2005 - Molex

Molex 2005 Annual Report
L E A D E R S H I P R O U N D T A B L E
martin Molex’s demand creation initiative has been successful in identifying
markets with growth potential. We use our integrated systems to help target oppor-
tunities faster and manage our opportunity pipeline better, so we can capture more
business and gain marketshare.
dave Our integrated systems also give us the ability to track global volumes and
leverage buying power. We’re not as efficient in this as we would like to be, but we’re
determined to improve. We spend 30% of our revenue on materials, and that percent-
age is rising, driven in particular by growth in our integrated products business and
unprecedented increases in the cost of copper, gold and plastics, which moves with
the price of oil. We’ve always offset escalating costs with productivity gains, but these
commodities are going up so fast, it’s harder to do today.
liam We now have our first global director of procurement, which will help us set
worldwide standards for materials and put a structure in place to obtain more aggres-
sive cost reductions from suppliers.
Becoming A Truly Global Company
martin We know we can accomplish more with a limited set of initiatives that we
can get everyone behind. So we’re focusing our energies–and all Molex–on four key
areas where we will demonstrate identifiable change in fiscal 2006 and beyond. These
strategic objectives start with making Molex truly global. We are very successful in
operating globally, but we’re still struggling with making Molex as effective a global
company as we want and need to be.
liam Being truly global offers so many opportunities for uniformity–in quality,
planning, engineering, delivery and project management. Unfortunately, customers
sometimes see a wide disparity in our performance from region to region. We have
customers tell us which Molex entity they want to deal with based on their experi-
ence, rather than us telling them which one they should go to based on who will do
the best job for their particular need.
martin There are basically three ways to structure any company: by geography, by
global product line or by the end-market you service. Molex historically has been
organized into four geographic regions, but we need to decide if that’s the right
structure going forward. In the past, we designed, manufactured and sold products
primarily within each region, so it made sense to organize and reward people that way.
liam Today, most of our business crosses regional boundaries, so sharing best-in-class
ideas and putting in place measurement systems that motivate and reward the right
behavior become a very different challenge.
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