A FOCUSED GLOBAL ORGANISATION
Following an international reorganisation during the year, Smiths Medical now has greater potential for profitable growth. It is a global organisation with five business units. Four business units focus on specific products and markets, while the fifth concentrates on operations. This reorganisation is intended to improve the effectiveness of sales and marketing and increase the efficiency of manufacturing and supply chain activities. To this end, distribution and manufacturing operations are being restructured for which an exceptional charge of £13m was incurred in the year. All five business units have increased focus on customers as the prime objective.

In the United States, the Anaesthesia & Safety Devices business unit is responsible for pain management, needle safety and temperature management devices and equipment, while Medication Delivery & Patient Monitoring covers infusion products, such as ambulatory pumps, vascular access devices and patient monitoring. Smiths Medical International is responsible for markets outside the United States and Japan. Smiths Medical Japan handles sales and marketing of all products in its home market.

In order to maximise the impact of our US sales force, sales teams are organised around product groups and concentrate on particular hospitals and buying organisations. This increases cross-selling opportunities as we are able to offer a wide range of products at each meeting.

The global operations business unit has centralised control of production in order to safeguard quality and improve efficiency. The majority of volume production now takes place at our manufacturing facility in Tijuana, Mexico, while a number of components have been outsourced to the Far East.

As a first step towards advancing the performance of Smiths Medical Japan, the minority interest was acquired. This has allowed us to introduce new management, with a view to accelerating sales growth and concentrating on high-margin Smiths Medical devices rather than third party products. Japan is the world's second largest market for medical devices and has great potential.