Imation Corporation is a leading global developer and supplier of removable data storage media. In 2006, Imation launched a 100 Day Plan to transform its sourcing organization to reduce costs and improve processes. The plan achieved key accomplishments like establishing metrics, developing sourcing strategies, and holding a supplier conference. Areas for future improvement included completing spend analysis and assessments to identify additional savings opportunities.

1. September 2006 Imation Confidential
SOURCING TRANSFORMATION AT
IMATION CORPORATION
Imation Sourcing
September, 2006

2. September 2006 Imation Confidential
AGENDA
• Imation Corporation Background
• Current Sourcing Organization
• Initial Attack Plan
• Observations from Stakeholders & Sourcing Groups
• Sourcing 100 Day Plan Initiatives & Results
• Potential Areas of Focus for 2007
• Lessons Learned
• Summary
• Q&A

3. September 2006 Imation Confidential
WHO IS IMATION AND WHAT DO WE DO?
• Imation Corp. is a leading global developer, manufacturer and supplier of
removable data storage media.
• U.S.-based public company with more than 50 years of experience in
removable data storage.
• Spun off from 3M in 1996.
• The broadest product portfolio in the industry—from the desktop to the data
center.
• Technology focus--Imation has more than 330 data storage-related patents.
• Acquired Memorex Corporation in January 2006.
• 2200 employees worldwide.
• 2005 Sales of $1.2B (2006 forecast is $1.5B).
• Annual spend of $1.1B.

4. September 2006 Imation Confidential
IMATION HAS A BROAD GLOBAL FOOTPRINT
Corporate HQ
& Technical Center
Oakdale, MNOakdale, MN
Worldwide Headquarters
Production FacilitiesProduction Facilities
Subsidiaries, Sales Office,
Distributor
Percent of Global Revenue
European HQ
Schiphol, Netherlands
APAC HQ
Tokyo, JapanTokyo, Japan
Americas
~ 44%
APAC
~ 19%
Europe
~ 37%
European
Technical Center
Components & Assembly Plant
Wahpeton, NDWahpeton, ND
Tape Coating Plant
Weatherford, OK
Tape Coating Plant
Camarillo, CA
Consumer HQConsumer HQ
Cerritos, CACerritos, CA

5. September 2006 Imation Confidential
Ulysse
s
Emulat
ors
and
HDD
Cartrid
ges
Tape
Drives
and
Tape
Cartri
dges
Optical Media
Magnetic
Media
Flash,
Micro Hard Drive
Drives
Accessories
Ulysses Removable
Hard Drive Backup
Data Storage Systems &
Services
New
New
IMATION PRODUCTS
Multi-Branding
Multi-Branding
B2B, Government
$1.0 billion
Retail/Consumer
$0.8 billion

6. September 2006 Imation Confidential
40,000 BCE
Cave
Paintings,
Bone Tools
3500 Writing 105 Paper 1450
Printing
1870
Electricity
Telephone
1947
Transistor
1950
Computing
Late 1960s
Internet
1993 The
Web
1999 2003
More Data Was Created in the Last 3
Years than in the Previous 40,000
Years Combined!
Source: UC Berkley, School of Information Management and Systems
Global Data Creation (Bytes)
WHY FOCUS ON DATA STORAGE?

7. September 2006 Imation Confidential
WHY FOCUS ON DATA STORAGE?
Product/Service Imation Market Position
Magnetic Tape #1 Worldwide
Optical Media #1 Worldwide
USB Flash Memory #2/3 U.S; Growing Worldwide
Removable Hard Disk New Growth Area
Accessories Growth Area, built on strong
Memorex position
Data Storage Services Vaulting, Data Center
Diagnostics
New Growth Area

8. September 2006 Imation Confidential
IMATION GLOBAL SOURCING ORGANIZATION
VP of Sourcing
Raw Materials
Sourcing Manager
Finished Goods & Indirect
Sourcing Manager
Compliance, Int’l Trade,
& Operations Manager
RM Commodity Mgrs.(3) Finished Goods CM’s (2) Import/Export (3)
New Products CM (1)
Plant Indirect Sourcing (4)
(Reports Into Plants)
Indirect CM’s (3)
IT/Process Improvement
(1)
EMEA Sourcing
Leader (1)
PO Execution (2)
Global Sourcing Spec
Asia (1)
Mag Sourcing Specialist
Japan (1)
Consumer Sourcing Organization
(Taiwan based) (11)

9. September 2006 Imation Confidential
SOURCING TRANSFORMATION

10. September 2006 Imation Confidential
INITIAL ATTACK PLAN
• Gather extensive feedback from current Sourcing
employees and key stakeholders.
• Identify strengths and weaknesses of the current
organization and past approaches.
• Launch a “100 Day Plan” to capitalize on existing current
strengths and close identified gaps.
• Communicate the 100 day plan across the organization.
• Put in place a management approach and structure to
sustain the gains and continue to drive improvement year-
on-year.

11. September 2006 Imation Confidential
ACTIONS SINCE JOINING IMATION--R. Christoffersen
• Met will all Sourcing professionals worldwide.
• Met with 30+ key stakeholders of Sourcing including:
– Americas Business
– European Business
– Product Strategy group
– Engineering
– Plant managers
– Europe and APAC business leaders
– Finance
– Legal
– Top management
• Visited all three manufacturing plants.
• Spent extended time with the current Sourcing leadership team.
• Attended CAPS Best Practices annual conference.
• Met with 15+ key suppliers.

12. September 2006 Imation Confidential
SUMMARY OF IMPRESSIONS FROM STAKEHOLDER and
SOURCING INTERVIEWS
• POSITIVE FEEDBACK & THINGS SOURCING DOES WELL:
– Good relationship with nearly all key stakeholders.
– Very dedicated employees.
– People are competent at doing their jobs.
– People in Sourcing get along well with others inside the function.
– Have demonstrated strong commodity expertise in many areas.
– Have good relationships with our key suppliers, especially in raw
materials.
– Many “islands of excellence” in how we do our work.

13. September 2006 Imation Confidential
SUMMARY OF IMPRESSIONS FROM STAKEHOLDER and
SOURCING INTERVIEWS
• AREAS FOR IMPROVEMENT:
– Need to improve linkage with R&D and Product Strategy groups.
– Need to strengthen the link between Planning and Sourcing, especially in the
Americas.
– Need stability in leadership and organization structure.
– Need a clearer vision and direction for Sourcing.
– Need more focus on people development, skill building and sourcing tools.
– Focus in Sourcing needs to move from tactical to more strategic.
– Key metrics are not always clear.
– Work plans and development plans need improvement.
– We are too reliant on sole suppliers.
– Too many points of contact with key suppliers.
– Commodity strategies are not documented and published.
– Total cost of ownership is not always understood and used in all decisions.
– Sourcing organization in Asia not extensive enough.
– Time to market and decision making is too slow.

14. September 2006 Imation Confidential
KEY ACCOMPLISHMENTS – THE 100 DAY PLAN
 New mission statement for Sourcing completed and rolled out.
 Key metrics established for 2006.
 Key work plan initiatives defined for 2006. Progress being formally
tracked quarterly with all Sourcing employees.
 Significant improvements to the 2006 material cost plan were
submitted and we are exceeding the plan.
 Formal, written sourcing strategies have been developed for flash
and optical purchased products. Further refinement of these and
communication with stakeholders will occur in 2006.
 The primary sourcing approach for all finished products was revised
in quarter four, 2005 with a focus on gross margin improvement.
 Imation’s first-ever supplier conference was held in February 2006.

15. September 2006 Imation Confidential
KEY ACCOMPLISHMENTS – 100 DAY PLAN (continued)
 New processes have been documented and deployed for Supplier
Report Cards and Managing Price Increases.
 A formal monthly communication & training session for Sourcing is
now in place.
 All current Sourcing procedures have been identified and classified
into logical section headings. All are being updated in 2006.
 A “lean” opportunity list has been developed. Priority setting is
underway.
 A formal commodity manager checklist for orienting new employees
at Imation has been drafted and is being piloted.
 Established a new product introduction commodity manager position
and staffed it with an experienced sourcing professional.

16. September 2006 Imation Confidential
DISAPPOINTMENTS & CORRECTIVE ACTION PLANS
• Did not complete a full corporate
spend analysis due to the infeasibility
of querying this data from Oracle.
• Did not complete CAPS assessment
of Imation’s procurement practices.
Questions were not completed by
CAPS until June 2006.
• Organization structure changes
were placed on hold due to the
Memorex acquisition.
• Working with possible IT providers.
Hope to propose a solution in 2007.
• Target to complete high level
assessment by Q4 and identify other
possible areas for improvement for
2007 work plan.
• Will be addressed after the
integration is fully completed in 2007.

17. September 2006 Imation Confidential
INITIATIVES PLANNED FOR 2007
 Conduct an employee survey of all members in the Sourcing team to
assess morale, job satisfaction, and areas needing focus.
 Complete a company-wide spend analysis to identify other possible
target areas.
 Complete the CAPS 10X Lite Assessment and identify other possible
areas for further improvement.
 Update all supplier contract agreement templates to reflect 2007
expectations of suppliers.
 Continue development of improved cost models and roll out to the
Sourcing team.
 Build on and sustain the improvements rolled out in 2005-6.

18. September 2006 Imation Confidential
LESSONS LEARNED
• Driving change can be a painful process.
• Engage everyone in the Sourcing organization in the transformation.
“Buy in” is important.
• Focus on strengths of the current organization.
– Be careful not to convey the past as “bad”.
• Do not push too hard or too fast.
• Stay engaged with key stakeholders on a regular basis.
• Recognize “terminology” difference between companies can be a
barrier.
• Be conscious of the potential for disruption from “external” factors.
– The Memorex acquisition slowed or stopped a lot of planned work
for much of 2006.

19. September 2006 Imation Confidential
SUMMARY
• Imation has a good Sourcing organization, with good
people, doing a good job.
• The opportunity clearly exists to elevate the organization
and its performance.
• You need to engage and tap the support, energy, and ideas
of everyone in Sourcing to achieve the business and
functional objectives.
• You need the full support and cooperation of all key
stakeholders to make this journey.
• This is not a 100 meter dash, it is a marathon!

20. September 2006 Imation Confidential
QUESTIONS?

21. September 2006 Imation Confidential
APPENDIX

22. September 2006 Imation Confidential
IMATION GLOBAL SOURCING MISSION
The mission of the Imation Global Sourcing team is to procure
products and services for the company at the lowest total cost
of ownership. To execute our mission, we will:
Identify, develop and manage a global supply base which provides:
 Market-competitive total delivered costs
 World class delivery and service
 Six Sigma-level quality
 Technology leadership
Develop a Sourcing organization with the following characteristics:
 Unquestionable ethics and integrity
 Relentless focus on total cost of ownership
 Strategic and global view of our business and the supply chain
 Functionally excellent in Procurement

23. September 2006 Imation Confidential
Region Quality Service Technology Cost Overall
Americas
Europe
APAC
Overall
(Supplier) 2006 Report Card(Supplier) 2006 Report Card
Region Quality Service Technology Cost Overall
2005 Report Card
Date:
Code: Approved:
Rating Definitions:
95+ Totally responsive to customer requirements/Excellent!
85+ Responds well to customer requirements / Good
75+ Marginal responses to customer requirements / Average
65+ Responds unacceptably to customer requirements / Poor
<64 Totally unresponsive to customer requirements/ Failing

24. September 2006 Imation Confidential
Accomplishments

25. September 2006 Imation Confidential
Areas for Improvement

26. September 2006 Imation Confidential
Top Four Improvement ProjectsTop Four Improvement Projects
Report Card Completed by: Date: