Compliant & Cost Efficient Manufacturing. Presenter s Name Presenter s Title

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1 Compliant & Cost Efficient Manufacturing Presenter s Name Presenter s Title

2 Safe Harbor Statement The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle s products remains at the sole discretion of Oracle. 2

3 Agenda Leadership in the Medical Device Industry Innovation in Medical Device Solutions Results Achieved by Oracle Customers 3

4 Oracle in Life Sciences Did You Know? 10 of the top 10 medical device companies run Oracle Applications 10 of the top 10 medical device companies run Oracle Technology 7 of the top 10 in vitro diagnostic companies run Oracle Applications 10 of the top 10 contract research organizations (CRO) run Oracle Applications 4

5 The Challenges We re Hearing Product Innovation How can I keep pace with new medical technologies, competitive offerings, and medical market demands to maximize revenue and profits? Rising to meet the demands for innovation R&D expenditures, have risen from 5.4% to over 12% Navigant Consulting Mar 05 Compliant & Cost Efficient Manufacturing How can my organization meet the increasing regulatory compliance demands while improving product quality and improving product profitability? Corrective and preventive action, complaint handling, and quality processes are among the most common sources of deficiencies cited in FDA inspections of device companies Centers for Devices and Radiological Health Feb 06 Customer Centricity How can I increase the efficiency of my sales, marketing and service organizations to provide greater value to our customers and maximize revenue growth? As high-technology medical supplies reach 40% of a hospital s overall supply budget, medical device companies must develop the sales and marketing tools needed to overcome customer concerns and skepticism Healthcare Financial Management Association Oct 06 5

6 The Challenges We re Hearing Compliant & Cost Efficient Manufacturing How can my organization meet the increasing regulatory compliance demands while improving product quality and improving product profitability? Corrective and preventive action, complaint handling, and quality processes are among the most common sources of deficiencies cited in FDA inspections of device companies 88% of all warning letters issued to medical device companies for Quality System/GMP deficiencies included a CAPA citation Management Controls 29 CAPA 26 Production & Process controls 22 Design Controls 12 Other 11 % of FDA 483 Citaitons 6

7 Agenda Leadership in the Medical Device Industry Innovation in Medical Device Solutions Results Achieved by Oracle Customers 7

8 Improve Operational Efficiency & Streamline Compliance Requirement Oracle Capability The Oracle Difference Reduce operational cost in a regulatory compliant environment Discrete Mixed Mode and Lean Manufacturing Most comprehensive, flexible mixed mode manufacturing solution Control and improve product quality and, insure regulatory compliance Electronic Records and Signatures (ERES) and Quality Assurance Flows Comprehensive GMP, CAPA, and quality processes with extensive ERES support throughout Create a real-time demand driven sales and operations planning process Advanced Supply Chain Planning and Collaborative Planning Only closed loop sales and operations planning solution 8

9 Improve Operational Efficiency & Streamline Compliance Requirement Oracle Capability The Oracle Difference Reduce operational cost in a regulatory compliant environment Discrete Mixed Mode and Lean Manufacturing Most comprehensive, flexible mixed mode manufacturing solution Control and improve product quality and, insure regulatory compliance Electronic Records and Signatures (ERES) and Quality Assurance Flows Comprehensive GMP, CAPA, and quality processes with extensive ERES support throughout Create a real-time demand driven sales and operations planning process Advanced Supply Chain Planning and Collaborative Planning Only closed loop sales and operations planning solution 9

10 Discrete Mixed Mode Manufacturing Reduce Operational Cost in a Regulatory Compliant Environment Benefits Lean processes that are sustainable and repeatable on a global scale Speeds the introduction of new products to the Flow Mfg process Supports continuous improvement in manufacturing processes Integrated software that directly supports lean mfg / lean supply chain management Planning Planned Orders Schedule Changes Component Substitutes Resources Substitutes Demand Schedules Configured Order Quality Specifications Complete Support for FDA 21 CFR Part 11 Cost Analysis Mixed Mode Mfg Execution Repetitive, Project Standard WIP Sample Customer Integrated Intelligence Flow / Lean ETO ATO / CTO MTS Lot-Based Analyze Adjust Lot / Serial Genealogy Tracking MES APIs, Direct Access Enterprise Shop Floor Productivity Real-Time WIP Visibility Model Shop Floor Quality: cgmp / QSR (21 CFR 820) Contract Mfgrs Contract Mfgrs Suppliers Suppliers Product Lifecycle Mgmt Warehousing / Transportation Asset Maintenance Service Production Status Material Availability Mfg Capacity Schedules / Changes Ship Notices Invoices / Payments Partner Collaboration 10

11 Oracle Discrete Manufacturing Supports Lean Work Orderless Completions Kanban Execution Supply Chain Planning Single backflush transaction for companies using pure visual management to run the shop floor Cards generated and printed Single and dual card kanban. One time kanbans Internal, production, supplier and inter-plant kanbans Out of the box integration with Mobile Supply Chain Apps Single step replenishment process Uses standard PO business logic to source material and communicate to supplier through isupplier portal, fax, edi, XML or print Status of supply visible on the card, and history is tracked throughout the life of the card Collaborative Planning reduces lead time and waste, improves agility, automates inventory replenishment for VMI and consigned material Inventory Optimization accounts for demand, supply, and lead-time variability when determining the point of postponement and inventory levels in the supply chain. Demand Planning calculates product family and configurable model planning percentages 11

12 Flow Mfg for Cost-Effective Production Customers / Distributors Cells Support Lean Manufacturing Practices to Reduce Cycle Time and Waste Demand (Orders/ Forecasts) Production Oper 10 Lines Oper 20 Oper 30 Oper 40 Sequenced POs Bin 1 Bin 2 Bin 1 Bin 2 Bin 1 Bin 2 Bin 1 Bin 2 Kanban Replenishment Inventory Feeder Plant Feeder Line Synchronized Production Suppliers Graphical line design and balancing Graphical Kanban planning Sequencing to build different products on the same production line 12

13 Oracle Flow Manufacturing Supports Value Stream Analysis Best of Breed Functionality that Drives Manufacturing Flexibility and Efficiency Value Stream Mapping Standard Work Definition Standard Machine and Labor Calculations Cell Design and Operator Balancing Mistake Proofing Defines and associates standard processes with product families, items, or configurable models. Add alternate paths & rework loops Add standard events Identifies TQC and value-add events Associates work instructions Calculates line & operation takt, and req d resources; highlight imbalances Eliminates non value-added work, regroup events into balanced operations, add IPKs, add resources Reviews TQC events for mistake proofing. Create quality collection plans Graphical Line Designer Mixed Model Map Workbench 13

14 Oracle Flow Manufacturing Supports Lean Execution Flexible Component Replenishment Supports a Wide Range of Business Needs Full Support for Configured Products Synchronized Components Supplier Sequenced shipment from supplier Main Flow Line Sequence 1, 2, 3 PO to supplier for components A, B, C (blanket PO optional) Sales Order Demand For Pick Components Synchronizes component pull by generating supplier and feederline kanbans based on the final assembly sequence Generates feeder line schedules directly from the parent line assembly sequence Generates a pick plan for low usage or large parts to pick components based on flow schedule sequence. Integrated with WMS Production Sequencing Sequences sales orders or planned orders using simple level loading sequence rules Or creates constraint based sequencing rules on any item, order, or component attribute Re-sequences flow schedules created by kanban pull or feeder line synchronization for a more optimal mix 14

15 Oracle Flow Manufacturing Supports Lean Execution Advanced Sequencing and Simplified Execution Full Support for Configured Products Operator Work Station Enables a paperless factory Simplified user interface presents all pertinent information and transactions to the shop floor worker Dynamic work instructions that change as configurations vary Assigns lot numbers to assemblies and components at any operation and use that information during work orderless completion Reporting Dashboards provide performance to schedule, inventory reports, on time delivery and quality metrics Linearity report and performance to schedule available within the flow application 15

16 Hologic Tightens Supply Chain on Single Instance Business Platform COMPANY OVERVIEW Leading manufacturer of medical imaging systems dedicated to serving the healthcare needs of women Generates $462M in yearly revenues and employs over 1,600 people. CHALLENGES / OPPORTUNITIES Difficult to coordinate production scheduling to optimize output due to multiple manufacturing systems Inefficient financial processes due to the use of multiple accounting systems Needed shorter delivery lead times and faster pricing to address expansion SOLUTIONS Oracle Discrete Manufacturing Oracle Order Management Oracle Purchasing Oracle Human Resources Oracle istore Oracle Financials Oracle Service Contracts Oracle Field Service Oracle Financial Analyzer CUSTOMER PERSPECTIVE Oracle ERP applications are an important part of our Lean manufacturing strategy. Oracle gives us system-generated metrics and continuous inventory analysis real-time information necessary for inventory reduction and predictable performance. Mike Parrilla, VP of Manufacturing RESULTS Reduced inventory at two key plants by 35% and 48% Improved inventory turnover by 112% Cut part shortages by 67% Shortened manufacturing cycle times by 84% Increased revenues by 20% 16

17 Improve Operational Efficiency & Streamline Compliance Requirement Oracle Capability The Oracle Difference Reduce operational cost in a regulatory compliant environment Discrete Mixed Mode and Lean Manufacturing Most comprehensive, flexible mixed mode manufacturing solution Control and improve product quality and, insure regulatory compliance Electronic Records and Signatures (ERES) and Quality Assurance Flows Comprehensive GMP, CAPA, and quality processes with extensive ERES support throughout Create a real-time demand driven sales and operations planning process Advanced Supply Chain Planning and Collaborative Planning Only closed loop sales and operations planning solution 17

18 How Oracle Addresses 21 CFR Part 820 Quality System Requirements 21 CFR Part 820 QSR Sub Part Oracle Solution B Management Responsibility Daily Business Intelligence (DBI) C Design Controls D Document Controls E Purchasing Controls F Identification and Traceability G Production and Process Controls H Acceptance Activities I Nonconforming Product J Corrective and Preventative Action K Labeling and Packaging Control L Handling, Storage, Distribution and Installation M Records N Servicing O Statistical Techniques Clinical Trials and Product Lifecycle Management (PLM) PLM, Oracle Files, Tutor Purchasing, (ASL, isupplier, etc.) Lot and Serial # Genealogy through Manufacturing and Patient Device Tracking Discrete Mfg/Quality Receiving/Quality Nonconformance thru Quality Corrective and Preventative Action through Quality Label Formatting through Inventory Inventory/WMS/Service Quality/ERES Framework/Oracle DB Service/Field Service/iSupport Quality/Discoverer/DBI 18

19 Oracle s CAPA Solution Corrective and Preventive Action E-Signature Non- Conformance Internal Audit Initiate CAR Analyze/ Investigate 100 1,2 ID Corrective & Preventative Action Manufacturing Customer Complaints Close Audit Trail / History Workflow Notifications Report/ Mgmt Review Verify/Validate/ Implement 100.4,5,6 Equipment Maintenance Suppliers E-Signature Development Statistical Analysis Reporting Intelligence 19

20 Medical Device Reporting Collection Plan and MedWatch Report Reports device-related deaths to the FDA Reports device-related serious injuries Supports preparation of annual summary reports for submission to FDA Uses standardized reporting forms Enables compliance with 21CFR Part 803 Medical Device Reporting 20

21 Integrated 21CFR Part 11 Framework Simplify Compliance Validation with ERES* Framework Consistent User Experience GMP-Critical Events Supported Industry Best Practice Business Processes Configurable Approvals Electronic Signatures Unbreakable Security Evidence Store Unified Technology Strong Security Reliable Electronic Signatures Audit Trail Capabilities as Required by GMP *ERES = Electronic Records Electronic Signatures Comprehensive Operational System Checks Validate-able System Supports 100+ pre defined business transactions 21

22 Integrated ERES Framework Support 21 CFR Part 11 / 820 Compliance E-Records, E-Signatures Provides Consistent User Interface Across All Events Signs in On-Line or Deferred Mode Validates User Controls and Security Levels Reliable Audit Trail Capabilities as Required by GMP GMP and Industry Best Practice Capture Points Quality Specs and Results Production Other Inventory Updates 22

23 Built-In Quality Management Seamlessly Execute Quality Improvement Programs Line Level Incorporates mandatory quality tasks into flow sequence Collects quality data with work-orderless completions Collects quality data as the assembly passes through line operations Manages Corrective Action Requests (CARs) with complete audit trail and history Enterprise Ensures compliance with government regulations, market demands (e.g., cgmp*), or internal quality mandates Tracks lot and serial number details enterprise-wide Improves responsiveness and cost of quality traceability *cgmp = Current Good Manufacturing Practices 23

24 Workflow-Driven Product Changes Eliminate Errors and Delays with Process Automation Create Change Request (ECR) ID Issue Assign & Notify Alerts & Notifications Assess Impact Schedule Cost Dispositions Review Approve or Reject Create Change Order (ECO) Create Work Pkg Review Test & Approve Implement Change Org 1, Org 2, Manages changes to engineering and manufacturing product information Phase-in changes based on MRP plans / inventory use-up, work orders Schedules and implement product changes on organization-specific dates 24

25 Stryker Implements an Electronic Quality Management System COMPANY OVERVIEW Stryker Corporation (Stryker) is a medical technology company with a range of products in orthopaedics and a presence in other medical specialties. Generates $5.4B in yearly revenues and employs over 17,260 people. CHALLENGES / OPPORTUNITIES Quality information not stored in one place, multiple systems / databases were used to enter quality information Device History Records maintained on paper Critical Components quality information maintained in third party quality system All manufacturing transactions and job data in legacy PRMS environment PRMS lacked traceability due to the recycling of job numbers First pass yield data stored in Access database No systematic validation on incoming inspection or manufacturing process SOLUTIONS Oracle E-Business Suite RESULTS Complete electronic Quality System Electronic Quality System integrated with incoming inspection and manufacturing process Integrated Service, Repair and Loaner processes All ECO approvals for new items, BOMs and routings approved through the erecords / esignature process All transfers from R&D to manufacturing managed through the eres process Non-conformances can be created directly from transactions like receiving transactions, move, scrap or a non-conformance can be created directly 25

26 Improve Operational Efficiency & Streamline Compliance Requirement Oracle Capability The Oracle Difference Reduce operational cost in a regulatory compliant environment Discrete Mixed Mode and Lean Manufacturing Most comprehensive, flexible mixed mode manufacturing solution Control and improve product quality and, insure regulatory compliance Electronic Records and Signatures (ERES) and Quality Assurance Flows Comprehensive GMP, CAPA, and quality processes with extensive ERES support throughout Create a real-time demand driven sales and operations planning process Advanced Supply Chain Planning and Collaborative Planning Only closed loop sales and operations planning solution 26

27 Oracle Demantra Demand Management Real-time Demand Sensing and Collaborative Consensus Forecasting Marketing forecast Customer sales CHANNEL DATA Collaboration Workbench Order history Shipments Demand Hub and Seeded Worksheets Sense demand real-time Sense demand more frequently, closer to the point of consumption Capture demand and forecast at more granular level (store, shelf, attributes, product characteristics) Achieve consensus demand number more quickly by involving all constituents at the same time, including customers Quickly identify and react to demand changes and exceptions Improve forecast accuracy Leverage advanced statistics for more accurate demand number Use any combination of quantitative or qualitative data to establish your base line forecast High precision statistical forecasting, no statistical background required Superior Bayesian-Markov forecast analytics Forecast based on attributes and characteristics Leverage Advanced Forecast Modeling for promotion lift decomposition and causal analysis Shape demand for profitability Plan new product introductions Plan promotions and sales incentives Identify cross selling opportunities Evolve to real-time S&OP Profitably balance supply, demand, and budgets 27

28 Oracle Demantra Demand Management Evolve at Your Own Pace to a Best-in-class Solution Start anywhere Forecast based on attributes and product characteristics Compute promotional lifts and analyze impact of demand drivers Assumption based forecasting Leverage POS and channel data Leverage POS and channel data Forecast new product introductions Forecast new product introductions Collaborate with customers Use advanced statistics and causal factors Complex alerts and custom worksheets Collaborate with customers Use advanced statistics and causal factors Complex alerts and custom worksheets Eliminate spreadsheets Manage rolling forecasts Collaborate with all constituents on one number Manage rolling forecasts Collaborate with all constituents on one number Manage rolling forecasts Collaborate with all constituents on one number Use basic statistics, alerts, and seeded worksheets Use basic statistics, alerts, and seeded worksheets Use basic statistics, alerts, and seeded worksheets Tailor worksheets for individual users Tailor worksheets for individual users Tailor worksheets for individual users From less complex to best in class 28

29 Multi-Tier Collaborative Planning Full Visibility and Synchronization Across the Extended Supply Chain CUSTOMER YOU CONTRACT MANUFACTURER SUPPLIER Plan your extended supply chain Demand systems Consensus forecast Share forecasts and supply commits with customers and suppliers Get visibility to supplier capacity Reallocate key components Run plan Supply forecast Run plan Demand boards Make alternate sourcing decisions Reduce inventory cost and improve fulfillment Supply commit boards Supply commit memory Suppliers manage your inventory Manage your customers inventory Optional Forecast memory React quickly to supply chain exceptions Waterfall analysis User-configurable exceptions Automated exception handling via workflow 29

30 Sourcing from Approved Suppliers Control Critical Purchases Generate ASL* Establish sourcing criteria Identify & analyze suppliers Create and maintain ASL Check Quality Establish sampling criteria and rules Perform item receipt inspections based on preset quality procedures and specifications Analyze & Select Purchase Receive & Inspect Inventory or Disposition Procure Electronically Source items / commodities and services from approved suppliers Route and verify purchase order approvals via workflow Disposition Receive quality data from receipt and transfers to inventory Electronically send notifications & initiate action on non-conformances *ASL = Approved Supplier List Continuously Monitor Performance Monitor supplier performance based on price, quality, and service Control ASL status based on quality inspection results 30

31 A Single, Consolidated View of Inventory Locate and Disposition Products with Confidence In-Channel In-Transit Warehouse WIP / Planned Production Consolidated Inventory Provide Inventory Visibility - In-transit inventory - At trading partners - Between manufacturing operations Enable Postponement - Optimize inventory location (manufacturing, distribution centers, central warehouses) Plan for Demand & Supply Variability Achieve More Accurate Promise Dates Increase Delivery Efficiency Proactively Respond to Exceptions VMI Hub 31

32 with Robust Inventory Controls Quarantine Contaminated Material Receive and Inspect Log Non- Conformance Move to Quarantine Disposition by MRB Update Status Status = HOLD Electronic and / or physical move Accept? Status = RELEASED Reject? Status = SCRAP Rework? Status = HOLD Prevent product / material mix-up Over time, reduce rework Meet regulatory requirements Workflow-driven with notifications Rework Order to Mfg 32

33 Lot Genealogy and Tracking MRI Equip (S.No. 512) ImageWare Boston, MA Acme Chip Fab 12 Boards R Us CPU (S.No. 232) PCI Board (S.No. 717) Memory (Lot No. 115) Bed Assy (S.No. 929) Bed (S.No. 892) ImageWare Ireland ThermoTech Oakland, CA Identification Traceability Nippon Fab Japan Motor (S.No. 676) Tray (S.No. 339) SKD Co. S. Korea Traces a customer shipment back to the original source Traces a lot or individually serialized product across all organizations Assists with 21 CFR Part 11 / 820 compliance 33

34 Sedecal Addresses Market Demands Through an Integrated Supply Chain COMPANY OVERVIEW Leading manufacturer of medical imaging systems dedicated to serving the diverse needs of the radiology community Generates $70 M in yearly revenues and employs over 200 people. CHALLENGES / OPPORTUNITIES Difficult to coordinate production scheduling to optimize output due poor visibility of orders Delivering customer configured to orders in a timely and cost effect manner Inventory tracking from order to delivery Needed shorter delivery lead times and faster pricing to address expansion SOLUTIONS Oracle E-Business Suite CUSTOMER PERSPECTIVE We have more than 500 suppliers worldwide and a network of 150 distributors in more than 100 countries, and Oracle E- Business Suite integrated them all into a value chain in just a few months. We share our mission with our customers, suppliers, and distributors: better service, higher quality, and faster delivery. Jose Antonio Bautista Oracle E-Business Suite Implementation Leader RESULTS Accurate production data available around the clock Documentation and material lists are easily shared Customers receive exactly what they ordered at the price quoted Commercial suppliers have a reliable online source of information Inventories are more accurate, deliveries are faster 34

35 Oracle Medical Device Solutions Summary Discrete Mixed Mode and Lean Manufacturing Most comprehensive, flexible mixed mode manufacturing solution Product Quality and Compliance Comprehensive GMP, CAPA, and quality processes with extensive ERES support throughout Advanced Supply Chain Planning and Collaborative Planning Only closed loop sales and operations planning solution 35

36 The Only Complete Life Sciences Solution Platform Processes Customer Results People Partners 36

37 37 Medical Device Process Footprint

38 Market-Leading Middleware Platform Best-Selling 32,000+ Customers Deployed 70% of World s s 50 Largest Firms $1B+ Business Highest Rated Only vendor in Gartner and Forrester leader quadrants for all Middleware components. Most Comprehensive Source: Forrester Research ranking of Application Platform Servers, April 2005 SOA Vendor of Choice 38

39 Oracle s People Advantage 220,000 database customers 1700 application ISVs 30,000 applications customers 275,000 customers benefiting from shared innovation 30,000 middleware customers 29,000 developers, support engineers and consultants 1300 participants in early customer adoption programs 5000 middleware ISVs 950 customers participating in Customer Advisory Boards 9000 database ISVs 35 Fusion strategy council members 425 user groups 500 Industry & Product strategy council members 39

40 Agenda Leadership in the Medical Device Industry Innovation in Medical Device Solutions Results Achieved by Oracle Customers 40

41 What Customers are Achieving improved case handling and escalation response time by 50% and reduced billing errors from 15% to 1% with Oracle Siebel combined three divisions into one view of the customer and reduced cost and complexity of quote-to-order process with Oracle Siebel increased service related revenue by 25% with Oracle Siebel Field Service implemented electronic quality processes supporting edhr, encr and eres with Oracle E-Business Suite implemented product data hub for maintaining enterprise wide product and label attributes increased on-time delivery rates from 70% to more than 90% and reduced book closing times by more than 50% with Oracle E-Business Suite 41

42 The Oracle Difference Only Oracle Most comprehensive, flexible mixed mode manufacturing solution supporting lean initiatives Provides out-of-the-box GMP and electronic records and signatures support that reduces risk and provides rapid process validation and compliance Provides a comprehensive closed loop sales and operations planning solution 42