由 Joan Trombetti
, Writer | March 25, 2009
Hospira, Inc. a leading global specialty pharmaceutical and medication delivery company, has announced details regarding Project Fuel, a multi-phased initiative to improve the company's margins and fuel its growth. Project Fuel will capitalize on the company's potential to increase shareholder value and improve operational efficiency by optimizing its product line, evaluating non-strategic assets and streamlining its organizational structure.
In conjunction with these actions, which are slated to occur over the next 24 months, Hospira expects to reduce its global workforce by approximately 10 percent and deliver annual cost savings of approximately $110 million to $140 million.
"To maximize our opportunities for growth and sustainable shareholder value, Hospira is taking a number of important steps to simplify our business, strengthen our financial position and establish a strong foundation for our future," said Christopher B. Begley, chairman and chief executive officer, Hospira. "By reducing costs and improving efficiencies, we can free up more dollars to invest for profitable growth and shareholder returns. And with a streamlined, focused organization, we will reduce complexity, improve performance and be better positioned to advance our significant opportunities."
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Optimizing the product line
Hospira's global product line encompasses thousands of list numbers, or SKUs, many of which represent multiple presentations of the same drug compound and serve the same medical need. By simplifying presentation choices, Hospira can better meet the needs of its customers with a focused, yet robust, portfolio. In addition to improving inventory management and manufacturing efficiency, Hospira expects the streamlined product line to produce indirect cost reductions through associated decreases in functional support. Importantly, customers will also realize enhanced service levels and value, while continuing to benefit from product choice across the continuum of care.
Evaluating non-strategic assets
Hospira's Specialty Injectable Pharmaceuticals (SIP) and Medication Management Systems (MMS) product lines have been established as key growth drivers, delivering strong performance and providing significant opportunity for future growth. As a result, the company is now able to turn its attention to rationalizing non-strategic assets that detract from the company's overall growth trajectory and margin expansion opportunities.