Logistics expanded to core competency

Geberit was awarded the → German Logistics Prize for 2011 from the German Federal Logistics Association in October 2011. The project recognized by the award was “Radical restructuring of corporate logistics services”, which drastically reduced costs and at the same time significantly improved processing time and delivery service. The centerpiece of the restructuring, which was initiated in 2005, was a new process model for supply chain management (SCM). The main projects in the 10-point master plan were the centralization of distribution; the new logistics center in Pfullendorf (DE), which went into operation in 2010; and Group-wide logistics controlling. In view of both Geberit's European customers and the production sites of Geberit in Europe, Pfullendorf’s central geographical location is ideal for facilitating the efficient handling of both logistics and distribution processes.

The founding of Geberit Logistik GmbH in 2011 was the final stage on the path to Group logistics as an independent corporate function. Logistics now plays an essential and clearly defined role in every area of the Company's entire value-added chain, which begins in the product-development process and includes purchasing, production, distribution logistics and transport management, through to the customer. Thanks to this integrated solution, logistics costs have been cut by 15% and the average processing time for a customer order in Europe has been reduced by 26%.

Ensuring “green logistics” was likewise an important part of the 10-point master plan. Environmentally friendly transport services rank with factors such as profitability and punctuality in their primary importance. Geberit does not maintain its own fleet of vehicles. Because external logistics contributes over 30% of the Geberit Group's environmental impact, collaboration with the transport service providers that work with Geberit is central. Partners agree to actively support Geberit in its efforts to use energy and packaging material efficiently and to reduce emissions by signing the Code of Conduct for transport service providers introduced in 2010. The companies are obligated to provide relevant data for Geberit's environmental reports.

The logistics calculator developed in 2010 facilitates the recording of data on vehicle fleet composition, transportation performance and fuel consumption of all transport service providers as well as the preparation of the annual eco-balance. Compared to the last reporting season, not only transports through the logistics center in Pfullendorf but now also all transports through Langenfeld (DE) as well as all air and sea transports have been mapped (which has necessitated the restatement of the relevant figures presented last year). The 12 largest transport service providers handled 168 million metric ton-kilometers (prior year 149 million metric ton-kilometers), resulting in CO₂ emissions of 25,500 metric tons (prior year 22,900 metric tons) with a fleet consisting of 85% Euro5 vehicles (prior year 70%), thereby exceeding the target value of two-thirds. Another important step in reducing the environmental impact is switching from roads to rails. For instance, 92% of the goods transported to and from Italy were moved by train (prior year 95%). The use of mega-trailers, which can carry an approximately 15% greater load volume, also increases energy efficiency: In 2011 about 1,200 such transport runs (prior year 1,050) between Rapperswil-Jona (CH) and Pfullendorf (DE) and around 750 transport runs (prior year 300) between Pottenbrunn (AT) and Pfullendorf were completed in this way.

Forward-looking procurement policy

Geberit's business partners and suppliers are obligated to maintain comprehensive standards. First and foremost, this applies to rigorous environmental protection, socially responsible working conditions and fair business practices. The → Code of Conduct for Suppliers was adopted at the end of 2007 and is aligned with the principles of the United Nations Global Compact, among others. As of the end of 2011, 603 suppliers had signed the Code of Conduct (prior year 563 suppliers). This equates to 93% of the total procurement value (prior year 90%), only slightly below the 2011 target of 95%. Among the top 200 suppliers, the proportion of companies that have signed is 99% (prior year 98%). The Code of Conduct is binding for each new supplier.

Risk management in Procurement has been continuously expanded in recent years. The Purchasing Excellence PUREX project begun in 2009 is targeted at the continuous restructuring and optimization of procurement throughout the Geberit Group. All employees in the Purchasing and Quality areas at all sites around the world (excl. USA) have been trained in the new Geberit supplier management process. The selection of new suppliers is required to include a quality audit covering some criteria on EHS (environment, health, safety) topics. All suppliers are evaluated using structured, comparative criteria based on five categories: company and finances, quality and EHS, price and costs, procurement chain and delivery, and production and technology. The planning system for performing systematic audits was further developed during the year under review. Existing suppliers are assigned to a sustainability risk category depending on production country and type of production process. This is the basis for the annual audit planning. The audit not only verifies compliance with directives, but also evaluates the future collaboration and exchange of expertise with suppliers. In addition to the quality audits covering a broad range of criteria, specific EHS audits are performed, in particular in the highest risk categories. When a purchaser from Geberit next visits a supplier, he checks to ensure that measures defined in the audit have been implemented. Audit results have a decisive impact on the future relationship with the respective supplier: possible actions range from increasing the delivery volume to continuing the collaboration in the previous scope to terminating the business relationship.