INTRODUCTION

This report consists of the consequences of practice experience, aim of which is to

understand industry practically, in TEMSA A.S production facilities. I was assigned to
Production Department, CANTER assembly line section.
During summer practice period, trying to observe as many facilities and people as I
can, a general idea about business world and production systems was gained. Meeting new
people and eventually convincing them to narrate their knowledge about looking to the
production facilities as a system had the top priority in my list of goals. Although their
unwillingness to talk about their knowledge, now, I know that a problem in a department is
not the problem of that department only. Looking to the situations and actions by accepting
them as a part of a system is one of the major duties of an industrial engineer.
Throughout the practice period, I spent most of my time in CANTER assembly line
and import warehouse. Workers point of view to management and production system was
observed so that ideas different from the managers, chiefs, and engineers were recorded. I
believe that these were the most valuable information that I found in TEMSA, since they are
the guys who directly do the jobs and know the needs.
During practice period, I witnessed three states of CANTER assembly line. When I
began, production had been stopped because of the preparations of new models of CANTER.
A week later, pilot production of the new models began. Finally, on last day of my practice,
mass production began. Especially, pilot production was a lucky experience for me. New
equipments, new assembly techniques, redesigned assembly line, and other improvements
were clear to observe.

1. INTRODUCTORY FEATURES
1.1
TEMSA Sanayi ve Ticaret A.. was founded in 1968. Production facilities are located
in Seyhan - Adana.
Headquarters
Kskl Caddesi ehit Temen smail Moral Sokak no: 2/1
34682 Altunizade - stanbul
Phone: 0(216)5445200
Fax: 0(216)3256040
Plant
Mersin Yolu zeri 10. Km P.K. 480
01323 Seyhan - Adana
Phone: 0(322)3556100
Fax: 0(322)4410105-4410874
Web: www.temsa.com.tr
e-mail: info@temsa.com.tr
1.2
TEMSA A. is a part of Haci Omer Sabanci Holding A.. All the shares are held by
the holding.
1.3
TEMSA has three areas of activities which can be stated as bus, automotive
marketing, and construction machinery. Bus group produces buses and midi-buses, which are
PRESTIJ, POWERBUS, METROPOL, OPALIN, TOURMALIN, SAFARI, and DIAMOND,
in its Adana facilities under the license of TEMSA. Also SAFIR is produced in ADANA
under the license of Mitsubishi. Automotive marketing imports and then offers sales, service,
and spare parts for the passenger vehicles of Mitsubishi. In addition, Mitsubishi Fuso
CANTER light trucks are produced in Adana. Construction machinery imports Komatsu
Heavy Machinery and offers sales, service, and spare parts for customers of Turkish market.
Production of construction machinery was stopped in 2002 and the facilities in Adana were
shut down.
Domestic market shares of TEMSA products in 2005 are tabulated in Table 1.1 below:
2

VEHICLE
PRESTIJ
POWERBUS
METROPOL
SAFIR
DIAMOND
CANTER (Medium Commercial Vehicle)
CANTER (Light Truck)

MARKET SHARE
30.8%
14%
0.6%
64%
7.1%
45.3%
50.9%

Table 1.1
Domestic market shares of TEMSA products
Being an important exporter, TEMSA has shares in European and Middle Eastern
markets:
Others
Tem sa
Van Hool

13
300
238
2238

Irisbus
Volvo

89

Scania

91

VDL
FAST

198
279

EvoBus
Neom an

783
167

Graph 1.1

Graph 1.2

Number of buses sold in France in 2005

Number of buses sold in UK in 2005

Graph 1.3

Graph 1.4

Number of buses sold in Italy in 2005

Number of buses sold in Germany in 2005

Graph 1.5
Number of buses sold in Syria in 2005
1.4
TEMSA offers its customers a wide product range in bus business. Travel agencies,
government corporations, municipalities, interurban passenger firms are natural customers of
the company. In addition to its eight different bus and midi-bus models, TEMSA has a flexible
production approach which enables the bus market consumers specify their own needs and
ask for the company for the necessary changes in production line. This flexibility increases
the customer attention and causes special orders from sports clubs to hotels and holiday
resorts.
CANTER commercial vehicles are generally bought by small or middle scaled
companies, retailers, logistic companies and people who needs personally.
Being a big producer and player in world and domestic markets, the activities of
TEMSA are monitored by some certifying agencies. Production and sales activities are carried
on under TS ISO 9001:2000, environment management is controlled by TS EN ISO
14001:2004 and health and safety management is controlled by TS 180001 OHSAS
certificates. Issues involved with workers health and safety are strictly monitored by labor
unions. Government involves with the company generally in financial issues like tax
payments. Competition Authority also follows the activities of TEMSA in domestic market.
Being the only automotive plant in Adana and a part of the Haci Omer Sabanci Holding,
TEMSA attracts the attention of local community about the activities of the company in both
domestic and foreign markets. Customers of the rivals of TEMSA may be identified as the

potential customers of the wide product range. The company carefully plans its pre and after
sales operations in order to maintain customer satisfaction and attract the potential buyers.
Being a bus exporter, TEMSA has achieved the bus market leadership in foreign markets, for
example in Syria1. Big companies like MERCEDES-BENZ, MAN and SETRA are the
competitors of TEMSA in both domestic and foreign markets and carefully watch the role of
TEMSA in global markets. CANTER is the market leader2 and does not have a big competitor
in Turkey.
1.5
A group of industrial engineers are located in Industrial & Methods Engineering
Department and are supposed to make analysis, find solutions to the problems of production
activities and apply the confirmed solutions. Moreover industrial engineers may be seen in
other departments like Production, Production Planning and Stock Control, Logistics, and
Quality Control departments. A bunch of activities performed by the industrial engineers of
TEMSA is listed below:

Preparation and release of daily, monthly production report.

Following up the goals of the company for every quarter of a year.

Making analysis of production capacity, determining the needs for a capacity

improvement, preparing new areas of production and establishing new assembly lines
for the production.

Keeping the time spent on a product.

Establishing a database for daily information about production workers. This database
is used as a source while preparing monthly production report and monthly
performance evaluation.

Evaluating the performance of production workers with the help of Monthly

Performance Evaluation System.

Studying to arrange the warehouses and the assembly lines and at the end to produce
buses and trucks in a more productive way.

Arranging the number of workers and hours of overtime in accordance with the
planned number of output decided by marketing department. Eventually deciding
whether hire new workers or not.

1
2

Please see Graph 1.5

Please see Table 1.1.

Releasing the detailed production plan considering manpower, time, and marketing
issues.

Organizing the production teams in such a way that they can educate themselves about
assemble working, worker safety, worker health, and first aid and so on.

Arranging the warehouse shelves considering box types and their dimensions, their
ease to reach and material handling equipments like forklifts.

Arranging the areas for after production quality control.

Acting as a bridge between the management and the production line and also between
the production workers and the bus or truck.

Releasing chassis number of vehicles.

Performing periodic stock controls.

Performing studies in order to increase productivity and efficiency.

Determining standards for material packaging.

Preparing education programs for assembly workers.

2. ANALYSIS OF MACRO ASPECTS

2.1
In order to produce a CANTER truck, TEMSA needs a variety of inputs. Materials,
labor, knowledge, energy, and money may be stated as the major items of input that the plant
uses.
Firstly, materials for production are the most important items of input. TEMSA prefers
not to produce raw materials, in contrast to work together with suppliers. Materials such as
chassis, engine, transmission, tires, and cabinet and etc. are supplied from both domestic and
foreign suppliers. AYM (Adana Yan Sanayi Merkezi) and IYM (Istanbul Yan Sanayi Merkezi)
are the domestic suppliers which are specialized to produce the spare parts for TEMSA
products. Due to the fact that AYM is in a close distance to the plant, it is possible to use time

in a more productive way. Closeness of AYM enables TEMSA to improve its JIT 1 approach to
production. However, some of the materials are imported from foreign countries. MAN
(Germany), DAF (Holland), MITSUBISHI (Japan), and VOLVO (Sweden) are the most
important foreign suppliers of TEMSA. Time issue is a significant factor while importing.
Time required for transportation of materials is tabulated below:
From / By

IMPORT

AYM

IYM

Truck

a week (from Europe)

two hours

two days

Ship

depends on country

Airplane

depends on country

one and a half hour

Table 2.1
Time required for transportation of materials
Location of the suppliers and the capacity of transportation media are the constraints
for the volume of transportation of the materials. Volumes of the transportation of the
materials are tabulated in Table 2.2.

From / By

IMPORT

AYM

IYM

Truck

1000 m3 / week

6500 m3 / week

1500 m3 / week

Ship

1000 m3 / week

Airplane

2 m3 / week

5 m3 / week

Table 2.2
Volumes of the materials while transporting
Secondly, labor is an important item of input that implies man force. TEMSA plant has
a low automation level on its assembly lines, that is, assembly of the parts are made by hand
and some hand equipments. As a result, labor is a determinative factor for the assembly line.
Assembly teams are organized as a team leader and the assembly workers. In assembly line,
every worker is specialized on a single or a few jobs and some of the workers, called jokers,
can do many of the assembly operations by themselves. By this way, it is aimed that the
1

Abbreviation for Just In Time.

assembly operations may never stop. In practice period, reduction of the unskilled workers
and an increase in the number of the workers graduated from technical schools were aimed
and some arrangements were made about this subject.
Thirdly, knowledge is an important item of input because of its necessity for faultless
products and reduction of the expenditures. Assembly teams educate themselves in assembly
operations with the help of team leaders and engineers. An efficient way of communication is
established between the engineers and the team leaders with local network and also oral
communication. In addition, the suppliers, especially MITSUBISHI, and the management are
in contact in order to share the last changes and updates.
Lastly, energy and money are two of the major items of input that the plant uses. Since
the plant is located in a close distance to the Adana city center, there is not a problem of lack
of electricity and water. As a significant factor, money is not a big problem for the company
due to its strong presence in the market and its reliable position for the credit loaners of both
Turkey and foreign countries.
2.2
Major facilities in TEMSA can be stated as assembly lines for bus, midi bus, and
truck, warehouses, parking areas, R&D facility, test course, cafeteria, and administration
building. A rough sketch of some facilities can be seen in Figure 2.1. Please see Appendix 1
for the whole layout of the plant.

BUS

Tires
Engine

CANTER LINE

WAREHOUSE

MIDIBUS LINE

Paint Boxes

Figure 2.1
A rough sketch of production facilities

Paint
Shop

2.3
The most prevailing factor for selecting the current location of the facilities is the ease
of transportation. TEMSA production facilities are located to a place on the way between
Adana and Mersin1. Plant is 10 km away from Adana city center, 5 km away from Adana
Airport and 50 km away from Mersin Harbor. These numbers are not big for a plant that is
situated on a 400,000 square meter site and includes a 54,000 square meter enclosed area.
Adana Airport is used when materials are imported from foreign suppliers or come
from IYM and are urgent. Materials are loaded to the trucks and carried to a 5 km distance.
Mersin Harbor is an important station for the imported materials coming from Japan, Holland,
Germany, and Sweden etc. Containers carried by ships are loaded to the trucks whose
direction is from Mersin to Adana. Materials from AYM and IYM come with the trucks or
light trucks with respect to their weight and volume.

3. MANAGEMENT INFORMATION SYSTEM

3.1
TEMSA organizational structure allows many decision makers at different levels. In
order to understand the quick and efficient decision making process in the company, these
levels can be divided to three, in descending importance:
i.

Strategic level: This level of decision making consists of the general management
of the company and the directories. General management is the head of the
company and captured by a single person, general manager. Directors are the head
of the departments of Marketing & Sales, Technology & Production, Construction
Machinery, Reinforcement & Logistics, Finance, International Affairs & Business
Improvement, Export, and Human Sources & General Management. Strategic

Please see Appendix 2.1 and 2.2 for the location of TEMSA.

10

level decision makers, i.e. General Manager and the directors, are the people who
decide a plant expansion, a new production line, a new model of a bus and other
issues that interest the whole company. These decisions are made in meetings
called FOT1, to which department managers and chiefs participate in addition to
strategic level personnel. Since TEMSA is a part of Haci Omer Sabanci Holding,
strategic levels decisions are supposed to be made after the authorization of the
management of the holding.
ii.

Tactical Level: This level of decision making includes department managers,

chiefs, and according to the subject, engineers. Generally these people are
responsible for the implementation of the decisions made by the strategic level
decision makers. In TEMSA organizational structure, a department called
Industrial & Methods Engineering is established for the purpose of doing exactly
what tactical level implies: implementation of the decisions. Determining the
needs for a plant expansion, arranging the new production line, deciding for the
education of the team leaders and the workers about the new model of a bus,
eliminating the problems arise from personnel issues, organizing meetings to
which engineers and team leaders participate are only a part of the jobs that the
tactical level decision makers deal with. Tactical level personnel report to the
directors and the general manager.

iii.

Operational Level: This level of decision making is made of engineers and team
leaders. Engineers are the people dealing with the technical issues about the
production line and reporting to the chiefs and department managers. In contrast to
upper levels of decision making, engineers and team leaders can be stated as dirtyhands, in other words the people who deal with physical and tangible stuff.
Allocating workers to jobs, deciding which workers are in day off, determining to
stop or continue production flow in case of a problem, scheduling production flow,
controlling materials stock in both production line and inventory, and assigning
team leaders can be named as the decisions and activities carried on by engineers.
Team leaders, on the other hand, are responsible for deciding which worker will do
which job, which materials will be put to which station and so on.
Organization structure of TEMSA at different levels of decision making is showed

briefly on below chart:

1

abbreviation for Plant Operation Meeting in Turkish.

11

General
Manager
Director1

Department Manager1

Director2

Director..

Department Manager...

Chief1

Chief..

Engineer

Team Leader

Figure 3.1
Organizational structure in TEMSA
3.2
TEMSA needs powerful computers to run all its applications. Personnel needs
computers in order to communicate, design, plan production, gather information and for other
issues. In addition to offices, where engineers, chiefs, and manager work, workstations on
production line also have computers connected to internet and local network.
Lotus Notes is one of the software used in TEMSA. It is used for communication and
file transfer among the company personnel. This software can be reached by any person in the
company, from general manager to team leaders.
AUTO CAD and CATIA are the software used for designing purposes.
ERP (Enterprise Resource Planning) is another computer-based tool used inside the
company. TEMSA has been using SAP, which is a German made ERP software, since April,
2003. It is used for managing the whole operational activities of plant in electronic
environment. Financial, logistic and planning activities are controlled and carried on in
contact to each other with this instrument. All information about finance, production,
production planning, and materials flow to the system and allow SAP get orders, make stock
control, make an order of production or purchasing, ask for offer, make offer analysis, prepare
invoice, and record accounts.

12

In order to produce a CANTER truck, production plan decided by strategic level and
prepared by tactical level is given to the SAP module. Materials needed for producing a single
truck are gained with the help of production tree implemented into software. A production tree
is a diagram including all materials needed to produce a truck or bus or something else. SAP
is run every fifteen days and shows the materials to be ordered. Route of the production,
materials needed, capacity of the plant, labor, and finishing time can be seen and controlled
via SAP.
Moreover personnel performance records, sales analysis, and maintenance control are
the jobs that SAP deals with. Although this software is very high-priced, TEMSA ensures the
usage of it in all production area. Modules of SAP used to perform activities in TEMSA are
written below:
AA

Assets Accounting

CO/CCA

Cost Centers Accounting

CS

Customer Service Management

FI

Finance

MM

Material Management

CO/PC

Product Costing

PP

Production Planning

QM

Quality Management

SD

Sales and Distribution

HR PA/PD

Human Resources

ITHALAT

Import

SAP PLM

Product Life Cycle Management

Hardware systems needed to run these SAP modules are tabulated in Table 3.1.
In TEMSA, there are five hundred PCs, a hundred laptops, fifty inkjet printers, and
fifty laser printers in use. All machines mentioned are connected to central systems on
TEMSA network. There are 11 locations in cities of Turkey where TEMSA departments are
established. Local networks in these locations are connected to central systems with frame
relay lines. All locations above may communicate with each other via Lotus Notes.
Existing PCs in plant, five hundred machines, have following attributions: Intel
Pentium IV, min 512MB of RAM, and min 40GB of hard disk space.

13

Database Systems

Machine Type/Properties
IBM RS/6000 P SERIES

Application System

7026-6H1(4 WAY, 750 MHz, 6 GB MEMORY)

IBM RS/6000 P SERIES

Test System

7026-6H1(4 WAY, 750 MHz, 6 GB MEMORY

IBM RS/6000 P SERIES

Backup System

7026-6H1(4 WAY, 750 MHz, 6 GB MEMORY)

STORAGE -3581-L17 (ULTRIUM TAPE
AUTOLOADER)
Table 3.1

Hardware systems of computers in TEMSA

4. AN OVERVIEW OF THE PRODUCTION SYSTEM

4.1
CANTER light trucks production line is shorter than the other production lines, i.e.
midi-bus and bus. Raw materials are carried by small vehicles to the workstations which are
labeled as CL1 CL2 CL16. After assembly line operations, truck is ready to use and driven
to the PDI parking area. Since a single truck consists of thousands of parts, a schematic
representation of the material flow of CANTER is provided in Appendix 3 without names of
the parts and operations. Significant parts and assembly operations, however, are provided
with their workstations below.
In workstation CL1, chassis is controlled and taken to the production line, then, loaded
on chassis carrier and chassis number is labeled.
In CLT31 and CLT32, front and rear axles are assembled.
In CL4, chassis is assembled on the axles. From now on, chassis and axles are carried
together.
In CL5, wheels are assembled to the chassis-axles duo, steering gear box is installed
and eventually chassis-axles duo is taken to conveyor instead of the chassis carrier.
In CL6, front and rear shock absorbers and main fuel pipes on chassis are assembled.
In CL7, brake, exhaust and steering pipes and muffler are assembled.
Workstation CL8 is abolished and jobs in this workstation are carried to other ones.
In CLT81 and CLT82, engine and transmission are united. From now on, engine and
transmission may be accepted as a single part.

14

In CL9, engine-transmission duo and hand brake pipe are assembled. Engine
installments and connection between steering pipes and engine are made.
In CL10, radiator and fuse box are assembled.
In CL11, front and rear shafts, right and left mud guards, and battery box are
assembled.
In CLT11, radiator secondary assembly takes place.
In CL12, air filter, mechanism for cabinet hinge, battery, and fuel tank are assembled.
In CL13, cabinet is assembled. Moreover antifreeze is added.
In CL14, hand brake is assembled; transmission, exhaust brake, and accelerator pedal
gap adjustments are done. Engine oil, fuel, and steering hydraulic are added.
In CL15, front and rear bumper, license plate, rear fog lamps, other plates, labels, and
CANTER logo and model are assembled. Interior of cabinet is cleaned.
In CL16, chassis retouch, engine oil and coolants control, brake and speed control are
done.
After CL16 operations, a CANTER is ready to use. However, in order to maintain
customer satisfaction, truck is driven to rework area and controlled from cabinet to a single
bolt. If an unpleasant error exists, it is eliminated in rework area by rework workers.

4.2
In Production Department of TEMSA, there are assembly lines for different models of
buses, midi buses, and light trucks. These lines are long and thin areas consisting of
workstations and material shelves. In each workstation, a different job takes place on preproduct (work in process) with different workers and different materials. For instance, while
producing a CANTER, cabinet is assembled in CL13 workstation, with workers specialized to
do this job, and with carrying equipments and connectors, used for only this job. Since each
pre-product follows the same route, i.e. assembly line, and follows each other, an unchanging
sequence of operations is observed. This makes assembly operation a repetitive process. For
instance, every CANTER light truck is subject to cabinet assembly process, done in CL13.
Eventually, those properties of assembly lines mentioned above are the definition for flow
shop and it is a fact that flow shop is seen in TEMSA production facilities.
On the other hand, a different type, project shop, is also seen in TEMSA production
facilities. In contrast to Production Department, there exists a place used by Research and
Development which is not made of assembly lines. There is a single product here and there
15

are not any routes, workstations or other products following each other. On the contrary,
product is stabled and all materials are carried to the place where it steps.
Reason behind project shop operations is the TEMSAs preference of make-to-order
production system. In this system a product is produced after it is ordered. TEMSAs flexible
production mentality is another reason for this. Due to customers special wishes on the
design of the product, a single with no other similar product is produced with the help of
project shop design of the Research and Development facilities. For example, due to a
customers wish, a CANTER was produced with rear sight system and another was produced
with a monitor inside the cabinet for watching DVDs, in R&D site.
4.3
In TEMSA production facilities, we can see that there are assembly lines which are
located parallel to each other. In each line a different product is assembled. Each of these lines
shows us an example of product layout. Pre-products always follow the same route and same
operations take place in each workstation.

CL1

DT12

CL2

DT11

CL3 LINE
CANTER

DT10LINE
DIAMOND

CL4

DT9

CL5

DT8

CL6

DT7

CL7

DT6

CL8

DT5

CL9

DT4

CL10

DT3

CL11

DT2

CL12

DT1

CL13
CL14
CL15
CL16

16

OTHER LINES

Figure 4.1
Rough layout of two of assembly lines
Fixed-position layout can also be seen in TEMSA facilities. R&D facility is designed
as a fixed-position layout where vehicles stand on a place without moving. Necessary
materials are carried to the area where the vehicle stands and workers are present around the
vehicle.
4.4
The most common handling equipment in the plant was probably forklift. It is driven
by a forklift operator and used for carrying, lifting up and down, and fixing huge boxes and
containers. Thanks to the forklift, high shelves can be used easily. It is generally used between
trucks and warehouse and also, between different shelves of the warehouse.
Except for forklifts, there exist carrying vehicles and bicycles in production area.
These are used for carrying materials from warehouses to assembly lines. Dimensions of the
vehicle depend on the material to be carried. Some of them pull chassis of a bus and some of
them carry a couple of tires. A sketch of the route of a carrying vehicle which brings cabinets
of CANTER to the assembly line, to the workstation CL13 is provided below:
LIGHT TRUCK
CL13

.
WAREHOUSE

MIDIBUS LINE
STORAGE
AREA

17

Figure 4.2
Sketch of the route of a cabinet carrying vehicle
Monorail hangers are also used as handling equipment in assembly line. This hanger,
similar to a crane, is the only equipment which can handle huge and heavy parts like chassis,
cabinet, and engine.
4.5
A productivity calculation method used in TEMSA is the one which compares number
of productions as output and labor used to produce them as input. An example for this
calculation is as following:
In April, 2006 TEMSA produced 1041 buses, including SAFIR, DIAMOND, SAFARI,
and TOURMALIN models. In same month used capacity is 93,850 man-hours.
Productivity = 104 / 93,850
= 0.0011 bus/man-hour
In May, 2006 TEMSA produced 101 buses, including SAFIR, DIAMOND, SAFARI,
and TOURMALIN models. To achieve these, 457 workers were on the line in corresponding
month. An example of productivity calculation which is carried on by dividing the number of
buses to number of workers used is below:
Productivity = 101 / 457
= 0.2210 bus/worker
4.6
In TEMSA, Accounting Department is responsible for calculating unit-manufacturing
costs. Since TEMSA is heavily interested in manufacturing light trucks, buses, and midi
buses, material costs and labor costs share the big portion of the cost pie. Cost components of
TEMSA are defined as: direct materials, direct labor, variable costs, and fixed costs.
Direct materials cost consists of domestic and foreign purchases. Examples to this unit
of cost are the parts used in assembly operations such as tire, engine, transmission etc.
Direct labor cost is the cost source stemming from the expenses of the personnel who
are directly in production process. Human Resources Department controls the costs with HR
1

Please see Appendix 4.

18

(Human Resources) module of the software SAP. Monthly costs which accumulated in direct
labor cost group are divided by total monthly actual direct labor hours and a coefficient is
found. This coefficient is multiplied by man hour of each job and direct labor for each job is
found. This mentioning may be formulized as following:
coefficient = total monthly direct labor cost / total monthly direct labor hours
direct labor cost of the job = coefficient * man hour of the job
Variable costs are the cost group that change proportional to the amount of production.
Accumulated monthly costs, which are accepted as variable costs, are divided by total
monthly direct labor hours and the coefficient is found. Then this coefficient is also multiplied
with man hour of the job, of whose unit cost is wanted. Formulation is written below:
coefficient = total monthly variable costs / total monthly labor hours
variable cost of the job = coefficient * man hour of the job
Fixed costs in TEMSA consist of indirect labor and general production costs, i.e.
factory overhead.
Indirect labor includes the expenses of the personnel who are not on duty on the
assembly line but involve in production process. Engineers in Production Department,
designers of R&D Department are the sources of indirect labor costs. Calculation way of these
costs is formulated below:
coefficient = total monthly indirect labor costs / total monthly labor hours
indirect labor cost of the job = coefficient * man hour of the job
General production costs, or factory overhead, include transportation, traveling, and
lunch expenses of the personnel and amortization, maintenance expenses of the company and
depreciation.
coefficient = total overhead costs / total monthly labor hours
allocated overhead cost of the job = coefficient * man hour of the job
Unit-manufacturing cost is calculated by adding unit direct material cost, unit direct
labor cost, and general production costs allocated to one unit (allocated factory overhead).
4.7
Since TEMSA is a company which is not offered to the public, its financial statements,
i.e. balance sheet and income statement, are not open the outsiders. Because of same reason,
Accounting Department was not willing to give the statements to the practicers. Ratio analysis
can not be carried out because of this fact.

19

5. PRODUCTION PLANNING AND CONTROL SYSTEM

5.1
Since a variety of products are produced in TEMSA, there have been different
production planning decisions for different types of products. First decision to mention is the
one for CANTER light truck. Due to CANTERs leadership in domestic light truck market 1,
Sales & Marketing Department is not worried about the sales of new productions. Decision
for the number of production is made by analysis of past data. TEMSA sales all CANTERs it
produced easily. However, the type of the products may sometimes be decided by some
research. For instance, in second week of the practice, pilot production of the new CANTER
models2, whose new designs were decided after customer suggestions, began.
Second decision to mention is the one for midi bus and bus models. TEMSA plans the
number and type of these products according to the agreements with municipalities, medium
and long distance tourism firms, and special customers (e.g. a football team). Make-to-order
type of production of TEMSA can easily be seen in the production of these models.
Last decision may be made by market research. TEMSA sends its bus, midi bus, and
light truck models to international fairs in order to monitor the attention for the models. This
kind of market research is a basis for producing new products.
Production planning decisions are made in FOTs to which strategic and tactical level
personnel attend. It can be said that a lot of people are involved in decision process, including
general manager, department managers, chiefs, and engineers.
Decisions made in FOTs are announced to the remaining personnel of TEMSA via
Lotus Notes and necessary changes in production trees are recorded into SAP, to which
everyone has access.
5.2
In TEMSA, imported parts can be accepted as scarce. These parts come from overseas,
namely, Japan, Holland, Sweden, and Germany etc. The reason behind being scarce is
transportation. Since importing occurs by seaway, it takes weeks even months if all procedure
is taken into account. In order to maintain the material flow, TEMSA plans its production and
make orders before months from the production. For this reason these imported parts are used

1
2

Please see Table 1.1.

FE711, FE839, FE859E, and FE859G.

20

in a more careful and planned way. Scarce parts of a CANTER may be stated as cabinet,
engine, transmission, brake and steering pipes and so on.
In addition to imported parts, some of the parts which are supplied domestically are
scarce, too. Most important one of the domestic parts is probably chassis. This part is the
framework for a CANTER and it is natural to accept chassis as scarce. During my practice, a
conflict between chassis suppliers and the Purchasing Department occurred which caused the
assembly line stop for a half day. This little disagreement affected the whole pilot production
process and caused disputes even in the company.
In order not to confront with problems like stopping the assembly line, flowing of
scarce parts from suppliers and TEMSA is so carefully planned that there is no room for a
delay. However, since a delay is always possible, TEMSA is in contact with several suppliers
which produce parts only for TEMSA.
Production Planning Department prepares the detailed production plan with the help
of the software, SAP. Production trees, which include all materials that a product needs, are
constructed in this software. In every fifteen days SAP is run and the necessary raw materials
are easily seen. SAP makes orders too and this decreases the human errors.
Everyone in TEMSA has access to SAP which means production plans and production
trees can be seen by anyone. Monitoring the plans makes possible errors decrease.
5.3
TEMSA keeps some important materials in stocks in order not to be out of stocks.
Four items that are kept in stocks can be stated as CANTER engine, CANTER tires, SAFIR
front door, and SAFIR luggage door. Firstly, an engine is kept in a special equipment called
regal, which has an unique shape used for only engines. Since engine is an important and hard
to supply element, management prefers to stock engines. Graph of number of engines on
CANTER assembly line versus time is plotted in Graph 5.1. Secondly, tires also need regals.
They are kept in stocks, since a single truck uses four tires and so that number of tires should
be sufficient in the assembly line. Graph of number of tires on assembly line versus time is
plotted in Graph 5.2. SAFIR front door and luggage door are kept in stocks in numbers. Graph
of number of doors in warehouse versus time is plotted in Graphs 5.3 and 5.4. These graphs
represent the period starting in July, 2005 and finishing in July, 2006.
Pattern in graphs 5.1 and 5.2 are similar. Line in the graph decreases nearly linear,
because there is no material adding into the shelves of assembly line until all the materials are
used. Generally in first half day of a day, twelve CANTERs are produced and in second half
21

day eleven CANTERs are produced. However, number of doors in warehouse fluctuate
randomly since number of products produced in each month are different and material adding
is frequent.

Graph 5.1
Number of CANTER engines in assembly line versus time

Graph 5.2
Number of CANTER tires in assembly line versus time

Graph 5.3
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Number of SAFIR front doors in warehouse versus time

Graph 5.4
Number of SAFIR luggage doors in warehouse versus time

The biggest difficulty with regard to managing inventories in TEMSA is space

requirements. Especially import warehouse needs more space, since new materials coming
from Japan and other countries are opened in a relatively little area which causes delays.
6. QUALITY PLANNING AND CONTROL SYSTEM
6.1
TEMSA states its quality policy as following:
Being TEMSA, paying attention to the competition environment, our prior targets are;

to provide customer satisfaction about quality of the products by meeting the needs
and expectations of them,

to develop continuously while keeping our performance at the highest level,

to produce and present our products in time by paying attention to save the
environment,

to ensure effective communication among our personnel with suggestions system,

team works, and educations.
TEMSAs approach to quality of all its products mentioned above is valid for

CANTER light trucks, too. Most important factor that defines quality of a CANTER is the
customer satisfaction.

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Suggestions and complaints about the trucks are studied carefully and taken into
account for further productions. CANTERs for the different road conditions of Europe were
produced in past years after the complaints of the customers. These customer preferences may
be individual, too. Since TEMSA has a flexible production approach, customers may want
differentiations according to their needs and preferences in their truck. An example to this was
observed during practice which was about mud guards of the truck. A special CANTER was
produced with longer mud guards according to a customers will.
Quality control activities in TEMSA occur in three steps which are entrance quality
control, process quality control, and final quality control.
i.

Entrance Quality Control: In entrance quality control area raw materials coming
from suppliers are checked whether they are appropriate or not for production. In
entrance control, equipments are controlled for their dimensions, mechanical and
metallurgical properties. Aim of this control is ensuring the quality of the materials.
Critical materials like engine, transmission, steering and brake pipes are controlled
more carefully. Activities seen here are as followings:

Preparing first sample control plan for the new raw materials and controlling
them.

Performing periodic controls of the safety equipments.

Examining the DOF1 documents which are forwarded by process control or

other departments and coordinating the precautions which should be followed
by suppliers.

Cooperating with Purchasing Department about choosing the appropriate

supplier and evaluating the suppliers.

Preparing return cards for the defective parts confronted with while producing
on the assembly line, informing the suppliers about the defectives, and making
them to take measures about the errors.

Recording the measuring equipments used in TEMSA and perform their

calibrations.

Following the standards applied in entrance inspection and ensuring the usage
of these standards.

By cooperating with the designing units, investigating the alternating drawings

of the materials.

Abbreviation for Arranging & Preventing Activity in Turkish

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Controlling paints, sealers, adhesives, and liquids in chemistry laboratories.

Measuring the strength, color, brightness, and thickness of the paints.

By cooperating with the suppliers, monitoring the improvement studies of

entering materials.

Checking the dimensions of the materials.

Testing the materials for their strength, toughness, endurance to heat and
perform bending and pulling operations in materials laboratories.

ii.

Checking plastics for their melting points.

Performing accelerated sun light testing.

Testing electronic devices for endurance, heat, life span, and vibration.

Fatigue tests.

Process Quality Control: This step of quality control takes place while producing
the products. In order to ensure the good conditions of assembly operations, processes
below are followed by this unit:

Preparing control files of the all vehicles produced in TEMSA. All properties
of the vehicle are recorded in these files. Moreover, critical testing points of
the vehicle are recorded to these files and process control is responsible for
these tests.

Process control technicians control the vehicles while assembly operations and
coordinate the elimination of the errors occurred. By making error analysis,
they inform the corresponding departments and follow the precautions that
they will take.

Arranging meetings for accelerating the rate of communication with suppliers.

This unit often informs final control, suppliers, entrance control, production,
purchasing, and R&D about the errors confronted with during assembly
operations.

Making error analysis about the errors noticed during process control and
preparing DOF reports.

Filing the released technical drawings.

Evaluating the damaged materials during assembly operations and preparing

scrap documents. Process control also coordinates the improvement studies for
the damaged parts.

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Informing production teams about the errors noticed in final control and makes
them take measures.

Investigating the complaints coming from customers and PDI1 and organizing
the precautions.

Investigating paint for its viscosity, clearance, and homogeneous distribution.

Checking the sealers put into the joints of the materials.

Checking the vehicle from the point of view of a customer, determining the
designing errors, and finding solutions. If the damaged part is huge, suppliers
of that part come to TEMSA and fix the problem in the plant. If not, part is sent
to the supplier.

Controlling torque of the joints and making them proper to the standards. A
torque value of a single nut which is not proper stopped the assembly line of
CANTER for a quarter of hours during my practice.

iii.

Hammer testing for screws.

Final Quality Control: This step takes place after the vehicle is produced. Activities
performed in this step are as following:

Checking, testing, and adjusting all the vehicles which are produced in
facilities.

Controlling electrical and mechanical parts.

Making balance adjustments of tires, headlamps, and brakes.

Testing the vehicle on road. Vibration test takes place here.

Sending the vehicles having errors to the Rework units.

Coordinating the communication with Rework units about errors.

After vehicle is ready to be delivered, it is sent to PDI.

7. OBSERVATION OF A PROFESSIONAL AT WORK

7.1
The most appealing position to me in TEMSA was that of the engineer who was
responsible for CANTER Production Department. He is an industrial engineer and has been
working for TEMSA for several years.

Abbreviation for Pre Delivery Inspection.

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He has some tasks and responsibilities mostly involved with the CANTER assembly
line operations. A bunch of tasks and responsibilities are written below:

He is the one who is in charge of the ongoing assembly operations.

He is responsible for the continuity and stability of the assembly line.

He is also responsible for the arrangement of the assembly line.

He is the person who observes the production process and finds out the problems
stemming from workers and equipments.

In case of having problems, he tries to find the solutions or inform the

corresponding departments and make them find a cure to the problem immediately
in order to maintain the continuity of the line.

Implementing the decisions made by strategic level into the production process is
one of the important duties of him.

Monitoring production and worker safety, and security is a daily work he has to do
especially in days of production.

Providing the communication and information flow between management levels

and workers and productions has a significant role in his job.

He has to control the attendance sheets of the workers filled by team leaders.

He has to maintain a communication and information flow between different

departments of the plant. For instance, he is always in contact with Purchasing,
Quality Control, and Production Planning departments which are heavily interested
in production operations and needs. A telephone conversation continuing for
approximately one and a half hours was observed by me about lack of an important
part, the CANTER logo, between him and the engineer in charge of the Purchasing
Department.

He has to participate to the meetings arranged by several personnel including

managers and chiefs which take much of the time he works.

He is the target of the complaints of the workers about production or personal issues
which are forwarded by team leaders.

A typical workday of the engineer starts with checking the Lotus Notes in order to be
informed about the orders and reports. A meeting to participate is a routine job for him after
an hour later than the start of the workday. He controls the assembly line after the meetings
and becomes informed about the daily processes. Generally he visits Production Planning
department in order not to lose touch with the detailed production plans. Afternoon, a meeting

27

is a routine again. According to my observations in two or three meetings, arranging meetings

for every single problem seem as a loss of time in most cases. In remaining hours, he tries to
be in assembly line as possible as he can in order to see the problems from a closer point of
view.
People he manages are the team leaders and the production workers. He is the person
to who team leaders report. On the other hand he reports to chiefs and in some cases directly
to production manager or production director. These reports are generally in electronic
environment but sometimes oral reporting took place during my practice.
Job of the above mentioned engineer does not require very much software knowledge.
He uses computer most of the time but not for modeling or programming. Tabulating data,
preparing performance sheets, writing reports, checking daily duties and production plans,
and preparing education sheets for workers are the reasons to use computer for him. This fact
does not mean that he lacks of computer usage, on the contrary, means that he does not need
software very much except for some office programs like Microsoft Excel or PowerPoint and
communication programs like Lotus Notes.
Being an industrial engineer, he is interested in productivity issues in CANTER
assembly line. He tries to implement his under graduate knowledge to the assembly line
operations and working conditions. During my practice, pilot production of new CANTER
models began and he found some time in order to make assembly operations more efficient. A
new education program for assembly workers was prepared by him before my practice and
consequences of that were promising in case of saving time.
I observed that an industrial engineer needs a variety of communication skills.
Speaking clearly and understanding the person spoken to are significant factors for
communicating well. However, being always kind, clear, and tolerant is not the correct action
to do. An industrial engineer should be aware of people who have different characteristics and
choose the way he or she communicate according to these.
8. ANALYSIS OF A DECISION MAKING PROBLEM
8.1
A decision making problem confronted with in my practice period was whether to
reorganize the CANTER assembly line and material delivery, flowing from warehouse to
assembly line; so that time and space will be used in a more efficient way. Two industrial

28

engineers, one from Production Department and one from Production Planning & Stock
Control Department, were in charge and may be called as decision makers.
Earlier, transportation of the materials from warehouse to CANTER assembly line was
being done in a primitive way. Warehouse personnel were opening the packages coming from
Japan, loading materials to carrying vehicles, going to the assembly line, asking for which
workstation will use those materials, and putting the materials on the shelves of the
corresponding workstation. It was aimed by decision makers that this inefficient way of
working had to be replaced by a new system which makes warehouse personnel put materials
into boxes of four different dimensions and deliver them to the exact workstations with the
help of labels on shelves. Object of this study was stated as more efficient usage of time and
space.
There was a definite decision: putting materials into boxes. However, there were two
options about where to stock boxes. One is to keep boxes which are full of materials in the
warehouse and deliver them to the assembly line when they are needed. On the other hand,
one is to deliver boxes to the assembly line immediately and put them into shelves.
Keeping boxes in the warehouse needs extra space. However, allocating more space to
the boxes limits the area used for opening huge packages and containers. Moreover this action
increases the labor time and number of forklift operators which causes extra costs. Time issue
is another limitation. There will be a loss of time when the materials are not in the assembly
line but in the warehouse.
Delivering boxes, on the other hand, needs more shelves in the assembly line. Shelves
should have such a design that workers will not have difficulty while taking boxes from those
shelves. Also, remaining area of the assembly line after shelves are located is to be considered
carefully in order not to limit the space used by production workers.
Option of keeping boxes in the warehouse was found to be very difficult because of
lack of empty space. As a result it was decided that boxes full of materials had to be delivered
to the shelves in assembly line. After that, a study which was about determining the most
appropriate dimensions of the boxes and the suitable type of boxes for every single material of
CANTER was conducted by me. Each part was measured mentally and put into the box that
fits. Determining the type enabled me to determine the number and type of boxes in each
workstation. Then, this information helped me to specify the design and the dimensions of the
new shelves to be ordered.

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When this system is in effect, assembly line workers will always find the materials
they need immediately in the shelves and there will be no delay because of lack of materials,
if an extraordinary condition originated from suppliers does not occur.
9. CONCLUSION
9.1
Most of the time spent in TEMSA, I was involved in an improvement study about
defining new box types and implementing shelves to the assembly line and eventually gaining
time and place. Through this study, many persons including assembly and warehouse workers,
team leaders, and engineers from different departments were introduced to me. Practice taught
me that maintaining communication with people is a must in order to be successful in
business area. While not dealing with the study, in office and interoffice relationships were
observed and business area was tried to understand during my practice.
Probably the most enjoyable thing was to understand some terms and jargons used in
business world. Listening to the professionals and witnessing the relationships between them
made me find answers to what efficiency and productivity mean, how works an assembly line,
how the hierarchy in the company takes place, who are chiefs and who are managers, how a
company transforms raw materials to finished goods, and more. Being familiar to these will
hopefully provide an advantage for our future.
Walking around the plant and trying to observe the relationships between the
departments was also a useful thing to understand a company and relationships with other
companies, especially suppliers and distributors.
Another four weeks in TEMSA would be useful, if I worked in Production Planning
Department that time. In my opinion, being in and looking into both Production and
Production Planning departments make an industrial engineering graduate almost ready to
work for a production company. Production planning is heavily involved in software
especially in SAP. Using software in domestic companies is an increasing trend and should be
learned in detail. Planning the operations and watching the consequences of them seem
exciting.
TEMSA departments which are involved in production generally employ mechanical
and industrial engineers. The office I was settled was consisting of eight mechanical engineers
and one industrial engineer. Three of mechanical engineers were technical drawers, three of
them were working on quality issues, one of them was in charge of technology, and one of
30

them was in charge of purchasing. Technical drawers were always sitting on their chairs and
busy with the drawings of the materials. Quality engineers were leaving their place when a
quality problem occurs on a vehicle and turning back. They had certain truths. Their drawings
were correct or wrong, a vehicle was suitable for quality principles or not.
The industrial engineer, on the other hand, was in contact with a variety of
departments and people. He was rarely sitting on his chair, however he was spending most of
his time by checking assembly line, talking to team leaders and workers about the production
processes, and staying in touch with production planning department. Due to his
undergraduate background, he always came with different point of views to the conditions. In
a few meetings to which I participated, that engineer often tried to convince other participants
about new arrangements and new ideas about productivity. In other words, he was the one
who looks from a different angle and he was the one who was ready to the innovations in
production area. Accepting the problems as consequences of different factors and looking to
them as they were a part of a system are the most characteristic properties of industrial
engineers, even in TEMSA.
TEMSA employs lots of industrial engineers in different departments. For the
activities that those industrial engineers perform, please see section 1.5.
Top management of TEMSA believes in the necessity of studies of industrial
engineers. The clearest evidence to this statement is establishing a department called
Industrial & Methods Engineering. In addition, a few years ago a team called Plant Operation
Team was constructed in order to make the company more productive and efficient.

9.2

How would you rate the contribution of the work you performed in the following
sections of this manual?
No Use

Absolutely Useful

Overview of Production System

Production Planning and Control System

Quality Planning and Control System

Management Information System

Observation of a professional at work

Analysis of a decision making problem

31

How would you evaluate the level of difficulty you faced in the followings?
Difficult

Easy

Explaining others what I wanted

Understanding what I need to do

Writing a report in English

Gathering data / documents / information

Transportation / food / housing

Converting observations into answers

How would you rate the contribution of the following courses material in the work
you performed?
No Use

Absolutely Useful

Industrial Engineering Orientation

Engineering Graphics

Principles of Economics I-II

Principles of Production Engineering

Engineering Econ. And Cost Anal. I

Engineering StatisticsI-II

Operations Research I-II

About the practice organization

Title: TEMSA Sanayi ve Ticaret A.S.
Mailing Address: Mersin Yolu zeri 10. Km P.K. 480 01323 Seyhan - Adana
City: Adana
Phone: 0(322)3556100
Fax: 0(322)4410105-4410874

REFERENCES
1. Yetkinel, O., Engineer, CANTER Production Department.
2. Yilmaz, M.F., Engineer, Production Planning Department.
3. Candilek, L., Quality Control Technician.
32

4. Tumuloglu, A., Quality Control Specialist.

5. Cetin, O., Export Specialist.
6. Mert, M., Export Specialist.
7. Teloren, T., Sales Support Chief.
8. Karaoglan, H., Logistics Department.
9. Altin, M., Accounting Specialist.
10. http://www.temsa.com.tr

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