EOS - Economy of Scale What is it? EOS - Economy of Scale / Economy of Scale is the decrease in cost per unit as the quantity increases. This concept, which is closely related to growth and large-scale production, states that the unit cost of each unit decreases when more products or services are produced. The effect of Economy of Scale is seen more clearly, especially in items where fixed costs are higher than variable costs. This concept is a fundamental principle that enables businesses to become more competitive and profitable as they grow. Economy of Scale History Economy of Scale was first published by Adam Smith in 1776 in his famous article Wealth of Nations< /a>" It is detailed in his work. With the emergence of large factories in the Industrial Revolution (1760-1840), the importance of Economy of Scale increased. Benefits to Purchasing Processes Better negotiation with suppliers Reinforces the win-win approach in sales Economy of Scale / How to Calculate Economy of Scale? The first step in determining the amount of Economies of Scale is that the business Total cost => Costs including all stages of the production process. Production quantity => The amount of products or services produced in a certain period. is to determine. To calculate the unit cost, the total cost is divided by the production quantity; Unit Cost = Total Cost / Production Amount The last step is to compare the old unit cost and the new unit cost. If the new unit cost is lower than the old unit cost, this indicates that the Economies of Scale advantage has been achieved. Uses of Economy of Scale Manufacturing Industry: Larger production quantities allow for lower costs per unit, thus offering more competitive prices. Economy of scale offers serious advantages in many sectors such as automotive, electronics and food products. Logistics and Transportation: In the logistics and transportation sectors, the use of larger transportation vehicles and warehouses for large-volume transportation operations reduces transportation unit costs. Energy Production: Large power plants produce energy at lower unit costs, which is reflected in cheaper energy costs to the consumer. Agriculture: Large agricultural machinery and mass production reduce costs. Service Sector: Large banks can serve more customers and thus reduce transaction costs. E-commerce: Uses economies of scale to offer products to a large customer base. It offers larger stock, faster delivery and lower costs. Healthcare:Hospitals and healthcare organizations can serve more patients and reduce the cost of healthcare by using economies of scale. Education: They can have economies of scale advantages by increasing the number of students through methods such as large classes or online education. Benefits Cost Reduction: Larger production quantities lead to lower cost per unit. This allows products or services to be produced more economically. Lower costs allow the business to offer more competitive prices and achieve higher profit margins. Competitive Advantage: Businesses that can offer products or services at lower unit costs are in a stronger position against their competitors. Profit Increase: Lower costs can increase a business's profits. Opportunity for Expansion: Economies of scale can increase the growth potential of the business. Having more resources and capacity to produce more products or services offers the opportunity to gain more share in the market. Innovation and R&D: Large-scale production allows businesses to direct more resources to R&D (Research and Development) activities. This contributes to the development and introduction of new products or services to the market. Better Customer Service: Large businesses have the capacity to provide better service to customers. More staff can offer faster delivery and better customer support services. Risk Diversification: Large businesses can diversify risks by offering more markets and product types. This allows the business to be better protected against fluctuations in certain markets. Supply Chain Improvements: Purchasing large quantities of materials allows you to take advantage of volume discounts and better supplier relationships. Sustainability: Large-scale production can enable more effective use of resources. More efficient production processes can increase environmental sustainability. Risks Financial Risk: Large-scale production requires large investments. This could put the business at financial risk. If growth expectations are not realized or financial resources are insufficient, the business may face financial problems. Operational Complexity: Large-scale production can cause operations to become more complex. More difficulties may arise in areas such as management of production processes, logistics, quality control and workforce management. Loss of Flexibility: Large-scale production can reduce the flexibility of the business. It may be more difficult to adapt to rapid changes and the ability to react quickly to the market may be limited. Quality Issues:Producing large volumes can make quality control more difficult. If quality control processes are not managed properly, serious decreases in product or service quality may occur. Competitive Pressure:Large businesses can make competition difficult for smaller businesses and may be under more pressure to offer competitive prices. This could reduce profit margins across the entire market. Second Resource Risk: Large-scale production requires large quantities of raw materials and supplies. This can increase the business' dependence on its primary supplier and make it more vulnerable to supply chain disruptions. Legal and Regulatory Challenges: Larger businesses may be subject to greater legal and regulatory scrutiny. Complying with local, national or international regulations may impose additional burdens. EOS Economy of Scale and EOQ Economic Order Quantity Relationship These two terms are often confused (and sometimes even compared) in business management, but they are both used in different areas. Economy of Scale is used when producing or selling a product, while Economic Order Quantity is used from its name. As can be understood, it is used when purchasing a product. Because while fixed expenses are also taken into account in the calculation of Economy of Scale, Economic Order Quantity This is not calculated. Although there seem to be gray areas in between, they serve completely different purposes. My related articles EOQ - Economic Order Quantity Why and How to use the Material Code? ROP - ReOrder Point / Order Trigger Point Minimum Stock VMI - Vendor Managed Inventory / Supplier Managed Inventory Consignment Stock Safety Stock StopGap / Temporary Measure Bullwhip Effect (Whiplash, Whipsaw) Beer Game / Beer Distribution Game Resources Chat Based AI Tools: ChatGPT & BARD https://www.business2community.com/dictionary/economies-of-scale< /a> https://en.wikipedia.org/wiki/Economies_of_scale https://econ.washington.edu/ sites/econ/files/documents/job-papers/kim_jmpaper_3.pdf https://www.investopedia.com/contributors/99607/ https://blog.hubspot.com/the-hustle/economies- of-scale https://www.investopedia.com/ask/answers/012815/what-are-some-examples-economies-scale.asp#: ~:text=Economies%20of%20scale%20occur%20when,on%20a%20business%2Dspecific%20level. https://gocardless.com/guides/posts/benefit-economies-scale/#:~:text=Economies%20of%20scale%20are%20cost,over%20more%20units%20of% 20production. https://www.investopedia.com/terms/e/economiesofscale.asp< /a> https://uk.indeed.com/ career-advice/career-development/economies-of-scale-examples https://www.wallstreetprep.com/knowledge/economies-of-scale / Photos Cover photo:

"Consignment stock is not just about shifting the cost; it's about aligning interests and incentives between supplier and retailer." - David Yang, Supply Chain Consultant What is Consignment Stock? Consignment Stock is an element of Stock Management used to optimize stock costs, where payment is made when the goods are used rather than when they are received. It is based on the French word “Consigne: Trust”. In Consignment Stock, which is based on the principle of stock ownership, the goods are physically owned by the institution, but the ownership is with the supplier. Ownership of the goods passes to the institution only when the goods are put into production or sale. Thus; The organization is saved financially, The supplier obtains a goods sales guarantee. Consignment Stock is mostly used in the retail and production sectors. In the retail industry, goods are paid when they are sold, not when they are placed on the shelf/counter. In the production sector, it is paid when the goods are put into production, not when they are delivered. Consignment Stock, which is a part of Strategic Purchasing, can only be used in the construction industry in high-amount and long-term repetitive purchases within the framework of Strategic agreements. Benefits Cash Flow: Payment is made when the product is actually used or sold. This improves businesses' cash flow. In this way, the slow return speed of the goods will not be a problem. Financial Relief: Since the financing of the stocks is made by the Supplier, "Working Capital" The need decreases. Risk Reduction: Since the management of stocks belongs to the supplier, the risks are assumed by the supplier. Of course, it should not be forgotten that the consequences will be experienced by the institution. Focus: Businesses can focus on their core business by spending less time on inventory management. Flexibility: Consignment stock provides the flexibility to respond quickly to demand fluctuations, Whiplash Effect Stock Availability: Customer satisfaction increases as products are always on hand. Strategic Relationships: If managed well, it strengthens long-term and strategic business relationships with the customer. Risk Management: "Stock levels" and "storage conditions" It is controlled by the supplier, thus minimizing risks. Risks Management Complexity: Can create an extra layer of management for both parties, complicating business processes. Trust Issue: The consignment stock model can create difficulties if there is no complete trust between the supplier and the buyer. Another reason for the trust problem is the possibility of the supplier incurring losses as a result of the sales planned at the beginning of the process not being realized. Demand Forecasting: Consignment stock can trigger loss and waste if an accurate demand forecast is not made. Slow Turnaround Rate: If products are not sold quickly, capital is tied up for the supplier. Stock Control: Incorrect or incomplete stock counts made by the institution may create financial and legal risks for both parties. Quality Risk: The quality of products that remain in the warehouse for a long time may decrease, which may negatively affect customer satisfaction. Consignment Stock vs VMI Comparison My Related Articles Why and How to use the Material Code? Minimum Stock VMI - Vendor Managed Inventory / Supplier Managed Inventory ROP - ReOrder Point > Order Trigger Point Safety Stock StopGap / Temporary Measure Bullwhip Effect (Whiplash, Whipsaw) Beer Game Resources Chat Based AI Tools: ChatGPT & BARD https://www.bizimkose.com/09 /18/what is consignment-goods-consignment-sales/ https:// www.dunya.com/gundem/gunumuz-envanter-sistemlerde-konsinye-stoklarin-ve-licensed-depoculugun-haberi-286925 https://tr.pharoskc.com/781-what -are-consignment-sales Photos Cover photo: https://www.instructorbrandon.com/how-to-create-consignment-replenishment-order-to-manage-stock-inventory-in- dynamics-365-supply-chain/

What is Minimum Stock? Minimum Stock is an important part of Stock Management that plays a critical role in Supply Chain is an element. It reduces the risk of being out of stock in case of demand fluctuations, malfunctions, etc. Thus, while increasing internal/external customer satisfaction, it also helps reduce purchasing costs thanks to planned purchasing. Benefits of Minimum Stock Tracking Prevents material and time losses that may occur due to material shortage, Provides economy of scale and transportation savings thanks to bulk ordering, Thanks to bulk ordering, it reduces the number of orders and eases the burden on the buyer. Whiplash Effect reduces, Improves relationships with internal customers. What needs to be done to increase its benefits Standardization should be achieved in materials. Seasonal changes should be kept up with in a timely manner. More precise predictions should be made with data analytics. Minimum Stock Quantities should be updated regularly. More accurate inventory tracking with Kanban Card to be done. Risks of Minimum Stock Tracking If there is too much water in the river, the irregularities in the ground may not be visible and may hide problems in consumption and order management. Towards the end of the project or production, excess stock may occur. Low stock turnover rate due to large purchase lots increases the cost of keeping stock. Creates the need for additional stock space (Nebol, et al., 2014 January p. 86). It may cause purchases of larger or smaller lots than necessary due to estimation errors. Requires constant precise monitoring. Minimum Stock and VMI (Vendor Managed Inventory) Comparison How to set up Minimum Stock Tracking? Minimum Stock Tracking items are determined. A unique Material Code is opened for each item. Delivery times of the materials are determined. The usage amounts of the materials for the last 3 months are determined. The minimum stock amount is determined accordingly. Order blocks are agreed (For example: Minimum Stock x 2). Minimum Stock Report is prepared and shared regularly. Minimum Stock Quantities are checked and updated periodically according to seasonality and business status. Slow Moving Materials Report will be drawn at regular intervals, and the effectiveness of the Minimum Stock Report is checked again. Resources Nebol, Erdal, Uslu, Tanyeri and Uzel, Ezgi. January 2014. Supply Chain and Logistics Management. 3. Istanbul: Beta Basım A.Ş., January 2014. s. 372. ISBN 978-605-377-055-4. Photos Cover photo:

What is VMI? VMI – Vendor Managed Inventory is an inventory management model in which the supplier directly manages the customer's inventory. VMI – Vendor Managed Inventory History VMI is a collaboration between large retail chains and their suppliers that began in the early 1980s. The development of innovative approaches such as re-evaluation of order points and demographic-based procurement coincides with this period. Traditional purchasing process Manufacturer: The product needed for production is ordered to the supplier in optimum quantity and at the right time, and the incoming goods are kept in the warehouse until consumption. Methods are sought to consume the excess that does not enter into production. The supplier's responsibility begins when the relevant order is opened and ends when it is closed. Stock management is under the control of the manufacturer. (Intrieri, 2015) Distributor:The products needed for sale are ordered to the manufacturer in optimum quantity and at the right time, processed and the incoming goods are kept in the warehouse until sale. Methods are sought for unsold products. The manufacturer's responsibility begins when the relevant order is opened and ends when it is closed. The distributor is responsible for order and stock management (Intrieri, 2015). Supplier Managed Inventory process Manufacturer: The supplier has all the stock, flow rate and minimum stock information of the manufacturer thanks to the live connection. Thanks to this instant information, it organizes the supply on time. It also takes back unsold goods with the MilkRun system. Management of the manufacturer's stock is the responsibility of the supplier. Distributor: The manufacturer has all the stock, flow rate and minimum stock information of the distributor thanks to a live connection (EDI or Web-based). Thanks to this instant information, it organizes the supply on time. The distributor's order and stock management is the responsibility of the manufacturer (Intrieri, 2015). It also takes back unsold goods with the MilkRun system. Stages Minimum and maximum stock quantities are determined Preferred supplier is determined and certified The supplier brings the goods in appropriate quantities to the location requested by the customer (Factory, construction site, branch, etc.). Meanwhile, a 3PL company can be used (Intrieri, 2015). Necessary infrastructure preparations Electronic Data Interchange (EDI) infrastructure (Robinson, 2014), Making necessary arrangements in ERP, Preparation of the contract in accordance with the process, Benefits for the customer It reduces the amount of stock Ensures that the stock is constantly kept at a certain level (Minimum standard deviation) Healthier relationship with supplier Decrease in total cost (TCO) thanks to economies of scale and reduced number of transactions (Lower unit prices, reduced number of personnel, etc.) Shorter response times thanks to reduced number of transactions Orders can be placed automatically from the system without the need for additional effort (Intrieri, 2015). Returns decrease (Intrieri, 2015). Puts full responsibility on the supplier Gives the supplier the necessary information instantly Reduces management costs (Intrieri, 2015). It allows timely supply. Prevents unnecessary stock space occupancy. Positive impact on cash flow and possibility of return, as there is no obligation to pay until the relevant material is used (Consignment Stock). Reduced risks of stock out Problems can be prevented before they occur, thanks to a long-term and close relationship with the supplier The possibility of errors is reduced by entering orders from a single point (Intrieri, 2015) Branches are relieved of their workload by delegating order responsibility to the head office (Intrieri, 2015) More accurate planning can be made thanks to the live tracking of the branches (Intrieri, 2015) Risks for the customer The problems caused by being dependent on a single supplier. Problems of protecting Know How Possibility of not being able to benefit from price discounts in the market Risk of being tied to the supplier Resistance to innovation by the supplier Benefits for the supplier Orders can be automatically received from the system without the need for additional labor (Intrieri, 2015). Gives the supplier the necessary information instantly Increase Inventory turns (Intrieri, 2015). Returns decrease (Intrieri, 2015). Reduces transportation and management costs (Intrieri, 2015). It allows timely transfer. It allows for a smoother logistics organization. Problems can be prevented before they occur, thanks to a long-term and close relationship with the customer. The possibility of errors is reduced by entering orders from a single point (Intrieri, 2015) Risks for the supplier Short and long-term financial liabilities that may arise if the customer is out of stock. The situation of having to get a refund if the supplied goods are not sold (Intrieri, 2015). Misleading inventory decisions due to lack of information. Information transfer interruptions due to incompatibility problems with customer software Failure to communicate fluctuations in market prices in a timely manner Difficulties in quickly adapting to customer innovation demands My Related Articles Safety Stock ROP - ReOrder Point > Order Trigger Point Why and How to use the Material Code? Resources http://www. slideshare.net/loracecere/vendor-managed-inventory-summary-charts-june-2014/3-Supply_Chain_Insights_LLC_Copyright http://www.slideshare.net/Hammaduddin/vendor-managed- inventory-12734689 http://www.slideshare.net/anandsubramaniam/vendor-managed- inventory-vmi http://www.slideshare.net/amansuveer9/vendor-managed- inventory-28753288 http://www.slideshare.net/loganath85/vendor-managed- inventory-9670618 http://www.slideshare.net/loracecere/what-is-the-value-proposition-of-vendor-managed-inventory-does-an-old-process-need-a- facelift http://www.slideshare.net/arishajamil1/vendor -managed-inventory-48942703 Intrieri, Chuck. 2015.The Benefits of Evolved Vendor Managed Inventory Model Led by Web-Based VMI. Cerasis. [Online] Fabruary 2, 2015. [Cited: December 30, 2015.] http://cerasis.com/2015/02/02/vendor-managed-inventory/. —. 2015. Vendor Managed Inventory Model for Supply Chain Cost Reductions. Cerasis. [Online] January 21, 2015. [Cited: January 20, 2016.] http://cerasis.com/2015/01/21/supply-chain-cost-reductions/. Robinson, Adam. 2014.Electronic Data Interchange or EDI in Transportation. Cerasis. [Online] December 11, 2014. [Cited: January 29, 2016.] http://cerasis.com/2014/12/11/edi-in-transportation/.

"UPC codes are the silent storytellers of the retail world." - Anonymous What is the UPC Code? UPC Code, known as the “Universal Product Code”, is a 12-digit numerical structure used mostly in the retail industry that allows the products to be delivered to the end user to be tracked and managed throughout the entire supply chain with unique codes. We see this code on the barcodes on the packaging of products almost every day. Management of UPC Code GS1 (https://www.gs1.org/). GPC Code indicates the product category, while UPC Code indicates the product on sale. Below I will discuss the differences between the two. UPC Code History UPC Codes were first used in 1974. This structure played a major role in the development of supply chain management. Over time, it has become more sophisticated with the advancement of technology and today it allows products to be tracked around the world. Benefits to Purchasing Processes Suppliers can manage products better, More effective monitoring of inventories, Facilitates demand forecasting, Reducing stock costs, Reduces complexity throughout the supply chain, Improving customer services, Ensuring fast and accurate response to customer demands, Ultimately, increasing customer satisfaction. Differences between UPC Code and GPC Code How to create a UPC Code? It is explained in detail in the video below; https://www.youtube.com/watch?v=mXtLSTBCPXA< /p> My articles about Product/Material Code Why and How to use the Material Code?< /a> HS Code – Harmonized System Code / GTIP – Customs Tariff Statistics Position ISO 3166 - Country Coding System KKS Code (Kraftwerk Kennzeichnen System / Identification Systems for Power Plants) SIC Code - Standard Industrial Classification UNSPSC - United Nations Standard for Products and Services Code Resources Chat Based AI Tools: ChatGPT & BARD https: //www.thebalancemoney.com/upc-universal-product-code-barcode-definition-2948258 SKU vs UPC: What Are The Differences?< /a> https://business.adobe.com/blog/basics/what-is-a-sku-how-is-it-used https://katanamrp.com/blog /upc-vs-sku/

The intricate links of the Zaibatsu families mirrored the interconnectedness of Japan's society and economy." -Ronald P. Dore, What is Zaibatsu? Zaibatsu means "Money Community", which is a combination of the words Zai => Money" + "Batsu => Clan/Community/Tribe". Zaibatsu is the general name given to family businesses that are usually organized around a conglomerate, controlling a number of related companies and controlling much of modern Japanese industry. Zaibatsu operate in many different sectors such as banking, mining, manufacturing and transportation. History of Zaibatsu (1868-1945) The historical origin of the Zaibatsu dates back to the Meiji Restoration (1868-1945). During this period, one of the cornerstones of the Japanese business model, Japan was rapidly modernizing and industrializing. The government has invested in many strategic collaborations to promote economic development. These industries, which were later transferred to the private sector, formed the infrastructure of Zaibatsu. From the 18 Zaibatsu group that stood out in this period, “Mitsui, Mitsubishi , Sumitomo and Yasuda” groups “Big 4”, they are the largest of the Zaibatsu formations. Other Zaibatsu Groups; Asano Fujita Furukawa Mori Kawasaki Nakajima Nichitsu Nissan Nisso Nomura Okura Riken Shibusawa Suzuki shoten The Impact of Zaibatsu on Purchasing Processes Zaibatsu operated effectively among Japanese suppliers. Their tightly integrated structure and easy access to international markets have enabled them to gain cost advantages in both national and international markets. Contributions of Zaibatsu to the Japanese Economy Industrialization and Modernization: Zaibatsu's during the Meiji Restoration period He was among the pioneers of Japan's rapid industrialization and modernization processes. This process played a key role in the country's transformation from an agriculture-oriented economy to an industry-based economy. Investment and R&D: Zaibatsu formations were pioneers in technological innovations and R&D investments. This played an important role in Japan's progress towards becoming a global technology leader. Employment and Education: Zaibatsu contributed to economic stability by providing great employment opportunities. They also created corporate training programs to provide education and training opportunities to their employees. International Trade and Investment: Zaibatsu were important players in Japan's international trade and investment. This helped Japan take a larger role in global markets and expand its foreign economic relations. Integrated Production: Zaibatsu effectively managed their supply chains by keeping different stages of production under their control. This vertical integration increased production efficiency. Finance and Banking: The Zaibatsu owned many large banks, which played a critical role in financing the Japanese economy. These banks provided financing for Zaibatsu companies as well as other businesses. Economic Stability and Growth: Zaibatsu's contributions to the economic structure promoted both economic stability and long-term growth. Cultural and Social Impact: In addition to their economic impact, the Zaibatsu also had a profound impact on Japanese society. Zaibatsu Families did significant charitable work supporting cultural and social events. Transition from Zaibatsu to Keiretsu The transformation of Zaibatsu Groups into Keiretsu took place in a period after World War II. . If we explain this process in order; The first stage was with the collapse of the Zaibatsu; Disbandment of the Zaibatsu: From the perspective of the United States, the Zaibatsu were Japan's key force in World War II. For this reason, the disbanding of these troops immediately after the war was among the first priorities. Prohibition of Holding Companies: Due to the "logic of rallying around a holding company", which is the main feature of Zaibatsu, the US occupation forces banned holding structures. Enactment of Anti-Monopoly Laws:It was not enough to ban holdings, an Anti-Monopoly law was also passed so that there would be no circumvention. After the Zaibatsu collapsed and the focus on this issue lost its former strength, Japanese companies rolled up their sleeves for a new organization and a more democratic and corporate structure. Keiretsu gathered around the system. Keiretsu s made Japan a leading figure in the world economy again in this period. It helped him become stronger. Note: My article about Keiretsuis below You can read it from the link; Keiretsu - The Backbone of Japanese Industrial Transformation My articles about Zaibatsu Keiretsu - The Backbone of Japanese Industrial Transformation Carlos Ghosn, Man of Plans and Goals Friendshoring - Supply from Neighborhood Resources Chat Based AI Tools: ChatGPT & BARD Youtube / What is the Zaibatsu? Youtube / What Eating the Rich Did For Japan Youtube / How A Clansman's Son Created Mitsubishi Youtube / Zaibatsu Project https://www.ilimvemedeniyet.com/meiji-restorasyon- and-japanese-modernization.html American-Supported Japanese Development Process: Transformation of Zeibatsu into Keiretsu (2) JAPANESE MANAGEMENT UNDERSTANDING AND COMPANY NETWORKS (KEIRETSU) Photos https://marketbusinessnews.com/financial-glossary/zaibatsu/

Keiretsu is the backbone of Japan's unique business environment, fostering a culture of deep-rooted partnership and collaboration." - Kazuo Inamori, Founder of Kyocera Corporation. What is Keiretsu? In the words of Toshio Yamazaki, "Keiretsu is not only a business model in the business world, but also a culture of solidarity and commitment. Keiretsu is a business of closely-knit companies based in the Japanese Zaibatsu Family network. Keiretsu is part of Japan's industrial transformation. Keiretsu members usually consist of different companies operating under the same parent company or in the same industry. Keiretsu Types Horizontal Keiretsu (Financial Keiretsu): It is a financial-oriented structure with a bank at the top of the pyramid. Vertical Keiretsu (Industrial Keiretsu): It is a production-oriented structure with the main producer at the top of the pyramid. History of Keiretsu Pre-World War II Zaibatsu large family-controlled business empires called Disbanded by the American occupation administration just after World War II The companies in question came together again after the war and decided that Zaibatsu was more democratic and less centralized. They reunited under their Keiretsu structure, which was a version of Keiretsu's Contributions to Purchasing Processes Keiretsu's biggest contribution is to optimize purchasing processes. Within the Japanese supply chain, thanks to close relationships between members, Trust, Speed, Lower cost, Preventing new players from foreign countries from joining the domestic market, Benefits such as are provided. Good Practice Examples Toyota: Adopting the Vertical Keiretsu structure, Toyota cooperates closely with its suppliers. Mitsubishi: Having horizontal Keiretsu structures, Mitsubishi creates sectoral synergy among its subsidiaries in various sectors. Nissan: Although it had a horizontal Keretsu structure before the Alliance it established with Renault, it left this structure after the Renault & Nissan Alliance led by Carlos Ghosn. Benefits of Keiretsu Risk Distribution: Keiretsu distributes risks thanks to close relationships between companies, minimizing the negativities that each company may face individually. Supply Chain Optimization: Close cooperation between Keiretsu members enables supply processes to be carried out faster and more effectively. This provides the opportunity to reduce costs and increase efficiency. Information Sharing: Thanks to a constant flow of information between Keiretsu member companies, a conducive environment for innovation and continuous improvement is created. Market Access: Keiretsu member companies provide easier access to other member companies' markets and customer bases. Cost Advantages: Through joint procurement and other cooperation activities, Keiretsu members can achieve cost advantages. Long-Term Relationships: The Keiretsu structure encourages the establishment of long-term relationships among members. This is a great opportunity for business continuity and stability. Financial Support: Some Keiretsu structures also include financial institutions. This helps member companies cope with liquidity problems by providing financing and credit opportunities. Global Network: A global network that some Keiretsu companies have provides opportunities such as access to international markets and global supply chain management for other members. Technological Progress: Easier sharing of technological knowledge and capabilities among Keiretsu members creates opportunities for technological advancement and product development. Flexibility: The keiretsu model offers the ability to react quickly to changes in market conditions. Flexibility is especially important for Just in Time (JIT) processes and reducing the Bullwhip Effect. Risks of Keiretsu Overdependence: Keiretsu members are closely tied to each other, and this can cause the problems experienced by one member to spread to other members. Loss of Flexibility: Due to the long-term and tight relationships required by Keiretsu, companies may have difficulty switching to external suppliers, which may limit their flexibility. Cartel Formation and Reduction of Competition: Keiretsu structures may lead to the formation of cartels or decreased competition within the market. Increase in Bureaucracy: The need for coordination and information sharing between companies can increase bureaucracy and slow down decision-making processes. Loss of Privacy: Relatively more transparent information sharing among keiretsu members may increase the risk of loss of privacy. Limiting Innovation: Some Keiretsu structures may be closed to outside innovation, which can limit or slow companies' innovation. Financial Risks: Keiretsu's financial structures may cause the financial distress experienced by a large member to spread to other members. Difficulty in Adapting to Market Changes: The keiretsu model can sometimes have difficulty adapting to rapidly changing market conditions. Dispute and Conflicts of Interest: The interests of different companies within the keiretsu may conflict, resulting in internal tensions. Difficulty in Accessing Foreign Markets: Companies with a keiretsu structure may have difficulty accessing foreign markets because they focus on the domestic market. Difference Between Keiretsu and Friendshoring My Articles on Keiretsu Carlos Ghosn, Man of Plans and Goals The Accident That Ended Ericsson Friendshoring - Supply from Neighborhood Onshoring - Domestic Production Nearshoring / Production in a Nearby Country Offshoring / Outshoring - Production in Foreign Countries Reshoring - Drawing Production Into the Country < /p> Bullwhip Effect (Whiplash, Whipsaw) JIT - Just In Time< /a> Resources Chat Based AI Tools: ChatGPT & BARD https://en.wikipedia.org/wiki/Zaibatsu https://en.wikipedia.org/wiki/Keiretsu Carlos Ghosn, Man of Plans and Goals The Accident That Ended Ericsson Shift: Inside Nissan's Historic Revival https://business-essay.com/the- japanese-economy-keiretsu-system/ https://vdoc.pub/documents /keiretsu-inside-the-hidden-japanese-conglomerates-14ps83flvqno https://www.researchgate.net/publication/228588354_Regional_Economies_and_Keiretsu_Groups_in_Japan https://www.researchgate.net/publication/46438420_Keiretsu_Governance_and_Learn ing_Case_Studies_in_Change_from_the_Japanese_Automotive_Industry https://www .ide.go.jp/library/English/Publish/Reports/Vrf/pdf/413.pdf https://www.investopedia.com/articles /economics/09/japanese-keiretsu.asp https://www.investopedia.com/terms/k/keiretsu .asp https://hbr.org/2013/09/the -new-improved-keiretsu https://www.bu.edu/rbfl/2021/05/24/a-historical-perspective-on-the-japanese-keiretsu/ Photos Cover Photo: https://www.bu.edu/rbfl/2021/05/24/a-historical-perspective-on-the-japanese-keiretsu/ !!! THANKS!!! Thank you for your valuable time. If you write your questions and/or suggestions in the comments, I will respond quickly. This article was first published on SedatOnat.com. For a new Supply Chain Article every day, Linkedin Newsletter ' You can become a member. Supply Chain Dictionary to www.TedarikZinciriSozlugu.com. Thank you in advance and have a nice day. …

Container is the brick of globalization." – Marc Levinson, author of The Box Why are there different types of containers? As the benefits of containerization became apparent, different container types were envisioned for different purposes. Especially as a result of Malcolm McLean's long efforts, standards began to be formed. The main reasons why there are different types of containers are; Different Load Types: Each load requires a special type of transportation. For example, cooling for foodstuffs, sealing for liquids, or extra durability is required for heavy machinery. Optimization and Efficiency: Containers specifically designed for the load can speed up loading and unloading. Security: Special containers for transporting sensitive or dangerous substances ensure the safe transportation of these substances. Cost Savings: Containers specially designed for the cargo provide cost savings in the long term by reducing damage that may occur during transportation. Flexibility and Compatibility: Different container types can be compatible with different modes of transportation (road, rail, sea). Volume and Size: Some goods need larger or smaller volume containers. Therefore, containers of different sizes are needed. Special Needs: For example, special containers are needed for some agricultural products with ventilation (pressurization or exhaust) requirements. Regulations and Standards: It is essential to use containers that comply with international regulations and standards for transporting some products. Main Container types Bx – Bulk Container ... Gx – General Purpose / General Use Container It forms the main backbone of Sea Transportation and Railway Transportation. It enables controllable quantities to be transported in high tonnages. Hx - Insulated Container Used for materials requiring thermal insulation. Px – Platform Container It is used for large, shapeless materials or equipment that cannot be transported in containers. Platform Flat Rack Rx – Reefer - Refrigerated Container / Cooler Containers It is indispensable for Cold Chain Management. It is used for products with high heat sensitivity. Sx – Named Cargo Container / Special Purpose Containers Containers specially designed for different purposes. Tx – Tank Container / Tank Containers It has an important place in Chemical Transportation and Food Logistics. Ux - Open Top Container Open top, usually for high loads. Vx – Ventilated Container – Ventilated Container With ventilation, usually for agricultural products. Other Container Definitions (Some of them are defined in the above types.) IMDG Container: Dangerous Goods Dry Storage Container / Dry Cargo Containers: Used for Railway Transportation and Sea Transportation. It offers high tonnage capacity. Double Doors Container: A type of container that opens at both ends. Cargo Storage Roll Container: Multi-layered and generally used for textile products. Side Open Storage Container: A type of container that is loaded by opening its sides. Car Carriers: Specially designed for vehicle transportation. Drum Container: It is barrel-shaped and generally used to transport liquid, powder, or granular loads. Half Height Container: Usually for stones and heavy loads. Open Side Container: The sides open, usually for wide loads. Tunnel Container: Another type that opens at both ends. Swap Body Container: Especially designed for land transportation. Rolling Floor Container: With a roll floor for fast loading and unloading. Intermediate Bulk Shift Container: For portable, liquid or granular cargo. Special Purpose Container: Special designs for special loads. High Cube Container: Height increased for more volume. My Related Articles The Container's Idea: Malcolm McLean TEU - Twenty-foot Equivalent Unit Container Check Digit (ISO 6346) Resources https://en.wikipedia.org/wiki/Shipping_container https://en.wikipedia.org/wiki/ISO_6346 https://atlantic-freight.com/en/faq/type -of-containers/ https://www.cargoflip.com/post/shipping-container-types< /a> https://coastcontainers.ca/blog/9-different-shipping- container-names Chat Based AI Tools: ChatGPT & BARD Photos https://atlantic-freight.com/en/faq/type -of-containers/ https://bulkflow.net/bulkflow-product/thermal-container-liners / https://www.shipacarinc.com /can-a-car-be-shipped-in-a-container/

What is Last Mile Delivery? Last Mile Delivery refers to the delivery of products to the last point, that is, the customer, in supply chain and logistics. In particular, it is almost the most complex process of E-Commerce, involving many variables and costs. Last Mile Delivery History We can see the first example of Last Mile Delivery in postal and telegraph services. The rise of e-commerce and especially the different approaches of international companies such as Amazon have made Last Mile Delivery a critical element in Supply Chain processes. Benefits to Purchasing Processes Less need to keep stock (Stock Optimization), More efficient last point logistics, Urgent orders arrive faster, Increased satisfaction of the final customer, Good relations with suppliers, Especially in E-Commerce, delivery time is the factor that determines the purchase, It can be summarized as follows. Opportunities Data Analytics: With artificial intelligence and data analysis, processes can be made more efficient and cost-effective. Individual transportation: The use of freelancers provides significant cost flexibility. Flexible delivery options: Processes such as purchasing from the cargo point and Kagro pot boxes can be decisive in purchasing as they will provide great flexibility to the customer at this point. Expanding the scope of service: Additional services, such as companies such as IKEA providing installation services during delivery, will increase customer satisfaction. Risks Variable costs: Variable costs required by being flexible are among the costs that must be kept under control. Operational complexity: The fact that the number of movements is higher compared to previous processes brings confusion. Employee safety: The dangers faced by people who transport vehicles with high accident rates, such as scooters and bicycles, are among the most sensitive points of the process. Sustainability: The fact that the highest employee turnover is at this point is one of the areas where sustainability in the Supply Chain will be most difficult in terms of quality and human resources. Useful Links https://www.co2emissions.com/ Good Practices Local Storage:In big cities, products are delivered to customers faster by using local storage areas. Smart Routing:Google Maps and similar smart route planning tools ensure faster and more efficient delivery. Drone Deliveries:Companies such as Amazon and UPS are further accelerating the last mile process by trying drone deliveries. Eco Deliveries: Deliveries made using electric vehicles within the framework of sustainability targets. ·Digital Tracking: Real-time location tracking to increase customer satisfaction. Amazon Prime Now: Amazon's 2 Hour Delivery Service is a good example of how Last Mile Delivery can be managed effectively. In summary... Last Mile Delivery, Although it may seem like a simple step, it is a process that still has high potential in Supply Chain processes and especially in E-Commerce. With the development of e-commerce and technology, we will see many innovations and improvements in this field. Resources Last-mile delivery and Why is it critical for supply chain Why is Last Mile Delivery Important in Supply Chain Operations? Fast forwarding last-mile delivery - McKinsey https://en.wikipedia.org/wiki/Last_mile_(transportation) Cover Photo: Adobe Express

A journey of a thousand miles begins with a single step." –Chinese Proverb Who is Malcolm McLean? Born in North Carolina in 1921, Malcolm McLean started his business life as a truck driver at a young age. threw. It became an important actor in the transportation business by establishing its own truck fleet in the early 1950s. But Malcolm McLean's real vision was to revolutionize freight transport processes. The Birth of the Container Ship Malcolm McLean explains how long it takes to transfer cargo from trucks to ships and how much it costs in the process. He realized that it was occurring. Malcolm Mclean thought that standardizing loads in containers would greatly speed up this process and reduce costs. Malcolm McLean in 1956 Ideal Malcolm McLean's goals with container standardization Fewer workers needed in transportation operations, -- A large number of goods of different sizes are lost in the hands of untrained workers who cannot even solve simple mathematical problems or take a long time to handle [The Box, p124], -- While 1 ton of cargo was handled with 1.9 man/hour in 1950, this figure increased to 2.5 man/hour in 1956. Any further increase in the number would increase the cost significantly [The Box, p38], With less visible goods and fewer people, thefts will decrease significantly. Machine-based work will reduce loading and unloading operations, In this way, transit times will be accelerated, This acceleration will also reduce port costs, This acceleration would also reduce the stock on the road, Increasing speed and decreasing costs enable the development of global trade, etc. On April 26, 1956, Ideal X from New Jersey to Houston, Texas It started its first voyage with 58 containers towards . This voyage marked the first official voyage of container shipping and revolutionized supply chain management and global trade. This innovative approach of McLean started the process of standardizing container transportation worldwide. Today, millions of containers are loaded and unloaded in ports around the world, contributing greatly to global trade. Contributions of containerization to the US Army during the Vietnam War McLean goes to great lengths to persuade the army to agree to containerization during the Vietnam war. And as a result of these efforts, an awakening begins in the US Army on this issue. Because at that time, almost all the needs of 540,000 soldiers, especially their food needs, had to be met from outside. During the Vietnam War, the US Army used specially designed container ships operated by Sea-Land transported large amounts of materials to Saigon Port. This demonstrated how effective containerization can be in terms of efficiency, flexibility and speed in military operations and further emphasized the importance of container transportation. Malcolm McLean's Difficulties McLean's innovative approach encountered many obstacles. First of all, ports and ships had to adapt to this new system. The industry, which had adopted traditional shipping methods, did not accept this change easily. However, McLean overcame these difficulties by fighting almost alone with his stubbornness, determination and visionary approach. Later, he had a lot of problems with the standardization of container sizes. At first, different states used different sizes. However, he overcame this and made significant contributions to the formation of today's ISO 668 standard. Strikes During this process, the main problem they experienced was the strikes at the ports. In labor-intensive port enterprises, the power of workers, and therefore of unions, was at unbreakable levels. Containerization meant needing significantly fewer people. This change caused great concern among dock workers. Seeing that their jobs would be lost, dock workers resorted to strikes and protests through their unions. Particularly in the United States, there were major strikes at East and Gulf Coast ports in the early 1970s. Strikes lasted up to 95 days. Although these strikes have the potential to slow down the development of container transportation, this method of transportation has become inevitable due to the efficiency advantages brought by containerization. During this period, unions fought hard to protect workers' rights and job security. Temporary protections and compensations were provided for dock workers, but still, in the long run, the impact of container shipping resulted in a drastic reduction in the number of workers working in ports. Main obstacles to ports Draft / Water Depth:Container ships need deeper waters due to their weight. This required the ports to be revised accordingly. Security: The fact that the inside of the containers are not visible and the large amount of unseen goods are transported initially raised questions about security for the state authorities. But this point was also one of the advantages against theft in container transportation. Lack of Infrastructure: Traditional ports are designed for cargo that is generally loaded and unloaded manually. Special cranes, forklifts and other equipment are needed to load and unload containers quickly and efficiently. Insufficient Storage Space: Containerization requires large amounts of storage space in ports. Many of the old ports did not have enough space to meet this new need. Transportation Links:Containers had to be easily transported from ports to inland areas. This is possible with rail or road connections. Some older ports did not have the infrastructure to support such connections. Operational Adaptation:Containerization has also brought changes in port operations. This required a review of business processes, information systems and logistics operations. Cost Issues: The transition to container infrastructure brought about significant costs. Some ports had difficulty covering these costs. When they were late in meeting their financial needs, they lost opportunities to other ports. Resistance and Cultural Factors: Resistance to containerization occurred by dock workers, unions, and sometimes local governments. This was particularly due to the possible negative effects of containerization on employment in ports. Physical Constraints: The physical location of some ports would not allow for expansion or modernization. For example, expansion options for ports close to the city center have been limited. Some ports losing their former powers As a natural consequence of the widespread use of containerization, ports and port cities have also transformed. Some traditional ports have struggled to adapt to container shipping and lost their former importance, resulting in the rise of new, more modern ports. At the same time, as the importance of containerization increased, it was seen that cities competed with each other through ports. USA - Port of New York It was one of the busiest ports in America before containerization. However, with containerization, it was directed to ports in New Jersey that can accommodate large container ships that need deeper waters (draft) and larger areas. USA - Port of San Francisco It was one of the most important ports on the West Coast before containerization. However, Oakland Port replaced San Francisco as it had a more suitable infrastructure for container transportation.< /p> England - Port of London This historical port on the River Thames has lost its former importance due to the impact of containerization. Felixstowe and Southampton stood out in container transportation. England - Port of Liverpool 19. Liverpool, one of England's busiest ports in the 19th century, lost its importance due to containerization towards the end of the 20th century. Other ports with more suitable infrastructure for container transportation have moved ahead of Liverpool. Italy - Port of Genova Genova, which was one of the important ports of the Mediterranean before containerization, became Marseille (France) and Valencia (Spain) India - Port of Kolkata Kolkata, one of India's oldest ports, lost its former importance after containerization. Mumbai and Chennai ports have become the leading ports of the country. Argentina - Port of Buenos Aires Buenos Aires, one of South America's most important ports, has faced some challenges with the rise of containerization. In particular, the shallowness of the Rio de la Plata River (draft problem) means that large container ships It made it difficult to enter the port. Philippines - Port of Manila The historical port of Manila, the capital of the Philippines, with the rise of container shipping, Batangas and < had difficulty competing against other ports such as a href="https://en.wikipedia.org/wiki/Port_of_Subic_Bay" target="_blank">Subic Kenya - Mombasa Port Mombasa, the main port of East Africa, has had difficulty updating its infrastructure due to containerization. This has brought ports such as Dar es Salaam (Tanzania) to the fore. Companies founded by Malcolm Mclean during this period McLean Trucking Company:McLean was founded in 1934 in North America. He founded a trucking company under his own name in Carolina. This company was his first venture in the logistics industry and has grown over time to become one of the largest trucking companies in America. Pan-Atlantic Steamship Corporation: In 1955, McLean acquired the Pan-Atlantic Steamship Corporation. He used this company to take the first steps in container transportation. Sea-Land Service, Inc.: Pan-Atlantic As the company took a leading role in container shipping, the company was incorporated into Sea-Land Service, Inc. in 1960. Renamed as. Sea-Land has been a key player in the globalization of container shipping and has pioneered many innovative practices. United States Lines: In 1978, McLean acquired United States Lines and used the company to expand global container shipping. However, by the mid-1980s, the company faced economic difficulties and went bankrupt in 1986. These companies show Malcolm McLean's persistence in logistics and maritime transportation. Malcolm Mclean's Farewell... Malcolm McLean, who completely changed international trade, is known as the father of container shipping. When McLean died on May 25, 2001, ships in many ports around the world sounded their sirens to commemorate and respect his contributions. This unique moment was a symbolic gesture that reflected the magnitude and importance of McLean's contributions to the maritime industry. This meaningful move showed the maritime community's respect for Malcolm McLean and his contributions to the industry. Malcolm McLean, the father of container shipping, brought the world closer together by making global trade more efficient, faster and cost-effective. Malcolm McLean's amazing life story, Marc Levinson's The Box.< /p> In summary... Malcolm McLean's contributions deeply affected not only the shipping industry but also global trade. The container ship has shaped the modern supply chain and globalization, enabling billions of dollars of trade and thousands of jobs. With deepest respect to the memory of Malcolm McLean... Useful Links Intermodal container ISO 668 Container chassis Reach stacker List of largest container ships List of largest container shipping companies List of busiest container ports Container crane Smart port My Related Articles TEU - Twenty-foot Equivalent Unit ISO 6346 - Container Check Digit Offshoring / Outshoring Friendshoring Onshoring Reshoring Nearshoring Resources https://en.wikipedia.org/wiki/Malcom_McLean Levinson, Marc. "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. https://en.wikipedia.org/wiki/The_Box_(Levinson_book) https://www.youtube.com/watch?v=62EIFCERlew&pp=ygUbdGhlIGRlYXRoIG9mIG1hbGNvbG0gb WNsZWFu< /a> https://www.youtube.com/watch?v=Ua2ZCnl3JDc&pp=ygUbdGhlIGRlYXRoIG9mIG1hbGN vbG0gbWNsZWFu< /a> https://www.youtube.com/watch?v=KeTtFk50ikU&pp=ygUbdGhlIGRlYXRoIG9mIG1hbGNvb G0gbWNsZWFu< /a> https://www.nytimes.com/2006/05/ 13/business/13nocera.html https://research.library.fordham.edu/transportation/1/ https://en.wikipedia.org/wiki/International_Longshoremen%27s_Association< /p> https://www.workersliberty.org/ story/2009/11/03/militancy-docks-1960s-remembering https://en.wikipedia.org/wiki/List_of_US_strikes_by_size Chat Based AI Tools: ChatGPT & BARD Cover photo: Wikipedia

Container transportation does not only carry cargo; it also carries economic growth and cultural ties." -Marc Levinson What is TEU? TEU Twenty-Foot Equivalent Unit represents the carrying capacity of a 20 foot (6mt) Container. It is indispensable for international sea and railway transportation. Larger containers are usually expressed in multiples of TEU; For example, 1 40 foot (12m) container is considered 2 TEU. Or FEU (Forty-Foot-Equivalent-Container. Thanks to this standardization created as a result of the long efforts of Malcolm McLean, the pioneer of container transportation, The way for MultiModal transportation has been paved. TEU is an indispensable tool for Just in Time . For container measurement units, you can refer to Wikipedia/Intermodal Container page. With this unit of measurement; Annual container handling capacity of the port, Traffic density capacity of the port environment, Carrying capacity of the container ship in terms of units, It can be measured. TEU History 1956: American trucker Malcom McLean creates the first container ship . 1961: TEU by International Shipping Organization (IMO) It is considered a standard unit of measurement. 1980s: With the increase in containerization, TEU becomes even more important. 2000s:TEU is now used not only in shipping but also in rail and road transport, as part of the global supply chain. Benefit of TEU to Purchasing Processes TEU is a constant guideline for a purchasing manager. It provides great convenience in load capacity, transportation cost and logistics planning. Thanks to the standardization of TEU, inventory control and order tracking become more transparent. Useful Links International Shipping Organization (IMO) International transport organizations: https://en.wikipedia.org/wiki/Category:International_transport_organizations< /a> My Related Articles JIT - Just In Time JIC - Just In Case ISO 6346 - Container Check Digit Resources Levinson, Marc. "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. Chat Based AI Tools: ChatGPT & BARD Cover photo: Adobe Express

“Reshoring isn't just a trend, it's a wakeup call to companies that money saved by offshoring was money lost in quality, responsiveness, and cultural alignment." - Anonymous What is Reshoring? Reshoring is when a company moves its production processes outside the country back to its home country. History We saw the concept of reshoring especially in the USA during the Trump era; For example: Apple (https://www.youtube.com/watch?v=hRYs4t6rSIk< /a>) Then, it started to raise more awareness with the Pandemic, War and crises in waterways. Opportunities and Risks It can be said to be the same as onshoring. But regarding the risks, the following can also be said: To bring a foreign production into the country, Transfer of production machinery Transfer of qualified personnel Possibility of deterioration of relations in the offshore country etc. Good practices Apple: -- In 2013, it moved production of the Mac Pro to the US so it had closer quality control. -- During the Trump Era, it started to bring some of its production into the country and did not experience any crisis. Adidas: It accelerated the production process and increased quality by opening its automated factories called "Speedfactory" in Germany and the USA. Resources https://www.thomasnet.com/insights/apple-reshoring// https://www.forbes.com/sites/timworstall/2016/05/30/more-jobs-not-coming-back-adidas-and-the-robot- shoe-making-factory/ Cover photo: https://info.crescentind.com/blog/reshoring-for-plastic-injection-molding-projects