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Agilent Operations

Since Agilent separated from Hewlett-Packard, we've been working on a major effort to align our operations with the needs of our businesses and to make our systems and processes world-class. Over the last 18 months, this work has made it much easier for customers to do business with Agilent across multiple channels—both online and offline. At the same time, we're enabling our businesses to intensify their focus on customers, markets and competitors. "Our operational transformation is all about simplifying, being even more externally focused and being more efficient," said Alain Couder, executive vice president and chief operating officer.

  Our operational transformation is all about simplifying, being even more externally focused and being more efficient.

When we launched Agilent, we knew that the systems and processes in key functions—including customer service and support, manufacturing, information technology (IT), procurement, human resources (HR) and others—were not well-suited to Agilent's needs as an independent company. In mid-2000 we began to transform how we manage and perform these functions and the systems that support them. We rolled out more than a dozen separate programs focused on customers, company-wide processes and employees.

All these programs share two fundamental goals. The first is to make Agilent easier for customers to work with by standardizing and simplifying our processes. These and other efforts, such as outsourcing to partners who are leaders in their fields, are helping us reach our second goal, which is to improve our operational efficiency across the company.

During 2001 we added, completed and refocused operational initiatives as different efforts reached their goals and as we navigated the sharp downturn in the communications and semiconductor markets. From mid-2000 through fiscal 2001, we delivered major improvements and created a foundation for future progress:

  • We measurably improved on-time delivery, customers' ability to reach the right Agilent person quickly and the cost-effectiveness of many functions;
  • We redesigned and streamlined hundreds of IT systems and business processes, and we consolidated a number of facilities;
  • We reduced Agilent's total selling, general and administrative costs by several hundred million dollars in fiscal 2001.

During 2001 we made substantial progress in a range of customer-facing activities. We consolidated from 40 customer business centers worldwide to five regional centers. We made it a lot easier for customers to do business with us online by customizing Web pages for 13 major customers and by improving our Web site's overall performance and availability. We also improved our on-time delivery rate substantially after making customer requested delivery dates the metric for progress.

These accomplishments helped us win important recognition in 2001. We won the President's Customer Satisfaction Award from Cisco Systems Inc., which is that company's highest supplier honor. Nortel Networks, Celestica Inc. and CIENA Corporation also recognized Agilent as an outstanding supplier.

In manufacturing, we increased our use of contract manufacturers (CMs) while lowering the number of strategic CMs to five. The result is greater manufacturing flexibility while optimizing our processes with fewer CMs. We also continued to move manufacturing to lower-cost regions, such as Southeast Asia.

In IT we're improving how customers, employees, suppliers and shareholders interact with Agilent. We completed more than 60 initiatives designed to improve IT efficiency and effectiveness in areas such as the administration of our voice and data networks and the delivery of help desk services to employees. We consolidated under-utilized servers and moved data and applications to them, and the result was that we freed more than 200 servers for other business needs. These and related efforts enabled us to achieve overall IT savings of about $160 million over 18 months.

In 2001 we also made substantial progress in a major initaitive to deploy new, global enterprise resource planning (ERP) system. Our plan is to implement a single, company-wide infrastructure that will replace hundreds of legacy IT systems and applications and will span many functions, such as order management, manufacturing operations and product introduction. The phased ERP rollout, which will occur in 2002 and 2003, will make Agilent faster and more responsive to customers by delivering up-to-the-minute information to customers and employees anywhere in the world.

  From mid-2000 through fiscal 2001, we've delivered major improvements and created a foundation for future progress.

In procurement we achieved great results from our work to simplify, standardize and consolidate. We reduced our supplier base worldwide by more than 50 percent, achieved significant reductions in spending on materials, and rolled out a single, company-wide banking and procurement card solution for the thousands of small transactions that take place every month at Agilent. Over 18 months we have achieved total net savings in procurement of more than $300 million, from a combination of direct materials savings in our business units and company-wide purchases.

In human resources we made it easier for employees to access and use a broad range of information. We consolidated the Human Resources Management System into a single, Web-based system that enables worldwide delivery of services and consistent HR transactions within Agilent. This effort allowed us to implement a major rollout of HR services to the Web, including, where feasible, training services that had previously been done in person. These and other actions helped us reduce per-employee spending on HR by 50 percent compared with a year ago.

We also achieved significant recognition as an employer of choice. We were No. 46 on Fortune magazine's "100 Best Companies to Work For in America" list. Agilent ranked No. 2 in "20 Best Companies to Work For" published by the Cahners Electronic Group, a major high-technology periodical publisher. Agilent's operations were ranked No. 1 in Singapore and No. 4 in Malaysia on the inaugural list of "Best Employers in Asia" in a study done by Dow Jones Publications and Hewitt Associates. We were also named the 13th best place to work in the United Kingdom in a survey of more than 200 companies by The Sunday Times (UK).

We're greatly encouraged by our results in making Agilent's operations more effective and efficient. We're focusing on inventory reduction as a major opportunity, and we'll continue to make customer satisfaction, on-time delivery and manufacturing efficiency key priorities. Our ability to be a high-performance company depends on how well we perform the operational functions that enable us to be fast and focused.

During 2001 we made substantial progress on many fronts, and we're determined to extend this progress in 2002 and beyond.

Year in Review
* Home
* 2001 Financial Overview
* To Our Shareholders
* Agilent in Communications and Electronics
* Agilent in Life Sciences
* Agilent Laboratories
* Agilent Operations
* Agilent in Citizenship
* Agilent at a Glance
* Shareholder Information
* Download PDF version
* Text-only version
* 2001 Annual Report
* Past Annual Reports
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