The Pulse -- December 2005

Lee Jeans Enhances E-Commerce Store Front
Following the launch of Lee1889.com in May 2005, Lee Jeans continues to push its aggressive e-commerce strategy. To help execute online plans, the company tapped LaGarde's StoreFront e-commerce platform for a scalable, shopper-friendly solution that linked with legacy systems. A customized Electronic Data Interchange system allows Lee to exchange data from its existing ERP system with online systems. Lee can now process orders, create shipping notices and update inventory across all branded online stores. As online needs evolve, the e-commerce platform can adjust to scale. "The flexibility of StoreFront's platform has proven to be extremely valuable," says Alex McDonald, Interactive Marketing Manager, Lee. "Not only have we been able to adapt the solution to meet our changing business needs, but we've also been able to maintain vital integrations between our online and offline systems."

Kodak Widens Scope of Digital Transformation
Eastman Kodak Company and IBM reach a definitive five-year agreement for IBM to provide a broad range of business support services to Kodak, including payroll services and credit and collections management, among others. Kodak expects to realize millions of dollars in operating and capital cost savings, while driving greater business flexibility and responsiveness in these process areas. This agreement is part of Kodak's broader effort to create a business model that is competitive in digital markets. This move will help Kodak to reduce administrative costs while benefiting from the improved delivery of business services from IBM. "Kodak has a huge opportunity in the digital world, and we are transforming our company and our brand to make sure we do all we can to take advantage of the opportunity," says Mark V. Gulling, director, Global Shared Services, and vice president, Eastman Kodak Company. "This agreement is a key part of our transformation because it will allow us to streamline our business processes and increase cost savings while freeing up resources to focus on our core imaging businesses."

Georgia-Pacific Under New Ownership
Koch Industries makes a $48 per share cash tender offer for all shares of Georgia-Pacific. The transaction, which was approved by boards of directors at both companies, has an equity value of $13.2 billion and a total enterprise value of $21 billion. Georgia-Pacific will continue to do business worldwide under the Georgia-Pacific name and operate businesses as an independently managed company. Included in the transaction are all assets of Georgia-Pacific, including its North America and international consumer products segments, as well as its building products, packaging, and paper and bleached board segments. says A.D. "Pete" Correll, Georgia-Pacific chairman and CEO. "Koch's acquisition of Georgia-Pacific will enable us to move into the future in an exciting fashion and continue achieving our financial and operating goals with committed new ownership that is exceptionally strong financially, has a long history of outstanding business success and a dedication to operational excellence."

Pacific Cycle Turns RFID Obstacles into Opportunities
According to Ed Matthews, Pacific Cycle's director of information systems, meeting the Wal-Mart RFID mandate was just the start of more tangible opportunities for the large manufacturer of bicycles. Pacific Cycle recently completed its full-scale RFID project, which leverages technology from SAP and Zebra Technologies. Matthews says the company was able to gain real-time supply chain visibility by capturing and integrating smart label information into its SAP enterprise-wide system. That integration allowed the bicycle supplier to automate warehouse operations so inventory movements could generate and record transactions without human intervention -- leading to a dynamic rebalancing of inventory flows. Zebra RFID printer/encoders were used exclusively by Pacific Cycle during the pilot.

Avon Embarks on Multi-Year Makeover
To fuel revenue growth and strengthen overall performance, Avon Products Inc. announces a multi-year restructuring effort, which includes:

• Efforts to flatten the organization and bring senior management closer to consumers through a substantial organization downsizing.
• The implementation of a global manufacturing strategy through facilities realignment.
• Supply chain efficiencies in the areas of procurement and distribution.
• Streamlined transactional and other services through outsourcing and moves to low-cost countries.

Initiative implementation costs are expected to total $300 million to $500 million before taxes, but benefits will help fund an increase in consumer investment and improve the competitiveness of its direct selling opportunity. Advertising, market intelligence, consumer research and product innovation will be funded at higher levels, with advertising spend projected to more than double by 2008. "By taking a comprehensive approach to our enterprise expense base and global value chain, we are identifying more efficient and effective ways of operating," says Andrea Jung, Avon's chairman and CEO.