british american tobacco p.l.c. annual report 2008 - Productivity

British American Tobacco p.l.c. Annual Report 2008
Employees at our factory in Izmir, Turkey. The number of cigarette factories within the Group has been reduced from 83 to 49 since 2000. This consolidation, undertaken with care for affected employees and communities, has removed excess capacity and means many more factories now serve more than 1 market.

Our focus is on smart cost management, marketing efficiency and capital effectiveness. This includes ensuring that we use our marketing resources and capabilities in the most efficient way, reducing unnecessary complexity and using our cash and other assets effectively.

We are saving money by turning a multinational business operating in over 180 markets into an integrated global enterprise that can take advantage of its scale. Greater integration across our supply chain is helping us to reduce costs, increase speed to market and improve effectiveness. We are also reducing our overheads and indirect costs (anything other than leaf, wrapping materials, cigarette making machinery and labour).

Following the productivity savings of more than £1 billion over 2003-2007, we continued our cost-saving momentum into 2008. The savings are both a source of operating profit growth and revenue for reinvestment in the business.

Read about our strategy in action:

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