Medtronic XOMED. Top Level Procedure for Handling, Storage, Preservation and Movement of Inventory

Transcription

1 Medtronic XOMED Rev. V Ref. 6.4 Page 1 of PURPOSE: 1.1 The purpose of this procedure is to provide for a system, instructions and responsibilities for the handling, storage, and control of Medtronic Xomed inventory. 2.0 SCOPE: 2.1 This procedure applies to all materials, components, subassemblies, and finished product, and directly concerns the Receiving, Manufacturing, Warehousing and Shipping operations, and Field Inventory. 3.0 ASSOCIATED DOCUMENTS: 3.1 Applicable Documents SOP Top Level Procedure for Control of Non-Conforming Product SOP Division Procedure for Product Labeling Development SOP Top Level Procedure for Return Goods for Service and Repair SOP Procedure for Handling of Contaminated Returned Products SOP Inventory Scrap Procedure SOP Domestic Shipping Department Order Processing and Packing Procedure SOP Receiving Procedure SOP Division Procedure for Product Identification and Traceability SOP Top Level Procedure for General Inspection and Testing SOP Division Procedure for Contract Review QCFM 767-3PL Product Transfer Approval Form 3.2 Reference Documents Interplant Transfer Inventory Adjustment Pick List (Work Order) Pick Lists (Customer Sales Orders) Receiving Ticket Returns RTS (Return to Supplier) Scrap Authorization Transfer to Stock 4.0 GENERAL: 4.1 This procedure is divided into five major categories. It includes the requirements for storage and segregation of material, the required handling of materials including the use of totes, the appropriate preservation of materials, and the appropriate procedure for moving material from designated areas. The major categories are as follows: Storage and segregation of materials Material handling Material preservation Material movement transactions Field Inventory 4.2 For the purpose of this procedure, the following definitions will apply: Material - any raw material component, or subassembly used in the manufacturing of a finished product, or the finished product itself. These items are also referred to as inventory. Bulk Material - Material that is issued to the operator (floor) instead of the production order. (Note: Batch number is tracked on the production order). Actual usage quantities are not designated at the BOM level. For usage, refer to specific process documents. 4.3 All nonconforming material is documented on a Nonconforming Material Report (NCMR), and processed per SOP Guidelines for the identification of damaged boxes at QA Incoming - A box should be considered damaged if the space that the box was designed to protect has been violated. A damaged box can likely be described as either crushed or punctured. Refer to SOP 360 for the inspection and testing process. NOTE - It is the responsibility of all employees to identify damages boxes upon detection

2 Rev. V Ref. 6.4 Page 2 of 7 Crushed Boxes - Two examples of crushed boxes are shown below Boxes that have been crushed enough so that the corrugate buckles should be considered damaged. Product inside crushed boxes should be inspected for physical damage. Punctured Boxes If a box has been punctured completely through the corrugate, it should be considered damaged. Product inside punctured boxes should be inspected for physical damage and contamination. Two examples of punctured boxes are shown below Partially Punctured Boxes The boxes below have been partially punctured. The puncture does not go completely through the corrugate and so the boxes are not considered damaged. Superficial Damage The boxes below have superficial damage to the corrugate only and are therefore considered not damaged.

3 Rev. V Ref. 6.4 Page 3 of PROCEDURE: 5.1 Storage and segregation of materials: There are several designated areas for the storage of inventory: the raw materials warehouse, and the Finished Goods warehouse; and a number of holding areas such as Receiving, Returns, Incoming Inspection, Chemical Storage, Shipping, Quarantine Areas, and storage locations in manufacturing. Storage locations in these areas are so designated with proper labeling or signage Storage areas are maintained in good condition to prevent damage or deterioration of materials. All products are properly identified with the part number and batch and serial number (if applicable). All product is stored neatly to prevent the danger of falling, and all product labels should provide a clear view of the container s contents. Product labels should be removed from storage container by an assigned operator before being sent back to manufacturing Material is processed utilizing a F.I.F.O. (First In-First Out) policy, and care is taken to assure that the oldest batch numbers for raw materials and oldest received date for finished goods are being used/shipped first Material which has passed inspection or is dock to stock is authorized to be stored in the designated warehouse storage locations. Material stored in manufacturing storage locations should have been transferred from authorized material in the warehouse. All other material is maintained in quarantine areas until such time as it is dispositioned and is labeled with red Reject sticker/tag and/or completed NCMR Form. Raw materials and subassemblies which have passed inspection are labeled accordingly, while finished product is not moved to the Finished Goods warehouse until such time as it has been released by QA The supervisor where the inventory is stored is responsible for the proper control and maintenance of the storage areas The JAX planning group uses temporary tags to identify scheduled replenishment dates on empty bins pulled from the designated inventory areas. These tags are not considered quality records as they are used only as a visual method for tracking expected deliveries. The information is redundant to information captured with the SAP system but aids in the planning department to manage priorities. As the system involves only empty bins with no physical parts present, the use of tags in this manner does not constitute a compliance issue. 5.2 Material Handling: Plastic tote containers may be used for storage, transport, and protection of raw materials, subassemblies inside the manufacturing areas, and finished product. or dirty containers are repaired and/or cleaned, or are scrapped if beyond repair Equipment used for internal transport of products includes carts, dollies, forklift, and pallet jacks. Only properly trained and designated warehouse personnel may operate powered lift equipment when moving materials. Warehouse personnel are properly trained in operating the powered lift equipment, and are routinely re-trained. Training records are located in the Human Resources Department. Powered lift equipment is maintained and inspected periodically Materials are handled by material handler(s) in a manner which prevents or reduces incidental contamination, compromise, or damage Critical device materials, implants, silicone materials or any other products or materials designated by Quality Assurance, when individually handled or exposed, must be done so only in clean/controlled manufacturing or inspection areas by trained personnel Clean or delicate materials, or products sterilized before sale, whenever possible, should be exposed or individually handled only in appropriate manufacturing or QA inspection areas Otology products not described in above should be exposed or individually handled in Otology manufacturing and inspection areas by trained personnel. These products can be handled in an alternate clean/controlled area by placing parts on a stainless steel surface that is cleaned with alcohol before each use Integrated circuits (I.C.'s) shall be handled by personnel in a manner that prevents damage from Electro-Static Discharge (E.S.D.). Any person handling individual I.C.'s must wear static grounding straps and the I.C.'s must be on an anti-static mat. I.C.'s must only be stored and transported in either E.S.D. packaging material, conductive foam, or anti-static chip carriers. Until P.C. boards are mounted in the case and hooked up, they must remain on grounded anti-static mats.

4 Rev. V Ref. 6.4 Page 4 of Materials that become contaminated, compromised, or damaged must be processed on a Nonconformance Report and dispositioned accordingly (SOP 037). Such materials must not be combined with other materials unless they have been reprocessed for cleaning and found acceptable. Less expensive items that are difficult to clean should be scrapped per Scrap Reporting Procedure (SOP 114) The appropriate Manufacturing and/or Quality Assurance Supervisor(s) should be consulted when the proper handling of any material is in question Returned product from customers or the field which may be infective as evidenced by contamination or which may have come in contact with body tissue/fluids requires special handling as documented in the Procedure for Handling of contaminated Returned Products (SOP 057). 5.3 Material Preservation: Material Storage Conditions Unless otherwise specified for a specific area or product, material will be stored under the following conditions: Temperature: +10ºC to +40ºC Relative humidity: 30% to 75%, Designated materials may require special storage consideration in order to protect the integrity of the product. These requirements may include but are not limited to the use of a refrigerator, freezer, or air conditioned environment. When such conditions exist, it is the responsibility of the area supervisors to ensure the product is properly stored in their respective areas Materials are so designated as a result of the labeling or packing slip provided by the supplier, or as defined in the product specifications provided by R&D. Material handler(s) are required to be trained as to which products require such consideration Some materials have a limited shelf life and are required to be controlled based on this. All short dated finished goods shall have a minimum of six months shelf life remaining prior to shipping to a domestic customer, and twelve months for international customers, unless authorized and accepted by Customer Service (SOP 367) Customer Returned product shall not be returned to inventory if its shelf life cannot meet the requirements in or its packaging cannot meet the requirements of (SOP 042) The Cycle Count Analyst will conduct visual inspections of products that have limited shelf life during the course of their normal cycle count activities. The Cycle Count Analyst will then log that they have inspected the item on the register that is attached to the refrigerator and freezer. In addition, all material handlers as part of their normal activities will take appropriate action if expiry dated materials are detected If it is determined that a product has short dating or is expired, a Nonconforming Material Report (NCMR) should be initiated and products will be moved to a quarantine location until dispositioned for rework or scrap (SOP 037). It is the responsibility of the personnel who identifies the short-dated product to notify QA to initiate the NCMR and corresponding inventory transactions Any inventory that has been identified as Not for Human Use, Sample, or the equivalent, will not be restocked as a product for human use application It is the responsibility of the area supervisor to ensure that all products in their area conform to this policy Inventory will be reviewed every two weeks (bi-weekly) for items that are nearing their expiration date. Items within 2 weeks of expiration date will be reviewed and staged for purge from inventory or expedited use. Operations will be responsible for removing material from inventory locations and production areas prior to the expiration date being reached SAP transaction MB5M can be used to pull a list of all materials (with the exception of bulk material) that will be expiring within a specified period of time Purging of items near their expiration date (but within the expiration date) should be handled in the same manner as cycle counting. This form of planned purging of near expiration material is not considered to be a non-conformance process and does not require a NCMR If a material or item is found to be past its expiration date, the material will be considered nonconforming per SOP Material Movement: Movement of inventory is not permitted without the appropriate paperwork or the appropriate on-line

5 Rev. V Ref. 6.4 Page 5 of 7 computer transaction processing. It is the responsibility of the area supervisor to ensure that proper paperwork or on-line transactions are processed correctly for materials stored in their area Inventory transactions can be processed by either the data entry clerk or by an material handler from the respective department, however, the material handler(s) are responsible for reviewing inventory documents for accuracy and completeness, and all inventory transactions should be processed in the computer the same day that the activity takes place Cycle Counting Cycle counting is performed on a regular basis of system inventory locations (SLOC) across the manufacturing plants ( manufacturing and DC). The cycle counts are intended to identify and correct discrepancies between the physical inventory and the SAP SLOC inventory. Decrementing of inventory can occur as needed to correct SLOC inventory levels to match physical numbers by performing a scrap transaction for the inventory difference in SAP. Increasing of SLOC inventory should only be performed based upon review of previous system SLOC movements where it can be determined that movements were made in error and traceability has not been lost. Otherwise, physical inventory should be scrap to align with SLOC inventory levels Cycle counts and material inventory adjustments are considered standard inventory management practices and do not require a NCMR. If during the course of a cycle count or material movement, it is believed that identify or traceability of a part has been compromised, a NCMR should be considered. Generate a Quality Event Form (QEF) and process per SOP Movement of inventory into the Raw Materials and/or Finished Goods warehouse areas can only be made by one of the following transactions: Receiving Ticket - Moves inventory from a purchase order into an incoming inspection location. Accepted material is then moved into stock via the Receiving Ticket, (see SOP 199). Transfer to Stock - Non-inventory items that have been purchased for in-house testing and evaluation that have been identified as usable components are moved into stock via this form. Inventory Adjustment - Add inventory to the Perpetual Records due to an error. Returns are processed as specified in SOP 051 Top Level Procedure for Return Goods and Service and Repair No materials can move into the warehouse areas unless they have been properly inspected and released by QA Movement of inventory within the Raw Materials and/or Finished Goods warehouse(s) can only be made by one of the following transactions: Keyboard Entry - Moves inventory from one inventory location to another and/or from one bin to another in the computer system Inventory Reclass - Used to state a fixed asset designation Stock Transport Order (STO) Used to transfer Finished Good product between branch/plants or location, generally within a distribution center ZR Order Type - Allows the movement of Inventory from the Finished Goods Warehouse to the Raw Material Warehouse. Scanner Gun - Moves inventory from one bin to another. NOTE: Scanning of a finished good packaging barcode (Unique Device Identifier) during bin movement verifies the accuracy of the barcode content (GTIN and variable data) by comparing the scanned information of the finished good with the expected data within SAP Movement of inventory out of the Raw Materials and/or Finished Goods warehouse(s) can only be made by one of the following transactions: Move Order - Allows inventory within the Raw Material Warehouse to be charged to an account number/department. SK Order Allows inventory within the Finished Goods Warehouse to be charged to an account number/department. Inventory Issues Used to update inventory that is lost, expired, obsolete, scrapped or damaged. Scanner Gun - Moves inventory from a storage bin to an in-transit bin while it is physically moved to a manufacturing floor bin. Inventory Adjustment - Remove inventory from the Perpetual Records due to an error.

6 Rev. V Ref. 6.4 Page 6 of 7 Pick List (Work Orders) - Assigns material from inventory to a specific manufacturing work order. Materials Issued report - Assigns material from inventory to a specific manufacturing work order. Pick List (Customer Orders) - Assigns material from inventory to a specific customer sales order, (see SOP 198) RTS (Return to Supplier) - Moves non-conforming material out of inventory back to the supplier/vendor. Scrap Authorization - Moves material from inventory via physical disposal of the material Physical movement of raw materials to fulfill a work order pick list or material issuance report will require that such raw materials are labeled in compliance with SOP 359 Division Procedure for Product Identification and Traceability Movement of material into Quarantine Areas can only be made by the following transactions: Nonconforming Material Report (NCMR) - Moves nonconforming material into an MRB location Any requests for inventory movement that are incomplete should be returned to the originator or to the originating department. Once the request is complete and accurate the material handler can move the inventory as outlined above. 5.5 Field Inventory (FI): Product that is still the ownership of Medtronic Xomed but is physically held at a Customer or Sales Representative location resides in either Field Inventory (FI1) when the product is disposable product or QP1 when the product is Capital Movement of Inventory into FI1 is performed with an FI order. This order will place the product into the Customer or Sales Rep Location. If the product is capital, a Reclass will be performed at the end of the month to move this Inventory to QP1 (Fixed Assets). This reclass will be performed by FSS at the requested of Xomed Finance Movement within FI1 and QP1 are performed using the FM Order Type. This is used to move from one location to another. For example one Sales Rep to another Movement back to the regular Finished Goods Warehouse from Field Inventory is performed by using a FZ order type. This will allow the sale of the product Returns are processed as specified in SOP 051 Top Level Procedure for Return Goods and Service and Repair. 5.6 Third Party Logistics (3PL) Medtronic Jacksonville has established a Third Part Logistics (3PL) arrangement with an external supplier to manage overflow inventory At this time, the 3PL will only store inventoried material for Medtronic. This can include raw material, subassemblies, and finished goods. The 3PL can also be used store non-product goods, like sterilization dunnage (dummy or sample products used in sterilization qualification) or spare equipment No secondary operations are permitted to be performed by the 3PL. The 3PL will not perform inspection, rework, breakdown/teardown, bundling or shipments to customers or other facilities Loose or small packed materials will be binned and secured to prevent tampering prior to shipment to the 3PL location. Larger bulk items will be shipped in their original sealed packaging configuration The 3PL facility will be set-up within the Medtronic SAP system with a SLOC location. Material shipped to the 3PL will be moved to this designated SLOC in SAP. The 3PL will be responsible for managing the inventory in their system while the material is in their possession. When material is returned from the 3PL, the material will be transacted from the 3PL SLOC into the appropriate JAX inventory location As all material will have already been received and released through inspection or inventoried off of completed work orders, all material returned from 3PL will go directly to inventory. No additional inspection is needed to receive material from the 3PL If bins or packaging is damaged upon receipt from 3PL, the receiving material handlers will contact QA for determination if a NCMR is required per SOP Last Time Buy Inventory Last time buy material may be staged at 3PL after receipt, but prior to inspection Material to be moved to SLOC 1009 to differentiate the material in SAP as being located at 3PL Each pallet will be shrink wrapped and identified with the following: SLOC Pallet Requires Incoming Inspection

7 Rev. V Ref. 6.4 Page 7 of 7 a list of all lot numbers within the pallet All affected material will remain on Quality Inspection status in SAP until inspected as per the normal process. This status is standard for items pending incoming inspection and prevents allocation of the material to production orders Supplier Quality will ensure that a quality agreement is in place with the 3 PL vendors, if needed A QCFM 767, 3PL Product Transfer Approval Form will be completed for each material part number to have access to the 3PL. This process will ensure that Supplier Quality and R&D approves that those materials are acceptable for 3PL storage. Supplier Quality will manage the record retention of these forms.

8 Medtronic XOMED Rev. UV Ref. 6.4 Page 1 of PURPOSE: 1.1 The purpose of this procedure is to provide for a system, instructions and responsibilities for the handling, storage, and control of Medtronic Xomed inventory. 2.0 SCOPE: 2.1 This procedure applies to all materials, components, subassemblies, and finished product, and directly concerns the Receiving, Manufacturing, Warehousing and Shipping operations, and Field Inventory. 3.0 ASSOCIATED DOCUMENTS: 3.1 Applicable Documents SOP Top Level Procedure for Control of Non-Conforming Product SOP Division Procedure for Product Labeling Development Procedure SOP Top Level Procedure for Return Goods for Service and Repair SOP Procedure for Handling of Contaminated Returned Products SOP Inventory Scrap Procedure SOP Domestic Shipping Department Order Processing and Packing Procedure SOP Receiving Procedure SOP Division Procedure for Product Identification and Traceability SOP Top Level Procedure for General Inspection and Testing SOP Division Procedure for Contract Review QCFM 767-3PL Product Transfer Approval Form 3.2 Reference Documents Interplant Transfer Inventory Adjustment Pick List (Work Order) Pick Lists (Customer Sales Orders) Receiving Ticket Returns RTS (Return to Supplier) Scrap Authorization Transfer to Stock 4.0 GENERAL: 4.1 This procedure is divided into five major categories. It includes the requirements for storage and segregation of material, the required handling of materials including the use of totes, the appropriate preservation of materials, and the appropriate procedure for moving material from designated areas. The major categories are as follows: Storage and segregation of materials Material handling Material preservation Material movement transactions Field Inventory 4.2 For the purpose of this procedure, the following definitions will apply: Material - any raw material component, or subassembly used in the manufacturing of a finished product, or the finished product itself. These items are also referred to as inventory. Bulk Material - Material that is issued to the operator (floor) instead of the production order. (Note: Batch number is tracked on the production order). Actual usage quantities are not designated at the BOM level. For usage, refer to specific process documents. 4.3 All nonconforming material is documented on a Nonconforming Material Report (NCMR), and processed per SOP Guidelines for the identification of damaged boxes at QA Incoming - A box should be considered damaged if the space that the box was designed to protect has been violated. A damaged box can likely be described as either crushed or punctured. Refer to SOP 360 for the inspection and testing process. NOTE - It is the responsibility of all employees to identify damages boxes upon detection

9 Rev. UV Ref. 6.4 Page 2 of 7 Crushed Boxes - Two examples of crushed boxes are shown below Boxes that have been crushed enough so that the corrugate buckles should be considered damaged. Product inside crushed boxes should be inspected for physical damage. Punctured Boxes If a box has been punctured completely through the corrugate, it should be considered damaged. Product inside punctured boxes should be inspected for physical damage and contamination. Two examples of punctured boxes are shown below Partially Punctured Boxes The boxes below have been partially punctured. The puncture does not go completely through the corrugate and so the boxes are not considered damaged. Superficial Damage The boxes below have superficial damage to the corrugate only and are therefore considered not damaged.

10 Rev. UV Ref. 6.4 Page 3 of PROCEDURE: 5.1 Storage and segregation of materials: There are several designated areas for the storage of inventory: the raw materials warehouse, and the Finished Goods warehouse; and a number of holding areas such as Receiving, Returns, Incoming Inspection, Chemical Storage, Shipping, Quarantine Areas, and storage locations in manufacturing. Storage locations in these areas are so designated with proper labeling or signage Storage areas are maintained in good condition to prevent damage or deterioration of materials. All products are properly identified with the part number and batch and serial number (if applicable). All product is stored neatly to prevent the danger of falling, and all product labels should provide a clear view of the container s contents. Product labels should be removed from storage container by an assigned operator before being sent back to manufacturing Material is processed utilizing a F.I.F.O. (First In-First Out) policy, and care is taken to assure that the oldest batch numbers for raw materials and oldest received date for finished goods are being used/shipped first Material which has passed inspection or is dock to stock is authorized to be stored in the designated warehouse storage locations. Material stored in manufacturing storage locations should have been transferred from authorized material in the warehouse. All other material is maintained in quarantine areas until such time as it is dispositioned and is labeled with red Reject sticker/tag and/or completed NCMR Form. Raw materials and subassemblies which have passed inspection are labeled accordingly, while finished product is not moved to the Finished Goods warehouse until such time as it has been released by QA The supervisor where the inventory is stored is responsible for the proper control and maintenance of the storage areas The JAX planning group uses temporary tags to identify scheduled replenishment dates on empty bins pulled from the designated inventory areas. These tags are not considered quality records as they are used only as a visual method for tracking expected deliveries. The information is redundant to information captured with the SAP system but aids in the planning department to manage priorities. As the system involves only empty bins with no physical parts present, the use of tags in this manner does not constitute a compliance issue. 5.2 Material Handling: Plastic tote containers may be used for storage, transport, and protection of raw materials, subassemblies inside the manufacturing areas, and finished product. or dirty containers are repaired and/or cleaned, or are scrapped if beyond repair Equipment used for internal transport of products includes carts, dollies, forklift, and pallet jacks. Only properly trained and designated warehouse personnel may operate powered lift equipment when moving materials. Warehouse personnel are properly trained in operating the powered lift equipment, and are routinely re-trained. Training records are located in the Human Resources Department. Powered lift equipment is maintained and inspected periodically Materials are handled by material handler(s) in a manner which prevents or reduces incidental contamination, compromise, or damage Critical device materials, implants, silicone materials or any other products or materials designated by Quality Assurance, when individually handled or exposed, must be done so only in clean/controlled manufacturing or inspection areas by trained personnel Clean or delicate materials, or products sterilized before sale, whenever possible, should be exposed or individually handled only in appropriate manufacturing or QA inspection areas Otology products not described in above should be exposed or individually handled in Otology manufacturing and inspection areas by trained personnel. These products can be handled in an alternate clean/controlled area by placing parts on a stainless steel surface that is cleaned with alcohol before each use Integrated circuits (I.C.'s) shall be handled by personnel in a manner that prevents damage from Electro-Static Discharge (E.S.D.). Any person handling individual I.C.'s must wear static grounding straps and the I.C.'s must be on an anti-static mat. I.C.'s must only be stored and transported in either E.S.D. packaging material, conductive foam, or anti-static chip carriers. Until P.C. boards are mounted in the case and hooked up, they must remain on grounded anti-static mats.

11 Rev. UV Ref. 6.4 Page 4 of Materials that become contaminated, compromised, or damaged must be processed on a Nonconformance Report and dispositioned accordingly (SOP 037). Such materials must not be combined with other materials unless they have been reprocessed for cleaning and found acceptable. Less expensive items that are difficult to clean should be scrapped per Scrap Reporting Procedure (SOP 114) The appropriate Manufacturing and/or Quality Assurance Supervisor(s) should be consulted when the proper handling of any material is in question Returned product from customers or the field which may be infective as evidenced by contamination or which may have come in contact with body tissue/fluids requires special handling as documented in the Procedure for Handling of contaminated Returned Products (SOP 057). 5.3 Material Preservation: Material Storage Conditions Unless otherwise specified for a specific area or product, material will be stored under the following conditions: Temperature: +10ºC to +40ºC Relative humidity: 30% to 75%, Designated materials may require special storage consideration in order to protect the integrity of the product. These requirements may include but are not limited to the use of a refrigerator, freezer, or air conditioned environment. When such conditions exist, it is the responsibility of the area supervisors to ensure the product is properly stored in their respective areas Materials are so designated as a result of the labeling or packing slip provided by the supplier, or as defined in the product specifications provided by R&D. Material handler(s) are required to be trained as to which products require such consideration Some materials have a limited shelf life and are required to be controlled based on this. All short dated finished goods shall have a minimum of six months shelf life remaining prior to shipping to a domestic customer, and twelve months for international customers, unless authorized and accepted by Customer Service (SOP 367) Customer Returned product shall not be returned to inventory if its shelf life cannot meet the requirements in or its packaging cannot meet the requirements of (SOP 042) The Cycle Count Analyst will conduct visual inspections of products that have limited shelf life during the course of their normal cycle count activities. The Cycle Count Analyst will then log that they have inspected the item on the register that is attached to the refrigerator and freezer. In addition, all material handlers as part of their normal activities will take appropriate action if expiry dated materials are detected If it is determined that a product has short dating or is expired, a Nonconforming Material Report (NCMR) should be initiated and products will be moved to a quarantine location until dispositioned for rework or scrap (SOP 037). It is the responsibility of the personnel who identifies the short-dated product to notify QA to initiate the NCMR and corresponding inventory transactions Any inventory that has been identified as Not for Human Use, Sample, or the equivalent, will not be restocked as a product for human use application It is the responsibility of the area supervisor to ensure that all products in their area conform to this policy Inventory will be reviewed every two weeks (bi-weekly) for items that are nearing their expiration date. Items within 2 weeks of expiration date will be reviewed and staged for purge from inventory or expedited use. Operations will be responsible for removing material from inventory locations and production areas prior to the expiration date being reached SAP transaction MB5M can be used to pull a list of all materials (with the exception of bulk material) that will be expiring within a specified period of time Purging of items near their expiration date (but within the expiration date) should be handled in the same manner as cycle counting. This form of planned purging of near expiration material is not considered to be a non-conformance process and does not require a NCMR If a material or item is found to be past its expiration date, the material will be considered nonconforming per SOP Material Movement: Movement of inventory is not permitted without the appropriate paperwork or the appropriate on-line

12 Rev. UV Ref. 6.4 Page 5 of 7 computer transaction processing. It is the responsibility of the area supervisor to ensure that proper paperwork or on-line transactions are processed correctly for materials stored in their area Inventory transactions can be processed by either the data entry clerk or by an material handler from the respective department, however, the material handler(s) are responsible for reviewing inventory documents for accuracy and completeness, and all inventory transactions should be processed in the computer the same day that the activity takes place Cycle Counting Cycle counting is performed on a regular basis of system inventory locations (SLOC) across the manufacturing plants ( manufacturing and DC). The cycle counts are intended to identify and correct discrepancies between the physical inventory and the SAP SLOC inventory. Decrementing of inventory can occur as needed to correct SLOC inventory levels to match physical numbers by performing a scrap transaction for the inventory difference in SAP. Increasing of SLOC inventory should only be performed based upon review of previous system SLOC movements where it can be determined that movements were made in error and traceability has not been lost. Otherwise, physical inventory should be scrap to align with SLOC inventory levels Cycle counts and material inventory adjustments are considered standard inventory management practices and do not require a NCMR. If during the course of a cycle count or material movement, it is believed that identify or traceability of a part has been compromised, a NCMR should be considered. Generate a Quality Event Form (QEF) and process per SOP Movement of inventory into the Raw Materials and/or Finished Goods warehouse areas can only be made by one of the following transactions: Receiving Ticket - Moves inventory from a purchase order into an incoming inspection location. Accepted material is then moved into stock via the Receiving Ticket, (see SOP 199). Transfer to Stock - Non-inventory items that have been purchased for in-house testing and evaluation that have been identified as usable components are moved into stock via this form. Inventory Adjustment - Add inventory to the Perpetual Records due to an error. Returns are processed as specified in SOP 051 Top Level Procedure for Return Goods and Service and Repair No materials can move into the warehouse areas unless they have been properly inspected and released by QA Movement of inventory within the Raw Materials and/or Finished Goods warehouse(s) can only be made by one of the following transactions: Keyboard Entry - Moves inventory from one inventory location to another and/or from one bin to another in the computer system Inventory Reclass - Used to state a fixed asset designation Stock Transport Order (STO) Used to transfer Finished Good product between branch/plants or location, generally within a distribution center ZR Order Type - Allows the movement of Inventory from the Finished Goods Warehouse to the Raw Material Warehouse. Scanner Gun - Moves inventory from one bin to another. NOTE: Scanning of a finished good packaging barcode (Unique Device Identifier) during bin movement verifies the accuracy of the barcode content (GTIN and variable data) by comparing the scanned information of the finished good with the expected data within SAP Movement of inventory out of the Raw Materials and/or Finished Goods warehouse(s) can only be made by one of the following transactions: Move Order - Allows inventory within the Raw Material Warehouse to be charged to an account number/department. SK Order Allows inventory within the Finished Goods Warehouse to be charged to an account number/department. Inventory Issues Used to update inventory that is lost, expired, obsolete, scrapped or damaged. Scanner Gun - Moves inventory from a storage bin to an in-transit bin while it is physically moved to a manufacturing floor bin. Inventory Adjustment - Remove inventory from the Perpetual Records due to an error.

13 Rev. UV Ref. 6.4 Page 6 of 7 Pick List (Work Orders) - Assigns material from inventory to a specific manufacturing work order. Materials Issued report - Assigns material from inventory to a specific manufacturing work order. Pick List (Customer Orders) - Assigns material from inventory to a specific customer sales order, (see SOP 198) RTS (Return to Supplier) - Moves non-conforming material out of inventory back to the supplier/vendor. Scrap Authorization - Moves material from inventory via physical disposal of the material Physical movement of raw materials to fulfill a work order pick list or material issuance report will require that such raw materials are labeled in compliance with SOP 359 Division Procedure for Product Identification and Traceability Movement of material into Quarantine Areas can only be made by the following transactions: Nonconforming Material Report (NCMR) - Moves nonconforming material into an MRB location Any requests for inventory movement that are incomplete should be returned to the originator or to the originating department. Once the request is complete and accurate the material handler can move the inventory as outlined above. 5.5 Field Inventory (FI): Product that is still the ownership of Medtronic Xomed but is physically held at a Customer or Sales Representative location resides in either Field Inventory (FI1) when the product is disposable product or QP1 when the product is Capital Movement of Inventory into FI1 is performed with an FI order. This order will place the product into the Customer or Sales Rep Location. If the product is capital, a Reclass will be performed at the end of the month to move this Inventory to QP1 (Fixed Assets). This reclass will be performed by FSS at the requested of Xomed Finance Movement within FI1 and QP1 are performed using the FM Order Type. This is used to move from one location to another. For example one Sales Rep to another Movement back to the regular Finished Goods Warehouse from Field Inventory is performed by using a FZ order type. This will allow the sale of the product Returns are processed as specified in SOP 051 Top Level Procedure for Return Goods and Service and Repair. 5.6 Third Party Logistics (3PL) Medtronic Jacksonville has established a Third Part Logistics (3PL) arrangement with an external supplier to manage overflow inventory At this time, the 3PL will only store inventoried material for Medtronic. This can include raw material, subassemblies, and finished goods. The 3PL can also be used store non-product goods, like sterilization dunnage (dummy or sample products used in sterilization qualification) or spare equipment No secondary operations are permitted to be performed by the 3PL. The 3PL will not perform inspection, rework, breakdown/teardown, bundling or shipments to customers or other facilities Loose or small packed materials will be binned and secured to prevent tampering prior to shipment to the 3PL location. Larger bulk items will be shipped in their original sealed packaging configuration The 3PL facility will be set-up within the Medtronic SAP system with a SLOC location. Material shipped to the 3PL will be moved to this designated SLOC in SAP. The 3PL will be responsible for managing the inventory in their system while the material is in their possession. When material is returned from the 3PL, the material will be transacted from the 3PL SLOC into the appropriate JAX inventory location As all material will have already been received and released through inspection or inventoried off of completed work orders, all material returned from 3PL will go directly to inventory. No additional inspection is needed to receive material from the 3PL If bins or packaging is damaged upon receipt from 3PL, the receiving material handlers will contact QA for determination if a NCMR is required per SOP Last Time Buy Inventory Last time buy material may be staged at 3PL after receipt, but prior to inspection Material to be moved to SLOC 1009 to differentiate the material in SAP as being located at 3PL Each pallet will be shrink wrapped and identified with the following: SLOC Pallet Requires Incoming Inspection

14 Rev. UV Ref. 6.4 Page 7 of 7 a list of all lot numbers within the pallet All affected material will remain on Quality Inspection status in SAP until inspected as per the normal process. This status is standard for items pending incoming inspection and prevents allocation of the material to production orders Supplier Quality will ensure that a quality agreement is in place with the 3 PL vendors, if needed A QCFM 767, 3PL Product Transfer Approval Form will be completed for each material part number to have access to the 3PL. This process will ensure that Supplier Quality and R&D approves that those materials are acceptable for 3PL storage. Supplier Quality will manage the record retention of these forms.