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



An integrated, global supply chain
An integrated, global supply chain
A farmer in Rio Grande do Sul state, Brazil, attends to tobacco leaf in a curing barn. The raw materials used in our products are sourced globally and supplied to the Group’s factories using the latest distribution methods and technologies, ensuring timely delivery and constant quality control.

We continually seek to increase the productivity of our business. The savings which are generated are a source of operating profit growth and revenue for reinvestment in the business.

Our focus is on smart cost management, marketing efficiency and capital effectiveness. This includes reducing unnecessary complexity to save costs and using our cash and other assets more effectively.

Integrated global enterprise

We are saving money by turning a multinational business operating in over 180 markets into an integrated global enterprise that can take better 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).

Productivity savings

Savings in supply chain, overheads and indirect costs amounted to £239 million in 2009 at constant rates of exchange. We are firmly on track to achieve our £800 million savings target by 2012.


Effectively and efficiently deploying our global resources to increase profits and generate funds to reinvest in our business.

Savings in supply chain, overheads and indirect costs:
£239 million