab or sheet metal from very distant foreign countries nearly doubles the
costs. After that, we started searching about neighbor countries. However, we could not find
any firm like Erdemir at neighbors.
35
So, we concluded that Erdemir is our only option to buy sheet and slab metal.
Here are the price and delivery options of Erdemir.
Delivery time: 5-7 days (Delivery time is standard at Erdemir. It does not change with the
amount we want to buy. Because they are a huge firm and they have inventories to handle 10
firms like us any time.)
Price: We selected the 6837 model. Because it is easy to deform and hard enough for our
purposes. The price per ton is $765 for this product.
3. Manufacturing facility and process
3.1 How does the production take place?
Manufacturing facility is composed of five job shops: casting, rolling, forging, bending,
machining. Every part of the product is manufactured by different activities in different job
shops. Besides, machining is a common process for all parts.
Manufacturing of five basic and significant parts are explained below. (Small parts like
screws are purchased from suppliers.)
3.1.1 Spindle:
Spindles in different size and length will be produced in our facility. Raw material for it is
slab metal. However, spindle is the key part of our product. Because it is the most vulnerable
part for wear and break downs. So spindle must be very strong and hard.
Spindle can directly be produced by machining, but it will be very costly. So, applying
machining after certain operations will be more cost effective. These operations can be either
casting or forging. A final machining process will be needed for both activities. Comparing
them, we know that parts which are produced by forging are stronger and harder than parts
produced by casting. It is because of the fact that there is strain hardening in forging and also
36
it forms continuous grain flow lines. (Kalpakjian &Schmid, 2008) also, forging is more costly
than casting. However, we need spindles hard and strong. Because of that, we chose forging
operation for spindle production.
After forging, final machining operations will be made.
3.1.2 Work piece support:
Work piece support is a wide and bended on the edges part to carry the work piece. It must be
strong enough to carry weights of 200kg’s. So we will need a metal part of thickness 3mm’s.
In this process; we will use sheet metal. Sheet metal will first go to a rolling operation. This
operation is for getting rid of residual stresses in the material which can be a cause of further
defects. Than it will go to bending machines and its edges will be bend. Finally there will be
maching for final holes and cuts.
3.1.3 Guide column manufacturing:
Guide column is also a key part. It will carry the weight of the electrical motor. So we will
manufacture it by forging. Slab metal will first be forged. Then it will be machined.
3.1.4 Gears block manufacturing:
Gear block has a complex shape. The most suitable process for manufacturing complex
shapes is casting. (Kalpakjian &Schmid, 2008) it is very hard to produce it with other
processes. So we will use casting for this process.then we will bend its edges. We would not
need this operation, namely we would do everything at casting; but it reduces cost to make
bending. A final machining will be needed like all other processes.
3.1.5 Motor covering plates manufacturing:
These plates are for only covering parts. So we do not need them strong or hard. So we will
use sheet metal as raw material and make it thinner with rolling. Then we will bend it for
appropriate purposes. And then a final machining will be made.
3.1.6 ASSEMBLIES:
After manufacturing of these parts, they are assembles together with other parts purchased
from suppliers.
37
An activity chart of manufacturing process and facility is given below:
Figure 3.1 Activity Chart
38
3.2 Facility Layout type:
Our facility will have a process based layout.
Here is a comparison of product based and process based layouts and wyh we have chosen
process based:
3.2.1 Process based layout:
“Process layouts are found primarily in job shops, or firms that produce customized, low-
volume products that may require different processing requirements and sequences of
operations. Process layouts are facility configurations in which operations of a similar nature
or function are grouped together.”(http://www.referenceforbusiness.com/management/Int-
Loc/Layout.html) So it is a job shop. This layout is suitable for firms that have lots of
different kind of operations. All operations need various kinds of processes. So establishing an
assembly line will be very costly for these firms; because they have to buy from same
machine for every part they need. Instead of that, they buy an appropriate number of machines
and group them into ones with similar functions. So, this layout gives firms the flexibility to
handle big number of different processes and activities. This is called process based layout.
General advantages of process based layout are listed below:
1. Flexibility: firms can handle a big number of different kinds of processes.

(http://www.referenceforbusiness.com/management/Int-Loc/Layout.html)
2. Motivation: workers will so different processes and activities. So they will not be
bored of doing the same things. Also they will have to reflect their personal abilities to
the job instead of standard things, so they will be motivated of their product.
(http://www.referenceforbusiness.com/management/Int-Loc/Layout.html)
39
3. Less system failure cost: there will be similar machines, so when a machine is broken,
other machines will be able to cover for it. So facility will not stop working bcause of
break downs. This means lower failure costs.
And general disadvantages are listed below:
1. Utilization: machines will be less utilized. Their utilization rates will depend on output
requirements.
2. Cost: per unit costs will be higher than product based layouts.
3. Confusion: system will be less automated. So there will be confusion. Organization is

important. (http://www.referenceforbusiness.com/management/Int-Loc/Layout.html)
3.2.2 Product based layout:
“Product layouts are found in flow shops (repetitive assembly and process or continuous flow
industries). Flow shops produce high-volume, highly standardized products that require
highly standardized, repetitive processes.”
(http://www.referenceforbusiness.com/management/Int-Loc/Layout.html) it this layout,
machines are sequenced one after other. So a material enters beginning of a line and exits line
after sequenced operations. Workers do same repetitive jobs. Machines are highly utilized.
There is two types of this layout which are paced and unpaced. Paced lines have standard
speeds which are arranged by automatic lines.
General advantages of process based layout are listed below:
1. Output: large volume f output is produced continuously.
2. Cost: unit costs are law. Also, workers are trained less because of the repetitive tasks.
Also, everything is organized, so it requires less organization attention. All of these
40
reduce costs. (http://www.referenceforbusiness.com/management/Int-
Loc/Layout.html)
3. Utilization: machines and workers are highly utilized because of standardization.
And general disadvantages are listed below:
1. Motivation: workers will do same repetitive tasks. No ability incentive.
2. Flexibility: firms will not have much flexibility.
3. Failure costs: when a machine fails, all line will stop working. So it will be costly.(
http://www.referenceforbusiness.com/management/Int-Loc/Layout.html)
Our facility will have a process based layout.
The reason is we do have a big number of varieties of tasks. Handling these tasks on a
product based layout will be nearly impossible. We will need too many machines, so facility
setup cost will be very high. For example, every part of our product requires a machining
process for cutting excessive parts or drilling screw holes etc. So if we arrange processes on
assembly lines, we will have to buy nearly 10 machining machines. This will sky up the costs.
Instead of that we will use process based layout and buy one or two machines. Also, this
layout will give us flexibility of making changes in our product. Also process based layout is
appropriate for standard products which are produced in high volumes; however our product
will not be produced in high volumes.
3.3 Other products that can be produced in our facility:
Most similar products to furniture drilling machine are plastic drilling machines and metal
drilling and milling machines. These products can be produced with smaller changes in the
product design.
41
To produce plastic drilling machine, we will use less costly material. Because this operation
will need less force and hardness than woodworking. So spindles will be less costly. Also
other parts will be thinner.
To produce metal drilling machines will be harder and high costly. Because we will need more
powerful electrical motors. Also probably we will need to buy spindles from suppliers,
because they must be too hard and strong. We will use more forging operations to make parts
more powerful.
3.4 Fixed cost of establishing the facility:
Die Casting machine: $90000
Forging machine: 185000
Milling Machine: $18000
Extrusion Machine: $80600
Bending Machine: $10300
Metal Sheet Cutting Machine: $85000
Power Generator: $980
Land and building cost: $300000
Total: $769000
3.5 Typical unit production cost:
Regular maintenance cost of the machines:
42
Die Casting machine: $840
Forging machine: 46
Milling Machine: $300
Extrusion Machine: $100
Bending Machine: $75
Metal Sheet Cutting Machine: $50
Power Generator: $10
TOTAL: $1460
Total electricity consumption per year: $60000
Total worker cost: 20 * 12 * 650 = $156000
General total: 156000 + 60000 + 1460 = 217460
Expected production per year: 800 machines
Cost per unit: 217460 /800 = $271
Raw material and purchased materials like electrical motors must be added to this cost. Also
there may be overhead costs that are missed from eye:
So cost per unit: 271 + 200(electrical motor) + 50(raw material) + 50(overhead costs) = $571
3.6 Typical fixed cost for an order:
Costs above were computed for the full time production of the facility. Yearly 800 machines is
a rationally small number for demand. So we expect that every machine produced will be
43
sold. So the facility will work full time and there will not be any additional fixed cost for any
order.
3.7 Break- even point:
We plan to sell a machine on the average of $1000. $1000 is a generally plausible price for
this market. This price choice is good enough for our sales purposes. Complete analysis of
this choice is included in section 5 of this report.
Typical unit cost was computed as $571 in above section. So:
Net Revenue per unit: 1000 – 571 = $429
We expect to sell 800 machines per year on the average.
Net Yearly revenue: 429 * 800 = $343200
Facility set-up cost: $769000
Breakeven point: 769000 / 343200 = 2.24 years
So we will amortize our investment after 2.24 years. 2.24 years is the breakeven point.
Here is the graph for the break-even point:
1200000
1000000
800000
profit
600000
investment
400000
200000
0
0 1 2 3
4. Manufacturing Decisions under Various Scenarios
44
B1
A1-B1
The most important factors to determine the optimal process are variety and volume. If
we want to produce many products in low volume, the suitable type of production is “job
flow”. If we will be produce a unique machine, and if the quantity is one this time the suitable
type of production is project. If we want to produce several products and moderate volume,
“batch process” type is suitable and if we want to produce a low variety of products in large
volumes, the most suitable production type is “assembly line” process. “Continuous flow”
process has similar characteristics to assembly line process about these issues.
A2-B1
If the demand is one at each time – not flexible- and unique “project process” is
suitable. If the demand variance is high “job flow” process is ok. If the demand variability is
moderate “batch flow” is suitable type. If the demand variability is low and quantity is high
“assembly line” or “continuous flow” according to type of the material produced.
A3-B1
If the demand variability in the market is high “job shop” is the most suitable. If it is
moderate “batch process” and if it is low “assembly line” process is suitable. If the demand
variability is very high then the “project process” is suitable.
A4-B1
If the product’s size is high, the bigger area and volume will be needed for the factory.
In addition, if high capital investment is needed, assembly line may be suitable. If capital
investment is low but labor skill is needed highly, then project process is more suitable and a
bigger place in m2 and m3 may be needed. If capital investment is low and labor skill and
number is highly needed, “job flow” a moderate place may be needed in terms of m2 and m3 .
We can say that if we need a big plant to make production, a place in an industrial area
become more suitable than a place which is within the city.
A5-B1
45
If the product has various characteristics a project process may be suitable to achieve
all of the parts of the product successfully. However, if the volume of the product have to be
more than one, than “job flow” or “batch flow” process types can be suitable.
A6-B1
Because of the geographical reasons like closure of the raw material, the factory may
be planted near to raw material. If there is a high raw material need, assembly line and
continuous flow may be suitable. If the climatic condition causes lack of transportation of the
product, than “project process” or “job shop” may be suitable because there is one unit or a
few unit of products that makes easier to transportation.
A7-B1
If the labor content and skill is high, than “project” and “job flow” necessities can be
satisfied. If labor content and skill is low “batch process” and “assembly line” necessities can
be satisfied. If the labor content is very low with skilled overseers, “continuous flow”
requirements can be required.
A8-B1
If capital investment is very low, project process is suitable. If capital investment is
low, Job shop process is suitable. If it is moderate, “batch flow” is suitable. For the assembly
line capital investment high and for the continuous flow process capital investment is very
high.
A9-B1
There is no direct effect of global warming on the type of the process. However, if
there will be restrictions on production volume because of emission and current type is
assembly line process, than “job flow” or “batch flow” can be suitable types.
A10-B1
If there is an economic crisis occurs due to earthquake, the limitation of the
production may become reasonable. Just in time or other order based systems can be used and
“project process” and
“job flow” process are feasible production systems. Also, replant of the plant to a safe place
may become an possible solution to keep the production system.
46
A11-B1
If an economic crisis occurs due to possible regional wars that our country may be
involved, the separation of the production in different countries becomes a feasible idea. If the
separation occurs and because of the economic crises, the demand may dramatically fall.
There will be a drop in the volume of production and “job flow” and “project” processes
became applicable.
A12-B1
An economic crisis may occur because of geographical disasters, sudden corruption of
the government or worldwide crises such as mortgage. Each of them possibly causes
reduction in the production volume and may result with the same situation that we
investigated at A10. However, if there is a worldwide crisis, replenishment do not work but
reduction in production volume is still applicable by the “job flow” or “project” processes.
A13-B1
A significant change in Dollar and Euro, changes the cost of the production. If the
production cost decreases, the price of the product will decrease and according to demand
“batch flow” and “assembly line” processes are applicable to increase production volume.
However, if the prices increase, then there will be a reduction in the demand and the volume
of the production may be decrease. Hence, “job flow” process system can be applicable.
A14-B1
Strike because of displeasure of workers:
If such a situation occurs and a usual thing in the country, the logical way of doing
production in a way that not highly depend on workers such as “assembly line” or “continues
flow”.
47
B2
Raw materials and/or subcomponents used in manufacturing the product
A1-B2
If there is an increase in the production volume, the need for raw materials or
subcomponents will be increased too because they are directly correlated. Also, if the variety
of the products will be increased, again there will be increase in the necessity of raw materials
and/or subcomponents and maybe new raw materials and/or subcomponents will be needed.
A2-B2
If the demand increase, the need for raw materials or subcomponents will be increased
to raise the production volume because they are directly correlated. Similarly, if demand
variance is high, some forecasting techniques should be used such as Winter’s forecasting
method. If a satisfactory condition occupied, the usage of raw materials and/or
subcomponents will keep at a regular level.
A3-B2
If the demand of the product increases for all the players of the market, demand of raw
materials and/or subcomponents increases because each player may increase its demand on
raw materials and/or subcomponents. If the demand variance of product increases, demand
variance of raw materials and/or subcomponents will also increase.
A4-B2
If the number of players increases in the market, probably the demand for raw
materials and/or subcomponents will be increase. Hence, the price of raw materials and/or
subcomponents may raise.
A5-B2
If the manufacturing capacity of the plant is high and if it uses this capacity, there will
be high demand for raw materials and/or subcomponents and probably will need a big area
and space. Moreover, if the factory is close to a big city, it will try to get raw materials and/or
48
subcomponents from close places to this city but if the transportation cost of raw mateiral is
higher than the transportation of the product, probably the factory will be established close to
raw materials and/or subcomponents source.
A6-B2
If the product has various characteristics, there will be a demand for various
subcomponents or raw materials to satisfy the each character of the product.
A7-B2
Geographical conditions may affect the usage of raw materials. If it is very hard to
reach the raw material, the firm will probably save some on the inventory. Similarly, if
climatic condition make hard to transport the raw materials and/or subcomponents, raw
materials and/or subcomponents can be hold in inventory.
A8-B2
If the number of workers is high, than the amount of mining of the raw material
probably be high.
A9-B2
If the capital availability is high, raw materials and/or subcomponents can be bought in
higher amounts and higher quality.
A10-B2
Some materials may be diminishing because of global warming and the reasons of
global warming like O3.
A11-B2
An economic crisis due to earthquake may cause the reduction in the production and
this situation cause a reduction in the demand for raw materials and/or subcomponents.
Conversely, if the economic situation of the country is wealthy, an earthquake may increase
the demand for some raw materials and/or subcomponents to reestablish the lost
establishment. If a company gets the raw materials from different countries, a regional war
may not stop the functioning of the factory.
49
A12-B2
Similar to economic crisis due to earthquake, a regional war may cause the reduction
in the production and this situation cause a reduction in the demand for raw materials and/or
subcomponents. However, if a company gets the raw materials from different countries, a
regional war may not stop the functioning of the factory.
A13-B2
An economic crisis probably decrease production and this cause to a reduction in the
demand for raw materials and/or subcomponents.
A14-B2
Strike because of displeasure of workers:
If a strike occurs, the mining of the raw materials may stop and the transportation of
these materials to the factories may stop.
B3
Selected layout for the manufacturing facility
If the production volume is high and a serial production system is used, product based
layout is logical. However, if a machine is produced like drilling machine, process based
layout is applicable as mentioned in the previous part.
A1-B3
If production volume is very high, the product layout system may become suitable but
if it has big variability then the product layout system is more applicable.
A2-B3
If the demand characteristic for the company’s product increases, there will be an
increase in the different kind of operations for each machine. Hence, process based layout
system will be needed. If these characteristics have a big variability, again process based
system is more applicable.
50
A3-B3
If the demand characteristics in the market increase by all players, there will be a need
for the usage of different production systems and this cause to apply process based layout
system. Increasing variability reflects similar properties.
A4-B3
A very big location both in area and volume may be a necessity for product based
system and for a machine like drilling, this is not reasonable. Process layout system is
applicable even the factory has big physical capacity and does not depend on the location of
the factory.
A5-B3
The various product characteristic need various applications such as milling, forging
etc. and process layout system is reasonable to apply all different applications for the each
characters’ need.
A6-B3
Although geographical and climatic conditions do not an important effect on the
production system layout, the lack of transportation may push the layout system into process
based system because there is not a serial manufacturing if we compare to product based
system.
A7-B3
The workers and their skills are more important for process based system. If there is
lack of workers availability product based system is more appropriate.
A8-B3
The product based system needs high capital investment. In contrast to product based
system, process layout system is more appropriate if the capital availability problem.
A9-B3
Product based system cause more emissions and if there are law that restricts
emissions, process based system will be more applicable.
51
A10-B3
If there is an economic crisis due to an earthquake, the demand will probably fall the
products and process based system become more applicable.
A11-B3
If an economic crisis due to regional war occurs, the demand will probably fall the
products and process based system become more applicable and selling product into different
regions is a reasonable idea.
A12-B3
If an economic crisis occurs, the demand will probably fall the products and process
based system become more applicable and selling product into different regions is a
reasonable idea.
A13-B3
If dollar and Euro increases and import is needed to be supplied, profit margin will
decrease and process based system is more applicable. If dollar and Euro decreases and
import is needed for the production, profit margin will increase and production capacity may
tend to be increased. The reasons for that is the value rate of YTL against Dollar and Euro.
A14-B3
If a strike occurs, process based system has not a big chance to be continue but by the
product based system the production may continue.
B4
Supplier selection for equipment
A1-B4
If the production volume increases and if we do not have a machine which is not
capable to adjustable to produce in large quantities, a new machine may be needed. For this
52
reason, the supplier should be selected according to possible production volumes. Also, if
there is a high production variability, the machine may not be suitable and some parts of it
may breakdown and there will be a need for new equipment to change the defected parts. For
this reason, a supplier which has capable machine and provide support should be selected.
A2-B4
If demand increases, there may be a need for new machines or/and additional units
which has to be bought from a machine supplier. If the demand variety increases, the supplier
may hold inventory for the machine it supplied. If the supplier is not capable to do that, more
than one supplier can be selected to supply the needs of the factory.
A3-B4
If the demand of all the player increases, the supplier needs to increase its production
to response in a short term. If this is not applicable, for different equipments different
suppliers should be selected. If the variety of demand changes in the market by all of the
players, a supplier should be selected which has strong R&D department and serve to
different needs of the market.
A4-B4
If the location of the factory is close to the city a supplier should be selected which is
located close to city and deliver orders in a short time. Similarly, if the location of the factory
is in the organized industrial region, a supplier should be selected which is located close to
region and deliver orders in a short time. The physical capability of the supplier such as m2
and m3 should be enough to serve the demands from it.
A5-B4
If the various product characteristics are needed, more than one supplier should be
selected to satisfy all needed characteristics of products. The reason is the idea of each
supplier may specialize on different characteristics.
A6-B4
If geographical conditions of the supplier makes harder to make transportation, a
supplier which is close to us should be selected because maybe a sudden breakdown occur
and we need new equipments. If this is not applicable, maybe we can stock some important
53
equipment which has bigger probability of breakdown. Similar situations are valid for the
climatic conditions.
A7-B4
If we do not have enough worker a more technological machine may be supplied if
there is skilled workers or if the supplier can educate some of the workers to function the
machine. If we have enough workers but not skilled workers, the supplier can supply a
machine which is ease to use and control.
A8-B4
If we have capital availability, probably there won’t be a problem between the factory
and the supplier. However, if we have capital problem, a supplier should be selected which
makes same agreements about payments.
A9-B4
If global warming cause different climatic situation rather than regular features of that
climate, a supplier should be selected which can adjust it to new conditions. Moreover,
different suppliers can be selected in the world which is in different regions.
A10-B4
If an economic crisis occurs due to an earthquake, a factory may not supply its
requirement from a factory in an earthquake area. For this reason, different suppliers from
different regions can be selected to take a precaution.
A11-B4
If a regional war occurs, making production in different places is a logical idea.
Similarly, different suppliers should be selected in different regions to get the requirements on
time.
A12-B4
54
If an economic crisis occurs, probably the cash gain big importance and if a factory
does not have enough cash, a factory should make an agreement about payment type that
allows to factory to delay the debit.
A13-B4
If there is a significant decrease in dollar and euro, the value of Turkish money will
increase ad this makes to export harder. If you have a foreign supplier, this may cause same
disagreements about payment. For this reason, local and foreign supplier should be selected to
decrease the effect of sudden change of dollar and Euro.
A14-B14
If there is a strike in the factory, there should be a delay about supplies. If a supplier
has a strike, different suppliers should be selected from different regions to decrease the
effect.
B5
Supplier selection for raw materials
A1-B5
If the production volume increase, the need for raw material will increase and supplier
have to be capable of doing that. If one supplier is not enough to get needed amount, more
than one supplier should be selected.
A2-B5
If the demand increases for the product, the demand for raw material also increases
because they are directly related. Similarly, if the variability of the demand increases for the
product, the demand variability for raw material also increases.
55
A3-B5
If the demand increases by all the players in the industry, the demand for raw materials
will increase. Similarly , if the variety of demands increases, variety increases but probably it
will be less than the variability of one company.
A4-B5
If the factory is close to city, the supplier may be selected from close to factory. Also,
if the factory does not have enough places to hold inventory, the supplier should be selected
that have a big inventory both in m2 and m3.
A5-B5
If the manufacturing facility produces products that have different characteristics,
different raw materials may be needed and a supplier should be selected to supply these kinds
of materials or different suppliers can be selected to satisfy all characteristics.
A6-B5
If geographical conditions of the supplier makes harder to make transportation, a
supplier which is close to us should be selected because maybe there will not be enough space
to hold inventory. If this is not applicable different suppliers should be selected because if one
of them will not reach, the other supplier may deliver the raw materials. Similar situations are
valid for the climatic conditions.
A7-B5
If we do not have enough worker the supplier of the raw material has not something
much to do. If a supplier has not enough workers, a different supplier may be use to keep
production.
A8-B5
If we have capital availability, probably there won’t be a problem between the factory
and the supplier. However, if we have capital problem, a supplier should be selected which
makes same agreements about payments.
56
A9-B5
If global warming cause different climatic situation rather than regular features of that
climate, a supplier should be selected which can adjust it to new conditions. For example, for
a orange juice producer, the supplier of the oranges shuld be awere of when he will deliver the
oranges. Moreover, different suppliers can be selected in the world which is in different
regions to decrease problem rate.
A10-B5
If an economic crisis occurs due to an earthquake, a factory may not supply its
requirement from a factory in an earthquake area. For this reason, different suppliers from
different regions can be selected to take a precaution.
A11-B5
If a regional war occurs, making production in different places is a logical idea.
Similarly, different suppliers should be selected in different regions to get the requirements on
time.
A12-B5
If an economic crisis occurs, probably the cash gain big importance and if a factory
does not have enough cash, a factory should make an agreement about payment type that
allows to factory to delay the debit.
A13-B5
If there is a significant decrease in dollar and euro, the value of Turkish money will
increase ad this makes to export harder. If you have a foreign supplier, this may cause same
disagreements about payment. For this reason, local and foreign supplier should be selected to
decrease the effect of sudden change of dollar and Euro.
A14-B5
If there is a strike in the factory, the supplier should be a delay about supplies. If a
supplier has a strike, different suppliers should be selected from different regions to decrease
the effect.
57
B6
Fixed costs for establishing the production facility
Fixed cost may occur due to the cost of opening a facility or establishing a facility.
This cost includes the cost of machines will be bought, cost of the land to establish the factory
and the cost of opening the facility each time. The establishing cost of the facility is “sunk
cost” in economic terms.
A1-B6
If the production volume increases, new machine may will be needed and this
increases the fixed cost. If a new facility has to be open, this also increases the fixed costs. If
the demand variability is high, maybe we need an expensive machine which is adjustable to
produce different amount in a fixed production time. This may increase the fixed costs.
A2-B6
If the demand is high, a bigger facility should be established and this causes higher
fixed costs while establishing the facility that is more than the fixed costs of opening a smaller
facility. If the demand variability for the product is high, a facility may be needed to answer
even the highest level of the demand. For this reason, it can be said that, if demand variability
is high, the fixed cost probably becomes higher than the situation that the demand variability
is low.
A3-B6
If the demand of all the players in the market for products increases, new facilities
may need to be opened and this increases fixed costs. However, if some firms which makes
establishments enters the market due to the high demand, it may cause a reduction on the
fixed cost for establishment because of competition.
A4-B6
58
If the facility established close to a big city, the land cost of the factory may be high.
Similar situation can be occur, if a factory land is bought in an organized industrial area rather
than using a land far away from the city but these places will provide a reduction in some
costs such as transportation cost. Also, the bigger area of the factory increases the both land
cost and establishment cost and the bigger volume of the factory increases the establishment
costs.
A5-B6
Various product characteristics may achieved by using various machines and this
increases the fixed costs. Also, various steps may be needed in different areas that increases
the fixed costs.
A6-B6
Geographical condition may affect the fixed cost, for example if the land is very rocky,
establishment cost increase. In addition, if the climatic condition cause very cold or rainy
weather, the factory must have the precautions such as isolation that increases the
establishment cost.
A7-B6
If there is no optimality in the number of working people which are establishing, the
establishment cost may increase.
A8-B6
If there is lack of capital availability, it may be hard to challenge with establishment
costs. If the company is paying establishment cost by taking a credit, probably establishment
cost may increase. In addition, if there is lack of capital availability, there will be lack of
capital to operate the factory.
A9-B6
If there is lack of capital availability, you can adjust your factory to the environmental
laws that aims to prevent global warming.
A10-B6
59
If an economic crisis occurs due to an earthquake, there may be some damage on the
factory and reestablishment may be needed so fixed cost increase.
A11-B6
If there is a regional war and you have capital, you can separate the production into
different countries that increases fixed costs. If you have not capital availability, seling the
products into different countries may help to improve the situation.
A12-B6
If there is an economic crisis probably fixed cost will be decrease but because of the
money is more valuable, it will be hard to establish a new plant.
A13-B6
If dollar and Euro increases and import is needed to establishment, the fixed costs will
increase. If dollar and Euro decreases and import is needed to establishment, the fixed costs
will decrease.
A14-B6
If there is a strike of workers, the fixed cost for establishment may increase because
you do what workers want or try to find other workers and transport them to the plant.
B7
Unit production costs
A1-B7
If the production increases, probably the unit marginal cost decreases and if there is
variability of production, unit production costs reflects this variability.
A2-B7
60
If the demand for company’s product increases, the production will probably increase
and marginal cost of production decreases. However, if a new plant is needed, this time a
fixed establishment cost may occur and in the long time the marginal cost may increase.
Conversely, if the production decreases, marginal production costs may increase.
A3-B7
If all the players’ demand increases in the market, probably the marginal cost will be
reduced because some costs will be paid different producers such as transportation costs.
However, this may cause an increase in the prices of the resources and this situation may
cause an increase of unit production cost.
A4-B7
If the factory produce the product with low transportation costs, its unit production
cost be smaller. If the facility has a big area and volume, its unit production cost maybe
increased because of establishment fixed costs.
A5-B7
Various product characteristics increases the unit production cost because for each
character there occur different costs for each character such as purchasing new machine,
establishing new unit.
A6-B7
If geographical conditions of the supplier makes harder to make transportation, the
transportation cost increases so unit cost. If fixed costs are high because of climatic and
geographical conditions as mentioned in A6-B6, the unit production cost will be higher.
Similar situations are valid for the climatic conditions.
A7-B7
If the worker availability is not enough marginal cost for production may increase
because of purchasing new machine may be required or additional worker transportation may
be needed. If there are workers more than need, this time marginal cost of requirement may
decrease due to less amount of salary.
61
A8-B7
If there is lack of capital availability, the marginal cost may increase because a firm
may not challenge to pay all of prices of its supplies and could not get a discount.
A9-B7
Unit production costs may increase if there are environmental laws that aim to prevent
global warming.
A10-B7
An economic crisis because of earthquake may increase the unit production costs
because repairs may be needed. Conversely, if there is not much thing to repair, marginal
costs may be lower because the prices of services and products might fall in the economic
crisis situation.
A11-B7
A regional war occurs, unit production costs may increase because production volume
may decrease and the factory want to establish new factories to different cities that increases
fixed costs and unit production costs.
A12-B7
An economic crisis may increase the unit production costs because the production
volume may decrease. Conversely, the unit production costs may be lower because in the
economic crisis situation the prices of services and products might fall.
A13-B7
If dollar and Euro increases and import is needed to production, the unit production
costs will increase. If dollar and Euro decreases and import is needed for the production, the
unit production costs will decrease.
A14-B7
62
If there is a strike of workers, the unit production cost for production may increase
because you do what workers want or try to find other workers and transport them to the
plant.
B8
Fixed costs for orders
A1-B8
If the production volume increase, the fixed oreder cost may decrease because the
supplies will be transported in more quantities instead of low quantites while paying the same
transportation cost. However, if demand variance increse, there is a high probability that fixed
order costs reflect a variance and increase because at each time you order, the quantity will be
different and sometimes a full truckload order will be delivered but sometimes a quarter
truckload order will be delivered.
A2-B8
If the demand for the products of the company increases and if the company increase
its orders to supplier, the fixed order costs will reduce because of the same reason with A1-
B8. If the variance increases, this cause to a variability of demands from supplier and cause
variability of fixed order costs.
A3-B8
If all the players’ demand increases in the market, probably the fixed order costs will
be reduced because some costs will be paid different producers such as transportation costs.
However, this may cause an increase in the prices of the supplier prices and this situation may
cause an increase of fixed order costs.
A4-B8
The supplier’s location effects the fixed order costs. If the supplier is close to city and
producer too, this decrease the fixed order costs. Similarly, if a company located in the
organized industrial region, some fixed order cost may become at lower price because the
similar firms in teh region may be supplied from same supplier.
63
A5-B8
Various product characteristics increases the fixed order cost because for each
character there may exists different costs and for each character maybe different supplier will
be needed and this cause the split of transportation.
A6-B8
If geographical conditions of the supplier makes harder to make transportation, the
transportation cost may increases so fixed order cost because a firm may need to give an order
more than its need. Similar situations are valid for the climatic conditions.
A7-B8
If the worker availability is not enough fixed order cost for production may increase
because of purchasing new machine may be required or additional worker transportation may
be needed. If there are workers more than need, this time fixed order cost of requirement may
decrease due to some work may be done instead of machines and there will be less order to be
supplied
A8-B8
If there is lack of capital availability, the fixed order cost may increase because a firm
may not challenge to pay all of prices of its supplies and could not get a discount. Conversely,
if it has capital availability, the firm can give full truckload order and minimize fixed order
cost.
A9-B8
If there is a limitation of the products that supplier produced because of the
environmental laws, a factory have to give an order maybe from different suppliers and
divided quantities that increase the transportation costs.
A10-B8
An economic crisis because of earthquake may increase the fixed order costs because
the factory may needs to change its supplier which provides best order costs.
A11-B8
64
If a regional war occurs, fixed order costs may increase because the factory may needs
to change its supplier which provides best order costs. However, production volume may
decrease and the factory wants to decrease orders. Hence fixed order costs may fall.
A12-B8
An economic crisis may cause to a decrease the fixed order costs because the
production volume may decrease and the orders. Also, the unit fixed order costs may be lower
because in the economic crisis situation the prices of services and products might fall.
A13-B8
If dollar and Euro increases and import is needed to be supplied, the fixed order costs
will increase. If dollar and Euro decreases and import is needed for the production, the fixed
order costs will decrease. The reasons for that is the value rate of YTL against Dollar and
Euro.
A14-B8
If there is a strike of workers at the supplier, the fixed order cost may increase because
you may need to make a deal with another supplier that takes higher order costs. If you have a
strike you may want to delay orders but this may cause a penalty that increases your cost.
A
Impact of A1, A5 and A8 on B1
If the production quantity is high, various product characteristics is high and capital
availabiliaty is also high there might be a trade of between production process types
which are “assembly line” and “batch flow”. The various characteristics may be
achived by batch flow but capital availability and production quantity support
assembly line process. For this reason several assambly lines may be established to
satisty the demand of various product characteristics.
65
B
Impact of A8, A12 and A14 on B7
If an economic crisis exists in the country and there is a significant increase in dollar
and euro the unit production cost changes under different scenerios. If dollar and euro
increase the cost for the buyer will increase because the rate of the value of YTL
decreases against Dolar, Euro. Economic crisis also decreases the power of purchase
of the supplier if there is lack of capital availability for the supplier. In this situation
the production of the supplier will decrease and unit production cost will increase
because fixed costs probably do not change. Conversely, if the firm has capital
availability, it can purchase local materials less than its vaue and if there is a
significant increase in euro and dollar, the firm can make expoert easily and may
increase its production level. Hence, unit production cost may fall.
5. SWOT ANALYSIS
5.1 Domestic Market
There is a huge domestic market for furniture drilling machines in Turkey.
Furniture manufacturing is one of top sectors that Turkey is good at. There a few global firms
and numerous small ones. For example, İstikbal is one of the leading companies around the
world in this field.
Apart from that, drilling machine is indispensable for furniture manufacturers. Drilling
accurate holes in accurate angles in wood without making defects around the hole is very
important for furniture manufacturing. Making this operation with small hand drills generally
result with defects and inaccurate dimensions. Trying to make angled drills makes the
operation even harder. So, even the smallest manufacturers need this kind of machine.
These entire mean there is a very high demand for furniture drilling machines in Turkey.
T he United Nations Commodity Trade Statistics Database report for last five years for
drilling/morticing machines for working wood/cork/bone/hard rubber/hard plastic(code
846595) is given below.
66
Perio Trade Reporte Partne Trade NetWeight Quantity Trade
Code
d Flow r r Value (kg) Unit Quantity
84659
2002 Import Turkey World $1,428,776 89,349 5 104
5
84659
5
84659
5
84659
2005 Import Turkey World $6,617,223 391,472 5 1,449
5
84659
2006 Import Turkey World $8,833,072 445,489 5 1,577
5
Table 1(UN Comtrade report for imports to Turkey)
As it can be seen from the data there is $8,833,072 of import to Turkey at 2006. This is a huge
number. Also, it can be seen that domestic market is developing very fast. To compare this, we
got the data for a similar neighbor Greece and a world leading country in the sector Germany
below.
Perio Trade Trade NetWeight Quantity Trade

Reporter Partner Code
d Flow Value (kg) Unit Quantity
84659
2002 Import Germany World $9,343,000 644,400 1 N/A
5
84659
2003 Import Germany World $9,379,000 3,323,404 5 1,062
5
84659
2004 Import Germany World $9,707,000 902,823 5 1,982
5
84659
5
84659
5
Tablo 2(UN Comtrade report for imports to Germany)
67
Perio Trade Trade NetWeight Quantity Trade
Reporter Partner Code
d Flow Value (kg) Unit Quantity
84659
2002 Import Greece World $5,626,644 91,295 8 91,295
5
84659
5
84659
5
84659
5
84659
2006 Import Greece World $3,716,340 136,388 5 759
5
Tablo 3(UN Comtrade report for imports to Greece)
We see that Germany domestic market is three times ours. They had an improving trend
however the number drops at 2006. We guess that this drop will continue in the coming years
because, furniture manufacturing is one of the sectors that developing countries can catch the
leading ones in small periods. So developing countries will manufacture more furniture in the
coming years and stop importing.
Also the data shows that Turkey has a bigger market than Greece.
We compared our market with others however we did not take into account our domestic
production. We could not find any data about the amount of drilling machine production in
Turkey. There is no determined data about it. However, general guess on the market is 20
percent. Namely 20 percent of drilling machines sold in Turkey are also produced in Turkey.
So we can compute the Turkish production in 2006:
($8,833,072 * [100 / 80]) * (20 / 100) = $2,208,288
Total market for 2006 is: $8,833,072 +$2,208,288 = $11,041,360
To sum up;
There is a huge market for our product ($11,041,360). Also this market has shown a big
increase in past five years and this upward trend seems to continue.
5.2 Global Market
68
There is no aggregate data for this information. So we tried and come up with an
approximation: we tried to sum up total exports of 6 biggest exporters to world. These
countries are Japan, Italy, UK, Germany, China and USA. They approximately hold 90% of
the total market.
Trade
Trade Reporte Partne Trade NetWeigh Quantit Quantit
Period Flow r r Code Value t (kg) y Unit y
$255,282,46 13,047,79
2006 Export Japan World 846595 1 2 5 35,256
$247,835,47 12,079,25
2006 Export Italy World 846595 7 6 5 34,227
United
Kingdo
2006 Export m World 846595 $4,322,646 375,568 5 16,893
German $117,320,00
2006 Export y World 846595 0 6,433,829 5 16,202
2006 Export China World 846595 $17,539,532 903,043 5 25,151
2006 Export USA World 846595 $9,307,075 479,186 5 7,548
$651,607,19
TOTAL world 1 135,277
Total market is found by this 90 percent: 650,000,000 * 100 / 90 = 722,000,000
Total global market is $722,000,000 and this market is expected to increase. The reasons are
explained above in section 5.1.
5.3 Strengths
We have the opportunity of being a domestic producer. This way we can supply a better
service system than other producers. We know the characteristics of Turkey, purchasers and
also market. So we hope that we will give the best service with low costs.
Apart from that, we supply drilling machines which have better quality than Chinese products.
This will satisfy most of the domestic purchasers. Because there is a huge price difference
between Chinese and world leader companies’ products. So, most of the Turkish purchasers
will find Chinese products too cheap and too low quality at the same time, however most of
69
them will not want to buy leader companies’ products because of their very high prices. As a
result, they will find our moderate quality and price (our product has better quality than
Chinese and higher price, also lower quality than world leaders and lower prices) suitable for
their preferences.
Our global strength is our geographical position. Turkey is close to Middle East and East Asia
than other producers. This means lower transportation costs to these countries. So Turkey can
penetrate to these markets easily.
5.4 Weaknesses
Our product can only drill one hole at one time. Some products have more than one spindle
and they can drill more than one hole at the same time. Also, some machines are very high
technologic, for example some of them have laser eyes for the inspection of the holes. Our
product does not have those properties. So, some leading furniture manufacturing companies
will not choose us, they will buy the highest technology.
5.5 Opportunities
A visual analysis of global market for the opportunities is made below.
70
Figure 5.1 Visual analysis1
• As it can be seen from the graph, Italy is the biggest exporter for drilling/morticing
machines for working wood/cork/bone/hard rubber/hard plastic. It holds nearly half of
the global market. Other big exporters are Germany, Japan and China.
• China itself is a big exporter. It is the fourth biggest exporter in the world. However,
china is one of the biggest importers too. Germany and Japan make their biggest
export to china. This is because of quality issues. China supplies low quality and
cheap machines to all countries. However, Germany and Spain supply high quality and
expensive machines. So, some Chinese producers prefer them which mean a big
import from these countries. Another reason for that is the low transportation cost
between China and Japan. SO there is a big trade between these countries.
• Italy’s export is nearly all to European countries. This is because of low transportation
and tax costs.
• Turkey has a relatively low trade amount in this picture. However Turkey has the
opportunity of being close to Middle East and East Asia from other producers. So,
Turkey can supply machines to these countries with low transportation costs.
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Another version of the graph above is given below. This graph shows the trade values in
dollars.
Figure 5.2 Visual analysis1
5.6 Threats
Chinese firms are a possible threat for us. Their products are cheaper than us. So some
purchasers choose their product only because of their prices.
They entered the Turkish drilling machine market 4 years ago show an incredible increase at
their market share in last these years. The grapf below drilling machines import to Turkey
from China.
According to the 2006 data they have %76 of the market:
[1201(imports from China) / 1577(imports from all world)] * 100 = 76
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And it’s bizarre that they accomplished this in only four years.
Perio Trade Reporte Partne Trade NetWeight Quantity Trade

Code
d Flow r r Value (kg) Unit Quantity
84659
2002 Import Turkey China $800 100 5 1
5
84659
2003 Import Turkey China $110,192 40,974 5 150
5
84659
5
84659
5
84659
2006 Import Turkey China $209,231 71,995 5 1,201
5
Table 4(İmports of drilling machines from China to Turkey)
Chinese producers can be a bigger threat in the near future. Their products’ quality is very low
at this period however they develop very quickly. Our advantage against them is our quality at
current time. If they develop faster than us and catch our quality without any price change,
they will supply same quality at lower prices. So this is a major threat. This threat can be
eliminated only with good innovation. We can distribute enough budgets to research and
development, so we will be one step ahead of them. Maybe these R&D works can make our
product as qualified as leading companies, and this way we can be leading company too.
6 THE SERVICE SYSTEM
6.1
6.1.1 Locations of centers and reasons for the choices
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There will be 3 service centers in our service system: İzmir(or probably Manisa), Kayseri,
Gaziantep.
Also our production facility at Istanbul will be a service center too. This way we will have a
total of 4 service centers. All of these four will provide service to domestic clients. However,
only İstanbul and İzmir(or probably Manisa) centers will provide service to foreign clients.
First service center will be in Kayseri. We have chosen Kayseri because that city is the one of
the main locations for furniture manufacturers in Turkey. First of all, market leader İstikbal’s
production facilities are in Kayseri. Apart from that, İpek and Poli are Kayseri centered firms,
too. Also, there are lots of small furniture producers, too. So, we hope that our machines will
be purchased and used by these furniture manufacturers a lot. Apart from all of those, Kayseri
is a city located on main transportation roads. So, we will be able to supply service to broad
region from there with the ease of transportation. Hence, having a service facility in Kayseri
will help us provide service fast with the advantage of eliminating transportation costs for that
region.
Second service center will be in İzmir or Manisa. These two cities are neighbor cities. They
have very similar characteristics. They both are centers for industry. Also, they are centers for
sea transportation. We will be able to give service to Ege and close parts of Akdeniz regions
from these cities by establishing a service center in these cities. Also, having a port city apart
from İstanbul will give us flexibility in supplying service to abroad. This flexibility means
that if we cannot find ships to send or receive products quickly in İstanbul port, we will try to
find a ship in İzmir. This way, we will be able to supply service faster to abroad.
Third one will be in Gaziantep. Gaziantep is one of the industry centers in Turkey. Also it is
the biggest city in south-east Anatolia. Furniture manufacturing is important at its industry,
too. So, it will be wise to have a service center there. We will be able to supply service to
broad region from there. Hence, having a service facility in Kayseri will help us provide
service fast with the advantage of eliminating transportation costs for that region.
Our last facility will be in Istanbul. Our production facility will also be a service facility. So,
we will have an extra facility in the city without extra cost. Istanbul is the leading industrial
and commercial city in Turkey; so service need of clients will be higher than anywhere else in
Turkey in this city. So having a service center is essential in here. Also, İstanbul is a port city.
We will provide service for foreign clients from here.
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6.1.2 Types of service
. All of these four will provide service to domestic clients. However, only İstanbul and
İzmir(or probably Manisa) centers will provide service to foreign clients.
Our service facilities will have maintenance and repair people. Also there will be spare-part
inventories in all of them. So we will provide these services:
1 – Repair:
Every service center will have a repair crew. They will respond to client calls firstly by going
to clients’ facility and repairing the machine there. If they cannot handle the breakdown there,
they will transport the machine to the facility and repair it there.
2 – Maintenance:
We will provide customers with free annual maintenance controls. Namely, our maintenance
crew in every service center will go to clients’ facilities and control the machine for free. Also
they will lubricate the machine for free too. This will increase our customer satisfaction with a
very low cost.
If customers need any maintenance service apart from free annual ones, they will have to pay
for that.
3 – Spare part supply:
Old or broken down parts will be changed by our crew. so we will have them on inventory in
the service centers for quickness.
6.1.3 Lead times
Lead times for all Turkish clients will be at most 8 hours.
For foreign clients, this time will depend on the country’s location. Generally, it will change
between 15 – 45 days.
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6.2 UML Diagram
76
Figure 6.1 Activity Diagram
77
7. Profit Patterns and Competitive Strategies
7.1 Profit Patterns
There are 30 profit patterns that Moser et al. suggest to increase the profit of the firms
and to enlarge the firms’ view about profit maximization strategies. These patterns are divided
into 7 parts which includes related patterns which are mega patterns, value chain patterns,
customer patterns, channel patterns, product patterns, knowledge patterns and organizational
patterns. Although all of these patterns are applicable to any industry, we believe that product
patterns are the most appropriate for our product and industry.
Moser claims that profitability is directly related in the past but nowadays profit and
value has several aspects and dimensions via different patterns. Product patterns consist 5
profit patterns which are “product to brand”, “product to blockbuster”, “profit multiplier”,
“product to pyramid” and “product to solution”.
7.1.1 Product to Brand
The product to brand is the first profit pattern of product patterns. Nowadays
customers are exposed to a great deal of different products that may provide customer’s to
satisfy his needs. Generally, their prices and functions are similar to each other which means
there is not many differentiations. In this situation, brands provide a differentiation and
promise customer satisfaction. In many areas, brand of the products has higher influence then
the product. If we think a few seconds there are lots of lots of brands will come to our minds
in different areas such as Starbucks Coffee, Microsoft, Evian water, Swatch watches so and so
forth. People are ready to pay more on well known brands. For example, in 1994, two
personal computers which have exactly same properties sold on different prices because of
their brands which are Compaq and IBM. The main suggestion of Moser is “Realize that
customers want and need valuable brands. Bite the bullet. Built the brand.” (Moser et al.
1999). We can examine product to brand in some subcomponents that is illustrated in mind
map which based on the Profit Patterns: 30 Ways to Anticipate and Profit from Strategic
Forces Reshaping Your Business by Moser et al. (1999). In the market, undifferentiated
offerings, eminent position and rapid growth of the valuable brands make stronger the product
78
of the brand. Also, customers’ decision criteria and affinity has importance on product to
brand. Existing product based attributes, brand image, satisfaction, simplification of choice,
differentiation and high affinity increase the product to brand image. Moreover, unawareness,
insufficient information, low sophistication, existing price premium and proliferation make
stronger to the attributes of the product. Also, mind shares of customers, investor and talented
employee are important for the product to brand idea.
7.1.2 Product to Blockbuster
Product to blockbuster is the second profit pattern of the product patterns which means
basically, from many projects to few (Moser et al. 1999). Moser claims that in many areas a
profit of balanced portfolio of products migrates into a few blockbusters. For example,
Kurtlar Vadisi is a blockbuster for Show TV, champions league matches is a blockbuster for
Star TV, league matches are a blockbuster for Digiturk etc. These kinds of programs create
massive viewership and can help the channel’s success. In our area, a blockbuster machine
which is differentiated from other kinds of machines may increase the profitability and the
firm’s success. Moser suggests that work on the system. It’s impossible to produce a
consistent series of blockbusters without a carefully developed and nurtured system (Moser et
al. 1999). Investments are new pipeline or systems are two subcomponents of the product to
blockbuster. In the investment part, successful products have increasing returns, average
products may cause money loss and a failing product cause money loss. Also, there are
skyrocketing costs of investments which are existing development costs or regulatory
approval costs or existing marketing costs. Also, there is increased effect on risk of failure in
investment part. By having blockbuster products return on investment is much higher.
Focusing resources on selected products with blockbuster potential and consistently
generating blockbuster products are the two parts of new pipeline or system component.
79
7.1.3 Product to Profit Multiplayer
Product to profit multiplayer is the third part of product patterns. Basically, product to
profit multiplayer is maximum profitability from a single product to a system that reuses that
product many times (Moser et al., 1999). This pattern is recognized by customers as a
winning asset against competitors and successfully reuse of generate high value. Most famous
examples are Disneyland, Michael Jordan, and Bloomberg so and so forth. Moreover, profit
multiplier patterns are based on brands derived from and talent of individuals. In our industry,
the quality and reliability of the machine we produced can be perceived as a component of
product to profit multilayer. Moser claims that (Moser et al., 1999) “Challenge your
organization to identify all the possible vehicles through which your product, brand or skill
can be sold. Pick the best seven. Built a system that puts them to work.”. High talent
intensity, high labor intensity and high capital intensity of resources provides increased
reliability of products. Transformability of reusable products is also increases the product to
profit multiplayer characteristics. Moreover, existing brand and character are two components
of intangible features or existing physical or both are the components of reuse of an asset. In
addition to these, multiplying brand identity is related to marketing but has an impact on
product to profit multiplayer. Finally, reusing the same platform is also important for this
pattern.
7.1.4 Product to Pyramid
Product to pyramid is the third profit pattern of product pattern. This is a creating
multilevel system. A product pyramid consists of different price points, brands, styles, designs
and functionality (Moser et al., 1999). Market experience increasing customer sophistication
and income stratification trigger the product pyramid pattern (Moser et al., 1999). For
example, some banks have different kinds of credit cards such as gold card or platinum card
etc. The prices of these cards are different and provide different advantages to customers. We
can see similar application in most of web sites. Moser suggests that “buildt a firewall at the
bottom. Built the profit maximizers at the top. If necessary, create the key layers in between”.
We can apply this pattern in to our firm by producing differentiated products which consists
relatively cheap to others and address most of customers and some are relatively expensive
and is profit maximizer. Product pyramid pattern has different subcomponents according to
mind maps. Low cost effect competitors, high variability of feature, luxury and breadth of
80
offering effect customers, being concentrated of on most expensive products effect profit.
Also, distribution platform or manufacturing platform or marketing platform effects product
component and potential for developing a shared platform is the key application for these.
Moreover, product portfolio is an important element of product to pyramid pattern. Multiple
product levels and maximizing and protecting profitability are the components of product
portfolio. Different functionality, different performance attributes, brands and styles or price
points are the parts of multiple product levels. Lowest level to keep the competitors out and
upper levels to bring profits are the two strategies of maximizing and protecting profitability.
Here, we can apply, all of these strategies to establish the product to pyramid patterns.
7.1.5 Product to Solution
Product to solution is the fifth product pattern of product patterns. It is basically

improving the economies of the system. Moser(1999) claims that that will solution become
significantly important in the next decade. The pattern is appeared because of customers
consider their system of economics and suppliers want to differentiate themselves. As a
supplier of the machine we should differentiate us from other suppliers by making
innovations, offering bundle of products or services. For example, a Swedish manufacturing
company Tetra created a block package for beverages that provides low freezing cost and low
inventory costs for the customers. Developing a solution based is very difficult because the
supplier have to know the economies of scale of the customers. Moser et al. (1999) suggest
that study your customer’s systems. Know their systems economics better than they do.
Create unique solutions to improve their systems if a producer wants to create a product to
solution pattern. To create a product to solution pattern there are a great deal of steps needs to
be completed. In the customer side, total system economics attention or hiring a vendor as an
alternative activity is needed. In the product side, there are several elements which are
alternative market opportunities, feature, price, quality, supply requirement and coordination.
Value shift into parts sales, Value shift into service or Value shift into integration are the
components of alternative market opportunities. High cost and long life cycle creates features,
high variation and high complexity creates quality and requirements from multiple vendors
are a need of supply requirement. Inadequate skill, time and resource are parts of selection,
integration, maintenance and finance which are the components of coordination factor.
Integrated offering is another part of product to solution system that consists of designing and
81
delivering a solutions package, reducing customer’s costs, reducing complexity of operations
for customers, reducing time-to-market or enhancing utility to customers.
7.2
Michael E. Porter gives importance on the external effects in his article which is
published by Harvard Business Review. He determines five forces and claims being
awareness of these forces can help a company to understand its industry and can increase its
profitability. The name of the article is “The five competitive forces that shape strategy”.
These forces are threat of new entrances, bargaining power of buyers, threat of substitute
products or services, bargaining power of suppliers and rivalry among existing competitors.
He claims that “industry structure drives competition and profitability, not whether an
industry is emerging or mature, high tech or low tech, regulated or unregulated”(Porter, M.,
1979).
Figure 7.1 Five Competitve Forces
Another article which is published by Harvard Business Review in 1959 written by

Marshall K. Evans is “Profit Patterns”. He defines segregating costs which are product costs,
committed costs and managed costs, external factors, planning procedure and pointing up
opportunities as elements of profit patterns. David R. Drobis sees strategy as a combination of
sub-strategies. Analyzing markets, generic strategies, focusing on customer and rethinking our
business is key strategies to apply a competitive strategy. Peter T. Ward, Deborah Bickford
82
and G. Keong Leong divide manufacturing strategy into two components which are
competitive manufacturing capabilities and investment made in manufacturing decision areas.
The former includes cost, quality, delivery (time), flexibility and the latter includes process
technology, capacity facilities and vertical integration, quality systems, production &
inventory control systems, workforce management and manufacturing organization. The
former and latter strategies are related to each other.
Tony Proctor defines some strategy elements in his book “Strategic Marketing”
defines generic strategies as low cost, focus and pre-emptive strategies. He also suggests
differentiation and shows generating customer value, providing customer value and being
difficult to copy as successful differentiation strategies. He also suggests the quality option
and building strong brands. Moreover, he defines focus strategies such as focusing the product
line, targeting a segment and low-share competitors. Also, by the effects of resources and
capability distinctive competencies can be created and this may lead cost or differentiation
advantage and this advantage may lead a value creation.
Michael E. Porter mention in his book “Competitive Advantage” consists major

drivers of the firm’s cost position, differentiation with the buyer’s value chain in mind, buyer
perception of value and signals of value, how to defend against substitutive products, role of
technology, competitive scope and its impact on competitive advantage and implications for
offensive and defensive strategy. Most of these strategies can be applicable for our firm but
because of our firms is new, in the first times we see that low cost and high quality strategies
are more plausible. Then we think with differentiated products we will try to increase our
profitability.
8. Innovation Management
The meaning of the innovation is the act of introducing something new (American
heritage dictionary). The change must increase a value and it is not an invention or it is not a
research development activity and innovation is a continuous activity. There are various kinds
of innovations which are business model innovation, marketing innovation, organizational
innovation, process innovation, product innovation, service innovation, supply chain
innovation, substantial innovation, financial innovation, incremental innovation, radical
innovation and social innovation.
83
We want to create innovations because we want to improve our company and create a
value. Some of aims that we can achieve by making innovations are:
- Quality improvement
- Extension of product variation
- Labor cost reduction
- New market adoptions and creations
- Energy consume and used materials reduction
- Conformance to regulations
- Production process improvement
- Organizational improvement
Innovation is a continuous process and if one firm make an innovation, this does not
mean the process is completed because each innovation increases the profitability of the
firm.
84
Figure 8.1 Effect of Innovation on Profitability
A global innovation company WIPRO gives importance on innovation. They consider

different initiatives of innovation. The scheme of their innovation idea is shown below.
Figure 8.2 Innovation in Wipro
8.1.1 Innovation
85
For these reasons, we will consider product innovation because we may need to develop a
new product or improve the existing product to satisfy profit patterns such as differentiation.
In this case, we may produce new kinds of drilling machines such as vertical or horizontal
machine and make real some of our aims which are extension of product variation and quality
improvement. Also, we may use some technological tools to increase drilling quality by using
CNC. These kinds of innovations may satisfy some of the customers’ needs and may increase
our sales and market share that calls our new market adoption and creation goal.
8.1.2 Service Innovation
Service innovation will be the second part of our innovation procedure. This innovation
type consists of new or highly improved service perception, differentiation of service
distribution or presentation and using new technologies while service distribution. This
innovation can be shaped according the lifetime and quality of the product that we produced.
We aimed to produce high quality products and to satisfy customer satisfaction good service
opportunities need to be supplied. We can guarantee 2 years and provide free service
opportunity if there is no violation of the terms of use. Also, we can provide different service
opportunities. For example, we can send a crew to the customers if there is a technical
problem with the machine. This innovation type may help us to improve our service system
and organization.
8.1.3 Process Innovation
Process innovation is another innovation type that we will consider. This innovation type
considers a new different production technique or distribution technique development or
improvement on an existing production or distribution technique. As we mentioned before, we
will producing all components of the drilling machine except from the engine. We determined
our production process as job flow system. However, if the market share increase or if we sell
spare parts we may change the process type if it is more profitable. Also, producing spare
parts in the factory and montage in different cities may become a different alternative about
production and service system. Moreover, this innovation type is directly related to product
innovation because process changes according to properties of product produced. By making
process innovation we can achieve some of our goals such as quality improvement,
86
production process improvement, labor cost reduction and energy consume and used material
reduction.
8.1.4 Marketing Innovation
Marketing innovation is another innovation type that we will consider. This innovation
type considers developing new marketing techniques or developing new marketing channels
or developing new packaging techniques. This innovation type may provide us to achieve
some of our goals such as new market adoptions and creations. This innovation is also
directly related the product we produced. We believe that if we produce high quality products
and if we produce differentiated products, it will be easy to find new market channels. Also,
we can sell products on internet as a different marketing channel and we can use web sites
like alibaba.com. By this innovation, we may increase our sales and create a rapid grow.
8.1.6 Organizational Innovation
Organizational innovation is another innovation type that we will consider. Organizational

innovation considers creating new work and systems or improving existing work principles
and systems. This innovation may increase the efficiency of the organization and increase the
profitability. We may achieve some of our goals such as organizational improvements and
labor cost reduction.
87
8.2 Solution Techniques of Possible Problems While Making Innovations
8.2.1 TRIZ: Theory of Inventive Problem Solving (TIPS)
Theory of inventive problem solving is developed by Genrich Altschuller in 1946. He

examined almost 200.000 patents and he developed this theory. The basic properties of the
theory are:
- Systematic
- Includes step to step development
- It is reliable and re-applicable
- It guides in spread solution areas
TRIZ theory includes creativeness level, steps of technical system developments and
perfectness. Also, the tools of TRIZ forty basic principles like divide local quality, generality
so and so forth and contradictions table.
We are planning to use the TRIZ theory if we face a problem while making
innovations. We believe that by using this theory we can solve some of the problems just
using the knowledge and creativeness of the employees of the firm. In addition to these, the
general lifetime of a technical system contains four different steps which are born, develop,
mature and decline. By using TRIZ, we want to keep our graph mostly in develop zone.
Figure 8.3 Effect of new product
88
8.2.2 Looking For Inspiration from Successful Innovation Examples
We believe that successful examples can be role model to make an innovation for our
industry. These examples can provide an inspiration for us and may trigger some creative
ideas for our industry. Here we will mention some of these successful innovation examples.
Arçelik produced a Turkish coffee machine which is called “Telve” and this product was
awarded by iF design award in 2005. The product provided some usage simplicities. In this
point, we may give importance produce a machine which has a successful design and usage
simplicity. Moreover, Yonca-Onuk produced a boat by using composite materials and this
boat became one of the fastest boats in the world. This innovation may trigger to look
different material to use in the production process of our machine. Moreover,
yemeksepeti.com may trigger us to give importance on internet usage as a different successful
innovative company. There are lots of firms which made successful innovations but even 3 of
them give some useful ideas.
8.2.3 Cooperation with Innovation Firms
There are some firms which help firms about projects that the firms want to make real.
Some of these firms support innovation without any monetary expectation.
Inovent is one of these firms which provide services about innovation, sales-marketing,
business development, laws and investment. Inovent is established by Sabancı Univercity and
aims to innovation and intellectual ownership services.
TEYDEB is another establishment that supports industrial research and developments,

project marketing and technological entrepreneurships. This firms aims to encourage research
and developments of the firms and increase the capability of Turkish industry. TEYDEB is an
establishment of TUBITAK.
Turkish Technological Development Foundation (TTGV) is another establishment that

supports firms about research and development, technological improvements and innovation.
They adopt “valorization of knowledge” idea and support ideas according to this criteria.
89
National Innovation Entrepreneurship is an establishment of Competitiveness Forum
which is an establishment of TUSIAD and Sabancı University. The aims of the National
Innovation Entrepreneurship are determining innovation strategies in Turkey, providing
cooperation between universities, firms and civil society. The content of the National
Innovation Entrepreneurship includes innovation and human resources and capabilities.
Technopolis is another establishment that focuses on innovation. The establishment has

“focus: innovation” branch in Turkey. The establishment interested in innovations and
encourages innovations.
90
9. Framework for Planning a Manufacturing System
Figure 9.1 UML Diagram of the steps followed
91
Figure 9.2 Distribution of the duties and followed way reflected by UML Diagram
92
REFERENCES:
Finch, Byron J. Operations Now: Profitability, Processes, Performance. 2nd ed.

Boston: McGraw-Hill/Irwin, 2006.
Stevenson, William J. Operations Management. 8th ed., Boston: McGraw-Hill/Irwin,

2005.
Kalpakjiyan & Schmid. Manufacturing Processes for engineering materials. Prentice

Hall. 2003.
Profit Patterns: 30 Ways to Anticipate and Profit from Strategic Forces Reshaping
Your Business, Moser et al. (1999)
Competitive Thinking for Competitive Advantage, Drobis, D., Public Relation

Quarterly
Configurations on Manufacturing Strategy, Business Strategy, Environment and

Structure; Ward, P., Bickford, J., Leong, K., Journel of Management, 1996
Sustainable and Competitive Advantage and Generic Strategies, Chapter nine
Profit Planning, Evans, M., Harvard Business Review, 1959
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Review of the Literature from 1993-2003, Becheickh, N., Landry, R., Amara, N.,
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Knowledge – Driven Development, Economic Commission for Europe, Genova, 2007,
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Presentations on website: http://www.ertek.info/
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Project Eryilmaz Karaman

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Manufacturing an

[Drilling Machine for Furniture]

Supervisor: Gürdal Ertek

Figure 0.1 drilling machine

Figure 0.3 Drilling Machine (http://www.global-b2b-

0.3.1 Prices of the competitors:

0.3.2 Lead time of the competitors:

0.3.3 Reliability of the competitors:

0.3.4 Regular maintenance costs of the competitors:

0.3.5. Irregular maintenance costs of the competitors:

0.3.6 Energy type used:

All of the products of the all firms need electrical energy.

0.3.7. Past References of the supplier:

0.3.8 Estimated life time of the supplier:

0.2 - 4 How and where is the machine used?

How does the machine actually work?

It basically works by the swing of spindle at generally 1500-2000revolutions/minute. This is

1. Selecting the Manufacturing Type and Equipment

Figure 1.1 Casting Machine

Figure 1.2 Forging Machine

Figure 1.4 Extrusion Machine

Figure 1.6 Metal Sheet Cutting Machine

Metal Sheet Cutting Machine

2. Raw Materials and Subcomponents

Figure 2.1 Bill of Material

Here are some electrical motor suppliers:

b - Zhejiang Jialile Electrical Machinery Co., Ltd.

Broad analyses of these suppliers are below.

MODEL POWER SPEED CURRENT EFF. TYPE SERIE

MODEL POWER SPEED CURRENT EFF. TYPE SERIE

product price per average delivery

2 - Zhejiang Jialile Electrical Machinery Co., Ltd.:

product price per average delivery

LeroySomer is one of world leading companies at electrical motor production. Most

So if we cannot be sure about qualifications of cheaper products, we will purchase form

product price per average delivery

So we finally concluded to purchase electrical motors from Elsan.

Sheet and slab metal:

Here are the price and delivery options of Erdemir.

3. Manufacturing facility and process

3.1 How does the production take place?

After forging, final machining operations will be made.

3.1.2 Work piece support:

3.1.3 Guide column manufacturing:

3.1.4 Gears block manufacturing:

3.1.5 Motor covering plates manufacturing:

Figure 3.1 Activity Chart

Our facility will have a process based layout.

3.2.1 Process based layout:

General advantages of process based layout are listed below:

1. Flexibility: firms can handle a big number of different kinds of processes.

And general disadvantages are listed below:

3. Confusion: system will be less automated. So there will be confusion. Organization is

3.2.2 Product based layout:

General advantages of process based layout are listed below:

1. Output: large volume f output is produced continuously.

3. Utilization: machines and workers are highly utilized because of standardization.

And general disadvantages are listed below:

1. Motivation: workers will do same repetitive tasks. No ability incentive.

2. Flexibility: firms will not have much flexibility.

Our facility will have a process based layout.

3.3 Other products that can be produced in our facility:

3.4 Fixed cost of establishing the facility: