Magazine

Table: Oiling the Corporate Machine


Today's top companies are those that keep a close eye on costs and don't waste effort--and those that sell products or services that help their customers do the same.

HOW TO BE EFFICIENT YOURSELF:

Hand off what you don't know

High-flying Nvidia (NVDA) relies on semiconductor makers to build the speedy graphics chips it designs, eliminating the cost of building a multibillion-dollar foundry. Sun Microsystems (SUNW) outsources much of its manufacturing, saving $300 million.

Let customers help themselves

Companies can save a bundle on customer service by letting clients get help online. Last year, IBM (IBM) eliminated 99 million calls to telephone help desks and sales reps by offering support information to customers on the Web. That helped Big Blue avoid $2 billion in costs.

Focus on process

PC giant Dell (DELL) knows that time is money and that inventory is the devil. By making a religion out of processing orders rapidly, streamlining production, and getting goods to customers fast, Dell can keep just five days of inventory on hand.

Tighten the supply chain

Server maker Sun Microsystems has designed software that alerts it when contract manufacturers have too many or too few parts to build Sun's machines---one reason Sun hasn't had to write off inventory as sales have fallen.

WHO WINS SELLING EFFICIENCY:

The contract manufacturers

Because they can save tech firms gobs of time and money, contract manufacturers are having a field day. Six of the top 25 on our list--including No. 1 Celestica (CLS)--make gear for others.

The teachers

Having binged on servers, software, and networking gear during the Internet boom, companies are now paying experts such as IBM, EDS, and Cap Gemini to show them how to make those investments pay off.

The coders

Forget gee whiz e-commerce software designed to revolutionize the way business is done. Now, old-guard software makers such as PeopleSoft (PSFT) and SAP (SAP) are prospering as companies buy programs that help them better manage their operations.

The innovators

As the number of Web pages piles up, companies need more efficient ways to store and manage information. That's why storage innovators such as EMC (EMC) and Brocade (BRCD) still get paid a hefty margin for their gear.


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