Developments within the organization
Personnel developments
In branches throughout the world, our employees each and every day devote their local knowledge and expertise to providing the best possible service to our customers. Our employees represent 36 different nationalities and work in 38 branches in 22 countries. Women comprise 29% of the total workforce, men 71%. To effectively adjust our organization to the difficult market conditions, we decreased the number of employees from 1,221 to 1,115 in 2016.
The growth and development of talented employees within our company is of major importance, as is flexible employability and (international) mobility. In-company training programs are organized and external training organizations are used in support of this.
In 2016, various colleagues in the Van Leeuwen Pipe and Tube Group changed jobs within their own company or took on a job at a Van Leeuwen branch in another country. Flexible employability and mobility are important themes in our personnel policy.
Van Leeuwen considers it an ongoing responsibility to combine growth and continuity with the well-being of employees and the sustainable development of the environment in which we work. Our social commitment is evident in the support for various regional and local activities and initiatives in the areas of sports, culture, philanthropy and education. Van Leeuwen employees regularly emphasize their mutual bond by taking part in sports events, which are sometimes associated with a charitable cause.
Our Code of Conduct clearly sets out our principles relating to the attitude and behavior of our employees. This information is provided and explained to each employee on joining the company. Last year, no code of conduct incidents were reported to the independent representative for Van Leeuwen.
Cost reduction measures
Due to difficult market conditions, especially within the energy segment, and low tonnage prices, revenues were under pressure in 2016. This necessitated the implementation of cost reduction measures in almost all branches in order to safeguard the company’s long-term continuity. Unfortunately it was not always possible to avoid forced layoffs in this respect. Our personnel policy is focused on long-term employment relationships with our employees and on investing in people and teambuilding. The forced layoff of employees is therefore difficult to reconcile with our tradition and corporate culture.
In 2016, there was a significant reduction in employee numbers i some of our Van Leeuwen companies, including Van Leeuwen Zwijndrecht in the Netherlands. Closing our operations in Brazil also involved a large number of forced layoffs. As a result, the total number of employees at year-end 2016 stood at 1,115, a decline of 106 in comparison to 2015.
LeeuwOne
Our strategy in part focuses on strengthening our distribution network in Europe. An element in this respect is that we are increasing cooperation in and integration of our branches in Europe. This effort, for example, focuses on the further implementation of European stock management, enabling us to provide better availability to our customers while maintaining the same stock levels.
We approach European distribution from an integral perspective through means of a network of cooperating warehouses, instead of a single large European warehouse. An important principle in this respect is that we want to be close to the customer and the market at all times.
To achieve this European integration, we initiated the LeeuwOne project in 2016. This project on the one hand focuses on organizational changes in our European branches and on the other hand on the implementation of a completely new SAP S/4 HANA system in Europe. Our systems must be capable of exchanging information with our customers, as well as our suppliers. In the future, we will make this information available to our partners through means of various portals. The implementation of digital applications, such as barcode scanners in warehouses and the implementation of e-commerce by means of webshops, also forms part of the LeeuwOne project.
Operations
To be able to continue our growth and to further expand the services for our customers, we are continuously developing our global network of stock locations, and service and treatment centers. We are further investing in plant and machinery in support of our value added services. The optimization of stock management systems, custom service and logistics concepts helps us reach our customers faster and with a broader and better product portfolio.
In France, as well as at our bar steel company Wauters in Belgium, we are installing additional cutting machines at the beginning of 2017. Our cutting capacity will also be significantly expanded in Central Europe. Over the past two years, activities in Vyškov, Czech Republic, experienced rapid growth. Therefore a large number of logistics improvements were implemented. To ensure a more efficient flow in logistics, investments were made to allow us to make more effective use of the available warehouse space.
With the support of a specialized external consultancy firm a detailed study was completed of our largest logistics center in Zwijndrecht, the Netherlands, to analyze the logistics organization and flows, and to undertake further efficiency measures in this area. The results of this study provide starting points for making further improvements in our performance and speed-to-market in 2017.
As a distribution company, we also explore how we can organize our transportation more flexibly and efficiently, for example by providing a wider range of transportation options and by combining transports within the Van Leeuwen Pipe and Tube Group. At Wauters in Belgium we have outsourced our transportation to an external logistics service provider. An entirely new truck fleet will provide greater flexibility in line with contemporary transportation demands.
Quality, safety and sustainability
Globally we continuously focus on the improvement of our work processes, in which quality, safe and healthy working conditions, and sustainability are a priority. We set high quality standards for ourselves that are translated into objectives each year. We regularly monitor progress through means of Key Performance Indicators (KPIs) and internal audits.
In December 2015, Van Leeuwen was the first company in continental Europe to be certified for the new ISO 9001:2015 standard by Lloyd’s Register. As a leading and innovative distributor and specialist we are committed to lead the way in compliance with this new quality management standard. Our key branches are part of the Group Certificate.
In 2016, we continued our efforts in improving working conditions throughout the world. Our health and safety system is based on the Occupational Health and Safety Assessment Series standard (OHSAS 18001). Van Leeuwen pursues an active safety policy that is producing good results. The frequency index for accidents with absence (IF rate) has dropped to its lowest level since this frequency was initially tracked some seven years ago. For 2017, with an eye on continuous
improvement, the objective is more stringent. A new internal awareness campaign will establish clear rules that apply to all Van Leeuwen branches and to all employees, and that will be discussed
together in toolbox meetings.