Kraft 2003 Annual Report Download - page 17
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Save,invest,grow.It’sthecontinuouscyclethatdriveslong-term,
sustainableresults.
Productivity–andthesteadyflowofsavingsitcreates–willcontinuetobe
ahallmarkofKraft.Whileitcomesfrommanysources,weseetwoareas
thatofferparticularopportunityforongoingcostsavings.
Thefirstissupplychaininitiatives,wherewewillfurtherleverage
ourprocurementscaleonaglobalbasisandrationalizelessprofitable
productvariationstohelpusachievegreaterproductionand
distributionefficiencies.
Thesecondisthroughadvancesintechnology.Wewillcontinuetoautomate
ourplantsanddistributioncenters,formulateourproductsinlower-cost
waysthatimproveormaintainourproductquality,andseekoutalternative,
lower-costpackagingmaterials.
Beginningin2004,we’retakingadditionalstepsthatarerightforthe
futurebutdifficultinthepresent.Toincreaseourinvestmentingrowth,
wemustbecomeanevenmoreefficientcompany.Sowearebeginning
anestimated$1.2billionpre-tax,three-yearcostrestructuringprogram.
Byleveragingourglobalscale,loweringourcoststructureandoptimizing
ourcapacityutilization,weexpectthisprogramtogenerateabout
$400millioninannualpre-taxsavingsby2006toinvestbackinour
brandsandacceleratetop-line-drivenearningsgrowth.
Weknowtheactionswetaketoreduceourcoststodaywillgiveusthe
financialflexibilitytofundoursuccesstomorrow.