ADT 2003 Annual Report Download - page 23

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21
REAL ESTATE
Tyco’s efforts to reduce its real estate footprint got off to an
impressive start in 2003. Using many of the same strategies that
are being employed in Strategic Sourcing, various business teams
are working together to reduce the company’s manufacturing
and other real estate locations by 20% over the next three years.
.. In 2003, Tyco reduced its real estate footprint by more than
230 properties, totaling approximately six million square feet
of space.
.. Tyco consolidated its 40 real estate brokers in North America
to two and is currently undergoing a similar process for its
international properties.
.. Tyco established a single company-wide database to track all
real estate holdings, owned or leased.
WORKING CAPITAL
Focused efforts to improve cash collections and better manage
inventory resulted in improved working capital performance
and were important elements for generating strong 2003 cash
flow. We expect further improvements in 2004 as we translate
best practices across the company and execute on plans to
achieve a more efficient global manufacturing footprint.
.. Tyco Healthcare completed 11 accounts receivable projects
and eight inventory projects in Europe.
.. Several segments, including Healthcare, Electronics and
Engineered Products and Services have initiated programs to
dramatically shorten manufacturing cycle times.
.. We will continue to minimize the amount of incremental
working capital required by employing Six Sigma and Lean
strategies to our cash and inventory processes.
SIX SIGMA AND LEAN MANUFACTURING
Six Sigma and Lean Manufacturing tools are being applied
across Tyco as the company looks to improve its manufacturing
operations, transactional processes and new product develop-
ment. Tyco has established a consistent training methodology
for use company-wide to guide the creation of a common
language. Rigorous procedures are now in place to ensure the
proper and aggressive implementation of Six Sigma and Lean
Manufacturing.
.. In 2003, Tyco completed 183 Six Sigma projects. At year-end,
the company had a total of 600 new projects under way.
.. The Company trained nearly 1,000 employees, including
Master Black Belts, Black Belts and Green Belts.
.. Tyco launched Design for Six Sigma in two operating seg-
ments: Fire and Security and Healthcare.
STRATEGIC SOURCING
Our “One Tyco” sourcing effort began to pay off in 2003. The
operating segments are working together to take advantage of the
leverage and scale provided by a $36.8 billion company that buys
approximately $15 billion of products and services annually.
.. Tyco has adopted a common seven-step strategic sourcing
process across the entire company.
.. The company launched 18 Strategic Sourcing teams, involving
a total of 150 Tyco employees, to look closely at nearly half of
its annual spending.
.. The teams are negotiating new company-wide contracts for a
variety of goods and services, including freight, capacitors
and resistors, office supplies, telecom and IT equipment,
with the goal of achieving significant savings over the previ-
ous agreements.