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| As announced by Drägerwerk AG, Lübeck, following its ad hoc notification of the evening of October 4, 2000, and already indicated at the stockholders' meeting last June, Dräger Medizintechnik GmbH, a wholly owned subsidiary and parent of the Dräger Medical Group, Drägerwerk AG's biggest division, is planning an all-out restructuring program for improving efficiency and earnings for the Dräger Medical Group. |
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| "Equal ranking priorities within this altogether DM 250 million productivity im-provement program (scheduled over a span of three years) are consistent cost reductions, optimized work flows throughout all departments and a significant increase in volumes in equipment business as well as data management and services in the midterm. The Medical Group will once again turn into an impres-sive source of earnings within the Dräger Group and a pleasure not only for our customers but our stockholders, too," says Dr. Wolfgang Reim, the newly ap-pointed Executive Board member in charge of the Medical Group. "With the aid of this new program, Dräger intends not only to maintain its technological su-premacy but also through cost leadership, further expand its international mar-ket position. The vast majority of jobs are safe and through this refocusing, the basis will be laid for further growth in the fiercely competitive international health market."
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| The cost-slashing program comprises the following eight items:
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| (1) Streamline administrative and support/service functions at the German sales branches and the Lübeck headquarters. |
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| (2) Simplify the global management and organization structure in order to reduce complexity and optimize work flows worldwide (e.g., instead of eight only five international sales regions).
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| (3) Cut working capital by 30 percent. |
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| (4) Quicken the transformation from a supplier of hardware to a foremost systems provider adept in services and problem-solving.
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| (5) Improve processes and step up the application of e-commerce (e.g., in the fields of purchase, logistics, and marketing). |
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| (6) Prioritize those businesses in which the Dräger Medical Group is either market leader or runner-up, or alternatively shed low-profit market seg-ments (e.g., Dräger MST GmbH, Wiesbaden, and its modular hospital container construction), or alternatively move into strategic alliances. |
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| (7) Introduce organizational measures for facilitating intragroup knowledge transfer and bundling know-how within the Dräger Group. For example the Data Management unit will be run as a new sector with headquarters and responsibility in the United States, and the separate German R&D locations in Essen and Kiel will be discontinued.
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| (8) Chain management compensation systems even more tightly to bottom line and cost of capital indicators. |
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(c) Drägerwerk AG & Co. KGaA, 2007 |
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