Stock management is like a balance board; too little is dangerous, too much is costly." - Anonymous Definition Safety Stock is a type of extra stock held in situations where regular uncertainty in the supply of goods is likely to lead to risks. Safety Stock is a stock type that is added to the Minimum Stock for items kept in Minimum Stock and cannot be considered separately. Pandemic and war situations have demonstrated the importance of Safety Stock in practice. Opportunities / Benefits It reduces the risk of production disruption as it prevents stock-out. Whiplash Effect caused by demand fluctuations reduces . Since it reduces urgent purchases, it prevents purchase costs from increasing. Since it creates larger purchase packages, it provides relatively more price economy. Since it contributes to the continuation of production, it supports competition. It indirectly supports brand reputation as it ensures that production is not interrupted. Risks Increases inventory holding costs. It brings opportunity cost in finance. It may increase losses in short-lived products. It may lead to numbness and blindness in the Supply Chain. Cover photo: https://www.anylogistix.com/features/safety-stock-in-supply-chain-management/

Total Cost of Ownership refers to the sum of the costs incurred by a product or service throughout its lifetime. TCO was first used in the IT sector in the 1980s and was later adopted in other sectors. Direct and indirect additional costs are often ignored when purchasing. This may bring temporary satisfaction with false information. However, correct decisions can only be made in the long term with Total Cost of Ownership Analysis. When calculating the Total Cost of Ownership, the following items must be added in addition to the Initial Purchase Cost; 1. Pre-purchase costs Portfolio work On-site inspection Sample run Contract process 2. Purchasing process costs Initial purchase price Financing cost Shipping cost (International/domestic) Shipping insurance cost Customs fee Certificate / Passport fee Cost of on-site quality control during the production process Cost of expected time for delivery 3. Post-purchase costs (Time until use) Preservation costs -- If the material in question has not arrived in the required packaging conditions The cost of returning damaged products and the resulting time without materials VAT etc. incurred due to missing or incorrect documents. additional taxes* Additional labor and equipment costs incurred during unloading as a result of inadequate packaging or incorrect loading Physical cost of keeping in stock Financing cost of holding in stock Waste due to expiration dates 4. Costs incurred during use Additional consumption compared to its equivalent Additional manufacturing costs compared to equivalent -- Length of time for paint to dry -- The obligation to be more meticulous and to have technical personnel compared to its counterpart Delay in work and loss of reputation in the eyes of the employer due to more damage/failure than expected due to insufficient quality Spare parts consumption Maintenance and Approval cost Energy consumption License and Subscription Training and Adaptation/Orientation Software update Operation and Support Residual value Renewal Resources Total Cost of Ownership: How it's calculated with Example What is total cost of ownership (TCO)? Chat Based AI Tool – ChatGPT Chat Based AI Tool - BARD Photo: https:/ /www.3stepit.com/blog/what-is-total-cost-of-ownership

In the dance of global business, trust is the rhythm, and friendship is the choreography." -Linda Matheson Definition Friendship, whose origins go back to the beginning of trade, means having business relations with the close circle. History Since the first years of trade, all merchants have preferred to do business primarily with people in their immediate circle, for security and other reasons. This approach, which is in practice with globalization, has found its place in theory as Firendshoring. If we consider that the way of doing business in trade is not only based on costs but also includes business relationships and trust, we can define Friendshoring better. The article covers procurement processes, but also covers Firendshoring service procurement. Benefits for Material / Service Procurement Processes Less Risk: Potential risks are reduced because friendships often create a deeper understanding and trust between supplier and buyer. More Collaboration: This approach enables a higher level of collaboration between supplier and buyer, which can help make processes more efficient and effective. The Power of Personal Relationships: Personal relationships can help the supplier and buyer better understand their needs, expectations and concerns. In addition, using close relationships at difficult points can speed up the solution of problems. Opportunities Strengthening Relationships: Friendship creates strong relationships between suppliers and buyers that are not only business-oriented but also based on personal foundations. This allows both parties to better understand their needs, expectations, and concerns. Flexibility: As a result of mutual trust, suppliers tend to be more flexible in friendshoring relationships. This situation causes demand fluctuations (Bullwhip Effect) or may increase the capacity to respond quickly to unexpected situations. Better Pricing: Friendship relationships can often lead to better pricing opportunities. The supplier may be inclined to offer more competitive prices when he knows the buyer is a loyal customer (The opposite is also possible). Faster Problem Solving:When problems arise, a faster and more effective problem-solving process is often expected thanks to strong relationships. Sharing Sensitive Information: Particularly sensitive information sharing between supplier and buyer may be more frequent and open. This could allow both parties to gain an advantage in the market. Long-Term Collaboration: Friendshoring requires long-term collaboration. In this way, it can create synergy by enabling institutions to be more open and helpful to each other. Risk Reduction: Since Friendshoring's infrastructure is based on close relationships, it can be more resistant to problems that may occur in the market. Since both parties tend to be more transparent towards each other, possible risks can be more easily predicted and managed (Supply Chain Visibility) Increasing Brand Reputation: Friendship relationships can increase a company's brand value and reputation. A strong relationship with the supplier supports commitments to quality, reliability and sustainability. Access to Global Markets: Friendshoring allows companies to operate more effectively in global markets. Particularly for companies looking to enter new markets, this means access to local knowledge and expertise. Risks Overdependence: Friendshoring can lead to over-dependence on the supplier. If the supply is disrupted for any reason, this may cause serious problems for the buyer. Mixed Business and Personal Relationships: Having business and personal relationships within the same framework may cause loss of professionalism and objective perspective. Loss of Flexibility:In some cases, a close relationship with one supplier can weaken relationships with other potential suppliers and limit the buyer's flexibility. Pricing Issues: Mutual proximity can lead to transparent and competitive pricing being overlooked. This may lead to higher prices without being noticed. Confidentiality and Intellectual Property: Close relationships can lead to blurred boundaries regarding privacy and intellectual property issues. In other words, an advantage can turn into a disadvantage. Emotional Decisions: The intertwining of business and personal relationships may cause emotional decisions to be made. This close relationship, which may seem advantageous at first, can actually cause problems to begin. Lack of Development and Innovation: By constantly working with the same supplier, the buyer may limit its access to new technologies, products or services in the market (See. Keiretsu / Carlos Ghosn – 1999 Nissan Rivival Plan). Cultural and Ethical Differences: Although both parties are close, differences in cultural and ethical values can cause disagreements. Conflict of Interest: Conflicts of interest may occur between business and personal relationships, which can cause much bigger problems in the long run. At this point, it should not be overlooked that sharing sensitive information due to the close relationship of institutions will further aggravate the consequences of the problems. Friendshoring vs. Onshoring Conclusion Friendshoring is not only a purchasing strategy, but also a method of establishing long-term and sustainable relationships in the supply chain. However, Friendshoring is far from being a corporate approach. Because it carries serious risks, institutional approaches should not be abandoned due to the blindness that trust will create. Resources https://scholar.google.com .tr/scholar?hl=en&as_sdt=0%2C5&as_vis=1&q=friendshoring&btnG= https://hbr.org/ 2020/09/global-supply-chains-in-a-post-pandemic-world https://en.wikipedia.org/wiki/Friendshoring# https://www.weforum.org/agenda /2023/02/friendshoring-global-trade-buzzwords/ https://www.nytimes.com/ 2022/11/18/business/friendshoring-jargon-business.html https://www.theguardian.com/business/2022/aug/06/friendshoring-what-is-it-and-can-it-solve-our-supply-problems https://www.bloomberg.com/news/articles/2023-09-11/-friend-shoring-is-a-us-trade-policy-that- s-good-news-for-india-vietnam https: //www.ecb.europa.eu/pub/economic-bulletin/focus/2023/html/ecb.ebbox202302_03~d4063f8791.en.html https://www.csis.org/analysis/limits-friend-shoring< /a> Chat Based AI Tools: ChatGPT & BARD Photo: Adobe Express < /p>

Definition: Kaizen, a term signifying Continuous Improvement, finds its origin in two Japanese words: Change: Kai Good/Better: Zen Brief History: Post-World War II Era: The philosophy of Kaizen, ingrained in Japanese work culture, primarily surfaced following World War II, marking Japan's industrial ascent. W. Edwards Deming's Influence: Post the war, American statistician and Quality Control Expert W. Edwards Deming significantly influenced Kaizen's evolution via his seminars on Total Quality Management (TQM) in Japan. Toyota's Adaptation: During the 1950s, Toyota Production System (TPS) emerged, rooted in Kaizen principles. Spearheaded by Taiichi Ohno, TPS ardently championed the tenets of "Continuous Improvement" and "Eliminating Waste." Global Recognition: The late 1980s saw the global acknowledgment of Kaizen, thanks to Masaaki Imai's pivotal work, "Kaizen: The Key to Japan's Competitive Success". This book elucidates Kaizen's foundational principles and their application in Japanese enterprises. Application in Purchasing: Supplier Performance: Adopting a continuous improvement perspective to incessantly evaluate and enhance supplier performance, thereby streamlining supplier management. Efficient Procurement: By standardizing processes, delays and errors are minimized, paving the way for swifter procurement procedures. Simplified Records: Process standardization facilitates an uncomplicated and rapid access system for records. Stock Optimization: Ensuring materials are ordered 'just-in-time', optimizing stock levels. Sustainability: A determined effort to curb waste and superfluous processes ensures a commitment to sustainability. References, https://en.wikipedia.org/wiki/W._Edwards_Deming Bricks Matter: The Role of Supply Chains in Building Market-Driven Differentiation Toyota Production System: Beyond Large-Scale Production Chat Based AI System - ChatGPT Photo: https://express.adobe.com/

Definition Nearshoring refers to moving the business processes (materials and/or services) of the institution to a country/region that is geographically and culturally closer to the point where the institution is located. ​ Main differences between Nearshoring and Offshoring; Especially in some regions within the country, the incentives implemented by the state direct institutions to the Nearshoring approach. In addition, it is an approach also applied in countries with large geographies (China, Russia, USA, India, etc.). ​ Benefits Benefiting from Incentives: It makes it possible to benefit from the incentives applied in the economic development zones created by the countries. Time Savings: Shorter shipping times and the same or similar time frames are ideal for effective collaboration and quick responses. Quality Control: Geographic proximity allows for more stringent monitoring of the production process. Flexibility: Working with a close supplier makes it easier to adapt to sudden changes in production volume or demand. Lower Warehouse Costs: Faster arrival and departure of products, reducing unnecessary inventory costs. Reduction of Global Risks: Producing in nearby regions can be an assurance against possible interruptions or disruptions of the global supply chain. Cultural and Linguistic Compatibility: Because nearby regions often share cultural and linguistic similarities, business processes are less complex and more effective. Low Transportation Costs: Close-distance transportation reduces energy costs and carbon footprint, creating a sustainable supply chain. Ease of Regulation and Compliance: The same or similar legal frameworks facilitate compliance and regulation processes. ​ Risks Capacity Limitations: There may not be sufficient production capacity in nearby areas, which may result in demand not being met. Technological Insufficiency: If the supplier does not have sufficient technological infrastructure, it may negatively affect product quality and delivery time. Political and Economic Instability:A political or economic crisis in nearby areas could threaten your supply chain. Transportation Risks:Although a closer location is advantageous, possible losses, delays or damage during transportation should be taken into consideration. Labor Costs:Labor costs in nearby areas may be higher than in more distant areas. Risk of IP (Intellectual Property) Theft: Insufficient legal regulations for the protection of intellectual property may increase the risk of IP theft. Quality Inconsistency: The quality control mechanisms of close suppliers may not meet your expectations. Regulation and Compliance Risks: There may be norms that must be followed, such as different tax laws and environmental regulations, in nearby regions. ​ Good Practice Examples Nokia: Thanks to its nearshoring strategy, it quickly procured semiconductors from other suppliers, which it could not procure from Philips due to a lightning strike. This fast response time enabled Nokia to maintain its market share. (Ref: The Accident That Ended Ericsson ) Volkswagen (VW): German automobile manufacturer VW reduced logistics costs by creating a supply chain in Poland. As a result, VW increased production efficiency and shortened the spare parts supply period. ​ Related Articles The Accident That Ended Ericsson https: //www.wsj.com/articles/nearshoring-shift-brings-production-hurdles-closer-to-home-6fc418ee https://www.supplychainconnect.com/supply-chain-technology/article/21234607/fusion-worldwide-nearshoring-a-strategic-response-to-the-current- supply-chain-model https://www.scmr.com/article/how_nearshoring_is_shaping_investment_decisions< /u> https://www.supplychainbrain.com/blogs/1-think-tank/post/36745-bringing-the-supply-chain-closer-nearshoring-is-here https://tms-outsource.com/blog/posts/nearshoring / https://www.forbes.com/sites/forbesbusinesscouncil/2023/09/01/the-global-journey-to-nearshoring-a-new-dawn-in-supply -chains/ https://www.mckinsey.com/capabilities/operations/our-insights/to-regionalize-or-not-optimizing-north-american-supply-chains https: //www2.deloitte.com/uk/en/insights/focus/transportation/future-of-transport-industry.html Chat Based AI Tools: ChatGPT & BARD< /u>

Offshoring is a complex issue with no easy answers. It is important to have a clear understanding of the risks and rewards involved before making a decision about whether or not to offshore." - Peter Drucker / Management Consultant Definition The organization's business processes (materials and/or services) are provided from abroad in order to save on labor and/or manufacturing costs. ​ History With the intensification of maritime trade thanks to the development of containerization after the Second World War, it first started in the 1960s when American companies turned to Asia in order to reduce production costs. With the rapid development of the Internet and communication technologies, the concept of offshore has increased its spread since the 1990s. Offhoring, which started with production, later manifested itself in the field of labor (especially in the textile industry). ​ Opportunities Cost Savings: Moving production and business processes to lower-cost regions provides a serious cost advantage. Especially in purchasing processes, this savings means more affordable prices and competitive products. Specialization and Efficiency: Each country has different areas of expertise. Offshoring makes it possible to benefit from these areas of expertise. Thus, business processes can become more efficient and of higher quality. Market Access: It enables companies to access new markets more easily in international production and purchasing processes. This often allows for increased sales volume and expansion of market share. Operational Flexibility: The capacity to operate in different geographies gives companies more flexibility. In this way, it can be quickly adapted to demand changes and market dynamics. Resource Diversity: Resources and materials from different geographies increase the diversity of products and services. This has a particularly positive impact on innovation and product development processes. ​ ​ Risks Quality Control: Offshoring may require extra effort to meet quality standards. While local production can be more easily controlled, offshoring may create difficulties in this regard. Communication Problems:Different time zones, cultural differences and language barriers can make communication difficult. Incorrect or inadequate communication can negatively impact business processes. Delivery and Logistics Issues:When production is outside the country, logistics and delivery processes become more complex. Natural disasters or political crises can negatively impact the supply chain. (For example: Coup, Tsunami, War, etc.) Intellectual Property Risk: Moving production or service processes to another country may make it difficult to protect intellectual property. Extra precautions may be required to protect patents or trade secrets. (For example: The current state of China's automotive industry) Social and Political Risks: Offshoring may have negative effects on the local job market and consumer perception. Loss of local jobs or poor quality products may lead to social backlash. High Initial Costs: Offshoring may require high costs in the initial phase. These costs may not be recovered until business processes stabilize. (For example: Automotive companies that had to leave Russia) ​ Good Practices and Examples Nokia: Nokia established factories in Asian countries in order to control production costs. In this way, it increased its competitiveness. Apple: Apple largely moved its production to China. Thanks to this move, it reduced product costs and gained a more effective position in global markets. Amazon: The world giant E-Commerce platform has significantly reduced labor costs by moving customer services to countries such as the Philippines. Inditex: Thanks to offshoring, it was able to offer cost-effective products in the fashion industry. ​ Differences between Offshoring and Outshoring Conclusion Offshoring stands out as a strategy that increases the competitiveness of companies and provides cost savings, if the above-mentioned Opportunities and Risks are examined correctly. Resources Offshore: Definition, How It Works, Pros and Cons Nearshoring Versus Offshoring: Pros And Cons For Tech Teams Getting Offshoring Right Offshoring - How to ensure success Chat Based AI Tools: ChatGPT & BARD

Definition Material Safety Data Sheets (MSDS) contain detailed information about chemical substances or mixtures. In this form; Topics such as physical, chemical, toxicological properties, first aid measures, fire fighting and environmental effects are discussed. MSDS not only secures purchasing processes in the construction industry, but also reduces costs and facilitates supplier selection. Using MSDS effectively is critical to the long-term success of the business. History It was put into effect by the OSHA (Occupational Safety and Health Administration) of the USA in the 1980s. Although originally created for the chemical industry, it is now widely used by different sectors. ​ Contributions to Purchasing Processes Risk Analysis: Risk profiles of materials to be used in construction projects are determined in advance thanks to MSDS. Supplier Selection: Suppliers can be evaluated based on the quality of the MSDS they provide. Cost Savings: Possible financial burdens are overcome by preventing accidents and health problems. ​ Good Practice Examples Boeing: Digitalized MSDS to understand the interaction of chemical substances. Caterpillar: It integrated MSDS into its supply chain management system and opened it to all its stakeholders. ​ Useful Links https://www.osha.gov/sites/default/ files/publications/OSHA3493QuickCardSafetyDataSheet.pdf

“Onshoring is the new Offshoring.” - The Manufacturer Definition Onshoring is the strategy of resolving the entire production process of an institution within the country to make the supply chain more local and controllable. History Countries like the USA and Europe, especially after World War II, placed great importance on Offshoring for many years. This has developed other countries economically and technologically, leading to an indirect technology transfer. In recent years, the interest in Offshoring has relatively decreased for the following reasons; Regulations Problems in ports Wars New war scenarios Pandemics Coups Problems occurring in sea routes. For instance, during Trump's time in the USA, there was a tendency to pull many productions from abroad into the country. Recently, due to the significant impact of the crisis between China and Taiwan on chip production, the topic of Onshoring has gained even more importance. Opportunities Better quality control Faster response times Quicker delivery times Reduction in inventory costs Contributing to the local economy Better resilience to international crises Improved cooperation Competitive advantage due to time benefit Risks High labor costs Initial investment costs Supplier dependence Local regulatory adaptation problems Lack of skilled workforce The danger of losing the price advantage The problem of putting all eggs in one basket Onshoring vs Nearshoring In Conclusion... Deep-rooted economic and technological changes in recent years indicate that Onshoring will become increasingly important. The above explanations also support this. Of course, providing a one-size-fits-all solution for institutions' operations is impossible. However, it's an approach that should be considered in planning based on the field of activity. Related Articles Broken Supply Chain of Ericsson Offshoring / Outshoring Nearshoring References https://hbr.org/2011/03/how-to-make-onshoring-work https://www.themanufacturer.com/articles/is-onshoring-the-new-offshoring/ https://www.bcg.com/publications/2017/lean-manufacturing-operations-honing-us-manufacturings-competitive-edge https://knowledge-leader.colliers.com/jay-flynncolliers-com/reviving-american-prosperity-the-power-of-onshoring-and-automation/ https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2023/06/21/onshoring-for-a-more-sustainable-and-secure-future/ https://www.wsj.com/articles/nations-aim-to-secure-supply-chains-by-turning-offshoring-into-friend-shoring-11652612580 Chat Based AI Tools: ChatGPT & BARD

It is a strategy created to ensure European Union countries' safe and sustainable access to healthy food. It covers the entire life process from the first formation of foods in the soil to their consumption by humans. Especially with 2020 Covid19 and the 2022 Ukraine-Russia War, we have once again seen how valuable it is to reach healthy food in addition to physical access to food. In addition, in our world, whose population and population density are constantly increasing, the importance of healthy and safe access to food in terms of countries' economic and political security is rising daily. The European Union has implemented the Farm-to-Form (F2F) strategy to minimize the abovementioned risks. The issue here is to ensure sustainable access to healthy food rather than improving food quality. Benefits Freshness and Taste Support local agriculture Environmental sustainability Healthy eating What needs to be done for the success of the strategy; Expanding access to clean water resources. In areas without clean water resources, agricultural and livestock productivity will decrease significantly. Expanding access to low-cost energy. Energy costs are essential inputs for healthy food production. To ensure close cooperation between all stakeholders. Ensuring the fair distribution of the benefit/cost relationship between all the chain links is vital for the continuity of agriculture and livestock activities. To reduce the negative impact on the environment. For sustainability, it is necessary not to damage the soil and water resources. To facilitate adaptation to the effects of climate change. Precautionary measures should be taken against climate changes in the regions. Mitigate the decline of biodiversity Reduction in the number of bees, Loss of water basins, Etc. Increasing food security Increasing traceability (Label, etc.) Prevention of theft and manipulation in Supply Chain processes Reducing economic barriers to access to food. tates to use their political and economic means to reach large masses of essential food products at low prices. Reducing physical barriers to access to food. Global and regional events such as Covid19 and the Ukraine-Russia War have made accessing grain and other essential food products challenging. Protecting the health of the soil and animals. Preventing the use of unhealthy fertilizers Preventing irregular farming Protection of animal health (Mad Cow, bird flu, etc.) Reducing the carbon footprint along the food chain. Reducing the carbon footprint along the supply chain will ensure sustainable food access in countries in the long run. Goals Increasing organic agriculture (to exceed 25% in the EU in 2030) Reducing the use of fertilizers (reduced by 20% in the EU in 2030) Reducing food waste (50% reduction in EU by 2030) Reduction of pesticides (50% reduction in EU by 2030) European Green Deal The Green Deal, a policy initiative proposed by the European Union (EU) and announced in 2019, reflects the EU's commitment to tackling climate change and transitioning to a sustainable economy. It aims to encourage the EU to be carbon neutral by 2050 and promote economic growth and environmental sustainability. Green Alliance Established in 1979, the Green Alliance is a UK-based environmental think tank that works to improve UK environmental policies and promote policy change for a sustainable future. Researches the environment and sustainability, Provides policy recommendations, It raises public awareness. The organization aims to understand environmental issues better and produce solutions by promoting cooperation and dialogue between the public sector, businesses, and civil society. Negatives High costs of processes. Decreased yield compared to traditional agriculture. Strategy faces trade barriers as the EU aims to reduce imports. Inability of small-scale manufacturers to meet the requirements of the system. Problems arising from the necessity of a healthy operation of the supply chain. References Farm to Fork Strategy (europa.eu) From farm to fork - Consilium (europa.eu) EU Farm to Fork - EUROPARC Federation A European Green Deal (europa.eu) A guide to the Farm-to-Fork Strategy: a Sustainable Food System for the European Union - H-alo Investing from farm to fork | Ravenscroft (ravenscroftgroup.com)

E-RFQ Enables to receive price offers in an electronic environment instead of via mail or printed media. In this method, suppliers enter their offers; On their own, In an electronic environment, From their office, From the ERP login screens given to them. Its main advantages are; Shorter processing time Transparency, Keeping personal relationships in the background Possibility of retrospective follow-up, Collecting supplier behavior information. Great preparation for E-Auction, Etc. The main challenges are; It takes time for the purchasing personnel to keep up with the change, Lack of faith due to being different from classical purchasing processes, Some suppliers are not technically ready to enter bids electronically, Etc.

It is the method in which the following benefits are provided by making the purchases made by the companies through the tender procedure via an electronic environment. Shorter processing time, Transparency, Independence from personal relationships, Profit maximization, Giving the supplier trust. The main challenges are; It is necessary to ensure the trust of the suppliers in the system, Requires prior training of suppliers, Obligation to have experienced personnel to manage the tender, Lack of belief (A belief that I can negotiate better) because it is different from classical purchasing processes, The common law of purchasing from the winning firm. The main types of electronic tenders; Dutch Type British Type Japanese Type Yankee Type Brazilian Type

It is an analysis technique used in cases where price and supply change seasonally. It is mainly used in the supply of raw materials and semi-finished products. S: Season > Easy to source and low prices OS: Off-Season > Difficult to supply and high prices Advantages; Allows pre-season preparation Reduces the risk of being out-of-stock Increases the opportunity to buy at a lower price Provides decision support in long-term stocking strategies Disadvantages; May increase inventory holding costs Can bring a financial burden References; https://www.slideshare.net/Sam8237/analysis-of-invetory-control-techniques-72197233