Packaging Sustainability Green Manufacturing Initiative, May 5, Corrine Kupstas, CI Leader Mark Kraak, Environmental Engineer

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1 Green Manufacturing Initiative, May 5, 2010 Corrine Kupstas, CI Leader Mark Kraak, Environmental Engineer

2 Define - Project Charter Project Description and Problem Statement: Perrigo needs to respond to increasing customer and consumer awareness of the environmental impact of operations and products. Doing so will: Reduce our environmental foot print Decrease costs associated with excess packaging and disposal Inefficiencies in operations Scrap during packaging Costs to dispose of scrap and obsolescent packaging materials Add value for our customers Scope: Primary, secondary, display & transportation packaging

3 Define - Project Charter (cont.) Stake Holders: Wal-Mart, SAMs and Other Customers Perrigo s Wal-Mart team Sales/Marketing Packaging Engineering & Packaging Operations EHS

4 Define - Project Charter (cont.) Team Members represented: Tablet and Liquid Packaging Marketing Packaging Engineering Regulatory Affairs Sales Procurement EHS Logistics

5 Define - Project Charter (cont.) Goals/Objectives: Reduce weight of secondary packaging Increase recycled content Right size packaging Improve packaging score card rating Reduce use of PVC Decrease SSSO $ Business Benefits: Reduce the costs of packaging operations Increase (or, at least maintain) business with Wal-Mart and other environmentally conscious customers Decrease cost of disposal of excess packaging materials Increase overall recycling of packaging materials

6 Measure Data Collection Plan Wal-Mart Score Card VOC (voice of customer) - Interviewed members of Sales and Marketing Initial POS (point of sales) data from Wal-Mart Analyze Discussion of each SKU in each category, including regulatory requirements to fit label content on tubes/cartons Analysis of savings available from Ibuprofen bottle and count size consolidation Marketing long term Analgesics Strategy Qualitative analysis of which ideas contributed to goals Improve Solution Selection Matrix FMEA

7 Product Improvements A-shape vitamins eliminated cartons Eliminated 40 K lb/yr cartons Reduced bottle weight by 41 K lb/yr Bottle in old box New bottle

8 Product Improvements Complete Multi eliminated stretch pack and carton Reduced packaging 153 K lb/yr

9 Product Improvements Nicotine Gum Replaced clam shell with theft resistant carton and up-sized from 200 ct to 240 ct Increased carton weight Reduced corrugate by 120 K lb/yr Eliminated 52 K lb/yr PVC Net improvement = 118 K lb/yr reduction in packaging 70% reduction in pallet loads (1,800 pallets)

10 Nicotine Lozenge National brand in clam shell Packaging Sustainability Product Improvements Perrigo launched in theft-resistant carton Increased carton weight Reduced corrugate by 4 K lb/yr, Avoided 6 K lb/yr PVC (NB used RPET) Net improvement = 19 K lb/yr 31% fewer truck loads

11 Product Improvements Cetirizine Replaced two bottles in a carton with single bottle in a stretch card Reduced total packaging weight by 7 K lb/yr

12 Product Improvements Replace chip with other bundling options in Tablet Packaging across multiple customers Reduce corrugate use in displays PVC alternatives evaluating PET-G for twin packing for tablets and liquids

13 Results to date Carton material savings = > 20 K lb/yr Bottle material savings = 117 K lb/yr Corrugate savings = 147 K lb/yr Reduced PVC use by 70 K lb/yr Pallet loads reduced by 1,800 pallets/yr Plastic film recycling up to tons/month

14 Operations Improvements Changed polypropylene (PP) pallet twine to LESS expensive polyethylene (PE) banding to facilitate stretch wrap recycling Recycle rate increased from tons per month to 20-25

15 Operations Improvements Pallet reclamation Internally rebuild 7 8 K pallets per month (instead of disposal or contract repairs) Foil roll caps returned to supplier

16 Perrigo Reclaims/Recycles Corrugated Cardboard Drums (steel, plastic and fiber) Plastic Film Carton scrap Office Paper Newspaper and Magazines Ink Jet cartridges Steel Super sacks Foil end caps (new)

17 Control StageGate PEM (Product Evolution Management) scorecard now includes sustainable packaging section StageGate Gate 3 Deliverables include sustainability questions for Packaging Engineering & Marketing Wal-Mart Scorecard process Ownership Data collection Data entry Crystal Report

18 at Perrigo Questions/Discussion

19 Perrigo Sustainability Efforts Employee Involvement Packaging Sustainability Team Environmental Team Safety on Target Environmentally sustainable prizes Earth Week Lunch & Learns Think Perrigo Green

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21 Reduce Use the Double sided print function Stop auto-generated printed reports Direct deposit and going paperless Paperless bulletin boards on SharePoint Use of Dual Monitors for previewing and revising Reuse Reclaimed office supply storage room Recycle Office paper recycling Include non-corrugated cardboard, journals, magazines and the envelopes with plastic windows. All material in containers are secure no need for personal shredders! Break room recycling - All 1-6 recyclable plastics, aluminum and glass Printer Cartridge / Toner recycled through a special program, please do not place these in the recycle or trash containers!

22 Perrigo Sustainability Efforts Community Involvement Employee website on Greenride, a local carpooling website to connect employees to potential carpooling partners Charter member of Southwest Michigan Sustainable Business Forum Sponsor Allegan County Conservation District native plant growth Support local Soil Testing to reduce Phosphorous in the Kalamazoo River Arbor day seedling and sunflower seed handouts since 2006 Wildflower and Sunflower plots at all Michigan sites