Fit4 2010 – Operational Excellence
Our top+ program defines a single standard of excellence for all our actions, products and businesses: to be best-in-class by delivering top performance and outpacing our key competitors worldwide. To achieve this ambitious objective, we’re leveraging two of our greatest strengths: our power of innovation and our global setup.
Best-in-class – by applying this yardstick to all our business strategies and activities, we’re building on our Company’s legacy of over 160 years of achievement. As an outstanding partner to customers around the world, we’re setting technology trends and converting innovations into market successes.
To achieve best-in-class, we establish clear, measurable goals for all our businesses and define and rigorously implement the concrete measures required to reach them. For example, our top+ program has teamed up with our operating units to develop methods and best practices that are helping us systematically increase revenue and cut costs in order to capture, maintain and expand leading positions in our markets. Benchmarking against the best of the best is now an indispensible part of our Company processes.
Setting technology trends
In some 190 countries, our innovations are making customers more competitive. Whether we’re engineering the world’s first system to fully merge the virtual factory with real-world manufacturing processes, developing gas turbines with an unprecedented efficiency rating of more than 60 percent in combined operation or producing dual-source computed tomography systems that can scan the entire human body in only 20 seconds, innovation leadership is – and will remain – one of our key goals. It’s also essential for achieving long-term success. To safeguard our position as a technology trendsetter, we’re implementing a clearly defined strategy to:
- intensify our focus on key technologies
- identify technology and application trends and
- translate innovative ideas into marketable products and services.
This three-pronged approach is ensuring that our customers will continue to benefit from the decisive competitive advantages created by our innovative products and solutions far into the future. The success of our trailblazing technologies is reflected in our patent figures. In fiscal 2008 alone, we filed some 5,000 patent applications, making us a world leader in the international patent statistics. Why this focus on innovation? Because we know from experience that only by offering cutting-edge technologies will we occupy leading market positions and reach the above-average profitability required to increase our Company’s value.
Our global setup – Broad market presence and efficient cost structures
International focus and worldwide commitment have always been a hallmark of our Company. At home in some 190 countries, we generate more than 80 percent of our revenue from sales outside Germany. Contributing revenue of over €14.8 billion, the U.S. is our largest single market. Asia and the Middle East are also key growth drivers. With the help of our global supply chain management system, we’re expanding our market presence and market penetration, for example, by moving production close to our customers – an approach guaranteed to increase the efficiency of our cost structures worldwide.
Our targeted SMART (simple, maintenance-friendly, affordable, reliable, timely-to-market) initiative will sharpen our focus on lower and mid-level market segments, where countries like China and India offer tremendous growth potential.
In these segments, a competitive cost structure is vital for success. That’s why we’re continuing to rigorously localize our entire value chain – everything from R&D, purchasing and manufacturing to efficient sales and distribution.
In a further step to maximize customer proximity, we’ve set up 20 Regional Clusters worldwide to bundle administrative functions previously performed at the national level, enabling our Regional Companies to focus more intensively on their local customers and sales activities. This reorganization is also optimizing our regional structures, improving the cost efficiency of our processes and helping us reach the cost-reduction targets set by our sales, general and administrative (SG&A) program.
Targeted initiatives round out top+
As part of our top+ program, we’re launching targeted initiatives on topics of crucial importance to our Company’s future. The first of these Company-wide initiatives – SMART – will further expand our global presence and help us identify and systematically exploit the potential of high-growth markets. Under the initiative – which also aims to enhance our competitive advantages and drive market penetration in lower and mid-level market segments in particular – we’re establishing R&D centers and production facilities in future-oriented markets, tailoring our innovative products and solutions to the unique requirements of the customers in those markets and optimizing every link in our value chain.
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