Baker Hughes 2009 Annual Report Download - page 5

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Improve Customer Focus:
Moving to a Geomarket Model
Our first imperative is to improve cus-
tomer focus, and that means getting closer
to our customers. The reorganization we
implemented in May was based on moving
from a portfolio-managed company with all
the leadership in the southern United States,
to a geomarket organization with Eastern
and Western Hemispheres, nine presidents in
regions around the world, and 23 geomarket
managing directors on the ground in all the
major markets.
The geographic organization improves
customer focus in a number of ways. By
locating senior management within the geo-
markets, decision-making authority is closer
to our customers and decisions can be made
at “customer speed”. By organizing the prod-
uct line field operations into geomarket oper-
ating units, we have improved our ability
to deliver multi-product solutions specifically
tailored to meet local requirements.
Over the last three years, we made a
determined and successful effort to hire
local talent to constitute the largest share
of our regional management, and we are
developing other employees so they can
fill leadership roles at the geomarket,
region and hemisphere levels. In addition,
we have placed nationals in executive
roles within each of the regions and have
attracted senior executives from other
companies, including companies outside
of the oilfield services industry, to fill
some of these positions.
This more-focused market approach is
giving us the granular view we need to
establish the right expert teams, drive the
right market-based technology needs, and
develop the right infrastructure in the right
places around the world.
Achieve Operational Excellence:
Improving Supply Chain and
Administrative Functions
With operations in more than 90 coun-
tries, we know that managing our supply
chain effectively is one of the single largest
opportunities for improving execution and
reducing costs; in fact, we estimate that
we can save as much as $300 million over
several years through implementation of
enterprise supply chain strategies.
We formed our Global Supply Chain and
Manufacturing organization in 2009 so that
we could achieve synergies from combining
our product line manufacturing capabilities.
The new organization leverages our global
footprint of manufacturing facilities, suppliers
and logistics expertise. Optimizing our supply
chain will be an important area of focus in
2010 and beyond.
As part of our cost reduction efforts,
we are also targeting $50 million in annual
savings through outsourcing specific shared
services functions in 2010, and we are
making improvements in our information
technology infrastructure.
In a difficult market, we made several strategic moves to enhance our
ability to compete on a global scale and fully participate in the most significant
opportunities in our industry over the next decade.
Houston
Rio de Janeiro
Calgary
Paris
Dubai
Kuala Lumpur
London Moscow
Regional Headquarters Geomarket Headquarters
2009 Annual Report 3