2017
Sustainability Report
Sustainability Report
We build close relations based on business success, openness and trust with our suppliers. We work for achieving a sustainable business performance through a supply chain that is financially sound, environmentally friendly in terms of operations, and reliable in terms of production quality and consistency. We adopt the development of both our employees and suppliers continually, providing organizational excellence, and improving business processes steadily as a principle.
We manage our supply chain processes by expert units such as our Supplier Development which report directly to the CEO, in addition to WCC and the Supply Industry Development. Strategic goals and performance results achieved are reported periodically to the senior management, Early Detection of Risks and Risk Management Committee and to the Board of Directors. The objectives and strategic approaches determined by our senior management identify our future activities.
We expect our suppliers to adopt similar ethical principles with us. For that reason, we include Tofaş Code of Ethics to the agreements concluded with suppliers. In case of any breach, we support them to comply with these norms.
In 2017, we continued using up to date purchasing methods for purchasing business processes and our activities in generalizing these methods via digital transformation. In the next reporting period, we aim to continue improvement studies in product costs through detail part commonization and localization projects. In addition, we plan to activate our plans in regards to the long-term “Supplier Park Rationalization” in which supplier park will be analyzed multilaterally.
Principally, we expect our suppliers to act together towards common objectives. When selecting suppliers, we expect them to be technically and organizationally excel in order to meet automotive industry’s expectations, to be financially sound, to have a capacity that contributes Tofaş’s competitiveness in terms of quality and cost reduction, to integrate innovations and industrial best practices to their business processes, to succeed in our process and work norm audit.
We conduct majority of our international purchasing with FCA purchasing organization. While carrying out local purchasing activities, we give the priority to local supplier with an aim of localization and to reduce foreign dependency. Except engine and transmission, we carried out 71% of our purchases from local suppliers in 2017. We realized direct material and equipment supply from 151 local companies, and indirect material and service supply from 1,814 local companies.
We give importance to enhancing suppliers’ competitive edge and support their development. We carry out activities that contribute to the development of our suppliers in product design, organizational and technical development, quality, cost improvement, physical and financial risks, production process improvement, and joint purchasing.
Generalization of WCM (World Class Manufacturing) in Suppliers: We conduct studies to generalize WCM in order our suppliers to integrate WCM methodology to their business models and to embrace the WCM Program. We share innovative practices that provide quality and cost improvement with our suppliers. In this regard, the aim is to generalize LCA (Low Cost Automation) project which was expanded to 30 suppliers, to 20 new suppliers in the next period. “Setup Periods Improvement Project” which aims to increase efficiency in production processes of suppliers will be activated in practice in 10 suppliers in 2018.
Tofaş Academy Trainings for Suppliers: We share Tofaş’s technical expertise with our suppliers through Tofaş Academy trainings. In 2017, we provided 58 training modules to 1,135 employees from 68 suppliers. Again, during this period, we initiated “UP” (Apply the Competencies, Plan the Development) program for the technical competency development of employees working in key areas including purchasing, quality, project and logistics units of certain suppliers; in this vein, 56 employees of 14 suppliers finished the basic trainings by the end of 2017. Suppliers’ journey of development through UP program will continue through trainings prepared specifically for expertise areas in 2018 as well.
Management Projects for Suppliers: For improving our suppliers’ management skills, human resources and process efficiency, we continued our projects on competency development in the areas of problem solving, planning, and diagnosis in 2017.
Supplier Orientation: 113 employees of 37 suppliers were informed with the organization called “Synergy” which aims to give healthy information to suppliers about Tofaş business processes.
Supplier HR Summit: In 2017, 74 suppliers attend to GO (Focus on Development) Summit in which best practices were shared to help develop HR processes of suppliers.
We evaluate sustainability risks throughout our entire supply chain. We adopt proactive methods in order to early-detect, manage and monitor environmental, social and economic risks that may appear in the supplier chain, and to predefine the necessary action plans. We support our suppliers operationally and financially to enable them to gain information about sustainability risk management.
We monitor and evaluate performance of all suppliers in areas of trade efficiency, quality and delivery via defined standards in order to secure quality and sustainability in manufacturing and increase our competitiveness. We work to increase suppliers’ awareness on the fact that reaching the target performance and practice level is also a factor that provides development for the supplier.
We identify risks in supply chain through an extensive and effective auditing practice. Therefore, we conduct extensive supplier audits including environment, occupational health and safety, and employee development. Then we support our suppliers through development plans we prepared to improve their performance. According to the audit activities done in 2017, we evaluated 26 suppliers in social criteria and 14 suppliers in environmental criteria.
To identify financial risks in supply chain, we carry out audits via our Financial Risk Management Department together with the support of an independent third-party corporation. In 2017, we have completed financial risk evaluations of 48 suppliers and developed their action plans.
