In line with these aims and recognizing that suppliers and their personnel are among the most important elements of its value-creation chain, Tofaş helps its suppliers constantly develop their capabilities, achieve organizational excellence, and enhance their business success and productivity.

In the conduct of its supply chain management operations, Tofaş seeks to safeguard its competitive strength, to reduce its production and procurement costs, to achieve the best possible quality and delivery performance in goods and services procurements, and to ensure the sustainability of all of these processes. In line with these aims and recognizing that suppliers and their personnel are among the most important elements of its value-creation chain, Tofaş helps its suppliers constantly develop their capabilities, achieve organizational excellence, and enhance their business success and productivity.

Tofaş’s procurements fall under three main headings defined as: Direct Materials, Spare Parts, Services & Industrial Procurement. In 2019 Tofaş’s total procurements budget amounted to EUR 2.4 billion in value. In the conduct of its procurements processes, Tofaş works with more than 2,500 suppliers, making purchases from 152 direct materials suppliers based in fourteen of Turkey’s cities.

CONTRIBUTING TO THE GROWTH AND DEVELOPMENT OF DOMESTIC SUBMANUFACTURING

Since the day it was founded, Tofaş has given great importance to localizing its procurements and reducing its dependence on imports by contributing substantially to the development of a home-grown automotive supply sector. Tofaş today procures an average of 75% of its components other than engines and transmissions from domestic suppliers.

Having made reducing its dependency on non-domestic sources and increasing localized content two of its medium- and long-term strategies, Tofaş works with suppliers especially to localize the production and procurement of electrical, electronic, and mechatronic components. Such efforts not only contribute to Tofaş’s own development but also support suppliers (whom Tofaş recognizes as its business partners) in their efforts to compete and succeed at the global level.

AN EXTENSIVE AND COMPLEX SUPPLY CHAIN

Tofaş works with an extensive and complex supply chain from which, in the main, it procures preformed sheet metal components, forged & cast machined components, mechanical & electromechanical components, electrical installments, molded plastic and rubber components, seats, door panels, vehicle glass, glove compartments, bumpers, mufflers, chemicals, interior & exterior trim, and connectors. In order to ensure and support the continuity of its manufacturing operations, Tofaş also engages in a broad range of service and other procurements such as capital goods and related services, contractor services, maintenance & repair services, and training & consultancy services. Owing to the importance of supply-chain continuity, a multifaceted risk-management approach is prioritized in the conduct of purchasing processes and of supplier relations.

IMPROVEMENTS IN PROCUREMENT PROCESSES

Whenever Tofaş considers the procurements aspects of its new projects, it gives particular attention to acquiring the latest technological abilities for the Turkish automotive industry on the one hand and to boosting its own competitive strength on the other. In line with this, Tofaş encourages international firms that are global manufacturers of automotive components to invest in Turkey or to enter into joint ventures with local suppliers.

Efforts continue to be made to amplify the company’s competitive strength by employing state-of-the-art procurement and business-process methods and by streamlining operations through digitalization. In line with the company’s Connected supplier/Digital transformation strategy, efforts were also made to create synergies between and among domestic technology suppliers and startups on the one hand and Tofaş’s suppliers on the other.

SUPPLIER DEVELOPMENT

In the conduct of all of its procurements operations, Tofaş focuses on establishing and maintaining business-partner relationships while making efforts to help its suppliers to enhance their performance in many different areas such as product design, organizational and technical improvements, quality, cost-improvement, physical and financial risk mitigation, manufacturing process improvement, collective procurement, and sustainability. Tofaş’s primary goal is to create a proactive and autonomous procurements process that completely replaces previously-existing ways of doing business that are merely reactive and focused on “problem-fixing”.

Since 2009, Tofaş has been encouraging its suppliers to take part in the World Class Supplier (WCS) program, which involves employing WCM methods in the conduct of their own operations. As of end-2019 the company was already working with 13 suppliers under this program and was helping another 15 achieve compliance. In the list of FCA global suppliers who have achieved WCM Bronze status, there are four Turkish suppliers of Tofaş.