Graco 2007 Annual Report Download - page 13

We reshaped our organizational structure
to establish Global Business Units (GBUs)
as the core organizing concept of our busi-
ness. To achieve long-term success, we must
leverage our brands, technology, supply
chain, consumer and competitor under-
standing and people on a global basis.
The new GBU structure will help support
growth across all business units and regions
while ensuring an appropriate cost struc-
ture. Each of our GBUs has been tasked
with creating and executing strategic plans
to drive what we call the “New Virtuous
Cycle.” This framework outlines the process
for creating differentiated products with
a best-in-class cost structure, backed by
investments in superior branding, to
achieve premium margins – thus creating
funds for strategic reinvestment in the
brands to perpetuate this growth cycle.
Our new organizational structure will
further enable our businesses to win with
their unique consumers and customers
and beat the relevant competition.
We continue to deliver on our initiatives
to achieve best cost in our manufacturing
and sourcing operations and to leverage
the power of One Newell Rubbermaid.
Our Project Acceleration restructuring
program, which produced cost savings of
$60 million in 2007, remains on track to
provide over $150 million in annualized
savings by the end of 2009. We have
begun consolidating our distribution and
transportation activities across the com-
pany to achieve better scale and efciency.
Over the past two years, our distribution
facility footprint has shrunk from almost
100 distribution centers to fewer than 80,
with a goal of reaching approximately 50
over the next two years.
In October, we successfully launched
SAP
® at our North American Ofce Products
business, marking the first major mile-
stone in our multi-year rollout of this
enterprise resource platform. SAP will
be a key enabler of best-in-class business
processes across the organization. We
have invested signicant resources in this
project, and we are pleased to have had
a seamless transition to the new system
in our North American Ofce Products
business. Our rst launch has provided a
useful roadmap and solid base of experi-
ence to reapply as we approach our next
go-live in the Home & Family segment
later this year.
Lastly, we are continuing to effect the
culture change necessary to support
our evolution into a top-tier consumer
branding and marketing company. As a
company we have identied and embraced
a common set of company values centered
around consumer-focused brand building,
collaboration, diversity and people
development, integrity and best-in-class
results. I have learned from experience
that cultural values can have as much
impact on a company’s performance as its
strategy. Our support of globally shared
values and behaviors, directly linked to
our vision, will enable us to deliver strong
business results and successfully face even
the most difcult challenges.
Levers for Sustainable Growth
As we look to 2008 and beyond, we are
focused on achieving sustainable growth
throughout the organization. We are invest-
ing in building the long-term capabilities
that build real shareholder value and con-
dence. I am proud of the men and women
of Newell Rubbermaid for their hard work
and dedication to delivering the positive
As we look to 2008 and beyond, we
are focused on achieving sustainable
growth throughout the organization.
Mark Ketchum
President and Chief Executive Officer
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