Smarter, safer Pharmaceuticals John Krachenfels Supply Chain Visibility and Optimization for a smarter planet

The Business Drivers for Supply Chain Visibility of Pharmaceuticals 5/31/2018 The Business Drivers for Supply Chain Visibility of Pharmaceuticals 8-10% of worldwide drug supply is counterfeit  $7.5 billion lost per year by 2010 Industry participants carry significant excess inventory due to lack of downstream visibility The Pharmaceutical supply chain is perhaps one of the most complex supply chains of any industry. Here are some interesting facts. According to the World Health Organization, {Click} approximately 8-10% of the worldwide drug supply is counterfeit. This equates to up to seventy five billion dollars a year in lost sales by 2010 Overall, it is estimated that 4.5% of revenue is lost due to supply chain inefficiencies. 4.5% of revenue is lost due to supply chain inefficiencies.

Governments & Industry are concerned for patient safety 5/31/2018 Governments & Industry are concerned for patient safety Legislation mandating serialization is emerging worldwide This broad array of emerging regulation requires a Global Compliance Strategy and serves as a catalyst Supply Chain modernization.

Technology Components 5/31/2018 Technology Components InfoSphere Traceability Server WebSphere Sensor Events RFID 2D Barcode Data Matrix Serialization Standard Data Capture Reports/Alerts & Event Notification 4 4

IBM Solution supports Authentication or Track & Trace

Expected Business Benefits from Track and Trace 5/31/2018 Expected Business Benefits from Track and Trace Source: AMR Research, 2009

Supply Chain Visibility Reverse Logistics Supply Chain Integrity 5/31/2018 IBM’s Solution for Pharmaceutical Track & Trace can address multiple business use cases Supply Chain Visibility Cold Chain Management Shipment Verification Sales Information Inventory Management Reverse Logistics Returns verification Targeted Recall Chargeback Resolution Supply Chain Integrity Diversion Detection Electronic Pedigree Product Authentication The Traceability Server Application Suite for Pharma may consist of: Pedigree and Serialization Compliance (Prerequisite for all applications in the suite) Material Flow Management. Expiration Management Cold Chain Management Vendor Managed Inventory Targeted Recall The Traceability Server Application Suite for Manufacturers may consist of: Returnable Container Management (Prerequisite for all applications in the suite) Parts Management Work In Process Management Just in time sequencing Yard management Dealer Inventory Management The Traceability Server Application Suite for Food & Beverage may consist of: Food Safety Compliance (Prerequisite for all applications in the suite) Expiration management Cold chain management Product Authentication Diversion Management

Open Loop vs. Closed Loop in Use Case Selection Criteria 5/31/2018 Open Loop vs. Closed Loop in Use Case Selection Criteria 2 tier open loop track & trace Higher Business Value 1 tier open loop track & trace Lower Closed loop track & trace Shorter Longer Time to Value

IBM Solution for Pharmaceutical Track & Trace 5/31/2018 IBM Solution for Pharmaceutical Track & Trace Standard Network 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 Applications Readers/Scanners Reader Protocol WebSphereTM Sensor Event Server ALE Interface EPCIS Capture Interface InfoSphereTM Traceability Server EPCIS Query Interface ePedigree Shipment Verification √ InfoSphereTM Traceability Server √ Traceability Server is an implementation of the EPCIS standard, which 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 Sensor Event Server make up the IBM Track & Trace Solution and work together to enable capture, store and share of EPCIS data. √ WebSphereTM Sensor Event Server √ √ GS1/EPCglobal Certification http://www.epcglobalinc.org/certification/sw_cert

5/31/2018 Summary Serialization mandates have emerged globally as an important means to protect patient safety. .Item Level Serialization is here to stay. Industry leaders are leveraging their serialization infrastructure to drive competitive advantage. New analytics and business eventing capabilities help customers drive significant value IBM's Track and Trace solution can help achieve both of these objectives based on industry standards EPCglobal certified product – High performance data repository – stress tested to handle production line speeds Available business features – address key business use cases in multiple industries Robust reporting and alerting – functionality beyond the standard to drive business value and ROI Security capabilities – policy-based access control down to the attribute/value pair Distributed architecture – modeled after banking system to enable enterprise scalability Highly flexible – works with multiple technologies and data carriers (RFID, 2D Barcode)