Güler Sabancı has been granted World Productivity Award

03.11.2010

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  • SABANCI HOLDING'S CHAIRMAN WAS THE KEYNOTE SPEAKER AT THE 16TH WORLD PRODUCTIVITY CONGRESS AND AT THE 2010 EUROPEAN PRODUCTIVITY CONFERENCE
  • GÜLER SABANCI HAS BEEN HONORED WITH THE WORLD PRODUCTIVITY AWARD
  • SABANCI HOLDING'S CHAIRMAN GÜLER SABANCI: "PRODUCTIVITY MUST BE IDENTIFIED AND MEASURED AT EACH STAGE OF PRODUCTION IF WE ARE TO REMAIN COMPETITIVE IN ALL OF OUR ENDEAVOURS AND IF WE ARE TO SUCCEED IN THE QUALITY-PRICE-SERVICE TRIANGLE."
  • "AT SABANCI, PRODUCTIVITY IS THE DESCRIPTION OF SUCCESS"
  • "THE GLOBAL CRISIS WAS CAUSED BY BOTH LOOSE MONETARY POLICIES THAT WERE NOT BASED ON INCREASING PRODUCTIVITY AND BY EXCESSIVE BORROWING RESULTING IN AN ABUNDANCE OF CASH"
  • "TURKEY'S STRONG BANKING SUBSTRUCTURE, ITS ABSENCE OF ANY TOXIC ASSET PROBLEMS AND ITS RATIONALLY IMPLEMENTED FINANCIAL POLICY ALL PROTECTED US FROM THE WORST EFFECTS OF THE CRISIS"
  • "TURKEY, AS A NATION, WILL NEED TO WORK HARDER IF IT IS TO ACHIEVE SUSTAINABLE PRODUCTIVITY IMPROVEMENTS"
  • "TO IMPROVE OUR COMPETITIVENESS ALONG WITH THE OTHER POSITIVE DEVELOPMENTS IN OUR COUNTRY, WE NEED TO BE MORE FOCUSED ON OUR POLICIES AND OUR ACTIONS"
  • "TURKEY, AS A NATION, SHOULD ACT UPON ITS VISION BY FOCUSING ON LONGER-TERM STRATEGIES"

"Sabancı Holding's Chairman Güler Sabancı was the keynote speaker at the 16th World Productivity Congress and at the 2010 European Productivity Conference. The two events were jointly held by the World Confederation of Productivity Science (WCPS), the European Association of National Productivity Centers (EANPC) and the National Productivity Centre (NPC). Ms Sabancı is the recipient of the World Productivity Award.

At the start of her speech when underlining the late Skip Sabancı's regard for the importance of productivity, Ms Sabancı said: "Mr. Sakıp Sabancı believed that productivity is one of the key concepts that can solve the world's global economic problems. This is because productivity must be identified and measured at each stage of production if a company is to remain competitive in all of its endeavours, and if it is to succeed in the quality-price-service triangle. Constantly searching for better ways of operating, improving, developing, and advancing towards true operational excellence are each parts of the Sabancı working culture. As Paul Meyer said "Productivity does not happen accidentally. Productivity is always the result of a deeply rooted commitment to perfection, rational planning and focused effort." Because of this, at Sabancı productivity is the description of success. We have adopted it as a culture."

-UNDERSTANDING PRODUCTIVITY-

Emphasizing the changes over the years in the understanding of productivity, Ms Sabancı said "Until the ‘80s, traditional quality control that focused on products' and services' quality was predominant throughout the market. This approach to controlling the quality of the final products and services was an inefficient and a high-cost solution. The developing markets and the competition that we were exposed to required us to switch to a more efficient and cost-effective relationship with quality. This became "quality assurance", which focused more on the quality of the processes by which the product was produced rather than just on the quality of the end product. During the ‘80s, the leading organizations within Sabancı Holding started to develop an understanding of quality assurance, moving away from quality control. Quality assurance is a focus on and understanding of the quality of the operational processes. However, to ensure that all of our organizations responded to the increases in competition in a corporate manner, we wanted the understanding and culture of quality and productivity to dominate all of our processes and activities, including our management processes. We found the answer in the Total Quality Management approach that stated to spread throughout Turkey during the ‘90s. We adopted the "Philosophy of Total Quality" because it is a management philosophy that will provide us with a permanent competitive advantage. The "EFQM Excellence Model", an instantiation of the Philosophy of Total Quality, was first adopted as a management philosophy by the Kentsa companies. Then, during the ‘90s, we began creating a productivity and cost-oriented quality culture. As part of these efforts, we implemented a number of specific practices: the "shop-floor" systems that enable a close monitoring of productivity throughout our production areas; "improvement teams" that allow employees to personally contribute to quality and productivity improvements; "TPM - Total Productive Maintenance" that enables us to have the benefit of high productivity in relation to all of our equipment and machinery; and our "poor quality cost system" that aims to monitoring how inefficient activities are reflected in costs, and to then reduce these inefficiencies and costs. A business culture dominated by an understanding of productivity was not only positively reflected in companies' business results; it also led to Kordsa - where I served as General Manager during the early 1990s - to be awarded six times, in four different categories, by the National Productivity Center."

-PRODUCTIVITY IN THE SABANCI GROUP-

Ms Sabancı also talked about the approach to productivity taken by the Sabancı Group as a whole. "We, as a group, continue in our efforts to popularize and adopt a result-oriented culture. We place considerable importance on conducting all of our activities in such a way that they exhibit high operational productivity, in accordance with our group's key performance objectives, and so that they create value through sustainable growth. In parallel to this, the competitive conditions that we face and our understanding of excellence require that we eliminate any efforts that do not either create or add value. We know that we must also apply this approach to the management of our processes. Every day, our organizations launch various projects that have the goal of developing operational excellence. I can say that operational excellence has become one of the core competencies of our Group. As an example, let me talk about EnerjiSA, the apple of our eye. Two weeks ago, accompanied by Prime Minister Recep Tayyip Erdoğan and his Minister Taner Yıldız, we opened EnerjiSA's Bandırma Natural Gas Combined Cycle Plant. The aim of the plant is to satisfy Turkey's demand for energy in the shortest time, especially now that demand has again rapidly grown after the crisis. The Bandırma Natural Gas Combined Cycle Plant is now the most productive natural gas plant in Turkey, featuring a 60% productivity rate, producing more electricity from less natural gas. The Bandırma Plant's high productivity rate will help to reduce the threat of global warming by reducing Turkey's carbon emission by 50,000 tonnes a year. Also, with our 60% productivity rate, we have now established a roughly 10% cost advantage over our competitors. In other words, we have delivered profit to each one of our shareholders as a result of our internalizing of the philosophy of sustainable productivity."

-UNDERSTANDING THE WORLD'S PRODUCTIVITY -

After talking about different countries' productivity, Ms Güler Sabancı said; "At the heart of productivity is the creation of more, and more effective, value from fewer resources. Therefore, when we talk about sustainability, we are talking about two intertwined concepts. Both a country's and a company's competitiveness are measured by their productivity. Research shows that countries' productivities define the extent of their welfare. We can also see that, through increased productivity, counties come to have "better governance", better functioning legal systems, and they tend to limit the regulation and control of their economic lives because they understand the benefits of markets that are open to investment. Transparent and measurable economic data itself increases economic productivity and, therefore, the general welfare."

She continued: "In economic life, it is possible to measure productivity and to see its contribution to sustainability. We are living in an age of scientific and technological developments. Being continually open to change and development is necessary to make any competitive advantage sustainable. These developments then lead to innovations in production process and production techniques. As Franz Kafka said, productivity is the ability to perform things that we could not ever do before. Innovations in productive processes and techniques are two of the factors that directly influence productivity. We can increase productivity as long as we keep pace with scientific and technological developments. Peter Drucker says: "Work productivity is the responsibility of the manager, not the worker." For this reason, one of the most important ways to increase productivity is the development of management and the organization. Any organization that succeeds in managing its assets and its human resources rapidly increases its levels of productivity. In the short-term, we can neither significantly increase, nor decrease, the capacity of our machines or of our manpower; it is the full utilization of these that lead to a positive effect on productivity. High productivity cannot be achieved in an environment where the existing capacity has been used for a long time at only low levels. The quality of the inputs at every stage of the production is important. High-quality inputs are indispensable for high productivity and high-quality end-products. Similarly, manpower quality, the most important input in production, also directly affects productivity. Manpower that is well trained, properly nourished and adequately protected against both disease and work accidents is the most reliable source of high productivity. Any improvement in the contributions, of any kind, at any level of the state or society will improve the country's productivity."

- GLOBAL CRISIS -

Sabancı also spoke about the relationship between the global crisis and productivity: "The global crisis was caused by both loose monetary policies that were not based on increasing productivity and by excessive borrowing that resulted in an abundance of cash. These caused the global crisis. An abundance of cash turned into excessive demand because it appeared in an environment that features the free movement of capital. This then inflated asset prices, the prices on the world's stock exchanges, the prices of houses and of commodities. Asset bubbles created a loan bubble. The phenomenon of risk was nearly forgotten. At the same time, increases in productivity and production could not catch up with these developments. What arose was an environment disconnected from the facts of the real productive sector and productivity. It was clear that this was not sustainable, and the system duly collapsed when prices and interest rates started to rise. Rates of demand rapidly fell and, due to the excessive risks that had been taken ("toxic assets"), the financial system came to the edge of collapse. It was obvious that such inflated demand achieved only by loosening the controls on money and budgets, and so not based on increasing productivity, was not sustainable. Now, the whole world should learn a lesson from what happened. As you know, the crisis that broke out during September 2008 altered many of the world's balances. Since then, the G20 countries have tried to do what needed to be done, and done so under some improved international coordination. However, the pieces have not yet fallen back into place. We see that developed markets like the U.S.A and Europe are emerging from the crisis more slowly. Indeed, despite the extraordinary public relief fund made available, the developed markets have not fully recovered yet. Throughout the developed markets, many companies went bankrupt and we can see that many that did survive did so only due to the aid that they received from the government. We can also see that these companies were unable to make the internal reforms necessary to increase their productivity levels. The U.S.A's slow growth is being driven by this public relief. We cannot see any real growth based on internal demand and investment. The public deficit and the total public debt have both reached unusually high levels. The solution made other problems even worse: many companies in the U.S.A. that borrowed from the government are finding it difficult to achieving their desired growth rates. This is only because they have not yet been able to combine this money with any strategic productivity policy. As they have used their government relief funds for their short-term needs, they are now looking for even more support to fund their investments in productivity and sustainability over the medium and long-terms. There are different stories here in Europe; for example, we saw in our neighbor Greece how damaged a non-transparent and non-productivity economy can become."

Ms Sabancı stated that Germany is in a completely different situation. "In Germany, when the crisis broke out, the government, industry, employers and unions - in other words, the whole country - made plans to overcome the crisis together. They made mutual agreements and then worked together in harmony. Together they implemented and applied the necessary productivity-based measures. Now, the unemployment rate in Germany is lower than before the crisis and, in fact, their unemployment rate is the lowest it has been for 20 years. Germany has 1300 companies producing high-technology products, and it produces the high-technology goods and devices that other countries cannot. The country place a great deal of importance on innovation and productivity, and it has again become the most productive country in Europe. Now Europe is trying to solve this imbalance with its other member countries.

- THE SITUATION IN TURKEY-

Noting that the growth after the crisis has been predominantly seen amongst the developing countries, Güler Sabancı said that Turkey is one of countries that overcame the crisis the best. She continued: "Turkey's strong banking substructure, its absence of any toxic asset problems and its rationally implemented financial policy all protected us from the worst effects of the crisis. The banking system, which was reconstructed following the 2001 crisis, weathered the storm exceptionally well. Autonomous organizations such as the Central Bank and the Banking Regulation and Supervision Agency enabled the whole system to be successful. The banking industry's strong capital base and its dynamic tracking of its customers support Turkey's growth. Our banks' capital adequacy is higher than the European average but, more importantly, our banks' capital productivity - the profitability of their capital - is at a satisfactory level and it has an overall sustainable structure. All of these have enabled Turkey to rise to a good place in the world's debt stock and budget deficit rankings. Turkey's economic climate has recovered. Our infrastructure is strong and privatization continues to advance rapidly. The state is establishing regulations directed at these controlling mechanisms. In this competitive environment, productivity becomes mandatory. Our growth figures are at levels such that they are examples for not only the G20 countries but for all of the world's countries. Inflation is under control and, therefore, low interest rates and opportunities for long-term loans both become available. Thus, for the first time, we are receiving signals that our investment rating may be improved. In a year we have risen to sixteenth place, from seventeenth, amongst the world's biggest economies. Yet, Turkey as a nation will have to work harder if it is to achieve sustainable productivity improvements. We should continue the privatization program at full speed so that our companies can work more productively and achieve their goals under greater transparency. I will emphasize this once again: Productivity is the indicator of success. The greatest risk to developing countries such as Turkey is a large current account deficit and the "hot" money from foreign institutions required to finance this deficit. Given the circumstances, we should reduce our public expenditures in both the medium and long-term, increase our levels of investment and get prepared for the future. To improve our competitiveness along with the other positive developments happening in our country, we need to be more focused on our policies and actions. We should not ignore policies that promote the real sector, productivity and that promote consumption. Our country has entered into a period of good growth and development. However, we should be sensitive to developments throughout the world. We are now an important member of the G-20 and we are starting to have a voice in the IMF. We play an important role in energy, one of the most important issues for the whole world's sustainability."

While stating that, during this upcoming period, productivity and sustainability will remain the world's two most prominent issues, Ms Sabancı concluded: "For this reason, Turkey, as a nation and as the Turkish private sector, should act upon its vision by focusing on longer-term strategies, and not forget the core of the issue. The core of the issue is competitive power and productivity."

After her speech, Sabancı Holding's Chairman, Ms Güler Sabancı, was presented with the World Productivity Award.