Koc Consulting Company Profile

1. Koc Consulting Company Profile Koç Consulting Aydoğan Koç SİNERJİTÜRK-SAVUNMA'08 SAVUNMA SANAYİMİZİN İÇ VE DIŞ EKO SİSTEMİNİ GELİŞTİRMEK 27 ARALIK 2008 ANTALYA, TÜRKİYE

2. Koç Consulting at a Glance About Us We provide consultancy services to our customers from Industry, National MoD’s, National and International Institutions to develop and implement innovative aerospace & defence strategies and projects. Our “High-Tech” consultancy services are concentrated on following areas: Aerospace & Defence Management Aerospace & Defence Engineering International Cooperations We are the trusted advisor and independent counselor to many of the most influential aerospace & defence companies and institutions in Europe and Turkey.

3. Areas of Consulting Aerospace & Defence Management Consulting Aerospace & Defence Management Consulting We support our customers to elaborate unique solutions in order to develop their business and enter new markets using our competences in : Executive Management International Project Management Industrial Strategies Organisational Development Technological Roadmaps Business Development • Acquisition Support • Proposal Management • RFQ & RFP Development • Negotiation & Contracting • Benchmarking • Integrated Master Plans

4. Areas of Consulting Aerospace & Defence Engineering Consulting Aerospace & Defence Engineering Consulting Addressing all fields in aerospace & defence engineering we support our costumers with: System Engineering Development of new Technologies Know-how Transfer Technology Transfer Risk Management Subject Matter Experts • Integrated Project Teams • Quality Management • Software Engineering • Supply Chain Management • Process Management • Training and Workshops

5. Areas of Consulting International Cooperation Consulting International Cooperation Consulting For a successful entry into the global aerospace and defence market, we support our costumers with: International Market Analysis Market Entry Strategies Business Development & Sales International Cooperations Strategic Alliances & Joint Ventures Intercultural Training

6. Capabilities & Expertise Human Resources: Engineering Expertise Air Systems Design & Configuration Development Flight Control System Aerodynamics Avionics Structure Software Basic Systems Engine In Service- Support Engineering Development Production Final Assembly Testing & Acceptance

7. Capabilities & Expertise Human Resources: Engineering Expertise Space/Satellite Systems System Engineering Payload Propulsion Structure Thermal Architecture Imaging System OBDH AIT AODC Power Communication QA Electrical Architecture OBDH On-Board Data Handling AODC Attitude Orbit Determination and Control

8. Capabilities & Expertise Human Resources: Engineering Expertise Launcher/ Missile Systems System Engineering GNC Propellant Tanks Structure/Fairing Liquid Propulsion Mechanisms Power Supply Solid Propulsion Thrusters QA/PA GNC Guidance Navigation Control

9. Capabilities & Expertise Human Resources: Engineering Expertise Defence Enabling Technologies Avionic Systems Radar Software Development Sensors Simulators Engineering Development Production Final Assembly Testing & Acceptance

10. Capabilities & Expertise Human Resources: Koc Consulting‘s Aerospace & Defence Network International Aerospace & Defence Network in: • Ankara • Bremen • Hamburg • Istanbul • London • Los Angeles • Madrid • Munich • Noordwijk • Paris • Prague • Richmond • Toulouse • Turin • Vienna • Cooperations with • International Lawyers • International Auditors • National Chambers • Institutes • Agencies • Universities

11. Unique Features of Koç Consulting We are: • Independent and objective consulting company • Unique aerospace & defence consulting company in Turkey • Specialized on aerospace & defence industry supported by functional experts in strategy, technology, innovation management and operations • Supporting management on strategy, organization, technologies, innovation and performance improvements • Addressing all fields of the sector: military & civil aircrafts, satellites, launchers, missiles, defence systems and aerospace services • Consulting along all the value chain worldwide: OEM, suppliers, service providers, satellite operators, maintenance & overhaul providers, airlines and governments • Animating think-tank workgroups dedicated to aerospace & defence technologies • Teaming up with selected cooperation partners • International present with offices in Munich (Germany) and Ankara (Turkey)

12. Issues for discussion – Product Development Excellence Arthur D. Litte & Koç Consulting study on development organization - The "Organizational Fit Index" to describe the fit between R&D Organization and corporate strategy Study results – all industries Organizational Fit Index Remarks Organizational structure and network Significant potential in optimizing fit between strategy and organization No industry specific pattern No strategy specific pattern No regional pattern 60% Operational structure: Management of critical interfaces Governance: Resources and budgets 61% 71% 59% • Individual discussion of organization & strategy • Learning from cross industry examples Operational structure:Integration and validation processes Governance:Project / Program / Product management 54% 56%

13. Issues for discussion – Product Development Excellence Integrated verification management over the entire product life cycle addresses four levers for cost reduction & efficiency improvement Example Automotive 2. 1. Costs actual 4. 3. plan Product life cycle 15% Reduction of total PLM costs SOP* 2. Reshape working Modes in Development Networks 1. Process- & Functional Frontloading 3. Optimize Prototyping Phase 4. Improved Ramp up • Competence Manage-ment, Make or Buy Strategies • Solution corridors as working mode in development networks • Synchronize SW – HW development • Performance contracting with engineering partners • Improved requirements management • Reduction of complexity (E/E Architecture) • Concept development including virtual verification • Improved testing strategies • Reduction of late changes • Reduce change requests • Improve configuration & verification-management • Improve system integration • Updates & customization via software flashing • Reduce scrap/ rework • Warranty/ penalties *SOP: Start of Production

14. Issues for discussion – Supply Chain Management The delivery of total care aircraft programmes and long term service agreements are changing the way aircraft companies deal with their customers To – Service From – Product Sell Product Make Product Design Product Acquire Maximise Service Contract Lifetime Profitability Grow Finance / Leasing Retain Maintenance & Parts Supply New Services Maintenance Finance Product driven model with after-market initiatives bolted-on to capture attractive margins Service driven model where ‘power’ is sold to the customer

15. Issues for discussion – Supply Chain Management ..and they are looking to capitalise on this wider level of customer interaction to build knowledge and create a learning organisation Feedback • Performance against SLAs • Profitability and pricing • Engine condition monitoring • Customer Dialogue • Research Internal R&D Service Development Customer Management • Products • Innovation • Technology • Capability • Budgeting • Targeted and tailored propositions • Learning from customer interactions Acquire Customers Maximise Service Contract Lifetime Profitability Grow Retain Delivery • Deliver against tailored contract(s) • Meet and exceed customer expectations efficiently and profitably

16. Issues for discussion – Sourcing As the top tier companies have sought scale they have increasingly focused on core competencies around platform assembly Past Present Future System Integrators Platform assembly System Integrators Large-scale integration OEM’s Small-scale integration Value-added parts and assemblies Make-to-print parts and assemblers Raw materials • Primarily direct supply • Many direct suppliers • No real role for “integrators” • Many “supply paths” • Fewer, but still many direct suppliers • Limited role for “integrators” • Larger role for value-adding suppliers • Fewer “ supply paths” • Far fewer direct suppliers • Extensive role for “integrators” • Still larger role for value-adding parts suppliers

17. Why we need System Integrators (some examples)?

18. Innovation Excellence is displayed those success factors, which are attributed only average importance Issues for discussion – Product Development Excellence 3 4 5 30% 25% Top 3 Erfolgsfaktoren Erfolgsvoraussetzungen Klare Trennung von Produktund Technologieentwicklung Ausgeprägte Produkt- und/oder Technologieplattformen 20% Strategische Make-or-Buy Entscheidungen Mehrumsatz mit neuen Produkten in %* 15% Gezielte Verbesserung der Projektmanagementfähigkeiten MeilensteinbasierterProduktentwicklungsprozess 10% Örtliche Zusammenlegung von Entwicklungsteams in kritischen Prozessphasen Nach außen gerichtete Unternehmenskultur 5% Systematischer Prozess zur Generierung neuer Ideen Kreative Mitarbeiter 0% Mittlere Bedeutung Sehr hoheBedeutung Branchenübergreifende Bedeutung des kritischen Erfolgsfaktors

19. Innovation Excellence Study – Aerospace and defense industry as "Power Innovator" Issues for discussion – Product Development Excellence Effiziente Innovatoren Power Innovatoren 70% 60% Telekommunikation,Informationstechnik und Medien Automobilherstellerund -zulieferer 50% Elektrotechnik und Elektronik Luft- und Raumfahrt 40% Pharma Umsatzanteil mit in den letzten 5 Jahren neu eingeführten Produkten in %* Branchenübergreifender Durchschnitt Bau und Bauzulieferer Maschinen- und Anlagenbau 30% 20% Chemie und Rohstoffe Konsumgüter und Lebensmittel 10% Konservative Innovatoren Erfolglose Innovatoren 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 0% Anteil des F&E Budgets am Gesamtumsatz in %*

20. Aircraft Systems Weapon Systems Life Cycle for the German Air Forces 1970 1980 1990 2000 2010 2020 2030 2040 Time Now Development 1955! F-4 Production Operation and Upgrades Tornado Studies Development Manufacturing Operation and Upgrades Studies Eurofighter Development Manufacturing Operation and Upgrades Follow-on Programs ?

21. Predevelopment Development & Production Operation Ca. 5-10 Years > 20 Years > 35 Years Operation Preliminary Design & Definition Prototype Manufacturing, Flight Test Series-production Conceptual Design Studies Development Phase-out Upgrades, Variants Life Cycle Phases  85 % of LCC are determined

22. 2007 Consolidation of European Aerospace Industry Hawker Siddeley British Aerospace De Havilland Hunting Gripen Export Bristol Saab SIA Marchetti Selenia Finmeccanica Aeritalia Alenia Finmecanicca EFIM (Incl. Agusta) Aermacchi MBB DASA Dornier TST Casa EADS Aérospatiale Matra Dassault Dassault

23. Expected Development • Development for increasingly difficult tasks: • Strategic Reconnaissance (HALE / MALE) • Tactical Reconnaissance (URAV) • Attack of ground targets (UCAV). • Air to Air combat

24. Thread Scenario Evolution 1940-2000 All out war incl. nuclear weapons High intensity conflicts Medium intensity border-crossing conflicts Internal up rise suppression,ethnic/religious turmoil Peace enforcement operations Terrorist/Guerrilla warfare Singular strikes Scenario analysis will result in military needs and definition of required enabling technology programs!

25. The importance of Military Space Utilisation is growing Space is a key contributor to National and International defense strategies: • Achieve autonomous capacity in intelligence and information (Comint, Elint, Imint) • Prevent attacks via early warning and missile defense • Significantly enhance modern military operations across the spectrum through satellites capabilities • Enable deterrence • Implement space control Source: USAF - A Space Roadmap for the 21st Century Aerospace Force Space capabilities have become essential to military operations

26. Military Space Utilisation Space dominance Space denial Space power Destruction Control Intelligence Deterrence Space utilisation Protection Access To space Surveillance Coms Ground segment Satellite systems Launcher Exo vehicles

27. Potential Future Military Space Systems • Military Telecom Programs • Mid-term demand covered by dual use and commercial services provided to national MOD`s • Long-term demand should lead to a dedicated fixed and mobile communications system • Military Reconnaissance Programs • Mid-term demand covered by military and dual-use satellites • Long-term demand determined by new satellite systems • EHR (Extreme High Resolution) identification • Hyper spectral for target identification • Advanced radar for all-weather/day & night wide swath reconnaissance • Tactical reconnaissance • Potential Programs For New Applications on demonstrator level • ELINT/COMINT/SIGINT • Early Warning • Laser communication • Military Navigation Applications

28. Savunma Sanayisinin İç Eko Sistemine Bakış (1) • Türk Savunma sanayisi son yıllarda önemli gelişmeler kaydetmiştir • Savunma sanayinin geliştirilmesine yönelik stratejilerin, kısa, orta ve uzun vade planlarının hazırlanmış ve uygulama sürecine geçildiği gözlenmektedir • Savunma sektöründe faaliyet gösteren firmalarımızın belirlenen stratejiler doğrultusunda gerekli altyapı oluşturma çalışmalarında olumlu gelişmeler olmaktadır • Milli Savunma sanayinin yurtiçinde oluşturulması ve geliştirilmesine yönelik uygun ortam oluşturma gayretlerinin olumlu ve sürekli bir artış trendi içerisinde olduğu dikkati çekmektedir • İhtiyaçların yurtiçinden karşılama oranlarında artış gözlenmektedir ve 2012 yılına kadar bu oranın % 50 seviyelerine ulaşması hedeflenmektedir

29. Savunma Sanayisinin İç Eko Sistemine Bakış (1) • Sadece yurtiçi pazar değil yurtdışı pazarlarda hedeflenmektedir • Türk firmalarının yurtdışı pazarlardaki rekabet gücü her geçen yıl artmaktadır • Teknoloji geliştirme faaliyetlerinin konsept oluşturma safhasının tamamlanmış olduğu ve uygulama safhasına geçildiği gözlenmektedir • Türk firmaları, AR-GE kaynaklarını artırmaktadır, fakat bu artış uluslar arası standartlara göre düşüktür • Yurtdışı AR-GE faaliyetlerine katılımım az olmaktadır • Yurt dışında savunma sektöründe çalışmış, bilgi birikimi ve tecrübesi yüksek Türklerden yeteri derecede istifade edilememektedir

30. Savunma Sanayisinin Dış Eko Sistemine Bakış • Savunma sektöründeki firmaların ürünlerinin yüksek teknoloji ürünler olması • Firma rakabet güclerinin çok yüksek olması • Büyük ölçekli savunma sanayii firmalarının dünya pazarının büyük bölümüne hakim olması • Teknoloji geliştirme ve ürüne dönüştürmede lider pozisyonlarını korumaları • AR-GE çalışmalarına çok büyük kaynaklar ayırmaları • Know-how ve teknoloji transferine sıcak bakmamaları • Teknoloji transferine devletlerin kısıtlama koyması • Avrupa Ülkelerinde savunma bütçelerinde önemli oranda kısıtlamalara gidilmesi • Ülkelerin ortak proje modelini benimsemeleri … gibi hususlar Türkiye’den bakıldığında göze çarpan dış ortam görüntüleri olarak bize yansımaktadır

31. Savunma Sanayisinin İç ve Dış Eko Sisteminin Geliştirilmesi Önerileri • Gelişmeyi tetikleyecek en önemli faktör olan TEKNOLOJİ’yi üretmek • Türkiye teknolojiyi kullanma aşamasını tamamlamış, Teknolojiyi üretme aşamasına gelmiştir • AR-GE çalışmaları daha fazla desteklenmeli ve özendirilmelidir • Tedarik projeleri yoluyla teknoloji transferinde titiz olunmalı ve ihtiyaç duyulan teknolojiler tam anlamıyla alınmalıdır • Savunma sektöründeki firmaların AR-GE’ye ayrılan bütçelerini yükselterek teknoloji üretmeleri • Yurtdışından teknoloji transferi sağlayacak tüm imkanlar kullanılmalı, • Yurtdışında bilgi birikimi ve tecrübesi yüksek, iyi yetişmiş Türk insan kaynaklarından veya kuruluşlarından etkin olarak istifade edilmesi • Savunma Bütçelerindeki kısıtlamalardan dolayı yurtdışı pazardaki daralma nedeniyle yabancı firmaların Türkiye pazarına girme çalışmalarından azami derecede istifade etme imkanını iyi kullanmalı • Teknoloji transferi sağlayabilecek yurtdışı firmalarla işbirliği imkanları araştırılmalı, ortak AR-GE projeleri gerçekleştirme fırsatı yaratılmalı, ortaklıklar oluşturulmalı • Türk firmalarının özgün ürün geliştirme ve üretmeye teşvik edilmeli, yönlendirilmeli

32. Teşekkürler Koc Consulting Innere Wiener Str. 11a D-81667 Munich Germany Telephone: +49 89 95 44 63 60 Telefax: +49 89 95 44 63 61 E-Mail: info@koc-consulting.de Internet: www.koc-consulting.de Koç Consulting Ltd. Cyberpark, Cyberpark Plaza B Bilkent - Ankara Turkey Telephone: + 90 312 265 06 10 Telefax: + 90 312 265 06 12 E-Mail: info@koc-consulting.com Internet: www.koc-consulting.com