1. PPM Training Project Portfolio Management Process
Trainer: First Name, Last Name
Date: dd/mm/yyyy
Janssen Supply Chain Enterprise Portfolio Management Team

2. Training Objectives What Why Who How
Understanding the WHAT, WHY, WHO and HOW of the PPM Process
What
Why
Who
How
What is the PPM process that is utilized by Janssen Supply Chain?
How does it link to our ability to achieve our strategic goals?
What is the critical role that you play in the process?
What steps and process flow does the process consist of?

3. What is the PPM Process?
A portfolio decision support tool for Janssen Supply Chain
Decide on a portfolio that delivers maximum value to the organization over a specific time horizon
Prioritize/rank projects within their portfolios based on a set of criteria
Governances & Leadership Team

4. Why do we do the PPM Process?
PPM helps us achieve our strategic goals
Before PPM
YTD with PPM
Capital decisions were taken from ‘history’
No formal process to make global investment decisions based upon strategic importance
No link between projects and CAPEX Budget exercise
The PPM Process has established:
Global project inventory
Integration of financial & project processes
All project linked & scored to strategic priorities
Alignment of Capital & Resources capacity
Facilitated active portfolio management
Strengthening of project management practices
Global leaders & decision-makers now:
Save time in data collection from sites
Have a transparent strategic & financial overview
Have a clear view on implications
Have a timely understanding of portfolio expend progress
Usually we have more ideas for project initiatives & improvements than money and resources. Projects must therefore compete for resources.
PPM enables fact-based decisions on GLOBAL priorities in a structured process.

5. Who is involved in the PPM Process?
All PPM roles are inter-connected and crucial to success
Highest Level Governance:
Oversight of all project types
Business transformation PMO
Governance Unit
Financial Unit
Business Unit LT
Portfolio Governance:
Calibrate priority
Decide which projects go in portfolio
Escalate conflicts to LT
Holds PM accountable
Includes:
Functional Mgmt (resources & oversight PMs)
Budget Ownership:
Ensure actuals = targeted spend
Work with Governances
PROGRAMS
Project Management & Resource Management:
Ensure flawless project execution
Ensure resource availability to deliver project on time
Accountable to:
Functional Mgmt
Budget Owners
PROJECTS

6. Resource Intense Projects Capital Intense Projects
Who is involved in the PPM Process?
Governance Model created to mirror JSC organizational Business Model
JSC LT PPM Council
LCM
Assets
Functional Teams
PDMS
Platform Small Molecules
Procurement
NPI
Platform Parenterals
Customer Management
Platform Liquids, Creams & Transdermals
Product Management
Global Quality
Platform Solids
CLS
Platform V&AT IT
Site governances
Resource Intense Projects
Capital Intense Projects
Governance Unit

7. How does the PPM Process work?
Project Prioritized by
Governance: trade-off vs. other LT approved project or conversion of placeholder into project (2 steps at same time)
How does the PPM Process work?
PPM Prioritization and Approval Flow
Project Case Approval in Governance
Project Prioritized by Governance
Prioritized by LT (BP Approval)
Idea/Need
Project in BP
- In Queue
Project Case
Accepted Project Case
Project Closing
Approved Project Execute
Project in BP - Plan
Archived
CAR Approval (when applicable)
Closing Activities Complete
Confirmation of Project Finalization
Project Approval
Resource Approval
Detail
Detail

8. How does the PPM Process work?
Projects are prioritized via a scoring system and criteria weighting
6 weighted Portfolio Drivers are used to score each project on 2 scales
Strategic Importance
Risk
Business Impact/Value
Project Attractiveness
Capabilities
Time to Complete
Resources Required
Project Ease of Implementation

9. High risk – EHS, Quality/Compliance, IT, Supply Continuity
How does the PPM Process work?
Portfolio is determined based on the JSC Strategic Prioritization Hierarchy Model
TRANSFORMATIONAL All other strategic programs designed to transform the way JSC does business fall into secondary priority
SECONDARY
JnJ Factory, Systems Harmonization, Planning, Procurement/Supplier, Network, Cost Reduction, LEAN, LCM, LMA, DTV, Quality Systems
“MAKE THE MEDICINES” Includes investments to launch new products and cover SCRM/BCP programs
NPI
Reliability: SCRM, Growth & Capacity, Track & Trace
Over the last several years our demand for projects, in particular Capex, has been significantly greater than the targets provided by the Corporation. With that constraint, the simple priority was not enough to use to determine the portfolio for 2 key reasons
- the first is that by definition – base business – those investments needed to maintain a safe and reliable supply would always end up being Low priority. There is no NPV, if typically are not high risk – eventually – if put off long enough, they might mitigate high risk – but this isn’t necessarily the best way to manage a business. And they typically don’t impact the ability to implement a strategy.
- the 2nd reason is that we have so many high priority projects that we run out of target before all the allocations.
- During last year’s BP exercise we grouped these projects into the Primary and Secondary priority.
Similar to Maslow’s hierarchy of needs mode whereby food, shelter, clothing and safety are the lowest level, we developed a priority hierarchy to manage this situation.
In the Primary priority we have 3 groups of projects
Carry Over, Base Business & Make the Medicines,
In the bottom of the hierarchy are the carry over projects. Typically – it is disruptive to stop projects already in flight, more expensive to re-start. As well then you may end up with a lot of sunk capital and nothing much to show from it. Unless there’ s a major assumption change e.g. generic competition, clinical hold – we want to complete projects.
for JSC this has been in the $200MM range for the last several years.
The next level in Primary Priority includes what we’ve termed ‘base business’ – investments needed to maintain a safe and reliable supply. Into this category as a starting point are the high risk – EHS, Quality, Compliance, IT supply continuity projects, reliability – site and small projects, and the necessary maint, distr and facilities/admin projects.
The last category in Primary – Make the Medicines – are those investments needed for new product launches, Growth & Capacity, regulatory compliance projects – like track and traceability. Also included in this category are the Supply Chain Risk Management projects. This was based on the direction of the JSC LT – who’s continued focus is on Reliability.
into the Secondary priority are all the other strategic programs – we’ve termed these transformational. As in Maslow’s hierarchy of needs these would be things like education and vacation.
- Should targets increase we may evaluate creating a more quantitative prioritization methodology between all the programs.
High risk – EHS, Quality/Compliance, IT, Supply Continuity
Reliability: Site and Small & Unidentified Maint & Dist, & Fact Maint
PRIMARY
BASE BUSINESS
Investments to safely maintain Reliability & Supply

10. How does the PPM Process work?
Process Changes with the STEP Deployment to Answer the Key Questions
Resource Management
Named Resource Management
Resource role updates
Resource Managers responsibilities
Base Business buckets
Project Management
Every project with a managed project plan
All projects in
Project Managers must update projects in system
Financial Management
Monthly financial forecasting
Actuals entry
Aligned financial template
TM1 budget alignment
Portfolio Management
Simplified & stage-gated portfolio flow managed by Portfolio Managers
Updated prioritization matrix
Real time reporting
All Projects in
Can I complete the projects in my forecast?
Will I hit my spending targets?
Are my resources working on the right projects?
What is the status of the projects in the portfolio?

11. Deep-Dive Slides

12. How does the PPM Process work?
In-Depth View: Portfolio Phases
Project goes through intake process & is entered into Instantis
If Governance accepts project, it becomes an “Accepted Project Case”
Project included in budget. Decision is made on “do now” or “do later”
Idea/Need
Project in BP
- In Queue
Project Case
Accepted Project Case
Project in BP
- Plan
Project Closing
Project Closing
Approved Project Execute
Approved Project Execute
Project in BP - Plan
Archived
Project comes to an end & closing activities are completed
Project is carried out & performance tracked via updates and reports
Project is given green light for resources & CAR funding is approved

13. Approved Project Execute
How does the PPM Process work?
In-Depth View: Key Steps per Phase
Monthly updates in line with financial calendar
Reporting of project status e.g.
Latest forecasting
Four up reporting
Change notification process
Performance to plan
Determination of completion of project activities
Project promoted to “Project Closing”
Project Case
Completion of Project Plan
Project moved to
“do later” list, or;
“do now”  Proceed to next Phase
Continuous Work in Progress (CONWIP) review of Projects
Selection of Projects to start in next three months
Addition of those Projects to CONWIP GO
Start of resource name assignments
Project promoted to “Project in BP – Plan”
Confirmation of named resources in line with start date
CAR process initiated (when applicable)
Completion of resource name assignment
Project promoted to “Approved Project Execute”
Accepted Project Case
Completion of Financial Closure Documentation
Completion of Lessons Learned & PPM feedback
Realisation & confirmation of savings benefits
Approved Project Execute
Project Closing
Project in BP - Plan
Project in BP
- In Queue
Charter created in Instantis
Charter promoted to “Project”
Presentation slot booked at Governance Review Meeting
Insight in role demands for Project
Intake presentation at Governance Review Meeting
Decision “Go/NoGo”
Project promoted to “Accepted Project Case” in Instantis
Projects parameters reviewed for prioritization
Project list determined for:
Projects to be proposed for BP (during regular working cycle)
BP budget approval for following year (during BP cycle)
Project promoted to “Proposed for BP”
Project list reviewed in another prioritization exercise
Decision on which Projects to commit to next year
Confirmation of Project List as Final Business Plan for next year
Project promoted to “Project in BP – In Queue”
Project Closing
Approved Project Execute

14. How does the PPM Process work?
In-Depth View: Role of Project Manager
Project Mgr
Finance Mgr
Portfolio Mgr
Gov Lead
Resource Mgr

15. How does the PPM Process work?
Project Mgr
How does the PPM Process work?
In-Depth View: Role of Project Manager
Resource Mgr
Portfolio Mgr
Portfolio Mgr
Project Mgr
Project Mgr
Portfolio Mgr
Resource Mgr
Finance Mgr
Approved Project Execute
Project Closing
Project Case
Accepted Project Case
Project in BP - Plan
Project in BP
- In Queue
Project Mgr
Project Mgr
Project Mgr 1.
Create Charter & draft Project Case 2.
Promote Charter to Project 3.
Determine resource roles needed for project, with Resource Mgr input 1.
On cue of Portfolio Mgr, adjust dates of Projects that will start now (‘do now’). 4.
Alert Portfolio Mgr to put Project on agenda of Governance Review Meeting
Project Closing
Approved Project Execute 1.
Initiate Financial Closure 1.
Update Project status until Project Closure 1.
Confirm named resources with Resource Mgr 2.
When Project activities are done, ask Portfolio Mgr to Promote Project to “Project Closing” 2.
Update 'To Be Named' Resources to the confirmed name/role 3.
Initiate CAR process (when applicable) with input from Finance Mgr

16. How does the PPM Process work?
Portfolio Mgr
In-Depth View: Role of Portfolio Manager
Project Mgr
Gov Lead
Project Mgr
Portfolio Mgr
Portfolio Mgr
Portfolio Mgr
Project Mgr
Approved Project Execute
Project Closing
Project Case
Accepted Project Case
Project in BP - Plan
Project in BP
- In Queue
Portfolio Mgr
Portfolio Mgr 1.
On cue of Project Mgr, place Project on agenda of Governance Review Meeting 1.
Direct Project Mgr that his/her Project is ‘do now’ & that Project dates must be adjusted 1.
Promote Projects to “Proposed for BP”, so that BP list can be made & reviewed 2.
Promote Project to “Accepted Project Case” if approved 2.
After PPM LT approves final list, Flip Flags to “Project in BP – In Queue” 2.
Promote the 'do now' Project
to “Project in BP – Plan”
Project Closing
Approved Project Execute 1.
On cue of Project Mgr, promote Project to “Project Closing” 1.
Promote Project to “Approved Project Execute”

17. How does the PPM Process work?
Gov Lead
In-Depth View: Role of Governance Lead
Portfolio Mgr
Portfolio Mgr
Gov Lead
Gov Lead
Project Case
Approved Project Execute
Project Closing
Accepted Project Case
Project in BP - Plan
Project in BP
- In Queue
Gov Lead 1.
Review Projects, calibrate & prioritize within Site/BU 1.
Review Projects at Governance Review Meeting
(“do now” vs. “do later”) 2.
Work with & direct Portfolio Mgr to Flip Flags of Projects to be reviewed by PPM LT 2.
Alert Portfolio Mgr to direct Project Mgr that his/her Project is “do now” & that Project dates must be adjusted
Project Closing
Approved Project Execute 1.
Approve Project to proceed once Resources & CAR are approved

18. How does the PPM Process work?
Finance Mgr
How does the PPM Process work?
In-Depth View: Role of Finance Manager
Project Mgr
Project Case
Approved Project Execute
Project Closing
Accepted Project Case
Project in BP - Plan
Project in BP
- In Queue
Finance Mgr
Project Closing
Approved Project Execute 1.
Assist Project Mgr with validating financial information & CAR/NPV preparation

19. How does the PPM Process work?
Resource Mgr
In-Depth View: Role of Resource Manager
Project Mgr
Resource Mgr
Project Mgr
Approved Project Execute
Project Closing
Project Case
Accepted Project Case
Project in BP - Plan
Project in BP
- In Queue
Resource Mgr 1.
Provide input to Project Mgr to determine resource roles needed for Project
Project Closing
Approved Project Execute 1.
Provide Project Mgr with confirmation of named resources

20. Who is involved in the PPM Process?
Governance Model created to mirror JSC organizational Business Model
LCM
Additional product driven capacity
All product/product family optimization
Product Tech Transfers related to LCM optimization (not network strategy)
Product Driven SCRM (Safety Stock, additional/Alternative MFG site, material supplier validation
Projects requiring PDMS support charged back to JSC
NPI
Launch Management Portfolio – Must Do

21. Who is involved in the PPM Process?
Governance Model created to mirror JSC organizational Business Model
Assets
Platform Small Molecules
Platform Parenterals
Platform Liquids, Creams & Transdermals
Platform Solids
Replacement/Upgrade of all assets & infrastructure
Introduction of new platform technologies
Manufacturing site and platform related optimizations
Tech Transfers driven by network strategy projects
SCRM at site level
Platform V & AT

22. Better definition for Product Management – not high level enough
Who is involved in the PPM Process?
Better definition for Product Management – not high level enough
Governance Model created to mirror JSC organizational Business Model
Functional Teams
Procurement
Customer management
Product management
Global quantity
CLS IT
Product Management
Focuses on product focused activities
(SCRM, Planning, Reliability, Launch Management, Value Stream Management)
Customer Management
Focuses on relationship with commercial companies and external customers
(Demand Planning, RADs, Graphics, Office Strategy & Execution, Business Excellence)
Manufacturing & Technical Operations
Focuses on technology, production, site network optimization for internal and external sites
(GTS, Platforms, Facilities, Procurement)
Global Quality
Focuses on quality and compliance (Quality, Analytics, DTV)
IT, Finance & HR
Provide critical support to the organization

23. Portfolio Drivers RISK Risk
Related to the business if ‘not doing’ the project (external risk) (e.g. business continuity plans)
3 risk categories are defined:
Environmental, Health or Safety risk
QA/Compliance risk
Continuity of Supply risk 
External Risk calculated as Severity x Likelihood
Severity: judgment of expected consequence
Likelihood: judgment of probability
6 weighted Portfolio Drivers are used to score each project on 2 scales
Strategic Importance
Risk
Business Impact/Value
Capabilities
Time to Complete
Resources Required
The next Prioritization level is Risk.
Risk has a few fields where based on your answers, will assess and place the project in a risk placement.

24. Money is key business driver of PPM
Portfolio Drivers
Money
Money is key business driver of PPM
RESOURCE CONSTRAINTS
Resources PEOPLE & MONEY
BUSINESS
BENEFITS
Deploy STRATEGY
Ensure Financial Return (NPV/CIP)
Address RISK to:
Quality; Regulatory
Security of Supply
Environmental; Health & Safety
6 weighted Portfolio Drivers are used to score each project on 2 scales
Strategic Importance
Risk
Business Impact/Value
Capabilities
Time to Complete
Resources Required

25. Portfolio Drivers - = PPM Resource Management Rationale
6 weighted Portfolio Drivers are used to score each project on 2 scales
Strategic Importance
Risk
Business Impact/Value
Resource CAPACITY
Resource SUPPLY
Resource DEMAND -
Resource Pool
Project Information
Variance =
Capabilities
Time to Complete
Resources Required

26. PPM Process Please advise on where this belongs? Three Decisions
GOVERNANCE
BUDGET OWNER
SITE
Prioritization & Approvals: Portfolio Manager determines a project’s correct Governance
What budget does my project roll up under?
Project Controls & Execution – Where is my primary work location?
Here is a good visual that represents view the portfolio in three different ways.
Originally, the process was set up by Governance to mirror the business model that JSC operates under. However, the way that our budgets are managed does not align with the governance model.
We have an additional complexity in that project managers may come from the different functional teams.
Each of these groups has a responsibility in managing the PPM process for their piece.
For a site Portfolio Manager this creates a complexity in ensuring that they are aware of and looking at the entire portfolio at their site.
READ WHAT EACH SECTION DOES FROM THE SLIDE
MTO
HO IT
HO Function (i.e.; Home office – product management)
GTS
Procurement
Site Eng/Maint
VSL PM
PDMS (etc)
Assets – Platform/Site
LCM/NPI
Functional