Question-and-Answer Session
[Operator Instructions]. Your first question comes from Jim Lucas of Janney Montgomery Scott.
Larry Kingsley - Chairman of the Board, President and Chief Executive Officer
Hi, Jim.
Operator
Jim, please go ahead. Jim, please proceed with your question.
Unidentified Analyst
Can you hear me, okay?
Larry Kingsley - Chairman of the Board, President and Chief Executive Officer
We could hear you, Jim.
Unidentified Analyst
Yes. This is actually Joe Herrick with Gutterman Research [ph]. A couple of things. It can be a very challenging year for a company and maybe factoring in surplus, what are you guys doing in terms of the operational improvement initiative throughout your plan regarding like various lean and six sigma to improve throughput, throughout your plans and what benefits do you expect to achieve with those?
Larry Kingsley - Chairman of the Board, President and Chief Executive Officer
Okay. Let me restate the question, because I'm not sure everybody can hear it is. In our manufacturing environment, and this overall top line environment as we're expecting what are the various lean and six-sigma initiative that apply? As your firm knows, and Jim who has followed us closely, that we have very consistently applied our operational excellence and more recently our commercial excellence. Overall, process improvement tool set very successful. We achieved in '07 our targeted incremental cost savings. So, we got to our both material, as well as labor productivity expectations. As we rolled up our plans for '08, we came to a number that exceeded '07 by a nice margin, which I’m not going to disclose right now. The most recent update is actually we think that we are even better off than that. And the way we track it Joe is that we look at actual costs, hard costs saved by the business and we have a very granular metrics approach that we can look into each of the business units, each of the product segments, understand by commodity. Right now in the case of labor to the... labor value contributed to any one of our work areas, we call them value strains, and I can tell you that we are rolling up an incremental number that's the best ever for certain and we're going to see nice contribution out of both our existing core businesses, as well as the newer acquisitions. On top of that, in the prepared remarks, as I mentioned through the course of '07, we significantly beefed up our supply chain management resources on the ground in China. And we think that we've already hit the ground running on some nice commodity-based, cross-business unit savings opportunities for us, that will begin to pay off early in the year and through the course of the year in '08. So, I can tell you that I think our businesses are just absolutely razor focused on both material and labor productivity. We've got higher hard numbers dialed into our plants. We’ve got good optics around the metrics, and I think with the new resources that we have added through the course, clearly the last couple of years, particularly in the supply chain side, I think we got nice opportunity to actually exceed our own internal expectations.
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