ITW Guiding Principles
Diversification
ITW's financial performance is generated by some 750 decentralised business units, employing around 55,000 people in 49 countries. This, together with more than 5,000 different product lines, means ITW is well positioned to meet the challenges of todayıs global market.
Overall success comes from the collective results of many different markets predominantly construction, automotive and food equipment. This mix of revenue provides stability during economic swings and helps to minimise the impact of country specific market cycles.
By allowing business units to operate autonomously each business is close to the people buying their products, this enables them to react to customer needs by providing original, customised products and services.
Innovation
For almost a century ITW have been at the forefront of innovation; typically, ITW are among the top 100 patent holders in the USA. In 2007, we had nearly 20,000 unexpired patents and pending applications worldwide and ranked 79 of top issuers of U.S. patents in 2006.
80/20
A driving force behind much of our success at ITW is our 80/20 business process, a practice that keeps us focused on our most profitable products and customers. The concept underlying 80/20 is simple: 80 percent of a company's sales are derived from the 20 percent of its product offering being sold to key customers.
Put simply, too often companies do not spend enough time on the critical 20 percent of their key customers and products and spend too much time on the less important 80 percent. Our view is that once you know who your high volume customers are, you can begin to understand what drives your growth and what your true costs are in the business. At the same time, we don't typically walk away from low volume customers; we just treat them differently, via outsourcing and specialty pricing programs.
The 80/20 principle guides our business processes and helps us find new ways to enhance customer satisfaction as well as drive margin growth and profitability. Specific processes include: product line simplification, segmentation, in-lining, cellular manufacturing and outsourcing, as well as manufacturing to the market rate of demand.
To find out more about ITW Inc. visit www.itw.com
