Janssen Latina sitea journey toSupply Chain Excellence

Luca Russo, General ManagerNovember 6th 2013

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Janssen Supply Chain VisionTransforming Our World:

Delivering affordable medicines to anyone, anywhere, any day

Our MissionBe recognized as a lean & very competitive pharmaceutical

manufacturer for J&J to bring Innovation into reality !!!

Product Launches•100% on-time launches

(76 in 2012)•24hrs rapid launches•2013 Launch plan:

Intelence 25 mg tabsTMC278 25mg tabsPrezista 800 mg tabsPrezista Glide tabsBG12 120mg capsulesTMC435 capsulesCanagliflozin tabs

Major Products•Rispedal, Reminyl• Invega, Incivo• Intelence, Prezista,

Edurant• IBL, Imodium, Motilium•Jurnista, Tramadol•Sporanox•Zytiga, •Zyrtec, Tylenol,

Benadril, Simply sleep

Sales / Production Costs**•Sales Supported: 4 BN$

•Capital: $ 16 MM•Conversion Cost: $ 67

MM (excl. IT)

**(YE 2012)

2014 Vision• Capacity to produce 6.2 BN

units• Fast execution: all lines at

5x3• Unit cost reduction of 30%• Full supplier integration• Excellence in compliance

and customer service• Pipeline development:

talents and Global leaders

Plant Space (Mfg)•Land: 1.313.000 sq ft• Facility Size: 591.000 sq.

ft. (including ext technical areas)

•Facility footprint: 341.000sq. ft.

•Total covered area: 503.000 sq. ft.

People• People: 522.5 HC (incl.

38 global)• Salaries: 156• Wages: 220• Others: 146.5• Exempts: 118• Non-exempts: 404,5

*(FBP2013)

Technology&Capabilities• Solids:Tabs,Caps(5.7BN)• Liquids: Shampoos,

Solutions (700 Tons, 14 MM bottles)

• Spray powder (100Tons, 4MM cans)

• Packaging: Blisters, Bottles, Sachets, Wallet

• High level of automation and integration

Janssen Latina, ItalyBe recognized as a lean & very competitive pharmaceutical manufacturer for J&J to bring Innovation into reality !!!

Utilization/Shifts/Quality•Utilization 75% (based

on 24/7)•24hr*7 days shift pattern•+1700 FG sku’s•FDA approved since ’95•Last 5 FDA inspections

approved• ISO 14001 certified•OHSAS 18001 certified

QEHS and ComplianceLatina

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Increased flexibility to

support volume and

copmlexity growth

Quality organization productivity:

Quality Highlights:

One Quality System as

outcome of intellectual

synergy with all regulations.

Date Audit

2007 • Saudi Arabia HA• FDA

2009 • AIFA• KFDA

2010

• ANVISA• AIFA• FDA• AIFA

2011• Turkish HA• AIFA• KFDA

2012• Japan• AIFA• Kenia

2013• FDA• MOCK TMC435• Mochida

EHS Highlights:

No Smoking Site since 2007

ISO 14001 Certified since 1999

OHSAS 18001 Certified since 2005

Sound EHS Compliance Profile2003 MAARS 4-4-42006 MAARS 4-5-42009 MAARS Green 2012 MAARS Green

Operating mode: Flexibility & Adaptability

Center of excellence& customer dedication

Local business Technology & International Launch accelerator

Benchmark for costs, compliance & customer service4

• Global Pharma, including Japan, Stent coating

• Business Change (MD)

• Local production• Small complexity

• FDA approved• Large complexity

• Pharma RX, OTC, generics, medical devices

• Best Solid center in J&J

• Process Oriented • Engaged

Organization• System Based

Compliance

• Consumer, Techfidera, Zytiga, Canaglifozine

• Reliable org• Talent development• Process centered org

20001990 20081980 2010

Understanding Latina: “culture of change”an History of Engagement , Change mgmt and Results

2012

40

150

218

732

322377

506 523

20132005

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Today challenges

NEW BUSINESS

NEWVOLUMES

NEWTECHNOLOGIES

LATINA LEAN JOURNEY

StabilityFlow

PullOfficial LMA 06

IntegrationSensei LMA 09

INTEGRATION

•Key Suppliers integration•Postponement•Integrated Change Mng.•Lean application to all Transactional areas

•Organization simplification •Cost competitiveness •Internal & External Benchmarking

2009-20112007-2008

DEPLOY FLOW & PULL

•Internal Value Chain•Inventory reduction

Stock Down (RM, PM) Consignment stock RW application with supplier Wip control &Kanban system

•Flow Visual Management•Internal Benchmarking

REDUCE CYCLE TIME

•Key Suppliers involvement •Customer Integration•Cycle Time Reduction•Productivity increase •Planning re-engineering•Solid Area re-engineering•Digital Factory

REDUCE PROCESS VARIABILITY

•Cycle time & Process variability reduction (6σ)•Maint. Excellence & OEE improvement•Quality Improvement•Process Automation•System Integration

2001-2003 2005-2006

SUSTAININTEGRATION

•Full Suppliers integration•E2E stream synchronization & flowing•Extensive Benchmarking•Robust Organization•Continuous Improvement

2004-2005

IntegrationInternal LMA 07Official LMA 08

2011-2013

REINFORCEINTEGRATION •Extensive Suppliers integration•E2E stream synchronization & flowing•Customer oriented culture•Talent Development•Reliable Organization•Change management/site master plan•Process automation & robustness• TDDB

IntegrationOfficial LMA 11Official LMA 13

LMA 2013 preparation

CHANGE MGMT

AGILITY&ADAPTABILITY

ORGANIZATION STRENGHT

INNOVATIONCUSTOMER FOCUS

PEOPLE

RELIABILITY

LATINA SUCCESS LEVERS 2011-2013

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Understanding Latina: Change management

The backbone of our history:Integration of People, Process & Technology

Pla

nt

Act

ivit

y &

Eff

icie

ncy

Decades

1982-1991

First DecadeBASEMENT

Computer Integrated Manufacturing Electronic Batch Record System

Laboratory Integrated Manag. System

NEXT DecadeGlobalization JSC

J&J FactoryMES

Shop Floor AutomationGlobal Q&C systems

2012-20211992-2001

Second DecadeINTEGRATION

Quality & Compliance SystemsAutomatic Materials Handling System

2002-2011

Third DecadeRegional Fill/Finish

EuRoPe2 PES (Best Practice)

IntegrationOperational Intelligence (Best practice)

•Must add value.

•Must help people.

Critical Success Factor: Innovation

Customer Focus: Customer Focus

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E2E value streams:

•Pharma•Consumer FW•Japan•Prezista•Daktaryn•Dolormin•Tylenol s•Narcotics•NPI•Launches

DEP

VALUE

STREAM

E2E VALUE STREAM

FLUID

BED

DRY

GRANULATION

HIGH

VOLUME

LOW

VOLUME

PHARMA

CONSUMER

JAPAN

MFG QC QAPLANNING

CONSUMER

RISPERDAL

BOTTLES

E2E

MFG-PKG

CONSUMER FW

JAPAN

PHARMA

CONSUMER

NARCOTICS

ZYTIGA

NPI/LAUNCHES

Dep Value Streams:QC•Low vol•High vol

QA•Pharma•Consumer FW•Japan

MFG•Fluid Bed•Dry Granulation•Japan

PLANNING•Consumer•Bottles•Risperdal•Mfg/Pkg E2E

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• Top Management visibility

• Compensation strategy (incl. Operator)

• Global roles

• Strong connection with University to attract top talents (Blue Eyes)

• Internal growth & targeted external injection

• Shop floor experience

• Job rotation (Intra-Extra Plant)

• Campus Mode

• MORE Program

Critical Success Factor:People Development

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Developing Leaders

MOREManagers On the RoadofExcellence

Developing Leaders

Reliable Results

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OTC Recovery

Business Impact of Latina in 2013

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Reputation & Brand Equity

Launch the Pharm NPI pipeline

Growth

TMC435

Reliability

Sustain

Deliver Customer ValueLast 5 years results:

100% on-time launches, including 24hrs launches

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40

60

80

100

120

2009 2010 2011 2012 2013

Cost/unit

Credo & engagement plan

1. Leadership model: “Supervisor a key role”, “more”

2. Engagement & commitment: “People make it happen”, “Credo execution leaders”

3. Simple, concrete & business oriented initiatives

4. Create & sustain a positive & innovative work environment

Key elements & focus areas

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Credo continue to grow while high rotation leveland people increase

LEAN TRANSFORMATION

• Adaptive culture and flexibility, attitude to drive the change.

• Will of reshaping our future through continuous improvements.

• People People People : passion and satisfaction for the Job !

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