1. Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group
Let’s build a smarter pharmaceutical supply chain.
Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group
Welcome. On behalf of IBM’s Software Group, thank you for joining us today.
We are going to explore an exciting software solution for Pharmaceutical Track & Trace, which is comprised of two IBM software products:
InfoSphere Traceability Server
…and Websphere Sensor Events
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2. Smarter planet opportunities are everywhere....
smarter safe pharmaceuticals
smarter solutions for retail
smarter supply chains
smarter
food
smarter manufacturing
smarter industrial operations
The solution is a perfect example of IBM’s initiative around building a Smarter
Planet. IBM is helping companies save money and create safer supply
chains.
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smarter
data center
smarter healthcare
smarter transportation
smarter traffic
smarter water management
smarter cities 2

3. Serialization and the New Era of Visibility The ability to obtain and verify the location, status and history of an item.
Pharmaceuticals: Can I be sure my prescription drugs are not counterfeit?
Parts: Which parts were assembled in my car and are they authentic?
Food: Where does my food come from?
Returnable Containers: Do my suppliers have enough containers to meet my production needs?
The ability to track and trace serialized items offers companies new visibility….
You can now obtain and verify the location, status and history of an item, product or any physical asset. Traceability can also help address questions around counterfeit drugs, authentic car parts, and food supply.
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The IBM Supply Chain solution enables customers in multiple industries to answer these questions today. 3 3

4. The world is changing and becoming more…
Instrumented
Interconnected
Intelligent
The explosion of new information, when integrated, analyzed, and acted upon using new types of intelligence, enables solutions that … help build Smarter Safer Drugs
Serialization is part of today’s modern supply chain….a supply chain that is more instrumented, interconnected and intelligent than ever before.
As demand for more serialized information increases, there is an explosion of new information.
When integrated, analyzed, and acted upon using new types of intelligence, IBM helps companies build and leverage their serialized supply chain to enable solutions that help build a Smarter, Safer Drug Supply
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5. Trace Events in a ‘Physical Meets Digital’ World
Serialized information links physical world assets, resources and infrastructure with the digital world of event processing, business analytics and optimization.
Supply Chain Optimization
Extend supply chain visibility, analytics and collaboration to transform supply chain operations.
Asset Optimization
Full lifecycle asset management through real-time visibility, optimization and traceability
Let’s take a look into how traceability enables a smarter, Safer and more efficient manufacturing and supply chain.
There are four major aspects of this ‘Physical Meets Digital World’ that can have a dramatic impact and drive efficiency in your business.
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Asset Optimization…..Products are captured in real-time and tracked through new event visibility, at more granular levels than ever before;
Supply chain Optimization: There is new visibility available and also business process correlation to events, not just internally but also selectively and securely shared with trading partners;
Efficiciency and additional process optimization can be gained from event visibility for simple and complex business processes & infrastructure.
Production
Process
Optimization
Leverage industry
information for asset
design and process
optimization.
Physical Infrastructure
Focus on smarter buildings, smarter water management, smarter grids, etc. 5

6. Supply Chain Visibility Can Produce Better Outcomes
4.5% of revenue is lost due to supply chain inefficiencies.
Stock-Outs – Excess safety stock is 10% of inventory at Manufacturers and $ K of excess inventory at each hospital and retail pharmacy
- IDC
The opportunity for Smarter Business results are all around us.
In the Pharma Industry ….recent regulatory requirements to improve drug safety demand that companies modernize their supply chains and increase visibility and efficiency. In addition to regulatory drivers, there is also a need to act due to lost revenue from inefficient supply chain visibility, stock outs and the need to take additional steps to combat counterfeit products from entering the overall drug supply.
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8-10% of Worldwide Drug Supply is Counterfeit – up to $75 billion a year in lost sales
- WHO 6

7. Global Serialization Trends
Concern for counterfeit drugs, diversion and patient safety is driving a global trend with legislative and serialization requirements IBM provides a common platform to allow flexibility to accommodate new standards
The trend towards more regulation and serialization of pharmaceutical products is increasing globally.
The number of countries acting on general concern for drug safety and moving toward some form of enhanced serialization to conform with tightening standards is a trend that will continue.
Working with IBM, your company can leverage a standards-based technology platform that is purpose-built to allow for consistent deployment and accommodate on-going changes with country-to-country requirements.
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EU Panel Votes to Crack Down on Illegal Medicines ASSOCIATED PRESS April 27, 2010
BRUSSELS - The battle against counterfeit medicines took a big step forward Tuesday when the European Parliament public health panel approved a bill to crack down on a fast growing industry worth (EURO)10.5 billion ($14 billion) a year in Europe alone. If it becomes law, drug makers must produce medicines that can be tracked from the factory to the patient to make sure no one tampers with the content.

8. Trusted Physical Data is Converted into Usable Information
Reporting & Analytics
End-to-end Traceability
Inventory Visibility
Temperature Tracking
Business Benefits
Increased supply chain visibility
Reduced counterfeiting and diversion
Increased Consumer Safety
Increased efficiency for conducting recalls and returns
Xylinke
Blood Thinner
T R U S T E D I N F O R M A T I O N
Before we talk about how to proceed in creating traceability projects within your operation, it is important for everyone to keep in mind the Whole Supply Chain perspective.
A Traceability system needs to be a trusted source of information. The completed traceability system will be only as good as its weakest link.
So it is essential to identify all the stakeholders and establish buy-in and cooperation. There is a compelling business value proposition for each stakeholder in the chain (including governments, not shown here).
All parties will benefit from risk mitigation and reduced liability, but other benefits will vary by stakeholder.
Key benefits beyond compliance with regulations may include increased access to global markets;
Increased quality control;
Improved demand visibility;
and forecasting or enhancing brand image and sales.
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Pharma
Manufacturer
Distribution/ Export
Retailer / Hospital 8

9. Smarter Supply Chain Architecture – Supply Chain Visibility Events are captured at various points in the supply chain, stored in a in a secure traceability network and can be shared with trading partners
InfoSphere Traceability Server
InfoSphere Traceability Server
InfoSphere Traceability Server
Manufacturing Plant
Distribution Center
Distribution Center
Retail Location
This diagram depicts what a typical supply chain might look like.
In terms of traceability, the red dots you see here represent ‘read points’.
These read points are where information is captured about the particular product, item or asset being tracked.
Events, such as receiving and shipping, are captured and stored to form a complete history.
In addition, this information around What, Where, When, Why and Who can trigger alerts, as well as simple and complex business processes
IBM Traceability Server allows event data to be securely shared with trading partners.
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10. InfoSphere Traceability Server
Types of Data
WHAT
WHERE
Location
City/State
Country/Region
Store #
Dock #
Port #
Manufacturing Data
Lot/Batch
Expiration
Environment Data
Temperature
Transactional Data PO
Invoice
InfoSphere Traceability Server
Now let’s look at the type of information you capture and how a centralized repository can help.
InfoSphere Traceability Server is based on a global technology standard called EPCIS – electronic product code information services. EPCIS event data tells you a lot of information about the movement of a product. An event contains information such as
what the product is,
where the product was seen,
when the product was seen and
why the product was there.
As a central, intelligent hub of information, you have the ability to track all of this information, and make important decisions to help with operational issues such as inventory management and counterfeit detection.
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WHY
WHEN
Timestamp
Business Process
Receipt
Ship 10

11. Standards Based Solution Components
√ GS1/EPCglobal Certification
Alternate
Standard Network Architecture
Solution Architecture
Solution Architecture
Readers/Scanners
Reader Protocol
Filtering &
Collection
ALE Interface
EPCIS Capture
Application
EPCIS Capture Interface
EPCIS Event
Repository
EPCIS Query Interface
Internal
Applications
External
ePedigree
Shipment
Verification
Business
Analytics
Vendor C √
EPCIS Query Interface
EPCIS Query Interface
InfoSphere
Traceability Server
Vendor B √
EPCIS Capture Interface
EPCIS Capture Interface
WebSphere
Sensor Event Server
Vendor A
(Systech,
Optel Vision, Siemens, …)
IBMs Traceability Solution is an implementation of the EPCIS standard, a cross-industry standard that is part of the EPCglobal/GS1 standard network architecture.
Traceability Server is comprised of a data capture interface, data repository and data exchange interface and is completely aligned with EPCglobal standards.
IBM has another software product within the stack, the WebSphere Sensor Event Server.
Together, Traceability Server and Websphere Sensor Event Server make up the IBM Track & Trace Solution and work together to enable capture, store and share of EPCIS data.
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ALE Interface
ALE Interface
WebSphere
Sensor Event Server
Vendor A √
Reader Protocol
Reader Protocol
Readers/Scanners
Readers/Scanners 11

12. How is Data Captured? From large to small enterprises
Distributor A
Needs to support multiple customers
Want to drive value through internal visibility
Wants to purchase and support own data management platform
EPCIS
Pharma Manufacturer
IBM
Traceability
Server
Event Capture
Device Management
Distributor B
Needs to support multiple customers
Has limited interest in driving value through internal visibility
Distributed Event Capture
Event Capture
The model used with Traceability Server and Websphere Sensor Events is flexible to allow for multiple trading partners to share information effectively and securely, and only provide visbiliity to what is important to share.
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Device Management
Distributed Device Management
Pharmacy C
Government agency hosts the data servers
Device Management 12

13. Expected Business Benefits from Track and Trace
And the benefit of greater inventory visibility within the supply chain consistently shows up as the number one need and business benefit of track and trace solutions according to industry research.
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Source: AMR Research, 2009 13 13

14. New Insights – The Power of Analytics to Gain Efficiencies
Xylinke
Blood Thinner
With inventory visibility, your company will be given new insights into new data. As part of its core functionality, IBM’s Traceability Server includes powerful analytics and reports specific to the needs of your business.
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15. Compliance (US): Pedigree Types (only IBM supports both)
Pedigree Document
Pedigree Data Requirements
EPCIS Pedigree
pedigree
receivedPedigree
shippedPedigree
InitialPedigree
Topic
Data
Source
Unique Identifier
Lowest saleable unit unique identifier
Manufacturer
Source of Drug
Name
Federal manufacturer registration number
Principal address of the source
Drug characteristics
Trade or generic name
Quantity
Dosage form and strength
Container size
Number of containers
Expiration dates
Lot number (s)
Owners
Business name
Each owner of the drug
Address
Date of Transaction
Sales Invoice Number
Shipping Info
Certification
Contact information of each person certifying delivery or receipt
Commissioning Event
Shipping Event
Receiving Event
Shipping Event
Receiving Event
IBM supports both document and EPCIS data requirements, and is the only solution to offer this.
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The supply chain path of a drug is known at any point 15

16. IBM’s Unique Value Proposition
IBM offers the most complete solution components: Device Management, Capture Middleware, EPCIS, and Pedigree App (both Document and EPCIS Pedigree) – the only “one stop shop”
IBM employs 400,000 professionals, operates in 170 countries, and has local expertise and support in any part of the world
IBM has been working with many global regulatory agencies: FDA US (drug and devices regulation), EFPIA, Brazil,Turkey
IBM solution has been deployed for different use cases in many industries for cross-learning opportunity
IBM solution provides low operational risk: redundancy, HA, and fail-over contingency
IBM solution enables extension to business applications such as: consignment inventory, supply chain visibility, cold-chain management, chargeback resolution, targeted recall
IBM solution can easily be integrated with many other complementary suite of products: ILOG, Maximo, MDM, Cognos
We believe your company can leverage IBM experience to make ready your supply chain……and get ready for a more complex serialized supply chain.
We are current on status for all global standards for serialization, and you can depend on a team to help you deploy your solution with over 400,000 professionals in 170 countries worldwide.
With the largest compatible suite of complementary solutions, look for IBM to streamline your deployment process and lower overall costs. 16 16

17. Workshop Invitation
Ready to learn more about how IBM can help your business?
IBM experts will arrange to meet with your team to evaluate your current readiness and make suggestions for next phase deployment needs.
Our teams have worked with several manufacturers and distributors globally, and can help you define a process roadmap to obtain serialization, compliance and help offset on-going costs by evaluating overall business process efficiencies.
We hope you have found today’s overview both informative and engaging. From our experience, it is most important that you make the decision to act and get started with the process toward Smarter, Safer Supply Chain today. Take advantage of our experience and our free workshop to learn more about how IBM can help your specific business needs.
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18. Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group
Thank you for your Attention
Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group
On behalf of IBM’s Software Group, thank you for joining us today.

19. BACKUP SLIDES

20. IBM’s Supply Chain Visibility solution – Platform for Many Applications
Inv Mgmt
Cold Chain
Recalls
Prod Auth
ePedigree
RCM
Data Center
Enterprise Traceability Server (EPCIS)
Serial Number Allocation
Commissioning Events for units, cases and pallets
Aggregation Events for cases and pallets
Decommissioning and De-aggregation Events for rework
Shipping Events for transfers and customer shipments
Data Capture Application/Local Traceability Server (EPCIS)
Serial Numbers
Commissioning Events
Aggregation Events
Decommissioning Events
De-aggregation Events
Shipping Events
Packaging Plant
Line Management
Device Management
Premises Server 20

21. Governments & Industry are concerned for patient safety
Regulatory Compliance remains the main driver in Pharmaceutical Track & Trace. Governments and Industry are concerned for patient safety. Both in the United States and in Europe, serialization laws are pending.
On the left, are 2 maps of serialization laws in the US and in Europe.
On the right, you see an example of a pedigree generated by the IBM system that depicts each movement of a drug and helps guarantee its authenticity.
IBM’s Solution for Pharmaceutical Track & Trace helps companies adhere to global compliance regulations, enables trading partner connectivity and ensures a safer more secure drug supply chain. 21

22. Regulations are Increasing World-wide
Pedigree and serialization regulations are a growing trend among domestic and international regulatory bodies
California
FDA
China
Korea
Brazil EU
Turkey

23. Risk Management: Product Authentication & Diversion Detection
Challenges
High risk of product counterfeit and diversion
High theft
Protecting brand identity
Increased inventory stock
Benefits
Minimize lost revenue due to counterfeits
Minimize lost revenue due to diversions
Increase patient and consumer safety
Brand protection and risk mitigation
WHO estimates counterfeit drug sales between $35 and 40 billion per year
Between 8 and 10% of the worldwide drug supply is estimated to be counterfeit
By 2010, more than $75 billion of sales will be lost per year
Companies can identify counterfeit or stolen product entering their supply chain
“Leveraging Track and Trace in the Pharmaceutical Industry”, IBM Whitepaper © 2009 23 23

24. Risk Management: Targeted Recall
Benefits
Execute a targeted recall quickly and efficiently
Enable a targeted recall over a full recall
Track progress of recall
Challenges
Inability to execute a targeted recall
Time, cost and effort to recall product
Lost revenue
Risk to brand identity
Companies can quickly identify where product has been shipped and efficiently execute a targeted recall 24

25. Operational / Performance Inefficiencies: Supply Chain Visibility
Challenges
Lack IDC notes the pharmaceutical industry loses 4.5% of revenue6
of supply chain collaboration
Lack of interoperable systems
Insufficient traceability
Benefits
Increased shipment accuracies
Reduce handling cost for discrepancies
Reduce working capital requirements
Ensure inventory levels are maintained to meet market demands
Reduce spoilage
Better forecasting
Increased operational efficiency
IBM’s WebSphere RFID Information can lead to better inventory within your own enterprise and within visibility up and down your supply chain. By enabling secure data sharing with trading partners, suppliers can react more efficiently to demand and retail outlets can reduce out of stock scenarios.
IDC notes the pharmaceutical industry loses 4.5% of revenue* due to supply chain inefficiencies
Companies can optimize their business processes driving operational efficiency and reducing costs
* “IDC Home: The Premier Global Market Intelligence Firm. 11 February 2009. 25

26. Operational / Performance Inefficiencies: Cold Chain Management
Challenges
High spoilage
Lack of compliance validation
Benefits
Improved product efficacy and safety
Reduced spoilage
Proof of SOP – regulatory
Track temperature and shelf-life data
Control temperature, monitors
Complimenting existing cold environment
IMS Health reports worldwide sales of biologic medications, which require temperature-controlled storage and shipping conditions, increased by 12.5% in 2007  $75 billion
Nearly double the 6.4% increase in sales of traditional pharmaceuticals
Companies can increase product safety and prevent spoilage due to inefficient processes 26

27. Operational / Performance Inefficiencies: Returnable Container Management
New containers
Container Flow for Manufacturers
Challenges
High investment
Cost to replacement
Lack of monitoring
High safety stock requirements
Scrap
Plant 1
Plant 2
OEM
Benefits
Reduce Costs
Reduce returnable asset inventory by up to 40%
Eliminate between 10-15% of safety stock
Sharply reduce substitution costs
Increase Operational Efficiency
Eliminate potential shutdowns
Increase asset utilization
Optimize operation processes through trading partner collaboration
Reduce Risk
Reduce asset counterfeiting
Reduce product counterfeiting
Protect investment
3PL
Supplier A
Supplier B
Supplier C 27 27

28. A Working Deployment Model – Pedigree
Traceability
Server
Event repository
and processing
Traceability
Server
Event repository
and processing
Serial Number Allocation
Data Storage/Management
Performance Measurements
Reporting/Alerting
WebSphere
Sensor
Event Server
Data Capture
ePedigree
Shipment Verification
Data Capture
Line 5
Line 6
Print serialized label
Data capture
Units to Case
QA rework
Processing
Line 7
Line 1
Line 2
Line 3
Processing
Line 4
Phase 4 – Trading
Partner
Data Sharing
Phase 1 – One line
Phase 2 – Add’l Lines
Phase 3 – DCs

29. A Working Deployment Model – Realizing ROI
Traceability
Server
Event repository
and processing
Traceability
Server
Event repository
and processing
WebSphere
Sensor
Event Server
Data Capture
Serial Number Allocation
Data Storage/Management
Performance Measurements
Reporting/Alerting
ePedigree
Shipment Verification
Line 5
Line 6
Data Capture
Processing
ePedigree
Shipment verification
Product authentication
Diversion detection
Returns visibility
Downstream expiration management
Downstream inventory visibility
Targeted recall
Line 7
Print serialized label
Data capture
Units to Case
QA rework
Returnable container management
Logistics Management
Dwell time
Cold chain
Controlled product
Returns visibility
Targeted recall
Line 2
Line 1
Line 3
Line 4
Processing
Phase 4 – Trading
Partner
Data Sharing
Phase 1 – One line
Phase 2 – Add’l Lines
Phase 3 – DCs

30. Reliable Performance US Pharma Manufacturer
InfoSphere Traceability Server
Shown results were achieved in the unit, case, pallet performance test of InfoSphere Traceability Server 30