Performance-Driven Supply Chains with Sales and Operations Planning

1. Performance-Driven Supply Chains with Sales and Operations Planning

2. Sales and Operations Planning in Life Sciences Your Panel • Paul Homchick, Sr. Director Supply Chain, Oracle • Valerie Kwiatkowski, CIO, ICU Medical • Erin Bunkley, Divisional VP Planning & Integrated Logistics, Pharmavite • Mike Kuban, Director Enterprise Solutions, Pharmavite

3. ICU Medical Overview • Pharmavite Overview • Panel Discussion ProgramAgenda

4. Pharmavite • Pharmavite business • Manufacturer of vitamins and nutritional supplements • Nature Made™ brand sold thru major mass retailers , clubs and drug store chains • 1989, purchased by Japanese Otsuka Pharmaceutical Co. • Since 1994, Nature Made products are the top-selling broad-line brand of vitamins in the United States • Key Business Challenges • Multiple MRPs, disconnected factory & material planning • Increasing inventory and critical material shortages • No capacity visibility into the planning process • Sourcing and Make / buy simulation & execution problems • No management visibility, reporting, dashboards • Oracle footprint • JDE 8.12, PDP, MRP and Demantra 6.0 • ASCP 12.1.2 • Demantra 7.3 • Hyperion 11.1.1 • OBIEE 10G

5. Characteristics of Our Supply Chain • Pharmavite’s supply chain consists of multiple facilities in Southern California. • San Fernando facility produces bulk tablets and soft gels • Valencia facility packages finished goods • Contract • Distribution centers in Valencia & Indianapolis ship to customers • New site under construction in Opelika, Alabama • The complex nature of our products and stringent quality standards have created planning challenges. Additionally, the fragmented nature of our current supply chain adds complexity. • In January of 2013, we are opening a new facility in Opelika, Alabama which will make our planning process even more challenging.

6. Process, System, Organization Alignment • Project entailed much more than a new system implementation but a fusion of: • New processes and policies • Roles & responsibilities • Organizational alignment • New metrics Forecast Distribution Center Split Displays FG Components Bulk Raw Materials

7. Why Oracle Value Chain Planning? • Pharmavite made a commitment to Oracle as a strategic partner for the following reasons: • Functionality of Oracle applications is equal and often better than competitive set • Synergy of applications across a single vendor drives ITS efficiencies • VCP provides an integrated supply chain solution from demand planning to supply planning to finite scheduling • VCP suite offers scalable solutions that support the future growth of Pharmavite

8. High Level Process & Integrations • Sales and Operations Planning • Monthly process that drives operational and financial planning • Demand Management • Customer and product driven forecasting based upon trends, market activities and promotional schedules • Supply Planning • Capacity constrained master schedule that plans supply across the supply chain to meet customer service targets Hyperion Demantra

9. Key Capabilities • Advanced forecasting tool - Demantra • Leverages JDE data to drive increased forecast accuracy • Provides capability for promotions management • Single, global supply planning system - ASCP • Ability to peg supply and demand though all levels of BOM • Production / Capacity management • Purchasing • Reduced material expedites and sourcing delays • Safety Stock methodology and solution (Demantra & ASCP) • Leverage Simulations Sets for What-if Scenarios • Model temporary capacity changes • Sourcing decisions • Demand changes

10. Lessons Learned • Data & Integration challenges • Customizations • Automation of Nightly/weekly programs • Performance • Worksheet • Batch Programs • Training • Business Super User • IT Support • Change Management • Consulting Partner • Supply Chain Fusion (Avata)

12. About ICU Medical • Designs and manufactures some of the world's safest, most reliable medical devices and systems for infusion therapy, oncology, and critical care applications. • Existing Systems Footprint • Oracle EBS 11.5.10 • Demantra 7.3.1 • ASCP R12.1 • OBIEE and APCC • Hyperion 11.1.1 • Product Lines Include • IV Sets • Closed Delivery Systems for Hazardous Drugs • Needleless I.V. connectors • Catheters and Cardiac Monitoring Systems

13. Why Oracle Value Chain Planning Reasons for selection • Oracle is our platform of choice • Existing skillset (business & IT) • Overall breadth of functionality • Demantra – cross-functional demand planning • ASCP- holistic optimization planning and scheduling with exception alerting • APCC – real time analytics & dashboards • Integrations • Demantra Hyperion • EBS  ASCP

14. ICU Medical Landscape Slovakia Mfg San Clemente, CA HQ, R&D, Sales Salt Lake City Mfg Encenada, Mexico Mfg design manufacturing

15. Implementation UPS Distributions (ULO, URA) FNL Distributions IT Distributions / MFG DE Distributions / MFG Fcst, Orders Internal Demand Customer Shipment Ships sub-assemblies Ships sub-assemblies EDA, Mexico (Mfg / Dist.) Salt Lake City, UT (Mfg / Dist.) Slovakia (Mfg) • Oracle VCP Footprint • Phase I: Demantra DM and Advanced Supply Chain Planning • Leverage Capacity Constraint Based ASCP planning across all manufacturing facilities • Phase II: APCC, Demantra / Hyperion Integration, S&OP Process

16. Key Business Challenges • Lack of a forecasting process, collaboration and knowledge of systems • Data manually gathered, unorganized and extremely time consuming • No forecast metrics or analysis • Time is spent gathering data, not for analysis & decision making • Changing business conditions • Moving toward direct delivery to end customerespecially in Europe • Realigning relationships with distributors • Finished Goods and Sub-assembly manufacturing with systems But limited business expertise to take full advantage of capabilities • Limited end-to-end supply chain visibility (reporting, dashboards) • Maintaining on-time delivery and inventory levels • Improving operational efficiency

17. Key Implementation Objectives Start with Building Blocks Demand Planning Supply Planning S&OP • Establish a connected supply chain with the visibility, leading forecast and supply planning processes and systems to scale and manage the evolving business • Create a cross-functional consensus forecast reducing the effort and cycle time • Consolidate the data & processes onto one platform – Demantra • Provide direct visibility to customer forecasts within the consensus process • Create comprehensive metrics to measure forecast performance • Define roles and responsibilities, role clarity, approvals and security • Establish a single, global supply plan with visibility and consideration of the capacity constraints • Enable and evolve the S&OP process by establishing the necessary reporting / dashboards for S&OP as well as supply chain

18. High Level Process & Architecture ASCP Oracle EBS Data Inputs Ops Planning Capacity Planning Demantra Sales Supply Chain Global Demand Plan Sales Forecast APCC Exec Team S&OP Dashboards Hyperion

19. Key Benefits • Demand Forecasting / Demand Planning • Institutionalized a clear forecasting process supported by a single system (Demantra) • Ability to establish a total, global view of the forecast ($/units) • Engaged other functional areas into the forecast process • Supply Planning • Single supply plan encompassing the entire supply chain • Capacity constrained plan providing clear visibility ahead of time to address issues • All manufacturing is looking at the same number (single source of truth) • S&OP • Reduced cycle time in the yearly budgeting process by having a single platform HyperionDemantraASCP • APCC has been very successful

20. Lessons Learned • Change Management • Process change • Executive Support • Resource availability • Data, Data, Data….especially with Capacity Planning • Choose the right implementation partner Optimal Process & System • Don’t do it all at once - (Crawl, Walk, Run) • Especially with ASCP Capacity Constraints • Don’t underestimate the people, process and technology complexities when moving to a capacity constraint based planning environment Phase III Phase I Phase II The Process & System Evolution

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22. Oracle Value Chain Summit | February 4–6, 2013Bringing People and Supply Chains Together Hyatt Regency San Francisco Maintenance Manufacturing Procurement Product Lifecycle Management Value Chain Execution Value Chain Planning 6 Distinct Pillars 180 Sessions in 17 Tracks All in One Great Location • Why attend? • Actionable business content • Focus on your specific domain • Insightful keynotes • Customer, Partner, Oracle & 3rd Party Sessions • Demo and Partner Pavilion • Ideal for networking in your peer community • This Summit is designed for you, • the Value Chain Professional • in your organization http://www.oracle.com/goto/vcs For more information: