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Mallinckrodt Inc. Information ServicesOverview and ERP Strategy

IS6800 PresentationMike CornishKathleen DelphaMary Erslon

October 2004

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Mallinckrodt Inc.

Mission: Sustain breathing, diagnose disease, and relieve pain

Respiratory, Imaging and Pharmaceuticals businesses

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Mallinckrodt IS – Guiding Principles

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Mallinckrodt I/S

(110 corp/ 75 sites)

Logistics

(16)

Tech Management

(44)

Order ManagementDistribution

Includes:JD EdwardsEMS,Varsity, etc.OASIS (Nuclear)Pharmacies (Nuc)Elec commerce

Data CenterWANCorporate LANHelp DeskDBA's

Mission:- Provide cost-effective I/S support to North American Mallinckrodt operations- Improve market competitiveness within each business unit through innovative application of technologies- Aggressively pursue standardization/consolidation of operational systems- Enable rapid integration of acquisitions- Provide timely and accurate information to support management decisions- Enable information flow to Tyco Healthcare

Mallinckrodt I/S Organization

Organizational Deliverables & Budget Linkage to Business Unit Management Team Linkage to Due Diligence Teams Cross-Organizational Issues/Policy Staff Recruiting/Development

Corporate

(12 corp/69 sites)

Manufacturing

(9)

Contracts

(9)

Cyborg HR/PRJDE FinancialsLIMS/TurbochromComplaint TrackingSASOracle ClinicalsTech DocsSite I/SPharmaceutical

PurchasingMRPWIPShop FloorKronosMfg Barcoding

Contract setup & pricingMembershipRebatesSales TracingsDistributor ChargebacksEquipment TrackingService / recall

Sr. Director InfraTHC

VP-CIO THC

16 /

Sales Systems

(18)

Sales ReportingData WhseSFACommissionsWeb development

Administration/

(1)

VP-Finance(COO)

THC Canada

(6)

Montreal & Ottowa:Network MgmtServer MgmtDesktop SupportJD Edwards Mfg1 st Level Support: Corporate Applications

VP-CIO THC

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Major IT Decisions

IT Principles Mallinckrodt business level

IT Architecture Mallinckrodt business level

IT Infrastructure Tyco International (vendor leverage)

Business Application Needs

Individual businesses + Mallinckrodt

IT Investment and Prioritization

Mallinckrodt business level

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Mallinckrodt Governance

Closest to Federal model Business IT executives work with finance,

“shared services,” business presidents to align with business objectives and minimize side efforts

Monthly operating review meetings “Old” Mallinckrodt, IS and internal operations was “a

hobby” Now – businesses involved in IS metrics because the

root cause of problems is often a system cause!

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Metrics

• 70 Sites• Total IS Headcount: 185• Approx. Mallinckrodt headcount 11,000• 30 Major software applications• 12 Concurrent major projects (JDE/BPCS)• 250+ Other projects • 6000 Desktops• 5,000+ Help desk calls / month•IS Budget in 2004 is 1.3% of Total Sales

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IS Budget

IS budget, at 1.3% of total sales, is extremely low (industry avg 3-5%)

Both expenses and head count reduced by half since FY00

Systems consolidation, not “bare bones” Management more focused on internal

operations, standardization, centralization President of one business: “Service is

better than ever”

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FY05 I/S Budget Analysis

0

10

20

30

40

50

60

70

Corporate Sites Total

FY00FY02FY04FFY05B

• Operating well below 50% of pre-acquisition costs• Source of savings:

• Site consolidation• Leverage of buying power• Aggressive cost management• Implementation of standard systems

0

50

100

150

200

250

300

350

400

Corporate Sites Total

FY00FY02FY04FFY05B

• Operating at 50% of pre-acquisition headcount• Source of savings:

• Site consolidation• Business ownership• Business alignment• Implementation of standard systems

FY05 I/S Expense: 1.3% of sales

Expense Headcount

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What is ERP?

Software solution that addresses the enterprise needs, taking the process view of an organization to meet the organizational goals, tightly integrating all functions of an enterprise

Facilitates company-wide integrated information systems, covering all functional areas

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What drives ERP?

Business Business development – new areas, products,

services Ability to face competition Efficient processes required to push the

company into top gear Customer Satisfaction

IT Present software does not meet business needs Obsolete hardware/software difficult to maintain

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Problems Tackled By ERP Systems

Material shortages Productivity Inventory problems Quality problems Customer Service Cash management

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Mallinckrodt ERP

Enterprise-wide integration of finance software JD Edwards (JDE) BPCS for manufacturing facilities

Business Planning and Control Systems “TRON” for nuclear facilities

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Enterprise Resource Planning (ERP)

2001 2002 2003 2004

IS Org formed

TycoAcquisition

O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S

JDE Respiratory

ContractConsol.

Hobart / STLP consol.

O N D J F M A M J J A S

IntegratePlymouthCust svc

IntegrateLPI c/s

IntegrateLF c/s

S&OP

Resp DistTo Atlanta

TJ move

Plymouthrollout

Carlsbadrollout

Juarezsplit

TC- SS integration

TC - Kendall

JDE-LPI

THC Canada – Systems Integration

ContrPolicy

Shift dosageTo Hobart

R&D Process

SpecialtyChem to MBI

GalwaySupply chain

OttawaInterco

Joliet DC

SOX

Irvineclose

Lafayetteclose

LF - JDE

ATL –JDEVarsity

JDE - DRP

BPCS - TJ

TC - USS

BPCS/JDE - Galway

Demo/Loaner/Eval

BPCS LF

Combi-tube Xfer

Trade-Ins

TC - Sherwood BPCS Raleigh

MIMIX Recall

TC - Partner

BPCS - Plymouth

BPCS –Irvine

TRON

Ottawa – sales tax

Microsoft patches / Active Directory

Pharma JDE / BPCS

The only constant has been change….

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Application Portfolio

BPCS JDE Partner

EDI / WebMethods

Data Whse

Varsity,EMSTRON

Cognos CompTHC Whse

LegacyApplications

ProductFG InventoryNet Requirements

CustomerPricingRebates/chgbacksIndirect Sales

SalesFinancial

Customer/ProductSalesRebates/chgbacks

Contracts

Shop Floor, MPS, MRP,Raw Material Purchasing,BOM

Direct Sales/Pharmacy

Order Management,Distribution, Financials

Contracts/PricingIndirect SalesRebatesChargebacks (dist rebates)

PRMS, Oasis, MapicsCOPS

Field ServiceFactory Service

TESS

Product, CustomersBOMsShipments

InterplantCust Orders, ack, SNsInvoicesInter-Divisional CRPInter-Divisional POs

Indirect SalesChargeback claimsBid Awards

Transportation/ Export

Sales AnalysisSales Force Commissions

CustomersProductsSalesRebates

Customer/ProductSalesRebates/chgbacksContracts

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Commercial Applications as of 7/04

IrvineJDE

IndianapolisJDE

TijuanaJDE

Respiratory PharmaceuticalImaging

JuarezJDE

St. LouisPRMS (STLP)

ParisCustom

PhillipsburgCustom

MontrealJDE

RaleighJDE

CincinnatiJDE

Maryland HtsOasis

RaleighPRMS (STLP)

GreenvillePRMS (STLP)

MalMerg

PRMS(STLP)

Hobart

OttawaSeibel/GP

PharmaciesJDE/TRON

GalwayJDE

FY05

FY05 FY05

FY05

FY05FY05

FY06

FY06

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Manufacturing Applications as of 7/04

IndianapolisBPCS

TijuanaBPCS

Respiratory PharmaceuticalImaging

IrvineBPCS

JuarezBPCS

St. LouisPRMS (STLP)

ParisCustom

PhillipsburgCustom

MontrealJDE

RaleighBPCS

CincinnatiBPCS

Maryland HtsMAPICS Raleigh

MAPICS

GreenvillePRMS (STLP)

MalMerg

PRMS(STLP)

Hobart

PlymouthBPCS

GalwayBPCS

FY05 FY05

FY05

FY05

FY05

FY06

FY06

FY06

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Focus Areas• Internal controls• Operational excellence in I/S and Mallinckrodt businesses• Enable business consolidation via ERP consolidation • Expand supply chain capabilities (VMI / CRP / RFID)• Support organic growth initiative through PLM strategy• Leverage buying power across Tyco via sourcing teams• Proactively explore opportunities for leverage across Tyco