Nazar Foods Company: Business Process Redesign Under Supply Chain Management Context

Nazar Foods Company: Business Process Redesign Under Supply Chain Management Context

S.C. Lenny Koh (University of Sheffield, UK) and Stuart Maguire (University of Sheffield, UK)
DOI: 10.4018/978-1-60566-424-8.ch020
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Abstract

Nazar Group of Companies has been a leading producer and distributor of cookies, crackers, cakes, chocolate, and other products in Turkey for more than 40 years. This case is about the group’s management roles in transforming the companies into a more consumer-focused orientation using supply chain management philosophy as a strategic framework. Descriptions of supporting business systems were summarized along with the challenges and problems facing managers in effective utilization of these systems in practice.
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Organizational Background

Nazar Cookies Company (NCC) was founded in 1961 by an entrepreneur who had seen a business opportunity in providing new cookie varieties for Turkish consumers. Having graduated from a European university with a management degree, he was expected to manage the family business of flour milling. After a short stay in his father’s business, however, he decided to go on his own way with a clear vision of bringing new tastes to Turkish consumers at the highest possible quality. He also decided to establish his company in his hometown, which is a strategically located central Anatolian city that already had considerable industrial activity.

After a year of intensive work both in product and process development, NCC could begin production in 1962 with a capacity of three tons per day of a few varieties of products that already existed in the market. Since NCC was essentially a production-focused company, and since there had not been any other marketing companies to work with, the products were sold in bulk (4-5 kg boxes) to individual merchants at the factory door, who would then distribute them to retail shops in their own territories.

During the first few years, workers, foremen, engineers, and the owner were all working together very closely and with high motivation toward getting a share in the market, which was dominated by three major players, all of which were located in Istanbul, the heart of trade in Turkey. In addition to his quick learning ability, the owner/president was very successful in transferring a few critical people from competitors and bringing know-how through his European friends and their networks.

The company established the first semi-automatic production line in Turkey in 1967. NCC grew rapidly by the addition of new production lines and new brands. In 1971, NCC became a family-owned company under the trade name of Nazar Food Company (NFC). In 1975, together with its major competitor today, NFC successfully employed the packaging machines, which were able to produce individually wrapped portions in its process lines. This led these two companies to differentiate their products and earn strong consumer acceptance in the marketplace. Also, in the same year, management decided to lease a computer from IBM to handle personnel files and payroll, which marked itself in history as the first private organization using a computer in Turkey. In 1979, a machinery company (Nazar Machinery Company) was established in the city industrial zone to produce special bakery machines both for Nazar companies and others. Also, during that time, the accounting activities were fully computerized.

As NFC was about to become the market leader in 1980 with sales reaching 39,400 tons, the country experienced its strongest social unrest, which created unfortunate problems with worker unions. The operations had suffered for almost a year, during which the two companies faced grave financial problems. In 1981, the president decided to establish a new production company (Bonjuu Food Company) in the industrial zone and a new marketing company (Nazar Marketing Company) in the city, both with the minor partnership of a big industrial conglomerate.

Until 1990, the Nazar Group of Companies experienced stagnation. Computerization reached operational levels in each company. The marketing company organized wholesalers across the country and executed its sales operations through them. There were about 50 large wholesalers who sold Nazar products to more than 2,000 smaller local wholesalers, who also could procure directly from NFC. The transportation between the factories and wholesalers was outsourced.

In 1993, the president decided to establish a new and modern production facility for NFC in the industrial zone and to transfer the production in the old factory entirely to the new one in time. This new plant started production in 1995 with one highly automated production line. In 1997, the marketing company was moved to Istanbul, and the sales operations were reorganized under a new distribution system where individual and exclusive distributors were hired as business partners. Most of the old wholesalers became exclusive distributors of Nazar brand products.

Complete Chapter List

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Table of Contents
Foreword
Elias G. Carayannis
Acknowledgment
Chapter 1
S.C. Lenny Koh, Stuart Maguire
The issues that are currently affecting all managers are similar to those facing managers of ICT. The following is a list, though not exhaustive, of... Sample PDF
Review of Current ICT Developments
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Chapter 2
S.C. Lenny Koh, Stuart Maguire
The ultimate reason why organizations develop information systems is so that their employees can make good decisions. If firms did not make... Sample PDF
Linking Information to Business Strategies and Decision-Making
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Chapter 3
S.C. Lenny Koh, Stuart Maguire
The introduction of new IS can often have a significant effect on the business practices within an organization. It is important that a lack of... Sample PDF
Developing and Implementing an ICT Strategy
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Chapter 4
S.C. Lenny Koh, Stuart Maguire
It is important for today’s dynamic organizations to develop a strong and sustainable links with outside organizations and agencies. It may be... Sample PDF
Strategic Alliance Through the Use of ICT
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Chapter 5
S.C. Lenny Koh, Stuart Maguire
Information Systems (IS) has borrowed many techniques from other disciplines. However, many of these have been borrowed from areas where the outcome... Sample PDF
Planning and Managing ICT Change
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Chapter 6
S.C. Lenny Koh, Stuart Maguire
The reason for going ahead with a new information system (IS) development can come from many sources. A new business requirement may force an... Sample PDF
Identifying Opportunities for Using ICT
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Chapter 7
S.C. Lenny Koh, Stuart Maguire
The development of information systems (IS) has for many years been regarded as the domain of the technical expert. In what appears to be a growing... Sample PDF
Introduction to Current Techniques for Effective ICT Development
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Chapter 8
S.C. Lenny Koh, Stuart Maguire
Nearly all information systems developments follow a structured approach. This is true of all projects. This chapter takes a critical look at both... Sample PDF
System Development and Project Management
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Chapter 9
S.C. Lenny Koh, Stuart Maguire
If organizations were good at ICT planning there would not be as many information systems failures. There is a definite need for improved... Sample PDF
Critical Success Factors for ICT Development
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Chapter 10
S.C. Lenny Koh, Stuart Maguire
For many organizations, the implementation of a new information system (IS) may be the biggest capital expenditure they undertake. If substantial... Sample PDF
Impediments to the Successful Implementation of ICT
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Chapter 11
Learning From Failures  (pages 176-206)
S.C. Lenny Koh, Stuart Maguire
Strategic.failures can be defined as failures of achieving the expected benefits from the organizational, size and industrial sectors or countries’... Sample PDF
Learning From Failures
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Chapter 12
S.C. Lenny Koh, Stuart Maguire
The Internet Cultural Era (ICE) has driven many Small and Medium sized Enterprises (SMEs) in the UK and Ghana to adopt ICT technology. This... Sample PDF
Drivers and Barriers for ICT Development
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Chapter 13
S.C. Lenny Koh, Stuart Maguire
Although Boeing and Rolls-Royce are operating in the same aerospace industry sector and use ERP, but the ways that they implemented their systems... Sample PDF
Current Developments and Diffusions in ICT: ERP, SCM, CRM
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Chapter 14
S.C. Lenny Koh, Stuart Maguire
Globalisation, modernisation and streamlining paradigms have driven many enterprises to use various e-Technologies in order to improve the... Sample PDF
E-Technology: E-Business, Intranet, Extranet, Internet
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Chapter 15
Knowledge Management  (pages 285-296)
S.C. Lenny Koh, Stuart Maguire
Knowledge.Management can be defined as the critical issues of organisational adaptation, survival and competence against discontinuous environmental... Sample PDF
Knowledge Management
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Chapter 16
S.C. Lenny Koh, Stuart Maguire
In information terms, security can be defined as the processes of ensuring that private information remains private and uncompromised in an... Sample PDF
Security and Risk Management
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Chapter 17
S.C. Lenny Koh, Stuart Maguire
Commercial airlines face an extremely challenging operating and competitive environment. To remain in business they must comply with ever-changing... Sample PDF
Improving IT-Enabled Sense and Respond Capabilities: An Application of Business Activity Monitoring at Southern International Airlines
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Chapter 18
S.C. Lenny Koh, Stuart Maguire
This case describes how banking in India has changed after developments in information technology in the last decade. The new private and foreign... Sample PDF
Competing in the Age of Information Technology in a Developing Economy: Experiences of an Indian Bank
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Chapter 19
S.C. Lenny Koh, Stuart Maguire
The Telecommunications Act of 1996 opened competition in the telecommunications market in the U.S. and forced the incumbent telecommunications... Sample PDF
Developing a Telecommunication Operation Support Systems (OSS): The Impact of a Change in Network Technology
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Chapter 20
S.C. Lenny Koh, Stuart Maguire
Nazar Group of Companies has been a leading producer and distributor of cookies, crackers, cakes, chocolate, and other products in Turkey for more... Sample PDF
Nazar Foods Company: Business Process Redesign Under Supply Chain Management Context
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Chapter 21
S.C. Lenny Koh, Stuart Maguire
The TeleDoc project of Jivan Institute has combined mobile commerce and the ancient concepts of Ayurveda for treatment of rural residents of India... Sample PDF
The Expansion Plan of TeleDoc: What and How Much of the Technology Employed is to Change?
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Chapter 22
S.C. Lenny Koh, Stuart Maguire
E-government is becoming a reality rather than a theoretical ambition; however, achieving the e-government anticipated benefits is still illusive... Sample PDF
Process-Aware E-Government Services Management: Reconciling Citizen Business, and Technology Dynamics
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About the Authors