Tofaş is committed to creating and maintaining a supply chain that is financially robust, operationally eco-aware, and reliable from the standpoints of production quality and continuity.

Ever since the day it was founded, Tofaş has always given great importance to increasing localization and to reducing import-dependency in the Turkish automotive industry. In order to contribute to the growth and development of a domestic automotive components-manufacturing sector, the company procures an average of 75% of its inputs other than engines and gearboxes from suppliers based in Turkey. Tofaş is exploring ways to increase that figure to 90% by 2030.

Tofaş is committed to creating and maintaining a supply chain that is financially robust, operationally eco-aware, and reliable from the standpoints of production quality and continuity. Acknowledging that its suppliers are as crucially important to its value chain as its own employees are, the company contributes to suppliers’ continuous development by helping them to achieve organizational excellence and to improve their business productivity and success while also strengthening Tofaş’s own sustainability culture throughout its supply chain.

Tofaş’s procurements fall under three main headings: Direct Materials, Spare Parts, Services & Manufacturing. In 2022 Tofaş’s total procurements budget amounted to EUR 3 billion in value. Working with over 3,000 suppliers in the conduct of its procurements processes, Tofaş purchases its direct materials from 152 suppliers located in 14 cities around Turkey.

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, training & consultancy services, hardware and 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.

GREEN PROCUREMENT

Tofaş’s Green Procurement efforts are grounded in a philosophy both of fostering a culture of sustainability through the company’s supply chain and of drawing attention to products and services whose environmental impact is lower. The goals of the Green Procurement program are to reduce the environmental impact of Tofaş’s suppliers’ production and service-provision processes, to improve its suppliers overall environmental performance, and to help reduce environmental risks.

Tofaş formulated an Environmental & Social Control Mechanisms Policy for its suppliers in 2022 with the aims of creating action plans for the environmental & social auditing of all of its domestic direct-materials suppliers and of completing such audits by 2025. By 2030 Tofaş also aims to have increased the CDP-solicited response rate to climate-change and water-security questionnaires among its domestic direct-materials suppliers to at least 10% and to have reduced the carbon footprint of its supply chain by 55% as per the Paris Agreement.

In pursuit of its Green Procurement objectives, Tofaş has selected twelve firms which together account for 45% of all the waste created, 39% of all the water used, and 34% of all the carbon emissions generated by its entire supply chain. As a result of visits made to these suppliers’ premises and of the subsequent analyses of current-situation findings, more than 100 actions for improving environmental-impact and energy-efficiency performance were identified. As of 2022, 80% of these actions had been completed and improvements of up to 50%–especially in environmental performance–had been achieved.

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.

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-2022, Tofaş was working with a total of thirty-three suppliers who were conducting their operations subject to all WCM rules and procedures and ten whose operations were compatible with core WCM requirements. In the Stellantis’s WCM ranking of the hundreds of suppliers with which it works globally, four of Tofaş’s domestic suppliers are in the top eleven and have attained “Bronze” status.