Strategy and Management
The Borusan Way
As a result of the Company‘s widespread
adoption of the disciplined management
approach which we have termed the Borusan
Way, the Borusan Group has consistently
managed to outperform its growth targets.
Within the principles of sustainable growth, the
Borusan Way encompasses such ideals as
respecting the environment while growing as
a company, contributing to society, respecting
human rights and working effi ciently. These
principles are the same ones listed in the
United Nations Global Compact agreement,
which we signed in 2006. Since then our Group
has fully adhered to the commitments we have
has made in that regard.
Our corporate targets are categorized under
three main headings and our performance
is evaluated within the framework of the 10
components of the Borusan Way.
Profitable Growth
Long-term Perspective and Creating Value Approach
The Borusan Group simultaneously focuses on making longterm
plans for all our business areas, while continuously
monitoring the value of our companies to manage our
portfolios in a dynamic manner. We have taken an important
step towards ensuring our economic sustainability by
preparing a comprehensive strategic plan for all our
companies designed to cover the period of 2006-2010.
Becoming an International Player
Approximately 93% of the Borusan Group’s income is
generated from its local production as well as the services it
provides on the domestic level, and the company intends to
continue this important investment in Turkey. In addition to
growing in Turkey, such key issues as globalization initiatives
and the need for economies of scale in many of the business
areas means that Borusan will have to expand its business
activities into other countries and regions.
Investing in New Business Areas
In order to create value for its shareholders and to maximize
the value of its portfolio the Borusan Group strategically
entered other business areas where it could utilize its
competencies. Consequently, the decision was taken to
invest in the energy sector. The company not only intends to
invest in renewable energy sources such as wind and hydro
but has developed plans to evaluate opportunities in other
alternative energy fi elds as well.
Growing with our Partners
Borusan believes in the principle of creating mutual value
through cooperating with our partners. If necessary, Borusan
is ready to cooperate with companies that initiate projects
which offer advancement opportunities in present business
areas, have the potential of creating added value and share
a common vision. Borusan has always been a preferred
business partner with such global giants as Arcelor-Mittal,
Mannesmann RW, BMW, Caterpillar, Land Rover and Eaton.
Strategic Market Positioning
Focusing on the Customer
The Borusan Group makes it a priority to offer solutions to
its corporate clients. Therefore, benefi ting from the use
of 6 Sigma’s ‘Voice of Customer’ (VOC) methodology and
Customer Relationship Management (CRM) implementations
we intend to strengthen the relations with all of our customers,
listen to their needs and adjust our targets accordingly to help
them maximize their success in all business dealings.
Market Leadership
Borusan generally tries to focus on business sectors which it does best or has the potential of becoming the best. In line
with our slogan of ‘being one step ahead’ our group companies
strive to secure either the fi rst or second position in the market
in all sectors and geographies. In almost all of our present
business areas we have already reached this target and we
plan to maintain our leadership positions in the future as well.
Operational Excellence
Corporate Governance
The Corporate Management of the Borusan Group is based
on the principles of high ethical standards, transparency and
integrity. The Board of Directors at Borusan has taken on the
responsibility of monitoring how management takes care of the
interests of its shareholders and other stakeholders. Corporate
governance principles have been adopted both at the Holding
level as well as in each of the companies.
Evidence of Borusan’s commitment to professionalism
and corporate governance is seen in its implementation of
measures such as family constitution and family agreements,
(which regulate the relations of family members within the
Group), operating principles for the Board of Directors, the
mandatory 360 performance evaluation for all Board members
and complete transparency in fi nancial reports in line with
international accounting standards.
Lean Process Management
As a Group we believe that the simplicity and effectiveness
of our processes play a key role in sustaining profi tability. In
order to reach perfection in process management we have
been implementing the 6 Sigma methodology across all Group
companies since 2002. In 2006, we enhanced our 6 Sigma
Tools by adding Lean Management Tools and started the
implementation of Lean 6 Sigma applications. The Borusan
Group is currently the best implementer of the 6 Sigma
process in Turkey.
Leaders of Growth
In order to have a high quality management team, along with
a dedicated labor force, as well as to develop leaders for the
future, the Borusan Group has put into operation exemplary
HR implementations in its sector, including 360 competency
management systems, career planning and the Borusan
Academy.
Financial Discipline
A healthy and strong fi nancial position is an important
inheritance from our past, as well as the key to our success
in the future. In order to sustain the profi table growth of the
Group, Borusan endeavors to establish fi nancial discipline
by implementing lean balance sheet management and the
effective management of expenses.
Corporate Governance Principles
The implementation of good and responsible corporate
management principles strengthens the trust our
stakeholders have in Borusan, thereby increasing the
sustainability and value of our Company. The Borusan
Group makes a point of adhering to corporate governance
values with respect to the management of its companies.
The Group’s implementation of Corporate Governance
Principles has been evaluated under the primary headings
of the Board of Directors, Shareholders, Transparency and
Interest Groups.
Board of Directors
The Borusan Group views the Board of Directors as the
primary body responsible for determining the strategy and
evaluating the activities of the Company. Furthermore,
the Board determines the vision and the mission of the
Company. It guides the management of companies, monitors
their performance, empowers them and provides them with
the proper environment to execute their operations. It does
not, however, interfere in their operation. The President of
the Board of Directors does not take part in the execution
of the daily processes. In order to make an objective and
appropriate decision he encourages and ensures the
appointment of independent directors who are experts in
their fi eld.
The Board of Directors initiates the setup and
implementation of warning mechanisms for potential
risks. The Board also ensures that all the activities of the
companies are performed in accordance with the established
rules of ethics. A total of 18 independent members currently
serve on the Board of Directors, representing various
Borusan Group companies.
Shareholders
The Borusan Group believes in the principle of treating all
shareholders equally and no single shareholder group is
ever given a concession with regards to voting rights at
companies which are open to the public. All shareholders
have equal rights. With regard to the distribution of profi ts,
some of the Group companies do offer concessions on
preferred stocks. Annually the companies hold a General
Assembly and, besides the companies which are publicly
traded, participation is generally close to 100 %. Minority
shareholders are given the opportunity to offer their
opinions to the Board of Directors during the General
Assembly. All shareholders of Group companies receive
regular and transparent information updates pertaining
to the general conditions of each company. The Investor
Relations Department is in charge of the updates on publicly traded companies. In addition, details pertaining to special
situations at the companies are provided regularly to the
Istanbul Stock Exchange and the media. The Annual Report
for the Borusan Group is published regularly and sent to
all shareholders and stakeholders. Additionally, it is also
possible to obtain a copy of the Annual Report from the
Borusan Group’s website. (www.borusan.com.tr)
Transparency
Transparency has become one of the Borusan Group’s
main principles. Therefore, the Group has forged a strong
relationship with all its interest groups, investors and
shareholders based on trust and transparency. The Borusan
name is respected in the marketplace for these principles
of trustworthiness and transparency. Since 1984 Borusan
has been implementing UFRS-approved Audit Reports,
the fi nal versions of which are shared with the public in the
Annual Report. The regulatory companies which implement
the above-mentioned inspection processes are changed
on a regular basis. The Investor Relations Department
addresses inquiries and provides periodic updates to
shareholders of the companies which are publicly traded.
The communication and informative activities of the Borusan
Group is handled within the framework of the Strategic
Communications Plan which was approved by the Board
of Directors of the Holding. An internal control department,
which reports to the executive committee, has also been set
up and is functioning.
Interest Groups
Employees are the primary interest group at Borusan
Holding. Various initiatives geared for the development and
satisfaction of Borusan Group employees are implemented
on a regular basis. Details pertaining to such activities are
provided in this report under the section below entitled “Our
Responsibility to Our Employees.”
With the exception of our shareholders, the other important
interest groups of Borusan Holding include our customers,
suppliers and fi nancial institutions with which we do
business. Close relations are formed with these groups
to create mutually benefi cial results; and satisfaction is
measured by surveys, the results of which lead to action
plans that are set in motion.
The issue of social responsibility is especially important
the Borusan Group, with the focus being on two separate
areas, namely education and culture and the arts. Details
pertaining to such activities are provided in this report
the heading of “Our Responsibility to Our Society.”
Borusan Holding is currently a member of various business
sector institutions including TÜSİAD (Turkish Industrialists’
and Businessmen’s Association), TKYD (Turkish Corporate
Governance Association), KALDER (Turkish Quality
Association) and Turkish Informatics Foundation.
Business Ethics Approach
The Borusan Group’s respected image and
corporate brand, which it has earned as a
consequence of both past and present activities, are
considered our most valuable assets. The protection
of this reputation, along with conducting business
based on the values of honesty and justice is our
main aim. The Group adheres to the principles of
high morals and fairness while expecting all its
business partners to act in the same manner.
Employees should never be placed in a position
where there is a confl ict of interest between their
business and personal activities. Each is expected
to approach matters objectively in order to achieve
this purpose. An employee handbook outlining the
approved and implemented corporate principles, as
well as work and behavioral tenets, is given to all of
the employees at Borusan Holding companies. The
rules of ethics of the Borusan Group are regularly
revised. This code of conduct will be published in
September of 2009.
In every business activity of the Borusan Group,
individual and corporate rights and freedoms are
fully acknowledged and supported. Discrimination
of any manner is not tolerated within the Group.
Human health is protected at all costs with regard to
working conditions, the effects of our work created
on the environment, goods manufactured and
services rendered. It is essential that all local and
offshore activities be conducted within the legal
boundaries of the related country. All of the products
and services offered to the customers of Borusan
Group are covered by a guarantee from the Group.
We aim to achieve full customer satisfaction. It
is crucial that fi nancial entries of the Borusan
Financial Group properly refl ect the essence of the
projects that have been completed. The Borusan
Group prefers to remain neutral in terms of politics
and believes that public interest should always
be given priority. The Group conducts its relations
with various public sector organizations within the
guidelines of sound ethical rules and business
etiquette principles.
Lean 6 Sigma
“In May of 2002 we began to implement the 6 sigma
philosophy at all Borusan companies in order to attain our
target of ‘Being one step ahead in every job’ we undertake,
as well as to reach our 2007 strategic objectives. The name
we have given to the targeted transformation in thinking that
is designed to create a competitive spirit within Borusan is 6
Sigma.”
A. Ahmet Kocabıyık
President of the Board of Directors
Borusan Holding
The 6 Sigma methodology aims to correctly assess customer expectations and dramatically
improve work performance. It is a management approach
that allows us to prepare the substructure necessary for
establishing a consistency between work processes, the
expectations of customers from the primary job processes
and job requirements. This method enables us to
systematically reduce the number of errors in our present
processes, products and services, plus it allows us to design
and continually improve new processes, products and
services that will ensure the sustainability of income.
We have come to know that whenever a process is initiated
under the principles of 6 Sigma, it is essentially guaranteed
to be an error free operation. The mistake ratio on a product
or service drops to 3.4 per million, which basically translates
into lean speed, low cost and fl exibility. The 6 Sigma
methodology helps us minimize the waste of Company
resources in our processes and also reduces the total time
involved, thereby enabling us to focus on meeting customer
demands and creating maximum value.
Taking these benefi ts into consideration, it is eminently
clear that 6 Sigma implementations clearly add value to our
sustainability efforts. The philosophy of 6 Sigma is designed
to create a culture of absolute minimal wastage, since waste is an enemy of both 6 Sigma and sustainability.
It also results in a decline in low quality environmental
expenses, resource consumption as a result of the drop
in demand for supplies, while improving the effi ciency of
environmental factors and utilizing methodologies and
tools to reach environmental management system targets.
In addition to its benefi ts to the Company Lean 6 Sigma
also contributes immensely to the development of
employees. Green Belts assigned to work on various
projects learn to work together as a team. Black Belts
gain experience in change management and leadership.
On top of all this, the whole organization gains a new
perspective in their present methods of work and the
ability to reassess their job becomes second nature to
them. For all customer interaction related processes the
Borusan management has set a target of 4 Sigma, where
99.379% of the manufactured products or services meet
customer demands.
2002-2008 Lean 6 Sigma Results for the Borusan Group
The breakdown of projects, which have been implemented
with their solutions since the Lean 6 Sigma took start, and
their returns are as follows.
There are currently 59 Black Belts actively involved in
various projects. Since 2002, in 12 waves a total of 137
Black Belts have taken on various assignments at the
Borusan Group, 114 of which are still continuing their
careers at Borusan. Meanwhile, the number of employees
who have taken on an active role in Lean 6 Sigma has
reached 2,300. These numbers are a clear indicator of
continuing positive change.
Voice of Customer
The concept of “customer satisfaction” carries
completely different meaning at Borusan. We
listen to our customers not only in order to please
them, but also to succeed and evolve with them.
As we designed more focused and productive
methods of working, we noticed that the effi ciency
and profi tability of our customers improved.
Considering the importance of product and service quality as
it relates to customer satisfaction, Borusan Holding began to
implement “Voice of Costumer” concept six years ago. Known
in short as VoC by those at Borusan, the procedure was swiftly
and comprehensively put into practice at the majority of the
Borusan Group companies and became a benchmark for the
Turkish private industry sector. As we implemented the VoC
model, our companies began to redesign, strengthen and
perfect their business processes by listening to the voices of all
our customers.
Presently, our companies are exerting a greater daily effort
in an attempt to provide products and services that create
added value for their customers and facilitate the attainment
of their business targets. In this regard, one of the most
important aspects of creating added value is the need to have
an understanding of the customer that is correct, timely and
dependable. Listening to the VoC leads to the identifi cation of
expectations, gaps and proper evaluations, thereby facilitating
the development of the best means of improvement. Over the
past fi ve years the results of the Borusan customer satisfaction
surveys have demonstrated a higher performance than the
average survey results in Turkey.
Where did we start?
The Borusan Group embarked on a new journey in 2006 by
implementing the initial stages of the 6 Sigma management
methodology. The 6 Sigma approach was promptly adopted
as a business effi ciency and excellence process, immediately
becoming the DNA of the Borusan business culture.
A 6 Sigma project was started, involving participants from all
Group companies, to sow the seeds of the VoC initiative.
The basic aim of the VoC system is:
-
To acquire the VoC in a systematic and structured manner
(better understanding)
-
To improve the current performance levels of business
processes to meet customer expectations (better performance)
-
To provide products and services that meet customer
expectations (better service)
Initially, the VoC was captured in the form of actual customer
comments and perspectives. Employing this data, the
process of defi ning “critical customer requirements” began.
Subsequently, activities designed to meet these important
customer needs were planned. Products and services which
cater to customer expectations were then designed.
Thus, the VoC approach began to function with the aim of
blending the philosophy of continuous improvement with the
concept of meeting increasing customer demands in a timely
and effi cient manner.
The present Customer Relationship Management (CRM)
systems were integrated with VoC processes in order to reach
the target of “product/service differentiation,” which involves
offering products and services that cater to expectations.
An effi cient customer relationship management approach, was initially implemented at Borusan Otomotiv, Borusan
Makina, Borusan Telekom, Borusan Lojistik and Otomax. The
establishment of a call center, which was applied throughout
the CRM framework, was pioneered by Borusan Otomotiv and
Borusan Telekom. After witnessing its success, Borusan Makina
created its own call center in 2007.
Hence, the Borusan Group focused on the
advantage and long-term success stemming
importance of “understanding” its customers
“listening” to them and took the initiative of
customer management process. From now
heart of Borusan’s business processes.
What did we achieve?
By the end of 2007, the Borusan companies operating in
the business to business sector were in close touch with an
average of 80 % of their customers.
ISO 10002 Customer Satisfaction and Customer Complaints Management Standards Quality Certifi cation
Based on customer results from 2006, the Borusan Council for
the VoC methodology included the Group-wide standardization
of the customer complaint management process, which is one
of the most important customer processes in our business
plans. In applying this initiative, a target was set to complete
the certifi cation of all Group companies according to ISO 10002
standards for customer complaint systems by the end of 2008.
In pilot studies initiated in 2007, Borçelik became the fi rst
company in its industry, and the third in Turkey, to attain the ISO
Customer Satisfaction and Customer Complaints Management
Standards Quality Certifi cation. Later on in the same year,
Borusan Lojistik likewise became the fi rst in its sector to be
awarded this certifi cation.
Kerim Çelik and Borusan Mannesmann Boru were certifi ed in
2008 and plans are currently underway for the remaining Group
companies to attain this ISO 10002 quality certifi cation by the
end of 2009.
The 2010 vision for VoC
The vision of the VoC that was set forth in the Borusan Group’s
fi rst 5 year strategic plan prepared in 2006 was defi ned within
the framework of the following target:
- To attain by 2010 a level of perfection and excellence of 4
Sigma (99.38 %) in all processes that create added value for
our customers.
The success stories of Group companies regarding VoC can be
seen in Borusan Holding’s 2007 Annual Report.
Borusan Group Companies with ISO 10002 Customer Satisfaction and Customer Complaints Management Standards Quality Certifi cates
Borçelik
Borusan Lojistik
Borusan Mannesman Boru
Kerim Çelik