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Consumer Goods Suppliers Identify $3 Million in Potential Annual Savings

Honeywell Report Discovers Hidden Savings Within Direct Store Delivery (DSD) Processes for FMCG Suppliers Fort Mill, S.C. April 22, 2014 As many consumer goods suppliers continue to report growing business challenges, a new report from Honeywell (NYSE: HON) has found that millions of dollars can be saved by evaluating and improving Direct Store Delivery (DSD) operations - namely the way that products are ordered, sold, delivered and merchandised.The report, which contains feedback from 350 C-level consumer goods executives and directors from across the globe, finds that 49 percent of organizations feel increased transportation costs have severely impacted profit margins in the past 12 months. But those organizations that have carried out process evaluations (known as process re-engineering) in the past year to improve their DSD processes have cut, or expect to cut, costs on average by $734,000 annually. <Additionally, approximately 20 percent of all respondents have experienced, or expect to experience, at least $1 million a year in tangible cost-savings through DSD process re-engineering, and about 20 percent of companies with 3,000 or more employees anticipate saving at least $3 million. "The report shows clearly that re-engineering DSD processes provides an opportunity for business transformation and competitive advantage," said Brian Schulte, industry director for Direct Store Delivery for Honeywell. Consumer goods companies can improve their revenue while cutting costs, enabling them to strategically grow their business and margins in these challenging times." According to the report, the top five areas identified by survey respondents for cost improvement are:
1. Fuel and petrol costs - $889,000 projected average annual savings 2. Merchandising - $725,000 projected average annual savings 3. Delivery receiving/check-in - $686,000 projected average annual savings 4. Delivery - $682,000 projected average annual savings 5. Payment procedures - $665,000 projected average annual savings
Respondents also declared that time, as well as money, could be saved across key workflow areas. Through making improvements to delivery, truck loading, delivery receiving/check-in, merchandising and order processes, respondents indicate that approximately 30 minutes could be saved in each of those five areas per route, per day, equating to more than 2.5 hours per day for each DSD route. Re-engineering: a strategic focusTime and saving opportunities are critical as the report indicates that the surveyed companies view DSD, the process for consumer goods suppliers to deliver their products directly to retail stores, as a critical focus for their strategy. Nearly 60 percent of surveyed organizations view DSD as key to their company's business strategy going forward.Consumer goods suppliers saw the primary goal of re-engineering their DSD processes as 'improving their strategic direction performance.' Currently, more than a third (35%) of respondents say operational efficiency and productivity have been the primary goal of their re-engineering efforts, followed by 19% each for revenue generation, reducing operating costs, and improving in-store execution (e.g. building in-store promotional displays on time).Download research infographic. Honeywell Scanning & Mobility (HSM) is a leading manufacturer of high-performance image- and laser-based data collection hardware, including rugged mobile computers and bar code scanners, radio frequency identification solutions, voice-enabled workflow and printing solutions. With the broadest product portfolio in the automatic identification and data collection industry, HSM provides data collection hardware for retail, healthcare, distribution centers, direct store delivery, field service and transportation and logistics companies seeking to improve operations and enhance customer service. Additionally, HSM provides advanced software, service and professional solutions that help customers effectively manage data and assets. HSM products are sold worldwide through a network of distributor and reseller partners. For more information on Honeywell Scanning & Mobility, please visit www.honeywellaidc.com. Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and performance materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, and Chicago Stock Exchanges. For more news and information on Honeywell, please visit www.honeywellnow.com.This release contains certain statements that may be deemed "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.