Freudenberg South Africa: using Life Cycle Thinking to adapt to new markets
As their regular textile and industrial market had shrunk in the region, Freudenberg South Africa had to shift to more dynamic textile markets. With the support of the UNEP / SETAC Life Cycle Initiative, they took this change as an opportunity to improve their supply chain, strengthening collaboration with their suppliers. Freudenberg South Africa successfully became competitive again.
Freudenberg South Africa has 102 employees and is located in Cape Town. It is a subsidiary of Freudenberg Performance Materials, the world’s largest producer of non-woven textiles, and belongs to the Freudenberg Group, a family-owned company based in Germany and present worldwide. Most of Freudenberg South Africa’s customers are local companies in South Africa, a few in regional countries within Africa and the Indian Ocean islands as well as in the Americas.
A difficult situation turned into an opportunity
Freudenberg South Africa manufactures interlining for the garment industry. When this market shrunk considerably in the region because of the decline of the clothing industry in South Africa, the situation became critical.
“We were experiencing lots of issues related to our suppliers not supplying on time and within the specified quality”, explained Jeanette Geldenhuys, SCM Manager at Freudenberg Nonwovens South Africa.
The company decided to shift to more dynamic and started developing and producing non-woven textiles for the markets of energy, car interior, hygiene and medical, building interiors, and other special applications. Well aware that their product quality and delivery was affected because of suppliers, the management also wanted to improve the entire value chain. They also foresaw the opportunity to improve sustainability, as a competitive advantage and in alignment with the group’s strategy.
Freudenberg South Africa benefited from a UNEP / SETAC Life Cycle Initiative programme, designed to help SMEs and small businesses build their capacity to implement a life cycle approach. Thanks to this programme, Freudenberg South Africa got the support of a Life Cycle Management coach, Zubeida Zwavel.
Suppliers are a business’ best allies
A first self-assessment was conducted, which relied on the Life Cycle Management Capability Maturity Model (LCM CMM) developed by the UNEP / SETAC Life Cycle Initiative. It confirmed that improving the supplier relationship upstream in the value chain was key to enhance product delivery and overall quality.
As part of its strategy to build long-term relationships with suppliers, Freudenberg South Africa decided to organize regular visits to suppliers’ sites with supply chain and procurement managers (at least every three months), and with the managing director and operation manager at least twice a year. An annual meet and greet seminar with suppliers was also put in place.
Building internal capacity
The company started building internal capacity through their supply chain by setting up meetings to create a clear understanding of their supply chain requirements. The impacts of the materials flowed was mapped.
Learning is an important aspect of the Capability Maturity Model process. Internal capacity was developed with the help of Zubeida Zwavel, LCM Coach on the project, through workshops organized with key staff members of various departments. A management workshop was also held to build specific skills around Life Cycle Management (LCM) and Life Cycle Assessments (LCA). These workshops forged the way forward in discussing how to integrate LCM into their overall business operations.
Implementing suppliers evaluation processes
Freudenberg South Africa defined criteria for measuring suppliers’ performance, including quality, delivery and areas of environmental improvements within innovation as well as process optimization. Those criteria were integrated into a “scorecard”, which was put in place to evaluate the performance of suppliers over time, and to facilitate the collaboration and improvement of services. This scorecard was integrated into the Freudenberg’s SAP system. A questionnaire for the self-assessment of suppliers’ environmental protection and workplace safety system was also put in place. Freudenberg took the opportunity to integrate criteria about innovation into the supplier evaluations, encouraging them to contribute to new developments.
Improving procurement processes
A procurement audit was held in January 2014 and purchasing trainings were put in place. The trainings covered general and background knowledge about procurement at Freudenberg, negotiation strategy, research and supplier selection, price evaluation, markets purchasing controlling and planning, contract management, suppliers standards self-assessment, supplier evaluation tool for raw materials, providing standard forms and templates. The evaluation of suppliers by buyers relied on price, quality, reliability (delivery/ delays), cooperation (quality of the relationship and of information provided), and innovation.
Better product quality and delivery
Working on long-term relationships with suppliers paid off, and Freudenberg South Africa assessed a tangible improvement in their final product quality. The company now tests each raw material on site for health, safety and environment compliance as well as product formulations. This investigation indicates where new raw materials need to be sourced, and is also aimed at highlighting any alternative materials which could be used in the process.
A signed Service Level Agreement provides Freudenberg a legal document that ensures the companies deliver within the agreed criteria. Penalties can be imposed if the requirements by suppliers are not met. A full Life Cycle Assessment on a major product is to be conducted over the next two years.
A local initiative supported by a corporate vision for sustainability
This local initiative occurred at a time when the Group’s sustainability strategy was enhanced at corporate level. The group’s head of Indirect Group Purchasing, together with the group’s Head of Corporate Procurement Germany visited Freudenberg South Africa for on week for training purposes, to support Freudenberg South Africa in its initiative.
The Freudenberg group has embarked on Resource Efficient Cleaner Production (RECP) projects in 2012. The company has also adopted an integrated management system policy and is certified in ISO 9001, ISO 14000.
With the support of the European Commission