Shipping  Products More  Efficiently With our new central- ized transportation  management system,  we’ve determined  the most efficient  shipping confi gura- tions and routes. This  reduces shipping  costs as we put more  products on a truck,  which means fewer  trucks on the road.  Holistic Margin Management (HMM) is  our unique discipline of leveraging pro- ductivity, product mix, and pricing to off  set  cost inflation and protect our margins.  Through HMM, we’re challenging ourselves  to find the most efficient and eff ective  ways to run our businesses. We’re engag- ing the collective efforts of everyone on  our business teams to identify costs that  don’t add value for our consumers, elimi- nate those costs, and then reinvest the  savings back into our businesses in ways  that generate sales growth.  So far, the majority of our productivity  savings have come from our U.S. Retail  As we look ahead, we expect costs  for commodities and energy to increase,  fueled by global demand. That means  HMM will remain key to protecting our  margins. Our goal is to capture a cumu- lative $1 billion in supply chain HMM  savings from fiscal 2010 through fi scal  2012, and we are targeting $4 billion in  cumulative savings worldwide over the  decade to 2020. Through our HMM efforts, we’ve been  able to offset input cost inflation in recent  years and protect our margins. Productivity  initiatives, such as a new centralized  transportation management system,  contributed to margin expansion in 2010. 13 Annual Report 2010 Gross Margin (percent of net sales) businesses, but we see great opportu- nities across our portfolio. For example,  our International businesses are begin- ning to reap the benefits of HMM, with  state-of-the-art manufacturing processes  and global sourcing of packaging and  ingredients. We’re also partnering with  our suppliers and customers to identify  ways we can work together to elimi- nate costs.  We’re driving growth by  protecting margins. Net sales less cost of sales. 10 09 08 07 06 39.7 35.6 35.7 36.1 35.6