ADT 2004 Annual Report Download - page 36

SEGMENT REVIEW
Q: WHAT ARE YOUR MAJOR TARGET MARKETS?
Tyco Healthcare is one of the broadest suppliers
to the global healthcare community. Our portfolio
includes such vital products as advanced surgical
tools and supplies, sutures and wound care, nee-
dles and syringes, contrast media for diagnostic
imaging, vascular therapy, respiratory care, and
generic pharmaceuticals.
Q: WHAT WERE YOUR KEY FOCUS AREAS IN 2004?
Our primary initiative was to effectively advance new
products through our pipeline. Accordingly, we
increased R&D funding by nearly 40 percent in 2004,
and expect to double our R&D investment over the
next few years. We’ve also expanded our opera-
tional excellence efforts and moved away from a
centrally managed team of Black Belts. We now
have Black Belts in every business unit, focused on
common as well as business unit–specific priorities.
Q: WHAT WERE YOUR BIGGEST SUCCESSES?
In 2004, Tyco Healthcare achieved 12.4 percent earn-
ings growth, a testament to the collective work of
the entire organization. What this number does not
reflect is the significant investment we have made
back into the business to enhance discipline in our
new product development process.
Among our commercial highlights were con-
tract awards with several key Group Purchasing
Organizations who represent nearly 70 percent of
the hospitals in the U.S.
Q: WHAT ARE YOUR GOALS FOR 2005?
We’re looking forward to a great year. We’ve added
significant resources to our Quality Assurance/
Regulatory Affairs function, supporting our com-
mitment to consistent world-class quality. Equally
important is our increased focus on world-class
service, in which we’ve committed to increasing
our already high current service levels of 90 percent
to 95+ percent. Our strong focus on operational
excellence initiatives will help us expand our profit
margins. Last but not least, we will continue to
accelerate our new product development efforts. We
have high expectations for the new technology that
will be introduced in 2005.
Q: HOW ARE YOU PLANNING TO LEVERAGE YOUR R&D SPENDING?
Among our significant advances in R&D, we’ve
improved our processes dramatically, and we
are becoming more disciplined with every new
development. A prime example of how we’re
working smarter and better is the great success of
our Kangaroo™ ePump, which is one of the first
products to come out of our new product devel-
opment process.
In addition, we’re significantly increasing R&D
spending. In 2002, Tyco Healthcare spent $127 mil-
lion in support of new product development; in 2004
we spent $209 million. We anticipate continued
increases in R&D spending over the coming years.
This will allow us to respond faster with new prod-
ucts that answer the greatest customer needs.
RICH MEELIA, PRESIDENT OF TYCO HEALTHCARE, AND HIS TEAM
ARE FOCUSED ON ACCELERATING GLOBAL GROWTH BY INCREASING INVESTMENT
IN R&D AND GEOGRAPHIC EXPANSION. THESE EFFORTS, ALONG WITH INCREASED
OPERATIONAL FOCUS AND CONTINUED FINANCIAL PERFORMANCE, WILL HELP
TYCO HEALTHCARE REMAIN A GLOBAL HEALTHCARE TECHNOLOGY LEADER.
Q&A WITH:
RICHARD J. MEELIA
President
Tyco Healthcare
TYCO
HEALTHCARE
34