Business report > Business and financial review
Logistics and procurement
Intelligent transport solutions
The area of logistics is viewed as one of Geberit’s core competencies. Integrated logistics processes enable greater customer closeness and thus represent an important link to customers. They also contribute to reducing environmental impacts. As the interface between plants, markets and transport service providers, Transport Management coordinates the activities in question and facilitates intelligent transport solutions, for example, by enabling transport runs between plants to be linked with deliveries to customers. This reduces the number of empty kilometers and increases truck capacity utilization.
In 2013, the cooperation with six main transport service providers for land transport in Europe was continued. These service providers regularly report to Geberit on their quality and environmental management systems – among others including the reduction of energy consumption and emissions. Geberit also arranged with these service providers for all new truck purchases to meet the Euro 6 emission standard in advance of this standard coming into effect in 2014. The logistics calculator developed by Geberit records data on the composition of the vehicle fleet, transportation performance and the environmental impact of the transport service providers and prepares an eco-balance sheet. This enables greater comparability between the transport service providers and a more efficient tracking of the improvements that have been made. In 2013, the largest transport service providers handled 176.6 million ton-kilometers (previous year 169.7 million ton-kilometers; +4.1%), resulting in 27,483 metric tons of CO2 emissions (previous year 26,883 metric tons; +2.2%), with a fleet consisting of 87% Euro 5 vehicles (previous year 84%) and already featuring 3% Euro 6 vehicles.
In the reporting period, mega-trailers were used for all transport runs between the Rapperswil-Jona (CH) site and the logistics center in Pfullendorf (DE) as well as between Pottenbrunn (AT) and Pfullendorf. These trucks allow more load volume to be transported. The use of mega-trailers as opposed to conventional vehicles resulted in 452 fewer transport runs being made in 2013. This translates into a reduction of 134,000 kilometers. Diesel consumption was reduced by 39,900 liters and CO2 emissions were lowered by 164 metric tons. Geberit is also working on innovative solutions aimed at enabling a higher goods per truck ratio and further increasing capacity utilization.
Furthermore, the pilot project with an → environmentally friendly, natural gas truck running between Pfullendorf and Rapperswil-Jona commenced at the end of 2013. This pioneering project is being conducted in collaboration with a transport service provider and a truck manufacturer.
Supplier management proves its worth
The centrally organized Purchasing department is responsible for procurement for all production plants worldwide. Geberit’s business partners and suppliers are obligated to maintain comprehensive standards. This not only applies to quality, but also to socially responsible and healthy working conditions as well as environmental protection and the commitment to fair business practices. As a rule, the selection of new suppliers is required to include a quality audit covering clarification on environmental, health and safety issues. Where an audit reveals inconsistencies in the area of sustainability, an additional, in-depth audit is conducted. The basis for the cooperation is the → Code of Conduct for Suppliers, which was introduced in 2007. This Code is aligned with the principles of the United Nations Global Compact and is binding for every new supplier. Up to the end of 2013, 701 suppliers had signed this Code (previous year 671 suppliers). This equates to 95% of the total procurement value (previous year 95%). Among the top 200 suppliers, the proportion of companies that have signed is 99% (previous year 99%).
When evaluating suppliers, Geberit strives to achieve the greatest possible degree of transparency. All new and existing partners are thus assessed by means of standardized processes according to the same criteria: company as a whole, quality and sustainability, price, procurement chain and delivery reliability, production and technology. Comprehensive supplier management has proven its worth. Since 2013, data is now exchanged only digitally between suppliers and Geberit.
The risk management approach is based on the division into risk classes – depending on the production location (country) and production processes at the supplier. To ensure neutrality and the expertise required for the audits, Geberit works with an external partner. In China, for example, the carrying out of audits by independent experts has proven effective. Performing such audits makes an important contribution to enhancing credibility in supplier management. Any shortcomings exposed by audits give rise to sanctions. As a rule, a deadline is imposed for remedying the situation. For example, shortcomings were revealed at three Chinese suppliers in 2013, primarily in the areas of occupational safety, working hours and remuneration. Action plans were agreed upon with these three companies, the implementation of which will be checked and demanded during a re-audit in 2014.