2018 Sustainability Report
We carry out our relationships with our suppliers on the basis of sustainable competition based on openness and trust. We believe that a supply chain that is financially strong, operationally environmentally friendly, reliable in terms of manufacturing quality and continuity will reinforce our business success. In this context, we are working to contribute to the continuous development of our suppliers, which are the most important elements of our value chain.
Supply chain processes are carried out through specialized units such as Supply Chain and Procurement Directorate, WCC, Supply Industry Development, which are directly affiliated to the CEO. The strategic objectives and performance results are reported to the senior management, the Early Risk Detection and Risk Management Committee and the Board of Directors. The goals and strategic orientations determined by the senior management are guiding our future activities.
We expect our suppliers to adopt identical ethical values with Tofaş. Therefore, our agreements with suppliers also cover the Tofaş Code of Ethics. In the event of any incompatibility with our code of ethics, we support our suppliers to adapt. We attach importance to our purchasing activities for our new projects so that they bring advanced and intelligent technologies to the Turkish automotive sector and ensure that they contribute to Tofaş’s competitive power in the global arena.
Our basic expectation from our suppliers is that they act in accordance with common goals as us. When considering the suppliers we will work with, we consider some basic criteria.
We carry out our international procurement processes together with the FCA purchasing organization. In the local procurement, we act in line with our goal of reducing the foreign dependency of the Turkish automotive sector and localization. In 2018, we continued to contribute to the development of domestic suppliers by using 75% of our procurement activities, excluding engines and transmissions, from domestic suppliers.
We include localization as one of our medium and long term strategies. Through our joint efforts with local suppliers, we support suppliers' access to global scale and competitiveness.
We carry out practices that contribute to the development of our suppliers in many areas such as product design, organizational / technical development, quality, cost improvement, physical and financial risks, manufacturing process improvement, joint purchasing and sustainability. We aim to create a proactive and autonomous procurement process with our supplier development activities. In order to share our know-how with our suppliers, we organize various training and events for suppliers within the year.
One of our main objectives in our supplier development activities is; to change the way of doing business by being reactive and focused on problem solving and to focus more on creating a proactive and autonomous process. In this context our basic approach is:
Focusing on our current problems correctly, developing approaches to solve them effectively and permanently,
Working as a strong and competent team in cooperation with the common aim and goal,
To establish systems that will detect and prevent all possible risks in our manufacturing processes before they become a problem,
To design and produce products and processes that cannot produce errors and to achieve a perfect quality level.
In 2018, in line with this objective, the main activities carried out within the framework of continuous development and sustainability in supplier dimension are as follows:
Within the scope of our strategy of “creating proactive and autonomous processes”, in 2018, more than 1,000 permanent improvement activities were put into service in 43 suppliers with the support of Tofaş expert teams and with the teams formed from different fields of expertise. In 2019, our suppliers will continue their activities within the scope of related strategies.
Innovative and technological solutions are implemented with our “digital transformation” strategy in order to accelerate the digital transformation, to develop efficient and error-free production processes, to create visual and efficient management systems while solving the current problems and risks in our suppliers' processes permanently. In addition to these solutions, we have brought together leading technology solutions providers in their fields including start-ups and suppliers in“GoTech” organization in order to increase the speed to access technology and their awareness, also to accelerate the spread of good practice examples. The first of the organization was realized in 2018 with the participation of 189 people and 56 suppliers and 50 best practices were shared.
We organized Tofaş Environment and Energy Day with the participation of our suppliers. In this organization aiming to share knowledge and experience on Environment, Energy and Sustainability, our suppliers shared good practice examples. In this event, which we will repeat every year, we aim to increase the sustainability awareness of our suppliers, which constitute the most important element of our value chain.
Within the scope of the World Class Supplier (WCS) Program, we have been conducting studies on the expansion of WCM in suppliers since 2009 in order to integrate World Class Manufacturing (WCM) methodology into business models. As of the end of 2018, we continue our activities with 28 suppliers. We are participating with 3 Turkish suppliers on the FCA global supplier list, which has a total of 10 suppliers reaching the WCM Bronze target.
We share innovative applications with suppliers that improve quality and cost. LCA (LowCostAutomation) project was expanded in 50 suppliers in 2018. Materials Logistics Engineering Directorate LCA (low cost automation) team won the first prize in European Automotive Logistics Awards Packaging & Material Handling Innovation category with the “Ceiling Coating Low Cost Automation” project that was commissioned in 2018.
“The Setup Time Improvement Project”, which aims to increase productivity in the manufacturing processes of suppliers, was implemented in 20 suppliers in 2018.
In order to improve the competencies of suppliers in important areas such as quality, project and logistics, the UP Program (Apply Your Competencies, Plan Your Development), which was implemented in the previous reporting period, continued in 2018 as well. As of the end of 2018, 36 employees of 11 suppliers completed their basic training.
With Management Projects for Suppliers we continued to develop management skills such as problem solving, planning and diagnostics of suppliers in 2018. With these efforts, we aim to increase the efficiency of human resources and business processes of our suppliers and to strengthen organizational competencies. In 2018, we provided mentoring support to 28 projects in 17 suppliers and ensured the successful implementation of the projects in order to disseminate the problem-solving culture in our suppliers and strengthen the culture of kaizen (continuous improvement).
With the Supplier Development Monitoring Portal, a new practice that we commissioned in 2018, we can monitor the performance and development indicators of our suppliers, the results of internal customer satisfaction and manage deviations with our supplier. In the development portal, quality performance, logistics performance, commercial performance, performance of continuous improvement activities, performance of stakeholder relations management are included.
We evaluate sustainability risks not only for our own operations, but also for our entire supply chain. We aim to foresee, manage and monitor the environmental, social and economic risks that may occur in the supply chain by using proactive methods and to establish the necessary action plans in advance. We provide financial and operational support to our suppliers in order to be knowledgeable in the management of sustainability risks.
We evaluate suppliers' performance in accordance with certain criteria. We act with the belief that reaching the targeted performance and application level is also a developmental factor for the supplier itself.
We identify social and environmental risks in our supply chain through effective and comprehensive audit work. Following the audits, we support our suppliers to improve their performance with the development plans we prepare. We carry out audits through our Financial Risk Management Department with the support of an independent third party to determine the financial risks in our supply chain.
