Integrated Report 2021

The role of the Barloworld Business System in creating value

To facilitate the effective execution of our group strategy and our ability to create sustainable value for our stakeholders we developed the Barloworld Business System (BBS). The purpose of BBS is to achieve a leadership style and culture that speaks the same language, is based on respect for people, society and the environment, and continuous improvement so that we deliver the value our customers require.

Leader Standard Work, when implemented properly, is one of the best ways to change culture

Group Chief Executive Officer Dominic Sewela

What winning looks like through BBS tools, techniques and methodology:

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Group strategy deployment aligns strategy from the C-suite to the frontline and keeps the executive team focused on:

  • Achieving breakthrough objectives:
    • Creating a zero-harm culture
    • Doubling intrinsic value
    • High free cash conversion relative to EBITDA
    • Achieving selective market share growth
    • Achieving diversity and inclusion targets
  • Implementing the strategic initiatives – using problem solving A3 Thinking – required to achieve the breakthrough objectives of:
    • Group Safety
    • Transformational Leadership
    • Group Portfolio Strategy
    • Wellness
  • Enhancing the effectiveness of our managers so that they can become coaches and enablers of our people and create a high-performance, learning organisation. Barloworld implemented Leader Standard Work to foster engagement, problem solving and value creation across the enterprise.
  • The roll-out of Managing for Daily Improvement (MDI) has resulted in over 80% of the Barloworld population being involved in daily improvement huddles in their teams to raise over 19 900 problems, of which 69% have been solved. This has had a positive effect on team morale and employees feeling empowered that they can have a positive effect on how they are able to improve their work and serve customers effectively and efficiently.
  • Project Studios or Obeya used to effectively manage complex projects and initiatives – particularly at group level where there is cross-divisional and cross-functional collaboration – in the least-waste way. This methodology has assisted in ensuring that mergers, acquisitions and disposals are delivered in a cost-effective manner and has helped in the efficient co-ordination of key Group Finance projects.
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Equipment southern Africa – value creation highlights


BOTSWANA, MOZAMBIQUE AND ZAMBIA

A problem-solving plan was developed for these regions, targeting improved profitability.

As previously reported, return on invested capital for these regions in the past was below hurdle rate, however, in FY2021 all the regions achieved ROIC above 13%. The daily improvement huddles are progressing well and facilitating effective cross-functional collaboration in problem solving.

AFTERMARKET

The Project Studio (Obeya) and daily improvement huddles worked effectively in focusing the team on excellence in services growth execution.

WORKING CAPITAL

The deployment of BBS tools in the order-to-cash cycle and inventory management resulted in reduced debtors days and improved stock turns.

In summary, 99% of all our brand champions are huddling on a regular basis, and report into scheduled Information Centre meetings. In the past three years since the implementation of the BBS transformation journey, Barloworld Equipment has managed to achieve in excess of 6 times return on investment on external Business Excellence consultants.

In summary, 99% of all our brand champions are huddling on a regular basis, and report into scheduled Information Centre meetings. In the past three years since the implementation of the BBS transformation journey, Barloworld Equipment has managed to achieve in excess of 6 times return on investment on external Business Excellence consultants.

end to end.

SMD

  • Under difficult circumstances and the establishment of a new SMD management team, SMD continues on the BBS journey at an accelerated pace, with MDI established across the organisation to engage leaders and team members in collaborative problem-solving and value creation daily.
  • Further, an end-to-end customer and supplier focused VSA was launched in August 2021, with some rapid improvement events (RIEs) focused on: realising value by reducing stock greater than six months old through the Stock Management RIE; and improving delivery turnaround times through the Registration Documents RIE. Upcoming RIEs include the Supplier Experience RIE and the Customer Experience RIE.
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Ingrain

  • Following the acquisition of Ingrain, the Ingrain Integration Project Studio or Obeya was used to integrate the business effectively and efficiently into Barloworld through a mechanism that enhanced teamwork and collaboration across several workstreams made up of individuals from both organisations.
  • Managing for Daily Improvement [MDI] was introduced to the Meyerton mill in February 2021 and to the Kliprivier mill a few months later, resulting in improvements in communication, collaboration, teamwork and problem solving, with incremental non-financial and financial benefits in certain areas and improved workflows.
  • An end-to-end VSA to identify opportunities to improve Overall Equipment Effectiveness (OEE) and remove wasteful processes was conducted at the Kliprivier mill and some early-stage problem-solving events are showing promising results.
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Avis Budget Rental and Leasing (ABRL)

  • Through Managing for Daily Improvement (MDI) the following improvements have been achieved at ABRL, which are scalable and repeatable: an improvement from the internal sales call centre in the lowest performing team from 29% of team members regularly achieving a million rand per month sales to 75% of the team consistently reaching the million mark, thus catapulting the team into the high-performers “Millionaire’s Club”; a marked reduction in the defects and backlog experienced by one of the accounts payable teams, resulting in an over 60% reduction in duplicate invoices, lead time and backlog, as well as a 50% improvement in their daily output of invoices; and the team at O.R. Tambo International Airport identified and implemented cost savings opportunities by eliminating wasteful paper-based processes, duplication of effort, data errors, incorrect billing and missing information that negatively impacts employee and customer experiences.
  • Through value stream improvement and improvement events, the ABRL team achieved an improvement in trading profit in excess of R20 million, under very challenging trading conditions and a relatively new management team.

Equipment Eurasia

  • Starting in Equipment Russia, the deployment of MDI has spread to the Mongolian business, as well as the UK office. The teams at Equipment Eurasia had raised over 2 400 problems, of which 75% had already been solved and the remaining 25% are in the process of being solved.
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