Journey to Product Excellence Shawna Wilkerson Sr. Product Manager I would like to thank you again for the opportunity to share with you Cardinal Health’s journey towards product excellence and provide you a sneak preview of our future technology. At the end we will break into groups and discuss the enhancements you would like to see in future Pyxis products.

Topics Operational Excellence Projects, Impact and Timing Process Standardization and accountability Design Excellence Improvements Let’s talk a little bit about operational excellence projects that we have completed, that are in process and on the docket

Six Sigma methods Method Utilized for . . . Lean Thinking Six Sigma Inventory Reduction Cycle Time Reduction Removing non-value-added steps Removing Waste Six Sigma (DMAIC) Improving Existing Products/Processes and Services Root Causes, Eliminating Defects Current Products Cardinal Health is leveraging the six sigma methodologies to make improvements to our existing products and processes. Through lean thinking, we are focused on how we can remove non-value added steps and waste. An example of this involved looking at our internal process for customer orders and making changes to ensure they receive the products they ordered. In addition to improving internal processes, we have identified opportunities to improve our existing product offerings. How do we reduce mini-drawer failures? How can we improve the customer experience associated with our BioID technology? When it comes to developing new products and services, we are focused on design excellence where the core consists of gathering voice of the customer throughout every step of the development process to ensure that our product outputs are a reflection of the inputs, which is the voice and needs our of customers. Additionally, building in quality along the way rather than it being an afterthought or something that we address after the product is released. DMAIC = Design, Measure, Analyze, Improve, Control Design Excellence New Products, Processes and Services Designing new systems when Incremental Improvement Cannot Close the Gap Using DFSS tools, including strong VOC rigor to design for differentiation Future Products

DET Project Successes Project Results CUBIE Hardware >7000 units remediated – continuing into FY08 and FY09 Bio ID Cloudy Lens 6000 BioID’s refurbed to date Western Digital disk array Remediation complete CD Duplication Making disks in-house since Jan ’07, Error rate near zero BioID Security All 2300 accounts remediated, nearly all by remote Regedit fix Carousel Drawer Mis-pocketing More reliable sensor replaced old sensor, in stock and being placed in field under PMs Non-Pike Motherboard We have had some successes with our use of six sigma methodologies to date. Hardware and software improvements have been made to the CUBIE technology to increase the reliability of the product. These improvements will continue to be rolled out to customers throughout this year. Almost a year ago we discovered a security risk with our BioID technology that was a result of incompatible sw driver versions. Our ability to identify the true root cause of the security risk issue enabled us to make a solution available to our customers that resolved the issue in a minimally impactful manner.

Projects Near Realization Phase Metrics Connect Analyze Phase #scans between lock-up Service Time LCD Touchscreen Failures % of Out of Box Failures MiniDrawer Improve Phase We also have some projects that are in the final stages including the Connect project and failures associated with our touchscreens and mini-drawers.

New Projects Project Metrics MS3500 Reliability Phase Metrics MS3500 Reliability Measure Phase Out Of Box Failure rate for MS3500 Long-Term Data Team Develop a system to collect the right data to measure our success and to find the largest opportunities Hard Drive Reduce Hard Drive/Image failures As Cardinal Health continues its journey to improve the quality and reliability of our products, we have some new projects in the hopper including a project focused on improving the out of box failure rate for our MS3500 product line. Additionally, how we can we increase the reliabilty of the replacement hard drives that our field personnel utilize to service your systems.

Topics Operational Excellence Projects, Impact and Timing Process Standardization and accountability Design Excellence Improvements Improving our products and services starts with an analysis of our processes, specifcally the way in which we approach product development,

Global Development Process: New System Approach Compliance FDA HIPAA ISO Harmonization CTS Product Development Operational Excellence Actual Practice New GDP Cardinal Health has embraced a systems approach to developing new products and services. Our new global development process is comprised of 3 core components. Our ability to comply with federal and regulatory bodies is a fundamental requirement for Cardinal Health to be able to do business. We have taken our previous product development process and integrated operational excellence to enable us to develop differentiated products for the market place. Demonstrating our adherence to our new process has enabled us to focus on those solutions that truly meet the needs of our customers

GDP: Key Enhancements Scaling Concept – Risk based Risk Management throughout New Phase 0 – Concept Generation Updated Phase 1 – Concept Definition To include Validation of User Needs Shifting Activities Earlier in the process Recognize system planning process needs Greater Emphasis System Design and Architecture Stable Product Requirements at end of Phase 2 Release-ready by end of Phase 3 Design Transfer planning and execution Phase 6 – End of Life Control Points and Effectiveness Checks Some key enhancements were made to our existing product development process. These include the concept of managing risk throughout the development process and use lean tools to design our risks to patient safety We have expanded our development process to include pre-phase whereby the concept of what is to be developed is fully vetted with customers and we have also implemented end-of-life paths for our products so customers can plan their technology purchases and help standardize the technology with their facility to best support their needs. There is a greater emphasis on the design of the entire system and the underlying architecture required to successfully support it. We have also integrated additional checks and balances throughout the process to get products to market in a timely manner that are ready and reliable for use in the market.

Topics Operational Excellence Projects, Impact and Timing Process Standardization and accountability Design Excellence Improvements

DEx : Moving Beyond Process Entitlement Process Improvements with Design Excellence (DEx ) Time DEx Benefit Z (s) 6 4 2 Only (Process Entitlement) 5 3 1 DEx is essential to meet quality goals By improving existing products or processes, we can only get to about 4 sigma. To get beyond this barrier really requires starting from the beginning. The difference is in starting from a product or process that has a much higher capability built into it from the beginning. This is why DFSS is really essential to meet CMP's quality goal DFSS gets us beyond improving marginal designs and processes DEx Moves Us Beyond Improving Existing Designs and Processes

Moving from Reactive to Predictive Reactive Design Quality Predictive Design Quality Transition to ... FROM: Evolving Requirements Design Rework and Tweaking Build and Test iterations Measurement “Test in” Quality TO: CTQ Flow down from Customer Expectations Control Critical Design Parameters Modeling and Simulation with Design and Process Capability Flow-up Statistical Quality Prediction “Design in” Quality Another way to look at the impact of DFSS on the design process is to consider that a goal of DFSS is to move from a reactive design approach to a more proactive approach. This means moving from doing things like evolving requirements as we go to making sure we understand what the customer wants up front; from going back and reworking or tweaking designs after we’ve discovered problems down the analysis and test path to understanding and controlling critical design parameters as part of the analysis; from building and testing to understand design capability to modeling and simulating before building hardware; From measuring and testing-in quality rather than predicting and designing-in quality.

Timeline Core improvements are included in new Global Development Process Teams are following these principles –you will see them in tomorrow’s new products We will also train 1st wave of Design Excellence Belts - Oct 08 – “Expert Engineers” to deep dive on the most critical design issues

Medication Dispensing Future Focus on improving patient safety Significantly improve clinician workflow and ease of use Significantly improve reliability and quality Lower the total cost of ownership for customers Unified medication and supply dispensing offering By developing products that have a clear clinical impact, we can support our customer’s drive towards patient safety improvements How do we take non-value added steps out of the process? Earlier you mentioned how the anesthetist has to login 3 times to complete their medication removal activity. Our goal would be for the dispensing cabinet to already know who you are as your approach the machine and with a quick swipe of your finger on the BioID to confirm your identity, you are logged into the system.

Next Gen Dispensing Concepts Med and Supply Total Inventory Management Refrigerated Medications Patient Specific and Odd-ball medications Tissues and Biologics High cost supplies (RFID) Single Platform Leverage common design principles Maximize common / interchangeable components Common underlying infrastructure/architecture / data model World-Class User Experience Intuitive Useful / Usable / Desirable Simple / Safe / Familiar Advanced Information & Analytics Normalized Data IDN Support Improved actionable reporting capabilities Improve Quality and Reliability Increase customer and patient satisfaction Improve service levels Build for future FDA requirements Lower Costs and Improve effectiveness for Customers Increase patient safety Lower Total Cost of Ownership Leverage current investments Enhance Workflows Combine medication and supply management Improve flexibility to match care-area specific needs Create a superior, standardized User Experience Integrate Information Technology Integrate with other Cardinal Health offerings Improve data management Automate inventory optimization

Next Generation: The Medication Management Continuum Hallway/ Care Pod Med Room Outside Room In Room The four medication storage options above may be mixed and matched for use throughout a healthcare facility to support specific needs of different care areas With this system, the modular units have flexible capacity to meet location and potential facility constraints Cardinal Health may not make this product available for commercial sale.

Next Gen Dispensing Concepts Given the use case we are about to discuss, we recognize the ideal system would place medications right at the location they are needed without over-burdening the nurse, at the bedside. With this system, there are the overall benefits of flexibility to meet the facility constraints, adaptability for optimal space utilization, and scalability to meet the need of each care area in the hospital. Remote preparation of medications for dispensing at the time of need would provide the nurse with information they can use to optimize their workflow and plan ahead. At remote locations such as the nurses desk, any PC or handheld, nurses can plan their medication administration tasks in advance by accessing med-related information and also queue up meds for dispensing before going to a dispensing cabinet Cardinal Health may not make this product available for commercial sale.

Next Gen Dispensing Concepts

Questions?

Enhancements and Wish List Discussion Group So now we are going to break up into 4 groups and brainstorm on your enhancement/wish list of changes to Pyxis products. Imagine that unlimited resources were available to make the changes to Pyxis systems. What would be the key enhancements/changes that you require to be successful in providing patient care.