ADT 2004 Annual Report Download - page 43

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Q: WHAT WERE SOME OF TEPS’ 2004 HIGHLIGHTS?
Beyond strong revenue performance, the TEPS team
achieved strong operational excellence results. We
dramatically improved working capital velocity,
reducing our days of working capital on hand from
125 days at the beginning of the year down to 103
days by year-end. Our restructuring projects, which
included a reduction of 35 facilities, will yield annu-
alized savings of approximately $60 million.
Q: WHAT IS THE KEY TO ORGANIC GROWTH AT TEPS?
Organic growth requires a creative attitude that
starts with understanding the needs of the customer
and then finding ways to meet those needs with
our know-how and technology. Each of our busi-
ness units has that attitude and has good growth
potential, especially as we globalize. We need to
leverage our brand and product leadership geo-
graphically and continue to invest in technology to
maintain leadership. Our biggest growth opportu-
nity is in the worldwide water industry. This is an
enormous market that is going to grow exponen-
tially over the next several decades as the demand
for potable water and wastewater treatment sky-
rockets. Tyco is already well established in this
market. We treat water to make it potable, deliver
water for drinking and irrigation, and treat or
remove wastewater. All these opportunities combine
to represent an exciting challenge and a dynamic
way to grow.
Q: WHAT IS TEPS’ FOCUS FOR 2005 AND BEYOND?
Growth is at the top of our list, and our strategy will
be driven by a mind-set that puts a premium on
our return on invested capital. And because it’s
imperative that we remain the low-cost producer in
the markets in which we compete, we’ll use Six
Sigma and lean manufacturing initiatives to drive
cost reductions in every aspect of our business. These
tools will help us find ways to increase manufacturing
productivity. We will continue to review our real
estate footprint for potential consolidation, and our
teams will review product offerings to make sure
they truly meet the current needs of our customers.
In addition, many of our products are integral
parts of a customer’s projects or systems, and accu-
rate, on-time delivery is critical. We will be exam-
ining our supply chain processes to ensure that
customer satisfaction remains one of our competitive
strengths. Finally, our people—and the communi-
ties where we all live and work—are incredibly
important to us. To this end, we are going to accel-
erate and drive our environmental health and safety
performance at every TEPS location worldwide.