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Indiana Logistics Summit

Indiana Logistics Summit. October 19, 2005. Supply Chain Strategy & Real Estate. Overview: Becton Dickinson - BD Strategic Decision Making Network Rationalization Site Criteria Building Design. BD – Company Overview.

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Indiana Logistics Summit

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  1. Indiana Logistics Summit October 19, 2005

  2. Supply Chain Strategy & Real Estate • Overview: Becton Dickinson - BD • Strategic Decision Making • Network Rationalization • Site Criteria • Building Design

  3. BD – Company Overview • Medical Technology Company serving Healthcare Institutions, Life Science Researchers, Clinical Laboratories, Industry and General Public • $5.3 Billion Revenue (~50% North America) • 3 Divisions: • Medical Device: Ex. Needles; Syringes; Catheters; Surgical Blades • Bioscience: Research Tools which Study Genes, Proteins & Cells • Diagnostics: Microorganism Mgm’t; Blood Collection Products • 25,000 Employees Worldwide • 59 Manufacturing Plants Globally • U.S.A. • 4 DC’s - 1.4mm Sq.Ft; Expanding in 2006 to 1.75mm Sq.Ft • Constructing new DC: Plainfield, IN - 653,000 sf; exp. to 970,000 sf • NYSE: BDX

  4. Strategic Decision Making Supply Chain – Real Estate • Distribution Orientation… • Planning or Reacting? • Trigger event – Service, Cost, Space, Sudden Change in Business Requirements, Acquisition/Divestiture • 3 – 5 year planning for growth, inventory rationalization • Business Case over IRR hurdle • Internal Selling

  5. Network Design • Network Design is a Balance • Service requirements - (cycle time, order fill, “last mile”) • Total Cost to Serve - (Distribution, Transportation & Inventory Carry Cost – Safety Stock) • Risk • Optimized Network = Optimizing Constraints • Optimal # of DC’s with sufficient capacity in Optimal geographic locations with Optimal Transportation & Inventory Costs which will meet/exceed Customer Expectations

  6. Location Selection – Key Drivers • Location - driven in general by optimization of transportation costs • Centers of Gravity: Manufacturing & Customers • Key Factors to selecting one City over another: • Existing Operations – Incumbent factor • Existing educated labor base within community • Transportation Equipment Availability • State, County & Local tax & training incentives • Availability of Investment Grade Land • Sophistication of Local Government concerning planning & efficient, ‘rules based’ decision making. • Supportive, Responsible & Seasoned

  7. Building Design • Key Factors, Changes • Building Height – 40’ clear - MHE • Velocity vs. Storage Density • T5 motion lighting • Climate Control – reinforced roof • Security built into site layout • ESFR sprinklers to NFPA standard • Building to FM standard

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