Procurement and logistics
Supply chains continue to be affected worldwide
The Corporate Purchasing department is responsible worldwide for procuring raw materials, semi-finished and finished products, commercial products, and services. Besides minimising costs, the primary purpose of comprehensive supplier management is to safeguard supplies.
In terms of procurement, there was a slight reduction in the impact on global and regional supply chains in the reporting year. However, the situation regarding the availability of raw materials and components remained tense, especially in the first half of the year, but improved considerably in the second half of the year, with delivery times reduced again.
Forwarders on land and sea were faced with major challenges, but thanks to the great flexibility of the transport service providers, the freight capacity required was made available as far as possible. Viewed overall for the entire Geberit Group, the bottlenecks experienced with raw materials and transport capacities in the reporting year did not result in any relevant shortfalls in the availability of Geberit products.
Massive rise in raw material prices
As previously mentioned, the situation on the raw material markets remained unstable in the reporting year, particularly due to the war in Ukraine. This had significant effects on prices in certain purchasing categories, particularly energy, transport and steel. The reporting year again saw extraordinary price increases for the entire product mix relevant for Geberit – both for plastics and for industrial metals. Compared to the previous year, the price increase in local currencies was 18.7% or CHF 189 million.
Compliance with Code of Conduct for Suppliers checked
All business partners and suppliers are obligated to comply with comprehensive standards. This applies to quality, socially responsible and healthy working conditions as well as environmental protection and the commitment to fair business practices. The basis for the cooperation is the Code of Conduct for Suppliers. This Code is aligned with the principles of the United Nations Global Compact and is available in 15 languages. As of the end of the reporting year, a large majority of suppliers as measured in terms of purchasing volumes had signed the Code.
Corporate Purchasing and Sustainability jointly ensure that the standards found in the Code of Conduct are upheld by conducting regular EHS (Environment, Health and Safety) audits. The number of audits made and their content are selected with the help of a risk matrix. The goal of these audits is to check compliance with the Code of Conduct and local legal requirements regarding environmental aspects, occupational health and safety and social responsibility on site. The audits are carried out by an independent service provider. Appropriate measures are initiated where required. During the reporting year, four external EHS audits (previous year: five EHS audits) were carried out at suppliers in the area of procurement.
Supplier Integrity Line
Introduced in 2017, the Supplier Integrity Line from Geberit allows suppliers to anonymously report any violations of the guidelines set out in the Code of Conduct for Suppliers by Geberit employees or by competitors. The hotline is free of charge for users and is operated by an independent service company in a total of eleven languages. Violations can also be reported online via an external website. No violations of the guidelines set out in the Code of Conduct for Suppliers were reported in 2022 (previous year: no violations reported).
Delivery capability and product availability in logistics ensured
At the end of 2022, Group logistics comprised the central logistics centre for installation and flushing systems and piping systems in Pfullendorf (DE) as well as a decentralised network of 13 European distribution sites for ceramic appliances and bathroom furniture.
As previously mentioned, the situation regarding the supply chains in logistics remained tense in the reporting year as a result of the continuing COVID-19 pandemic and the war in Ukraine. Thanks to rapid, flexible actions by the employees in Geberit logistics and the production plants, as well as the flexibility of external suppliers and transport service providers, it was possible to ensure the availability and delivery of products.
Increased productivity and further standardisation
In the reporting year, a concept was drawn up for optimising and automating how ceramic sets are put together in logistics, with the aim of achieving significant increases in productivity. In this context, a semi-automatic production cell was commissioned for the logistics centre in Lintorf (DE).
The Group-wide SAP-ERP system introduced at the German sites at the start of the reporting year led to advancements in standardisation and transparency in logistics. With the new system, process steps can be monitored and analysed better, thus paving the way for continuous improvements.
Cooperation in transport management for the benefit of the environment
Geberit’s external transport service providers have to actively support Geberit in its efforts to use energy and packaging material efficiently and to reduce emissions. Additionally, they are also obligated to provide the corresponding data for Geberit’s environmental reporting. In 2022, the standardisation of the planning and transport process was promoted with the harmonisation of the SAP-ERP system in Lintorf.
The further expansion of the clean truck fleet and optimised truck capacity utilisation led to further reductions in CO2 emissions (see also Green logistics).