INTEGRATED ANNUAL REPORT 2011 GRI RESPONSES  

Responsible value chain

Critical component of strategy and incorporates key stakeholders
Represent leading global OEMs, principals and brands
Governance framework promoted throughout supply chain

By representing leading global original equipment manufacturers (OEMs) and brands, Barloworld participates in supply chains that conform to norms and regulations, and aspires to the highest standards.

Relationships throughout our supply chain are based on mutual respect, trust and benefit. They are guided by our governance framework of ethics, codes of conduct, policies and commitment to legal compliance.

Interactions are also informed by our strategic framework. Integral to this is our commitment to being a leader in sustainable development and identifying competitive advantage through solutions that help customers achieve their sustainability objectives, facilitate a transition to low-carbon economies and expand into related opportunities.

Aside from OEMs, Barloworld sources goods and services from a range of other service providers. This is particularly important in South Africa where integrating previously disadvantaged people into the economy is a key socio-economic driver. Through our South African-orientated enterprise development initiatives and preferential procurement programme, we support small to medium-sized suppliers, contractors and enterprises in our supply chain. Ongoing engagement with all suppliers and customers ensures they are aware of expected standards and conduct. We disengage from elements of our supply chain that do not conform.

Responsible principals

> OEM standards and commitments reflected in products, technologies and services offered by Barloworld
> OEM targets and objectives provide a framework and focus attention in the group
> Complemented and supported by group standards

Barloworld represents leading international OEMs and brands such as Caterpillar, Hyster, Avis, Audi, BMW, Ford, General Motors, Mercedes-Benz, Toyota, Volkswagen and others. The group is therefore part of supply chains that reflect international best practice in the manufacture, sale, service, support and disposal of products.

These standards are complemented by Barloworld’s own ethics, values and standards. We are committed to working with suppliers to ensure our customers’ objectives are met and their competitive position enhanced.

Products and services

> Provide leading, environmentally sound solutions that help customers achieve their sustainable development objectives
> OEMs’/principals’ focus on developing leading technologies supporting sustainable development
> Internal activities measured and reviewed
> Focus on energy consumption and carbon emissions
> Lifecycle responsibility

We recognise the environmental impact of our customer solutions and work with our principals to provide leading products and solutions that foster environmental stewardship. Equally, our represented OEMs focus on reducing the environmental footprint of products we offer to customers throughout their lifecycle. Energy and emission efficiencies as well as product disposal are core aspects being addressed.

Caterpillar is continually improving the energy efficiency of its products, to reduce emissions from its clean diesel engines and maintain fuel efficiency. Caterpillar prides itself in building innovative products that are not only the most reliable machines on the market, but also meet and exceed sustainability targets for highly regulated countries. Caterpillar Inc. 2020 goals include a 20% increase in customer energy efficiency.

Caterpillar is also leading in co-generation. Examples include greenhouse applications where the exhaust gases (CO2), heat and power from an engine are utilised. The power generates electricity and the heat and CO2 enhance the growing process.

Caterpillar’s acquisition of MWM Holding GmbH (MWM), a leading global supplier of sustainable, natural gas and alternative-fuel engines significantly expands customer options for sustainable power-generation solutions. The ability to supply natural gas engines and turbines to complement the traditional diesel engines results in one of the broadest engine offerings in the industry.

Leading principals for our motor retail operations continue to develop and introduce energy-efficient, low-emission vehicles, as well as hybrid and electric vehicles. Car rental fleets generally comprise vehicles under 12 months old with the latest technology, resulting in overall energy and emissions efficiency.

Logistics has introduced a range of innovative products and solutions which include:

Green Trailer configuration which reduces wind-drag by up to 35%, fuel use by some 10% and resulting emissions
Distribution network optimisation tool, CAST-CO2, calculates networks according to emissions and can be used as a tool to minimise carbon emissions in a supply chain
CINO is part of a suite of supply-chain optimisation products that enables companies to make strategic inventory positioning decisions to optimise the entire supply chain. Effective and efficient supply chains have improved carbon footprints.

Hyster lift trucks generally offer the best energy efficiency (energy use per load moved) of any manufacturer and emissions are among the lowest in the industry. The OEM supports green technologies through engineering collaboration and extensive internal field and validation testing. Diesel lift trucks are evolving to meet the latest US and European emission standards. Electric trucks incorporate systems that recapture energy when braking and lowering loads. Improved product design results in less weight and improved efficiency.

Barloworld’s automotive, equipment and handling divisions have business models that enable vehicles, plant and equipment solutions to be provided as new or used units and through long- or short-term rental applications. In the equipment and handling divisions, this is augmented by a significant component rebuild programme. This business model ensures efficiencies and synergies throughout the lifecycle of equipment, plant and vehicles and extended useful lives for these products.

Caterpillar Inc. takes an integrated approach to sustainable progress

'Our ongoing commitment to sustainability fits perfectly with our focus on customers and helping them to become more efficient while meeting their sustainability challenges. Inclusion on the DJSI for the eleventh straight year is an honour and a confirmation that we are focused on making sustainable progress possible'

Doug Oberhelman, Caterpillar Chairman
and CEO.

 
Barloworld has sustainable principals

Barloworld Supply Chain Software helps optimise Renault’s environmental plans
ISEL, at the University of Le Havre and Renault’s Environmental Division, is working with Barloworld Supply Chain Software (SCS) to help minimise cost and reduce carbon footprint, with CAST software.

ISEL, School of Logistics (graduate) of the University of Le Havre in France is currently working on the VALVER project, which was initiated by Renault in December 2009. The project was established in response to the legal constraints regarding the recycling of vehicles and raw materials, according to new French policies.

“The supply chain surrounding the glass recycling operation at Renault, required reorganisation and reconfiguration in order to become fully optimised, whilst fitting within various time, legal and environmental constraints” explains Christophe Bisiaux, Logistics Project Manager at ISEL Le Havre. “To achieve this, we have selected CAST software, which has been developed by Barloworld SCS to assist with supply-chain modelling, network design and optimisation.”

Ewan French, Chief Operating Officer at Barloworld Supply Chain Software explains “By using CAST software as a decision tool to model the network, ISEL has been able to identify supply-chain scenarios that enable the reduction of both cost and carbon emissions.”

Product responsibility

> Customer health and safety paramount
> Majority of products and technologies sourced from leading OEMs
> Health and safety issues, product labelling and information addressed with OEMs
> OEMs responsible for product review, design and development
> Group services and solutions comply with legislation
> Increasing expectation of product stewardship
> Leading service commitment including inspection and maintenance
> Extensive customer satisfaction surveys and follow-up processes
> Customer privacy respected

Customer health and safety

Customer health and safety is a critical aspect of all Barloworld’s products, services and customer solutions. In representing leading global brands, our customer solutions are backed by warranties, guarantees and product responsibility, and design features.

All new vehicles, plant and equipment have comprehensive service and maintenance regimes (time- or use-based). These include the inspection, and renewal if necessary, of critical safety items. Rental plant and equipment are subject to similar assessment and service disciplines.

Safety always comes first
Caterpillar is committed to providing customers with the safest and most reliable products and services available. One key area of focus is preventing slips, trips and falls when mounting or dismounting a piece of equipment. The access system upgrade for Cat® 785 and 789 large off-highway trucks provides a diagonal stairway for improving entry and exit from the platform and the cab.

Tyres, brakes and other identified safety aspects are subject to entrenched assessment systems, OEM service requirements, service-plan schedules, and where available self-diagnostic capabilities in vehicles, plant and equipment. General health and safety aspects are increasingly included in the design and manufacture of vehicles, plant and equipment as are features that ensure operator or driver comfort.

Driving skills for people with disabilities
Avis Rent a Car South Africa and Barloworld reacted to the story of a paraplegic woman trying to obtain a driver’s licence in South Africa.

By assembling a team including the QuadPara Association of South Africa (QASA), Masterdrive and others who could help those in similar situations to achieve mobility – Driving Ambitions was born.

Driving Ambitions provides driver assessment and training for people with disabilities. Its first vehicle, a Hyundai i20 fitted with permanent hand controls and a dual brake, was sponsored by Avis.

Barloworld has also contributed R150 000 to start Driving Ambitions’ engines. Cars with specially adapted hand controls for people with disabilities are part of the Avis fleet.

Appropriate handover procedures are in place for all products to ensure customer knowledge, including health and safety operating procedures and service requirements. Operator and driver training is provided where required. The OEM-recommended inspection, maintenance and safety system upgrades and training programmes are explained and promoted to ensure customer health and safety.

Where available, remote monitoring through advanced telemetry and inbuilt warning systems supports detailed maintenance and service programmes, ensuring optimal plant equipment and vehicle operation.

To complement OEM warranties and guarantees, the group institutes appropriate insurance to cover potential liabilities from product use, rental or after-market activities.

Customer satisfaction

Customer satisfaction is primarily assessed through informal and formal surveying tools, including regular engagement.

Over the last four years, Caterpillar and Barloworld Equipment have moved from simple call-centre surveys to the most recent innovation in surveying customer value – a web-based process able to produce much more meaningful data for analysis. The convenience of this approach is also generating a much higher customer response rate of 50%.

The customer service target for next year using the last reliable call-centre data (end 2010) will be 83% as agreed in the 2012 common goals between Barloworld Equipment and Caterpillar.

All automotive dealerships participate in external independent customer satisfaction surveys, normally conducted by OEMs. In addition, individual dealerships conduct their own surveys, particularly on their service departments.

Independent customer surveys are entrenched in our car rental operations which conduct over 3 000 independent interviews each month. Scores are generally above 88% (considered excellent) with peaks of over 91%. The target for the year was 89%. Scores and targets have been improving steadily in recent years.

Avis South Africa wins again in 2011
For the eighth consecutive year, Avis Rent a Car has won the award in the Sunday Times Top Brands Survey in the Business to Business Car Rental Category.

“The award is the result of committed and ongoing dedication to raising our benchmarks across the entire spectrum of Avis operations,” comments Wayne Duvenage, chief executive of Avis. “Our brand promise of ‘We Try Harder’, is not just there for show – it is a value that runs through the DNA of the organisation and of all our Brand Ambassadors and is lived out on a daily basis, as this latest award so clearly proves.”

“Our approach to people, I believe, is central to our continued brand success,” he points out. “It motivated the creation of our Customer Satisfaction Index (CSI), still unique in the industry, which keeps such a close eye on our levels of customer satisfaction that the slightest deviation or dip in approval solicits instant reaction to rectify what is perceived as not up to standard.”

Similarly, fleet service operations monitor customer satisfaction with scores around 87% for the year (peak in December 2010 at 88%). The target is a score above 85%. Logistics has an independent company conducting regular customer satisfaction surveys and cluient feedback sessions are arranged.

Handling operations have a number of customer interventions, including focus meetings, a national response centre in the UK, a variety of surveys and a call centre in South Africa.

Quality and customer satisfaction are elements of the ISO 9001 quality management system which has been implemented in a number of operations across the group.

Product stewardship

Barloworld recognises that responsible product stewardship includes initiatives to manage and mitigate the environmental impacts of its products, services and customer solutions. This ultimately includes disposal. The group will act in conjunction with its principals to address this issue. However, existing business models, as well as recycling, rebuild and remanufacture initiatives already proactively mitigate the disposal implications of group products.

Regular assessment, service and maintenance ensure environmental stewardship through the optimal operating condition of each product. New product development continually addresses and reduces negative environmental consequences.

Caterpillar retrofits reduce greenhouse gases
Retrofits can provide the latest electronic fuel system technology for Cat® D3600 generator sets without requiring replacement of the generator set. Generator sets can be retrofit from mechanical to electronic fuel injection technology, providing fuel savings and the associated reduction in greenhouse gas emissions.

The logistics division has software products where customers’ rights are clearly delineated in licence agreements as well as in maintenance and support agreements.

Marketing and advertising

Marketing and advertising conforms to applicable laws and standards, and complies with principals’ standards and corporate identities. Any local adaptations require prior consent from principals. Barloworld Logistics and group brands are managed by established functions at divisional and group level.

During the year there were no:

instances of non-compliance with regulations on advertising, promotion or sponsorship
substantiated complaints on breaches of customer privacy and losses of customer data
fines for non-compliance with laws and regulations on the provision and use of products and services.