Business Continuity Planning Thermo Fisher Scientific Cell Culture & Bioprocessing Global Headquarters: 925 West 1800 South Logan, g , Utah 84321 The World Leader in Serving Science Enabling Our Customers to Make the World… Healthier 2 Cleaner Safer Cell Culture & BioProcessing History $5M investment in Logan, UT and Cramlington, UK facilities Launched industry’s first stirred tank singleuse bioreactor HyClone SerumFree Media named Drug Discovery Products of the Year by Frost & Sullivan • Innovators of single-use technologies • Largest installed base of stirred-tank single-use bioreactors 2012 2011 2008 2006 2006 2004 2003 $15M investments in Biocenter (Logan, Utah) Thermo Electron and Fisher Scientific merge Fisher Scientific acquires HyClone • Industry I d t leaders l d iin offering ff i solutions l ti ffor cell culture and single use technologies • More than 20 years of experience in cell culture media • More than 45 years as a manufacturer of cell culture products HyClone acquires Cell Culture Media capabilities 1989 1967 HyClone Laboratories founded in Logan, Utah Investing in the future of bioprocessing 3 Business Continuity More than 40 years of experience built on a foundation of Quality, Assurance of Supply, and Customer Service BP-SOP0062 Organization-level plan with the policies and procedures for response to emergencies of sufficient magnitude to cause a significant disruption to normal business operation functioning. Business Continuity Plan BP-FCD1324 BP FCD1324 Comprehensive response procedures in the event of workplace emergencies that includes fires, chemical spills, and natural or manmade disasters Emergency Response Plan Essential Business Activities BP-FCD1356 BP FCD1356 Categorical description of business units and their activities stratified by level of importance, with minimal staffing levels and recovery time objectives Ensuring your business continuity starts with a partner you know and trust for quality products and assurance of supply 4 Thermo Scientific Value Chain Research Development Manufacturing Supplier Management Program Quality Processes Service & Support Supplier Management Program • Raw Material Qualification • Supplier Management • Inventory Management Quality Processes • Change notification • Process & product controls Service & Support Programs • On-going customization and development support services • Customer Supply Chain Partnership (SCM) programs 5 Distribution Strategic Sourcing Program Continuously looking forward at on-going risk mitigation strategies Quality • Quality products begin with sourcing the best materials available Redundancy • Our primary goal is to establish multi-sourcing contracts to mitigate sole-source risks Contingencies • In cases where redundant sourcing is not feasible, we’ve created contingency plans 6 Inventory Management: Raw Materials Our is O supply l chain h i excellence ll i built b il on extensive i raw material i l qualification lifi i and continuing inventory management Qualification Guidelines • Compliance with ISO 9001, ISO 13485, and cGMP • Database of source origin and animal origin information • Commercial evaluation Performance Management • • • • • • Ongoing material testing Facility audits Score card evaluation Quarterly business review g for single g sourced components p Collaborative risk mitigation Service demonstration assessments A strong supply chain is the sum of its parts – and it all starts with raw materials 7 Critical BioProcess Container Raw Materials We W work k with i h all ll parts off our supply l chain h i to understand, d d manage and d control procedures and components that impact our products Resin Supply • Equivalency issues are due to changes in manufacturing site and formulation changes, e.g., additive packages • Strategic challenge due to biopharma’s expectations of resin and component specificity • Demand forecasts are in place with ample safety stocks • Additional stockpiling or negotiated extensions in supply are initiated prior to known resin supply changes Maintaining high quality standards 8 Critical BioProcess Container Raw Materials We W work k with i h all ll parts off our supply l chain h i to understand, d d manage and d control procedures and components that impact our products Supply of CX Film • Proprietary formulation that is owned by Thermo Fisher Scientific • Produced by Baxter Healthcare facility in USA (backup Baxter site – in Italy) • Thermo Fisher Scientific can in principle outsource film from other suppliers • Rolling quarterly demand forecasts are in place • 6 months of film inventory on hand • 6-12 month change notification with contingencies for extension on a case-by-case basis Integrated quality communication for secondary manufacturers 9 Supplier Management: Facility Audits & Risk Mitigation Rigorous Supplier Management Program • Facility audits: • Quality System Verification • Process P d documentation t ti • Robust training system • Management of raw materials Risk Mitigation • Assess supplier redundant manufacturing capabilities (location, tooling, and trained staff) • Supply agreement negotiations • Identify alternate suppliers 10 Supplier Management: Scorecard Sample questions we ask: • • • • • • • • 11 Is there sufficient redundancy in personnel training that secures product manufacturing? Are there operating mechanisms in place for communication with their suppliers (business review, forecast, etc)? Is the supplier pp flexible and reactive to critical situations? Is there an inventory/accountability system which will provide traceability to a finished product? Are all finished goods sampled and tested adequately for specification alignment? Does the supplier change notification process meet our requirements and expectations? Does Thermo understand the supplier’s future direction and long term growth/development strategies? Does the supplier have a long term relationship with Thermo? Inventory Management: Manufacturing We demands levels W actively i l forecast f d d and d proactively i l maintain i i inventory i l l for f over 2000 components from 350+ suppliers Operations Management • Material requirements planning (MRP) • Production planning • Inventory control system Reliable Supply Practices • Maintaining required level of inventory • Managing capacity according to sales order demand from customers • Flexibility to expedite manufacturing • Product delivery according to customers schedules Managing inventory is critical to delivering your products on time 12 Component Library & Safety Stock Our O extensive i list li off pre-qualified lifi d components ensure optimal i l performance f and maximum cost savings on finished goods Standard Component Library • Contains over 500 components with a proven history of function and reliability • Purchased in large quantities at lower cost, saving you money Safety Stock • Maintenance of safety stocks for critical components in case of catastrophe • Historical demand and forecasts determine stock levels • Effective Eff ti analysis l i and d managementt allows ll us tto respond to customer demand spikes The right fit for the right price 13 Global Operational Footprint Cramlington, UK • Liquid Media, Buffers, Supplements • BioProcess Containers Lanzhou, China • Serum Manufacturing and Distribution Tokyo, Japan • Warehouse & Distribution for all Finished Goods Logan, Utah Aalst, Belgium Aalst • cGMP Logistics Beijing, China • Serum Distribution • Media • Regional Distribution Center • Serum • Liquid and Powdered Media, Buffers, Supplements • BioProcess Containers and SingleUse Technologies Melbourne, Australia • Bovine Serum • Other Animal Serum Tauranga, Ta ranga New Ne Zealand • Bovine Serum • Other Animal Serum Global Business Office 14 Regional Distribution Center Bioprocess Containers Serum Media, Buffers, Process Liquids Global Operational Redundancy PRODUCTS BioProcess Containers Media, Buffers & q Process Liquids Sera REDUNDANCY BioProcess Containers (BPC) Production  BioCenter, Logan, UT (chamber production)  N. N Campus, Campus Logan, Logan UT (chamber production and final BPC assembly)  Cramlington, UK (chamber production and final BPC assembly) 15 Media and Process Liquids Production  S. Campus, Logan, UT (liquid and powder production)  Cramlington, Cramlington UK (liquid production)  Beijing, China (small volume liquid production and powder packaging) Serum Production  N. Campus, Logan, UT (U.S.; USDA; Canadian; New Zealand -porcine only)  S. Campus, p , Logan, g , UT ((sera origin: g U.S.)  Lanzhou, China (sera origin: Chinese)  Mordialloc, Australia (sera origin: Australian)  Tauranga, New Zealand (sera origin: N New Z Zealand) l d) Change Notification Advanced Customer Notifications • Changes in product raw materials • Production or testing process • Manufacturing and storage facilities Anticipated Discontinuations • • • • Customer contract assessment Evaluation of existing supply Procurement of supply prior to discontinuation Manage supplier to support transition plan Strategic Thinking • Proactive approach to reducing the risk of last minute changes • Achieved by providing you alternate sources and dual components 16 Services: Supply Chain Partnership Programs • Historical trend analysis of purchase orders • Work with us to determine which supplies and quantity to keep in inventory • We keep your supplies in our warehouse • Product shipped from Thermo Fisher warehouse within 2 days of your request Safety Stock • Future production needs analysis for future 6-12 months • Tell us what you need and by when • Products are available 4 weeks prior to your target date • Product shipped from Thermo Fisher warehouse within 2 days of your request Demand Planning Eliminate lead times – have your supplies when you need them 17 Building relationships Ensuring continuity and E i your business b i i i starts with i h a partner you know k d trust for quality products and assurance of supply With over 40 y years of experience p in this industry, y, we’ve built a foundation on • Quality • Assurance of Supply • Customer C t Service S i By partnering with us, you can have confidence that we: • • • • • Actively manage our supply chain for current needs and future sustainability Collaborate with you on risk mitigation strategies Design our products to fit your needs and give you the best performance Proactively help you receive your products when you need them Take care of your single-use supply chain so you don’t have to Evolving with the global needs off our customers 18 Your Partner in Science Committed to our customers’ goals for better results and greater productivity 19 Strategic Sourcing: Achieving Success Sometimes dual sourcing isn’t feasible, but we still take action Because of the cost associated to create a tool for injection-molding a large item, it is cost-prohibitive for a second supplier without the volume of business to function. In the case of a catastrophe, we needed a risk mitigation plan. We worked with the supplier to contract with a company in a different state for space, and had a duplicate tool made and stored offsite in a secure location. In the event of a catastrophe – the firm will ship its duplicate tool to the contracted secondary manufacturing location. Two is better than one When notified by one of our suppliers that they would no longer support one of our key components, we developed 2 additional suppliers and have since completely transitioned onto using our new suppliers. Proactive vs. Reactive Tooling for a critical component was getting old. Our proactive programs detected this well ahead of a problem and procured a company to build a tool with greater capacity. Through this action we have strengthened the integrity of our supply chain and we now own the IP and the tool. 20