ReOrder Point, an element of Minimum Stock tracking in Stock Management, is the order trigger point indicating at which stock level the material that should be in stock will be reordered. This trigger level, updated periodically according to usage, is calculated by considering the Lead Time and the EOQ - Economic Order Quantity. ReOrder Point = Average daily consumption x Delivery Time (days) Product= Electrode 15 kg (Average Daily Consumption) x 21 Calendar days = 315 kg Order Trigger Point Economic Order Quantity = 200 kg 315 kg / 200 kg = 1,575 => 2 1,575 => 2 2 x 200 kg = 400 kg EOQ Accounted order quantity

Visual (Kan) - Card (Ban) The Kanban Card, a transparent and efficient visual card system that does not need software and has become the backbone of inventory management in the Toyota Production System (TPS), introduced by Taichi Ohno in the 1940s, is used in different fields by constantly improving itself. This system, which remained undetected by other manufacturers for many years, attracted the attention of other manufacturers after Toyota announced its details and benefits. Today, the Kanban Card, which finds its use in many different business areas, from management to the IT sector, has also inspired many other business tracking systems. Some benefits; No need for software thanks to tracking on paper Provides visualization of current stock status and/or business process Facilitating the recognition of inert products thanks to the visualized stock Focus on continuous replenishment Increases teamwork See Also: JIT - Just-In-Time & Material Coding System References https://kanbanize.com/kanban-resources/getting-started/what-is-kanban-card https://levstal.com/news/advantages-of-using-the-kanban-system/

Procurement is one of the most essential strategic responsibilities of a company. Because companies have to make purchases to produce goods and services that will meet customer needs. Procurement constitutes a large part of the monetary expenditures of many firms. For example, approximately 60% of the costs in industrial enterprises are materials. After all, there are responsibilities carried by the departments that carry out purchasing activities, which are so important. These responsibilities are brief; Determination and evaluation of the goods and service resources that the company needs Ensuring good business relations with these resources on quality, delivery, payment, and replacement Research and evaluation of new materials, products, and potential resources Purchasing the material required for the company at the best price by the quality requirements Establishing and maintaining effective communication between departments within the company, with suppliers and potential suppliers outside the company Informing the top management about the cost of company acquisitions, changes that will affect the company's profit and market share Cost reduction programs, value analysis, “buy or produce” studies, and market research Just-in-time purchasing philosophy; It is defined as the receipt of high-quality products from a small number of vendors in small quantities and exactly when needed to achieve the goals of “zero stock” and “zero defect.” In this context, it is necessary to thoroughly review the buyer-seller relations and regulate them in line with new principles. Just-in-time purchasing philosophy; It identifies inventories as the most crucial waste item, as they both cause high costs and hide the sources of inadequacy. For this reason, it has been adopted as a continuous goal to reduce stocks within the framework of just-in-time purchasing. Reducing stocks in a production inventory system can only be achieved by eliminating the reasons for stock holding. Holding stocks means tying money and capital to reserves. For this reason, companies want to allocate as little capital as possible by keeping less stock. So they try to use the money and funds elsewhere. However, it is also necessary for the company to have sufficient stock in order not to disrupt its production and marketing functions. Therefore, a balance should be established in stock management. Factors affecting stocks in Businesses; A. Factors affecting raw material stock B. Factors affecting the stock of semi-finished products C. Factors affecting product stock A. Factors affecting raw material stock; 1. The amount of raw material planned to be produced. The stock will also increase as the planned quantity of finished goods increases. 2. The seasonality of raw material supply. In some seasons, the stock of raw materials will increase. 3. Minimum stock quantity. The need to keep production to avoid being interrupted in future periods due to lack of raw materials. 4. Large purchases sometimes allow companies to save significant amounts of money. For example, large purchases provide significant discounts or savings on transportation costs. 5. Expectations about raw material prices. The probability of a price decrease causes less raw material stock, and the likelihood of a price increase causes more raw material stock. 6. Efficiency in internal purchasing and stock control affects the raw material stock positively or negatively. 7. Raw material durability time 8. Cost of holding stock 9. The breadth and cost of financial opportunities 10. Storage capacity of the enterprise B. Factors affecting the stock of semi-finished products; 1. The technical nature of the manufacturing process and the length of its duration. The longer the manufacturing process, the higher the stock of semi-finished products. 2. Added values created during manufacturing. As the added value created grows, the stock of semi-finished products increases. 3. Continuity of production activity. Disruption of the continuity of production activity increases the stock of semi-finished products. 4. Production quantity. As the amount of production increases, the stock of semi-finished products also increases. C. Factors affecting product stock; 1. Sales volume: It is directly proportional in the long run. It is about organizing production according to sales in the short run. 2. Seasonality of demand: Stocks increase when demand is stagnant and decrease when demand is lively. 3. Seasonality of raw material purchase: Production must increase significantly during the raw material purchase season. This increases the stock of finished goods. 4. Competition conditions in the market: Intense competition increases the amount of product stock. 5. Number and dispersion of sales regions: As sales regions increase, product stock increases. 6. Production to order or for the market: In make-to-order production, there is little need for a stock of finished goods. Businesses producing for the market need finished goods stock. 7. The product's physical characteristics and the risk of keeping stock: Risks such as deterioration, fashion, and price drop create a tendency to keep less stock. 8. Production variety: As production variety increases, product stocks also increase. 9. The cost of keeping stock and the firm's financing possibilities: As the cost increases and the financing possibilities narrow, the stock of finished goods to be held decreases. 10. Storage possibilities of the business: As the storage possibilities narrow, the stock of products decreases. Seven types of waste that do not create value in a business process (Nebol, et al., 2014 January p. 76); 1. Overproduction 2. Waiting time 3. Transport 4. Transaction processes 5. Stock 6. Movement 7. Fires A forward point of this is JIT 2. At this point, an official from the supplier is positioned at the customer's location to collect the relevant orders (Nebol, et al., 2014 Jan. p. 107). The customer transfers the responsibility of being out of stock entirely to the supplier. Some benefits of Just-in-Time; Significantly reduce additional stocking costs due to idle stock Minimizing financing opportunity costs due to idle stock Prevention of damage caused by relatively long stock holding and exhaustion of performance life Revealing hidden errors and deficiencies in processes Supporting the continuity of quality improvement processes Developing supplier relationships Reducing production errors by improving processes References Nebol, Erdal, Uslu, Tanyeri ve Uzel, Ezgi. 2014 Ocak. Tedarik Zinciri ve Lojistik Yönetimi. 3. İstanbul : Beta Basım A.Ş., 2014 Ocak. s. 372. ISBN 978-605-377-055-4.

LOT Number = Party Number With the logic of induction, it is a kind of identification number that reveals which lot a product is a part of. It allows traceability retrospectively by being processed at an appropriate point on the product or package. When there is a problem with the product, other products coming out of the same production line/line/pot can be checked or collected when necessary. Some areas where it benefits; Filtering problematic product lots facilitates recalls due to production errors. It facilitates the collection of faulty products, especially food and health products, from the market and users. It allows to reduce the number of samples in quality control applications. Supports production cost calculations. References https://www.finaleinventory.com/product-news/why-is-a-lot-number-important

P(O)LT Purchasing (Order) Lead Time = Purchasing Flow Time Order Delivery Date - Material Order date = Purchase Flow Time The time to receive the order is opened by the relevant group. Although it varies on a sectoral basis, the general processes are; Order confirmation Bid collection Tender (if there is no Institutional Agreement) Contract (if not available) Payment confirmation Payment Production Foreign Logistics Handling Quality control Internal Logistics etc. Ways to shorten the Purchasing Flow Time; Development of stock tracking systems Simplification of procedures Establishment of decision support systems to anticipate seasonal needs Automation of orders by including them in the Minimum Stock system Preventing orders from opening on weekends (An order opened on Friday can only be processed on Monday.) Reducing the number of transactions thanks to order consolidation Developing the supplier portfolio by category Improving communication with suppliers Ultimately, looking at the process as a whole, carefully overhauling all stages, and carefully evaluating the feedback to be received from internal and external stakeholders in this process (Using people's brains, not just their hands) References https://www.investopedia.com/terms/p/purchase-order-lead-time.asp

Stock Keeping Unit / Stock Code / Material Code Inventory Code, the backbone of Inventory Management, is a unique material identification tool consisting of AlphaNumeric characters, created by going down to the details of each product. Sometimes it's the car itself, and sometimes its smallest bolt. Although it varies from company to company and from industry to industry, the general trend is to go down to the details that need to be followed. These character sequences, which seem meaningless when you read them, become a vital language in the background. Benefits; Especially in the production and sales sector, it enables or accelerates stock management at an incomparable level. Enabling stock and finance predictability by tracking seasonal activity and trend Facilitating the coexistence of conjugate and complementary products It provides convenience in determining the stock location Enables customer behavior analysis Supporting fast response times by providing automation Making it easier to avoid out of stock etc. See Also: Material Coding System References https://www.thebalancesmb.com/what-is-a-sku-in-retail-terms-2890158

SDE Analysis, consisting of the initials Scarce, Difficult, Easy, is an inventory analysis technique that classifies products according to availability. S: Scarce > Scarce resource / No fixed production => Kraljic: Strategic and Critical D: Difficult > Difficult / Long lead time => Kraljic: Strategic, Critical, Leverage E: Easy > Easy to find / Short lead time => Kraljic: Routine and Leverage Some features of hard-to-find products; Products subject to government inspection Imported products Scarce resources High-tech products Products that take a relatively significant time to produce Critical machinery/equipment spare parts Advantages; By providing forward-looking planning, motivates to make a long-term supply plan. It creates sensitivity against possible supply problems, thanks to tracking products with supply time problems. References https://www.linkedin.com/pulse/fsn-ved-vs-hml-sde-analysis-santhosh-patil/ https://www.slideshare.net/Sam8237/analysis-of-invetory-control-techniques-72197233

General Description JIC Is a version of JIT that is more ready for possibilities. In addition to JIT, it aims to reduce the risk of being out of stock by keeping more stocks on certain products. All businesses, especially manufacturers, who dedicate a significant part of their capital and physical areas to stock keeping, have achieved considerable cost advantages thanks to JIT led by Toyota. These advantages, which last for years, are about to be replaced because, - 2020 Covid-19, - 2021 Evergreen event, - 2022 Russia-Ukraine War, - 2023 Possibility of Chinese invasion of Taiwan, by a kind of hybrid solution. The emerging understanding here is JIC. JIC is not a substitute for JIT, but rather represents a gray area between Push and Pull, which is integrated into it. We can also think of it like this; - ProActive instead of ReActive - Flexibility over Efficiency Of course, just like in JIT, Supply Chain Visibility is critical here. If there is a deficiency in this regard, JIC can cover this problem with increased inventory, but it will also make the return to JIT more expensive. However, applying JIC to specific product groups may be possible rather than to all products. In this way, additional costs will be reduced to some extent. To be successful in JIC, studies should be done on the following topics; - Researching alternatives - Incorporation of new suppliers into the system instead of Off-Shore, on the same continent and, if possible, in closer geography where political and political problems will not occur) - Reducing the number of suppliers in places where natural disasters occur frequently - Keeping potential problem areas under constant observation - Creating the infrastructure that can react quickly when possibilities or sudden problems occur - To increase the Minimum Stock Levels (ReOrder Point) within the framework of specific analyses - To be sensitive not only to market dynamics, but also to political dynamics and public health issues. - Making the ERP System compatible with the JIT / JIC system on a product basis Advantages; - Gaining an asymmetric advantage in the market as a result of faster response to sudden supply problems - Reducing the financial losses at this point by reducing the out-of-stock ratios Disadvantages; - Relatively higher inventory costs compared to JIT - Increased opportunity cost as financing is tied to stocks - Possibility of holding unused stock In summary... Especially in recent years when maps and units are trying to be updated, JIC must be evaluated. As in the case of The Broken Supply Chain of Ericsson, while the painful examples of what supply shortages cause are still in our memory and the problems that may be caused by chip production in Thailand in the coming years remain fresh, it is evident that it is essential to address this issue. Recently, major manufacturers, especially Ford and GM, have started implementing the JIC approach in their offshore products. References · The New Supply Chain Mindset: From Just-in-Time to Just-In Case | SupplyChainBrain · Just-in-Time vs Just-in-Case: Choosing the Right Strategy | NetSuite

“You cannot overestimate the unimportance of practically everything.” (John C. Maxwell) When we know that every decision in our life does not have the same payoff, every minute has the same importance, and not every person has the same value, we cannot discuss a general 1/1 balance. The 80-20 Rule; Vilfredo Pareto, an Italian-born civil engineer from a middle-class family (1848 France-Paris – 1923 Switzerland-Genoa), in research he conducted in 1897 on income inequality observed; According to a source, In England, 80% of the economy is controlled by 20% of the people [2], According to another source, 80% of the land in Italy belongs to 20% of the people, 20% of the peas in the garden give 80% of the crop, He discovers that there can be a mathematical link between the "significant minority" and the "insignificant majority." And he publishes this work in his article "Cours d'Economie Politique" [3]. His article received little attention for a long time. In 1907, the American economist Max Otto Lorenz supported the income imbalance with the Lorenz Chart, which bears his name, and provided a visual understanding of the analysis. In 1950, Joseph Moses Juran created the mathematical model of the 80-20 rule with the logic of "Separating the vital few from the trivial many". Joseph Duran personally names the model Pareto and applies this model to the Supply Chain. The Vital Few / The Skilled Minority: Few resources explaining much of the problem The Useful Many: A massive amount of resources explaining a small part of the problem. Based on the principle that every event does not have an equal effect, the Pareto model was noticed by the world after the 2nd world War (I could not find the reason). Although the 80-20 Rule, which argues that the unbalanced ratio between causes and effects is inevitable, was later differentiated by 64-4 (Richard Koch and Perry Marshall's comments) or 50-1 rules, the general trend is concentrated around 80-20. The Pareto chart is also one of the 7 Basic Tools of Quality Control [5]. 1. Check sheet 2. Control chart 3. Stratification (Flow Chart / Run Chart) 4. Pareto chart 5. Histogram 6. Cause-and-effect diagram (Fishbone Diagram / Ishikawa Diagram) 7. Scatter diagram The Pareto rule, which ensures that the causes of a problem are ranked in order of importance, is divided into three groups; 1. Group A: 80% of the results, 20% of the causes 2. Group B: 15% of the results, 30% of the causes 3. Group C: 5% of the results, 50% of the causes Application Steps; 1. The problem or purpose is determined. 2. Root causes are listed. Tools to be used; 5 Times Why [6] Fishbone Diagram / Ishikawa Diagram Kök Sebep Analizi / Root Cause Analysis 3. The criterion to be measured is determined by SMART logic; Specific Measurable Assignable Realistic Time-Related 4. The unit of measurement is determined [7]. 5. The measurement period is determined (Time, block, etc.) [8]. 6. Data are collected carefully by creating a checklist [9]. 7. Ensure that enough data is available. 8. Those with a high standard deviation [10] are eliminated. 9. Items close to each other are grouped under categories [7]. 10. Analysis is done with the help of applications such as Excel [11] or Minitab [12] / [13]. 11. A graphic should support the analysis, giving a clearer photograph at first glance. 12. It is evaluated whether the analysis effectively solves the problem by drawing a meaningful conclusion (Brainstorming). 13. Decisions to be taken are determined and implemented [11]. Frequently used fields Time and cost efficiency improvement projects, Supplier segmentation, Prioritization of strategies. Matters needing attention - Historical data Since historical data is taken, the effects of recent updates/innovations may not be visible. For this reason, it should be ensured that the correct range is taken [14]. - Fixed 80-20 implementation It is a symbolic value of 80-20 in terms of the overall average. Pareto does not necessarily have to be 80-20 or give a total of 100. The aim is to grasp the absence of symmetry and clearly distinguish between the insignificant majority and the qualified few. While 90-10 or 70-30 when appropriate, Pareto's Pareto (Repeated / Multilevel) can be taken in necessary cases (For example: 64-4, 51-1) ) - Considering that it would be more beneficial to apply repeated Pareto / Multilevel Pareto A more valid point will likely be reached due to the repeated application of the Pareto process. But, if it is continued repeatedly, the effect goes up to zero. For this reason, the process leading to the root problem should be looked at rather than the number. It is necessary to stand where it is thought that the correct answer has been taken. - Considering 80 in 80-20 as garbage The Pareto rule paints us a picture. It is not correct to eliminate the unnecessary ones in this picture. For example, talking on the phone about efficient time management takes place 80%, but we may need to talk on the phone to do our work. For this reason, it would not be right to make a clear distinction. - Don't focus on the wrong spot The weight of more significant figures than leveraged expenditures in Kraljic Portfolio Analysis [15] can lead to misinterpretation. - Focus on Quantity only Since calculating all of the returns in business and private life quantitatively may lead to erroneous results, it is also necessary to question their quality. Packaging Feedback Timely delivery Etc. - Thinking that it applies to everything It should not be thought that Pareto can be used in every subject. For example, sending e-mails is 80% of efficient time management, but we may need to send e-mails. - Assuming the root problem is found Pareto gives a general framework, not a definitive result. It is the user himself who will comment on the picture in this frame. The difficulties encountered Measurement technology of data [9]. Lack of understanding of how products should be stored [9]. To decide when and how [9]. Some parts of the Pareto Chart come out flat. These categories need to be re-evaluated. In repetitive lists, the need for additional module support to the program or existing program is fed from a constantly updated resource set. Advantages It allows you to eliminate long lists of problems and focus on the main points (Justin Harris). Like cost-based problems, quantitation can yield quick results. Because of the content of the most crucial cause of the problem, it also becomes common to reveal the consequences. Small parts are also separated. Autopsying problems, is a helpful tool in limiting access to errors and thus in preventive use. Processes can be examined with the analysis carried out at regular intervals (Before-After analysis). It allows you to avoid long KPI lists and focus on what matters. Percentages of problems can be easily calculated. Compromise becomes easier, thanks to the fact that it reveals a mathematical result. It saves time and money by shifting the energy to the right points. "Time manages itself if you focus on the most important things (Richard Koch)." In the process of this procedure, it creates a management that will be worked on and authorized, and problems are identified. It helps to create a dynamic list of goals in regular assessments. Opposing views The most interesting opposite view of the Queen of Pareto is that Benito Mussolini, a younger student in 1904, was influenced by Vilfredo Pareto's lectures at the University of Lausanne and turned away from the first Socialism to Elitism during the years he was the leader of Italy. As a result, the right decision was made for the Totalitarian regime. Some real-life paintings We are likely to see the Pareto principle in many different areas of life; 80% of world energy production is consumed by 8% of the country [16]. 80% of Nobel prizes are won by 16% of countries [17]. In 2002, Microsoft stated it could prevent 80% of system crashes by solving 20% of the most reported bugs [18]. Factories employ 23% of the working groups [19]. Warren Buffet owes 90% of his fortune to 10 investments [20]. How to make a Pareto chart in Excel? https://support.office.com/tr-tr/article/pareto-grafi%C4%9Fi-olu%C5%9Fturma-a1512496-6dba-4743-9ab1-df5012972856 https://markamuduru.com/grafik-olusturma7-adimda-excelde-pareto-chart-nasil-hazirlanir/ https://www.youtube.com/watch?v=2UdajrDMjRE&feature=emb_logo References [1] "Pareto Principle," [Online]. Available: https://marketbusinessnews.com/financial-glossary/pareto-principle/. [Accessed 02 2020]. [2] "Vilfredo Pareto," [Online]. Available: https://en.wikipedia.org/wiki/Vilfredo_Pareto. [3] V. Pareto, "The New Theories of Economics," vol. 1, no. 1, 1897. [4] «Pareto,» [Çevrimiçi]. Available: https://onedio.com/haber/garip-bir-sekilde-yasamin-her-alanina-sirayet-eden-ilginc-prensip-pareto-ilkesi-704658. [Erişildi: 02 2020]. [5] "7 Basic tools of quality," [Online]. Available: https://en.wikipedia.org/wiki/Seven_basic_tools_of_quality. [6] S. Onat, «Kalite Kontrol,» 28 04 2016. [Çevrimiçi]. Available: https://www.sedatonat.com/post/kalite-kontrol. [Erişildi: 29 08 2020]. [7] E. Canpolat, «Pareto Analizi Nedir?,» Cilt %1 / %2-, no. -, 2019. [8] S. Alamehmet, «Pareto Analizi / Blogcu,» [Çevrimiçi]. Available: http://enm.blogcu.com/pareto-analizi/9375819. [Erişildi: 02 02 2020]. [9] G. Briscoe, "Pareto Analysis (the 80:20 rule)," [Online]. Available: https://www.managers-net.com/paretoanalysis.html. [Accessed 02 2020]. [10] "Standart Sapma," [Online]. Available: https://tr.wikipedia.org/wiki/Standart_sapma. [Accessed 29 08 2020]. [11] U. Erdemir, «Pareto Analizi,» [Çevrimiçi]. Available: http://paretoanalizi.blogspot.com/. [Erişildi: 2 February 2020]. [12] M. Parker, "How to Run a Pareto Chart in Minitab," [Online]. Available: https://www.leansigmacorporation.com/how-to-run-pareto-chart-in-minitab/. [Accessed 02 02 2020]. [13] D. Doğan, «Minitab Eğitimleri / Pareto Analizi,» [Çevrimiçi]. Available: https://duygudogan.wordpress.com/2018/10/13/minitab-egitimleri-12-pareto-analizi/. [Erişildi: 2 February 2020]. [14] "Pareto Analysis / Colorado DOT," [Online]. Available: https://www.codot.gov/business/process-improvement/self-service/tools/solve-guide/part4/pareto-analysis. [Accessed 02 02-Feb 2020]. [15] S. Onat, «Kraljic Portföy Analizi,» 19 09 2016. [Çevrimiçi]. Available: https://www.sedatonat.com/post/kraljic-portfoy-analizi. [Erişildi: 29 08 2020]. [16] "List of countries by electricity consumption," [Online]. Available: https://en.wikipedia.org/wiki/List_of_countries_by_electricity_consumption. [Accessed 01 09 2020]. [17] "List of Nobel laureates by country," [Online]. Available: https://en.wikipedia.org/wiki/List_of_Nobel_laureates_by_country. [Accessed 01 09 2020]. [18] "Microsoft's CEO: 80-20 Rule Applies To Bugs, Not Just Features," [Online]. Available: https://www.crn.com/news/security/18821726/microsofts-ceo-80-20-rule-applies-to-bugs-not-just-features.htm. [Accessed 01 09 2020]. [19] "Employement in industry," [Online]. Available: https://data.worldbank.org/indicator/SL.IND.EMPL.ZS. [Accessed 04 09 2020]. [20] "Is Warren Buffett's 90/10 Asset Allocation Sound?," [Online]. Available: https://www.investopedia.com/articles/personal-finance/121815/buffetts-9010-asset-allocation-sound.asp. [Accessed 05 09 2020].

General expression Before entering Kraljic Portfolio Analysis, we need to consider supplier relationships. Due to the fact that supplier relationships are arranged with the perspective of “price reduction” instead of “ adding value “ [1] in general, the preferred approach is based on to be dominant, being in the driver’s seat in the face of the supplier. Here, which provides the opportunity to become dominant is the enthusiasm of the supplier. The eagerness of the supplier is important. Because, thus, important advantages are gained over issues such as ; A contract in better conditions, Purchase at a more affordable price, A shorter length of term While it is difficult to find enthusiastic suppliers in low-budget purchases, this difficulty is relatively overcome in midsize-budget purchases. Low and midsize -budget purchases lead to the danger of “putting all the eggs in the same basket” because of the large purchase packages created for enthusiastic suppliers [1]. Besides, managing hundreds of suppliers, thousands of product kinds and tens of bill payments requires a very different approach. Besides, by virtue of intensive possibilities that the globalizing world provides for the supply of raw materials, semi-finished and finished products, goods now can be easily procured from very different and remote locations of the world. Moreover, competition conditions, becoming more difficult, also oblige companies to do that. This situation leads to many geographical, political and economical uncertainties. In addition to all of these, since the logic that suppliers are considered as business partners rather than competitors, will add not only a great value for company especially through knowledge sharing and experience share that it will provide in strategic and critical product/service groups but also will provide many problems to be solved before occurrence; it will also provide plenty of time for issues that need to be focused on. Effective portfolio analysis is very useful in overcoming these and similar problems. With portfolio analysis, suppliers are divided into groups according to their importance levels. Thus, as well as due importance is given to strategic suppliers, the only required time is allocated to routine purchasing suppliers, thereby allowing to focus on the right point [2]. Pareto analysis is usually used in portfolio analysis. However, Pareto analysis prioritizes groups with sorting based on the size of the purchase amount. Therefore, it is not a strategic approach. Because, “Strategic product” suppliers can be included among the C group suppliers whom too little interest are shown, and most likely they go unnoticed. For example, “spare part” is a low-amount purchase, but has vital importance for critical equipment in the enterprise (production band, generator, crane, etc.). For this reason, with only Pareto analysis, grouping suppliers on the basis of their portfolios is not enough, furthermore, it is dangerous [3]. Kraljic Method Peter Kraljic, for this purpose, delivered a new solution for this issue in the article entitled “Purchasing Must Become Supply Management” that he prepared for the Harvard Business Review in 1983 https://hbr.org/1983/09/purchasing-must-become-supply-management). The analysis in question consists of the dimensions of Profit impact (size of purchase volume) and of Supply Risk (supplier dependency rate). Figure 1 – Kraljic Portfolio Analysis Chart (Picture: https://www.pool4tool.com/procurementworld/practices-can-be-best-only-in-a-certain-context/ ) Kraljic has 5 main ideas; The strategy should not solely consist of price reduction-aimed negotiations (Leverage group) Different strategies should be developed for different supplier categories Like opportunity/cost, risk also should be defined. Besides “Suppliers”, “Product categories” and “Purchase amounts”; “Goods market” should also be taken into consideration, Value chains and risk situations should be questioned. Kraljic argues that in addition to the Pareto analysis, procurement importance should also be assessed in supplier classification. The factors determining procurement importance; Added value Strategic importance Total cost Profit contribution Kraljic grouped portfolio analysis under four categories in light of aforementioned his ideas; 1- Routine, non-critical material (Low risk, purchase in low amount) Product group features; Having standard qualifications, readily available, substitutable Low added value Low amount and low profit-induced. For example; Cleaning materials, scraps, stationery, etc. Strategy to be implemented; Create a medium-term estimated demand plan Create order packages for optimal price advantage (larger / smaller) Reduce safety stock [5] Focus on systems such as Vendor Managed Inventory (VMI) or consignee purchase. Prefer suppliers that allow purchasing online, and if possible delegate purchases, you, only control them Investigate productivity-enhancing opportunities to reduce the loss of operation time before and after the order process. Decision-making authority level [4] Purchaser (Low level) 2- Leverage (Low risk, purchase in high quantity) Product group features; Having standard qualifications, readily available, substitutable Low added value High amount and high profit-induced For example; Concrete, metallurgy products, foodstuffs, etc. Strategy to be implemented; Create long-term estimated demand plan [4] Create order packages for optimal price advantage (larger / smaller) Reduce safety stock [5] Focus on systems such as Vendor Managed Inventory (VMI) or consignee purchase. Investigate productivity-enhancing opportunities to reduce the loss of operation time before and after the order process. Prioritize the profit objection [6] Make use of the scale economy (If there is no central procurement, seek the way of combining orders with all other units) [7] Seek for a replacement product Perform market research at regular intervals Decision-making authority level [4] Purchasing Department Manager (Top level) 3- Critical (High risk, Purchase in low quantity) Product group features; Certified Unique, specific, hard to find, rarely available alternative High added value Low amount and low profit-induced Supplier/service provider with strong references For example; Equipment spare parts, special service purchases, custom made materials, etc. Strategy to be implemented; Create medium and long-term estimated demand plan Make medium or long term contracts Investigate all potential suppliers in the market in detail [4] Establish a strong relationship with the supplier Consider safety stock enhancement [5] Decision-making authority level [4] Purchase Team Leader / Chief (Second level) 4- Strategic (High Risk, High Purchase Amount) Product group features; Certified Unique, specific, hard to find, rarely available alternative High added value High amount and high profit-induced Supplier/service provider with strong references Large-scale supplier/service provider For example; Raw material, production band, generator, transformer, curtain wall, etc. Strategy to be implemented; Create long-term estimated demand plan [4] Make long term contracts Investigate all potential suppliers in the market in detail [4] Increase cooperation with a supplier (such as a partnership) [6] Listen to supplier’s creative ideas Develop a performance-based relationship and if necessary, help to improve the supplier’s performance [6] Consider safety stock enhancement [5] Investigate self-production Keep urgent action plan available against risks such as geographical, political, disaster, accident risks Decision-making authority level [4] Purchase Department Manager or General Manager level (Top level) Table 1 – Kraljic Prototype Analysis Matrix Kraljic Portfolio Analysis Quadrant Pareto Groups Of course, it is necessary to investigate the subject from the viewpoint of a supplier. It is highly probable for a supplier to make a similar evaluation for its customers in the same way. For strategic partnership, both sides should look at each other with the same eyes. It should not be forgotten that the lifestyle of the supplier side is completely different from that of the buyer side [8]. As well as the preparation of supplier portfolio analysis, supplier performance evaluation also has to be performed according to a specific procedure (See: Supplier Performance Evaluations). It is also important to update both the portfolio analysis and the performance evaluation according to a procedure at certain periods. The categories of products will differ by market conditions (Raw material bottlenecks, currency fluctuations, etc.) and the company’s activity area (Manufacturing, energy, housing, etc.). Therefore, it should not be forgotten that portfolio analysis will show a serious change in the current market situation, firm and project basis, and accordingly, an update should definitely be made. It will be very useful to create two different spaces called “Main Product Group” and “Sub Product Group” on the supplier list in order to check that the portfolio analysis is done correctly and also to make subsequent updates easily. (E.g. Main Group: “Metallurgy”, Sub Group: “Carbon Steel” or “Stainless”). Besides, firms operating in more than one sector at the same time will also need to perform such analysis separately on the basis of their field of activity (To give an example from the contracting sector; the construction of both Power Plant and Residence at the same time ). The preparation of this type of portfolio analysis will naturally take a long time. However, with the net portfolio and strategy image to be acquired, the purchasing department will increase its efficiency by focusing on more important issues and suppliers and will gain significant advantages in medium and long term. Kraljic Portfolio Analysis Sample Application The Kraljic Portfolio Analysis application consists of several phases. First of all, all suppliers are grouped as Main Group and Sub Group. This will be very helpful both in decomposition on the activity area basis, and on future updates. If the same supplier has several different product groups (eg: Strategic and Leverage) then the same supplier can be written more than once. (This paragraph is completely optional.) Figure 2 – Main and Subgroups on a product group basis Subsequently, as in Figure 3, the relevant sections are filled out first (“Pareto Group”, “Profit Impact” ve “Approval or Special”), and the result of “Kraljic Group” section is obtained with the following formulation =SWITCH( (“Pareto:“&[@[Kraljic Cr:Pareto Group]]&”, Profit Impact:“&[@[Kraljic Cr:Profit Impact]]&”, Appr or Special:“&[@[Kraljic Cr:Appr or Special]]), “Pareto:A, Profit Impact:Yes, Appr or Special:Yes”,”Strategic“, “Pareto:B, Profit Impact:Yes, Appr or Special:Yes”,”Strategic“, “Pareto:C, Profit Impact:Yes, Appr or Special:Yes”,”Strategic“, “Pareto:B, Profit Impact:No, Appr or Special:Yes”,”Critic“, “Pareto:C, Profit Impact:No, Appr or Special:Yes”,”Critic“, “Pareto:A, Profit Impact:Yes, Appr or Special:No”,”Leverage“, “Pareto:C, Profit Impact:No, Appr or Special:No”,”Routine“, “!!! Control !!!”) Figure 3 – Kraljic Portfolio Analysis Data Entry and Result With the help of the above list, the strategies to be pursued can be followed easily. Besides, optionally, a graph like in Figure 4 can also be created to see the overall situation( The graph was created with Microsoft Power BI). Figure 4 – Kraljic Prototype Analysis Sample References [1] T. Colwell, “How to Select Strategic Supplier – Part1,” 7 February 2012. [Online]. Available: https://acuityconsultants.com/wp/2012/02/how-to-select-suppliers-to-add-value-beware-the-suppliers-perspective/. [Accessed 9 May 2016]. [2] A. V. Weele, «Purchasing Portfolio Management,» 2014. [Çevrimiçi]. Available: https://www.youtube.com/watch?v=5VvS12UWV8w. [3] «Peter Kraljic Portfolio Analysis,» 2012. [Çevrimiçi]. Available: https://www.youtube.com/watch?v=GKWHdc7LlnU. [4] P. Kraljic, «Purchasing Must Become Supply Management,» Harward Business Review, September 1983. [5] M. E. T. «The Kraljic Portfolio Purchasing Model – Assessing Risk and Maximizing Profits,» www.MindTools.com, cilt 1, no. 1, p. 1, 2016. [6] «Kraljic Protfolio Analysis,» 2012. [Çevrimiçi]. Available: https://www.youtube.com/watch?v=cEtHVlMSInk. [7] «2.3. Analysing the Procurement Portfolio and Developing a Procurement Profile,» 1 September 2012. [Çevrimiçi]. Available: https://www.ungm.org/Areas/Public/pph/ch02s03.html. [8] Alıntı, Alıntı. September 19, 2016 - Istanbul

The Fire On 17 March 2000 of Philips’ history, a fire due to stroke of lightning breaks out at the factory in New Mexico, where Philips produced semi-conductors that are also used for Nokia and Ericsson telephones (40% of its capacity). The fire is extinguished within 10 minutes. Soma damages are inflicted in the unit where semi-conductors are produced. Moreover, due to dust and dirt that occur during the fire is extinguished, the number of dust which has to be 1 morsel for 1 cubic meter (that is 10.000 times cleaner than a surgery environment) reaches higher levels and causes the chips at to store to become unusable. Philips authorities calculate that that may start their production phase within one week by underestimating the problem. They negotiate with Nokia and Ericsson authorities and notify that they will give them priority right after they start their production. The authorities on Ericsson side rely on the notification of Philips, in the direction that they will start their production within one week. They do not procure an action plan due to the fact that they are not aware of the gravity of the condition yet. Nokia side Nokia production planning supervisors have been tracking the Suppliers’ productions on daily basis for 5 years, thanks to their control mechanism that they have developed. As soon as the situation occurs, Nokia’s production and purchasing authorities procure evaluations after visiting the facility. As purchasing manager of Nokia used to work at a factory that produced semi-conductors in the past, he guesses that aforementioned producing may take longer than one week and informs the top management about the situation. Under the light of this information, Nokia immediately takes the action. Due to intense contact between Nokia and Philips that has been ongoing, explanations of Philips does not reassure Nokia. On the contrary, Nokia suppresses their colleagues at Philips in order for making them find more active solutions. On 31 March 2000, i.e. 2 weeks after the incident, the firm of Philips makes and explanation and declares that production process will take 6 weeks by approximate means. In this way, the term takes 8 weeks. In this case that would affect the production of millions of telephones; Nokia takes the action through 3 ways; A team works with Philips on alternative plans that would include other production facilities, too, Another team changes the designs, and works on productions at other facilities of both Philips and other producers’ facilities, The last team, moreover, starts looking for different Suppliers in order to relieve the pressure on Philips. Thus, two available Suppliers answer in the affirmative on the 5th day of the inspection. Additionally, all stocks of appropriate chips are provided by all producers from all around the world. Ericsson side Nonetheless, the firm of Ericsson does not recognize the seriousness of the condition until early April. Therefore, they gum up the works. Nokia saves the day thanks to taking immediate and effective precautions and increases its profitability and market share. So much so that, aforementioned fire is not mentioned in the annual report of the year of 2000. On the Ericsson side, however, the problem gets heavier and mobile phone unit ends the year with 200 million dollars loss due to the lack of semi-conductor due to the fire, according to the report dated 20 July 2000. After six months, the situation gets more serious and the loss becomes 1,68 billion dollars. On April 2001, i.e. 13 months after the fire, the firm of Ericsson is forced to transfer some of its units to Flextronics and to decapitate most of its employees. Eventually, in consequence of long-term unofficial negotiations, the firm of Ericsson is sold to the firm of Sony on October, 2001. A fire of 10 minutes affects a large firm very deeply and reshapes the market of mobile phone and Ericsson becomes Sony Ericsson… References A Fire in Albuquerque Sparks Crisis For European Cell-Phone Giants [Çevrimiçi] / yaz. Latour Almar // The Wall Street Journal. - 29 January 2001. - https://www.wsj.com/articles/SB980720939804883010. Ericsson [Online] // Wikipedia. - https://en.wikipedia.org/wiki/Ericsson. The Fire That Changed an Industry: A Case Study on Thriving in a Networked World [Online] / auth. Mukherjee Amit S. // FT Press. - October 1, 2008. - September 7, 2015. - https://www.ftpress.com/articles/article.aspx?p=1244469. January 9, 2016 - Istanbul

"To give way to the person who knows where he is going, even the world is drawn to one side." (David Starr Jordan) Nusret Gökçe is born in 1983 as one of the 5 children of a mining worker in Erzurum. At the age of 2, his family is moved from Erzurum to Darica. Due to financial impossibilities, he has to leave school after primary school and he starts his working life as a butcher's apprentice in Bostancı. At the same time, with 10 craftsmen, he works for 18 hours a day, for about 13 years, without being idle for a minute. When butcher-restaurant concept started like Günaydın Meat Eatinghouse in Istinye Park,2007, Nusret Gökçe also excited about this new approach. And he says  "I have to do this." First of all, he researches, where is the best place for this job in the world? Argentina (Slaughterhouses) America (Steak House's) Japan (Top quality fatty meats) He cascades his goals and moves... Despite his lack of language and money, he is not afraid and with the help of a French customer in 2007, he barely clears the money and goes to Argentina. After returning, the chemistry of the hand changed with his own words. Despite being named and recognized in several newspapers and magazines in Turkey, he does not interrupt his goals and America continues his dream. After being rejected 4 times in 2010, he barely gets a 3 month visa and goes to America. He works as a fugitive in New York 's leading 4 restaurants without charge. A menu he made during this time was published in the New York Times. After returning from America, he is now ready for business. He talks with Mithat Erdem, an old friend. He has no money, he will put his will. 'What would be its name?' Mithat Erdem asks,he writes 'Nusr-et' on a piece of paper and says,' "I will buy you a machine for counting money after six months." It will happen as it says, and in 6 months it will make all the investment, pay its share. "The man who goes to the flesh" Nusret Gökçe finally formed a partnership with Ferit Şahenk in 2009. Now the target is Japan. He thinks that his final destination should be a suitable meeting. Nusret Gökçe is a very beautiful example that dreams, plans and stages dreams. As Muhammad Ali said; "The champions do not come out of the halls, they come from people with passion, imagination and purpose." References https://www.beserhaber.com/guncel/survivor-ascisi-nusret-gokce-kimdir-20-haziran-survivor-all-star-da-yemek-yapan-asci-h11452.html https://www.youtube.com/watch?v=-b3ZxYkEJpU https://www.youtube.com/watch?v=zjE9DQVL5_c January 9, 2016 - İstanbul