Gilmer Minor III, CEO of Owens & Minor Inc.

Owens & Minor is a $3.5 billion national medical supply distributor, mainly to acute-care hospital systems, with 44 distribution centers around the country. We are a New York Stock Exchange company that was founded in 1882 by my great grandfather and Mr. Owens. I guess that qualifies us as an old-economy company. Today, we are anything but that.

We are a company that knows its place and its duty. We are servants to our customers and our duty is to help them be successful. By doing so, we ensure our own success if you have any faith in mankind. I do, and it has been the case for Owens & Minor for almost 120 years.

The foundation I inherited and have tried to perpetuate is based on the principles of integrity above all else, as well as courage, empathy, common sense, teamwork, and the willingness to change and have fun.

Is this old fashioned? Out of step in today's fast-paced society? Pass? by current business standards? I think not. Because history is a record of the past and a blueprint for the future, the foundation that we have built in the past will stand us in good stead going forward. I feel the Owens & Minor of today is more progressive, creative, and dynamic than ever before because of our people, our collaborative partnerships with Perot Systems, IBM, and Business Objects, and our passion for success.

Here are some characteristics about Owens & Minor that got us to the dance:

• a) A good company must reinvent itself every three to five years
• b) We are a large company with a small company mentality
• c) Our relationships and partnerships are based on trust
• d) Our technology budget is driven by the needs of our business leaders
• e) We collaborate with everyone

We have always been an IBM house. That started in 1954 and continues today. We grew our business through some 22 acquisitions over a 30-year period. In 1981, our sales were $181 million, today 20 years later, $3.5 billion. In 1994, we made an acquisition that doubled the size of the company. At that point, we outsourced the management of our operating system to IBM in Boulder, Colo. We struggled with this acquisition and in 1996 we really had our backs to the wall. We were a reactive technology shop at the time but decided as one of our three strategic objectives going forward that we wanted to turn information into knowledge into profit. We saw the value of information on the horizon and we wanted to become a leader in its accumulation and use. People in this room who are my heroes began to join the company: Jon Garmon, Don Stoller, Dwayne Hobbs, Pat Caine, Paul Higday, and Pearlene Derello from IBM as our account representative.

In May of 1998, we hit the wall again when our largest single customer went elsewhere with its $400 million in business. Of course, our stock went down appreciably and when we told Wall Street we were going to rebuild the business and not slash and burn, it went down further. No way were we going to give up. We had come a long way with our technology development and we felt we could leverage that to success. In five months, the $400 million was back on the books in new business at higher margins driven by our technology solutions.

It became apparent to us that for the task ahead we needed a partner to help us. Perot Systems emerged as a natural partner, an organization that was similar to ours in culture and integrity, with a team of creative people second to none. We outsourced the rest of ISIT relationship to them and we have never looked back. It's the absolute best strategic decision that Owens & Minor has ever made.

Now on the scene is Rick Mears from Perot to manage our relationship. Rick is part of our management and company planning team as well. We've always looked at Perot as an equal partner in getting us to where we need to be strategically. This relationship with Perot, sprinkled with new relationships and older ones like Business Objects and IBM, are why I am here today. David Guzman joined us eight months ago to lead our new initiatives and to bring a fresh and creative spirit to our organization, and he has done just that. But the work has really just begun. We are in a growth industry surrounded by giants like Cardinal and McKesson--yet for medical/surgical distribution, we are the company the industry is turning to for real-time logistics services and technology solutions. Some advice: know your business, know your people, and love your people. Pick good partners and love your partners and always run your business with the highest integrity so you can get a full night's sleep every night. Pretty fundamental stuff--but it works.

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