0. A “Process Driven” Hospira
Introduction to the Framework

1. Hospira at a glance
The World’s Leading Provider of Injectable Drugs and Infusion Technologies
Market leadership positions in:
generic injectable pharmaceuticals globally
biosimilars in Europe and Australia
medication management systems globally
70+ years experience; public independent company since 2004
2011 annual revenues of $4.1B
15,000 employees 1 1

2. Unwavering Commitment to ...
Our philosophy
Vision
Advancing Wellness™… through the right people and the right products
Integrity
Ownership/Accountability
Speed
Entrepreneurial Spirit
Values
Our customers and patients, delivering on our promise by serving their needs with integrity, trust and innovation
Our employees, by embracing diversity of thought and cultural perspective, fostering an environment of empowerment, fairness and respect
Our shareholders, by safeguarding their investment and providing a fair return
Our communities, acknowledging our social responsibility through active citizenship and thoughtful giving
Unwavering Commitment to ... 2

3. Hospira addresses critical healthcare needs
Key Products
Customers
Critical Needs
Specialty Injectable Pharmaceuticals (SIP)
portfolio of ~200 products
many differentiated
To reduce:
costs
medication errors
infections
To improve:
patient safety
worker safety
productivity
Hospitals and alternate site healthcare providers
Medication Management Systems (MMS)
~575,000 installed devices globally 3

4. Hospira product categories
2011 Net Sales $4.1B
Specialty Injectable Pharmaceuticals (SIP)
Other Pharma %
Generic injectables
Proprietary drugs
Biosimilars
Medication Management Systems 24%
Medication Management Systems
Specialty Injectable Pharmaceuticals (SIP)
63%
Infusion devices, dedicated administration sets, software and services
Gravity administration sets
Other Pharma
Large volume solutions
One2One™ contract manufacturing services 4 4

5. Driving operational and quality excellence
We are reinforcing the foundation and preparing the organization for global expansion
We are making sustainable change in our process and quality procedures across our global manufacturing footprint
We are investing in the future with strategic capacity, best-in-class processes and people
Quality improvement and remediation efforts will position us favorably for long-term success 12

7. Driving Process Behavior - Background
Hospira has made a commitment to become a more “process driven” organization – desiring to increase integration and collaboration between functions and locations
This is a 5-7 year cultural journey which was started in 2011
The Journey included
Laying foundations for process work to evolve in the overall enterprise
Enabling specific projects or initiatives to improve process
Creating language and tools for people to utilize in process efforts
Providing more clarity on process ownership and accountability
Examples of foundational elements include:
A process framework – a cataloging/navigation structure to help people talk about processes in the same way
A process governance model – where there are specific roles and designed to drive process governance across and within functions
Standards/accelerators for process work – including modeling tools, benchmarking/best practice access, process improvement methods, etc.

8. Process Charter – Vision/Mission
VISION: Hospira, will be known as a process-driven enterprise, that
supports, empowers and energizes employees,
encourages their initiative to work across silos,
enables and allows its people to perform process work to achieve desired corporate objectives.
Mission: The process platform will enable:
Hospira wide process understanding,
competency to manage,
frameworks to define, measure and sustain process focus in our company at the right levels at the right time for the defined outcome.

9. Why a Process Enterprise
Process enterprise enables people to do process work
A Process Enterprise defines and organization by behaviors and attitudes of all personnel
not purely defined by organization chart
A process-managed enterprise supports, empowers and energizes employees, encourages their initiative, enables and allows its people to perform process work.
Process work is
work that is focused on the customer,
directed toward achieving results rather than being an end in itself,
follows a disciplined and repeatable design.
Michael Hammer, Agenda

10. In a process centric organization, all employees can answer…
What process or processes are you a part of?
How does the process create value for customers? How do you personally contribute to value? How do others?
What do people immediately before and after you in flow of process do?
By what measure does Hospira judge performance of your process? What is current level of that measure?
What other processes interface with yours? What do these processes need from yours? What does yours need from them?
What efforts to improve your process are now under way?
Business Process Thinking Check List By Michael Hammer, the author of Agenda

11. What is a Business Process?
Designed group of related tasks that work together to create a result of value for a particular customer
Characteristics of a process
has defined triggers (initiating events)
has defined inputs
adds value
produces defined outcomes and deliverables
has customers (internal or external)
normally crosses existing organization or functional boundaries
Measurable
how an organization does its work
Set of activities to accomplish a particular objective for a particular customer
Characteristics of a process
have defined inputs, add value and produce defined outcomes and deliverables
have customers (internal or external) who are recipients of an outcome or deliverable
normally cross existing organization or functional boundaries
measurable
have defined triggers (initiating events)
Breakthrough performance improvement comes from redesigning work on an end-to-end basis
The constraints on performance are in the process, not in the tasks
Eg: hours to format Excel file then pass on to next process who either doesn’t look at it or spends hours reformatting? Infamous printing reports no one looks at
A process is not a…. Methodology , standard operating procedure, training document, system, transaction

12. What isn’t crystal clear?
Value Stream 4
Processes should follow the direction of an overall value stream.
People Report to Functions
People perform “activities” which should align to processes.
Activity 2
Process 3
Finance 1
We know how our functions are organized AR AP FA 1 2
It is not consistently clear what activities/hand offs are performed by each function 3
We have not used consistent terminology in our processes – making it difficult for decision making, ownership, etc.
Operations SC
Procurement
Quality 4
Value Streams with Owners responsible for providing direction and clarity

13. Why a Framework?

14. Process is a Fundamental Component
Process & Tools
Continuous Improvement Techniques
Process Frameworks
Process KPIs Measurement
Communication & Education 1 2 3 4 5
Product and Commercialization Excellence
LEAN in Operations
Technology Enablement
Process Driven Organization
Business Results
Process work and enabling Tools
Primarily Process work

15. An Enterprise Framework?
Originated in IT
Large Transformation Programs
ARIS Modeling Tool
Previous GPO/Global Construct
Focused on Driving Common Language
Still in the Early Stages

16. Framework Objectives Common Frame of reference/translation tool
Internally
Within a group
Across groups
Globally
Externally
Benchmarking Partners
Integrators Consultants
Outsourcers
Consistent Method of Organization
Integrated view of process (non-silo)
Supports standardization
Helps map processes to functions
Helps identify ownership

17. Components of a Framework
Vocabulary
Structure
Naming Conventions
Templates/Tools
Decomposition Rules
Modeling Rules/Guidelines
Repository Structure

18. Processes Should Be Grouped into a Framework (Sometimes also called “architecture”)
Common Frame of Reference
Consistent Method of Organization
Ease of Navigation
Integrated view of process (non-silo)
Supports standardization
Helps map processes to functions
Helps identify ownership
Internally (Within a group, Across groups, Globally)
Externally (Benchmarking Partners, Integrators, Consultants, Outsourcers)
Frameworks are increasingly being used as a translation tool with external partners.

19. Hospira’s framework should …
Define all business activities, organized by process
Allow processes grouped into end-to-end chains – Called “Value Streams”
Provide One global common business process framework
underlying procedures and work practices may vary by site or region
Drive process based performance metrics
Enterprise excellence vs. functional excellence
Common industry framework enables benchmarking
Establish a common language across the enterprise

20. Many frameworks to choose from
APQC (American Productivity and Quality Center)
SAP
SCOR (Supply Chain)
etc
tool selection is not as important as putting a tool in action
Generic tool is trigger for discussion
Engagement with key stakeholders – various levels – is critical to success
APQC - the American Productivity and Quality Center
OSBC - Open Standards Benchmarking Collaborative
Supplier processes
Product Design
DCOR™
Customer processes
Supply Chain SCOR™
Sales & Support CCOR™
Product Management

21. Hospira Process Framework (The HPF)
At Hospira we started with:
APQC general industry
+ Pharmaceutical industry
+ Automotive Industry
+ Aerospace/Defense
= comprehensive base inventory list of 400 processes classified into 12 process categories

22. Can you visit me in Chicago???
This ???
Or This??

23. Framework Levels Process Category Process Group Activity Procedure
Level & Name
Description 1
Process Category
Highest level of process in the enterprise Eg: Source to Pay 2
Process
Group
Group of related processes Eg: Procurement 3
Series of interrelated activities which convert inputs into results (outputs) Eg: Determine sourcing strategy 4
Activity
Key events performed when executing a process Eg: Negotiate Contract 5
Procedure
Step-by-step instruction on how to perform tasks within activity Eg: Step 1: Review vendor history
Drill down for more details

24. Base process inventory list sample
category
2 Develop and Manage Products and Services (10003)
(Pharma)
2.1 Discover Products (12752)
2.1.1 Manage research (12753)
2.1.2 Perform research/ licensing (12757)
(5.0.0)
2.2 Manage product and service portfolio (10061)
2.2.1 Evaluate performance of existing products against market opportunities (10063)
2.2.2 Define product/service development requirements (10064)
2.2.3 Perform discovery research (10065)
2.2.4 Confirm alignment of product/service concepts with business strategy (10066)
2.2.5 Manage product and service life cycle (10067)
2.3 Develop products and services (10062)
2.3.1 Design, build, and evaluate products and services (10080)
(AD)
2.3.1A (AD) Manage Configuration (11703)
2.3.1B (AD) Develop and implement manufacturing/services (11717)
2.3.1C (AD) Plan product resource requirements (11730)
2.3.2 Test market for new or revised products and services (10081)
2.3.3 Prepare for production (10082)
2.3.4 Compile and submit dossier (12763)
2.3.5 Manage regulatory requirements (12771)
2.3.6A Maintain product/process data (11740)
2.3.7A Manage transfers of product data (11751)
3 Market and Sell Products and Services (10004)
group
Process

25. Core Business Processes (global)
“Value Streams” Tie Core Processes Together to Achieve Desired Business Results & They Cross Organizational Silos
Value Stream: e.g. Forecast to Plan
Value Stream
a.k.a. End-to-End Business Process, is a designed group of related core processes, tasks and systems, spanning functions and regions, that work together to create and deliver ultimate value to stakeholders; Value Streams are led by an internal leader across a matrix organization.
Integrated KPIs
Core Business Processes (global)
Business Process,
is a series of value-added activities and tasks, performed by both people and equipment, to purposefully achieve a common functional goal for one or more value streams; Core Processes are owned by Global Process Owners (GPO).
3.3.1
Develop Sales Forecast
Manage Demand for Products/ Services
8.1.1 Perform
Planning/ Budgeting/ Forecasting
7.5.4 Create IT Services & Solutions
The Collaborative Forecasting Tool Touches a Subset of the Forecast-to-Plan Value Stream

26. “Value Streams” Cross Organizational Silos
Value Stream: e.g. Forecast to Plan
Value Stream Leader
Highly respected Hospira business leader
Owns the value stream KPI and identifies gaps requiring process work
Accountable for driving process improvements now and in the future
Collaborates and work closely with Global Process Owners associated with the Value Stream
Integrated KPIs
Business Processes (global)
Global Process Owner
Globally represents processes within specific value stream/s
Identifies ways to eliminate, streamline or simplify a process
Deliver global results across functions and regions
Design and manage business processes
Represent process enterprise-wide in decisions affecting processes
Participates in technology selection and deployment
3.3.1
Develop Sales Forecast
Manage Demand for Products/ Services
8.1.1 Perform
Planning/ Budgeting/ Forecasting
At any given point in time there are varying degrees of process ownership. It is not realistic that all process owners would be identified at once and will operate the same way. However, if there is a need for a process decision (especially one that has a large impact) and there is no identified Process Owner – the Value Stream Leaders should be able to assist/guide for an appropriate course of action given the situation.
7.5.4 Create IT Services & Solutions
Note: process ownership doesn’t imply it needs to be the same from site to site or centrally managed.

27. Examples…. What else can we do with a framework? Show ownership
Show information about processes
Maps
Information
Metrics
Training

28. Framework key messages
As the world around us changes, so do business strategies and organizations, but framework remains intact and withstands the test of time
Transformation efforts focus on process groups, such as P2P.
Can’t manage transformation at the holistic framework level
Transformation must consider all impacted functions but process ownership must be with one organization with representation/advice from impacted functions
Process owners must collaborate and focus on complete end to end process, not just their portion

29. Success of a Framework Centralized management/maintenance
While the processes and decisions are owned by the value stream and process owners, centralized maintenance is critical
“Adopt before Adapt” to maintain external benchmarking/reference links if at all possible
Adopt, Govern and provide oversight before locking in tools

30. Realize we are in a multi-year journey…

31. So now what?

32. Key Messages - Process/Value Streams
Common Process Language will be a critical component to us moving to a process driven organization
Process Names and the Process Framework Should stand the test of time
Centralized management/maintenance of process information is critical to success
Process owners must collaborate and focus on complete end to end process, not just their portion
Processes will need to be owned - typically by a function
While Process focus is Critical, transformation efforts typically target on groups of processes (value streams)
Transformation efforts must consider all impacted processes, value streams and functions
Function is still important – keeping skills relevant, providing structure and accountability within a discipline

33. What do we ask of you in general?
Understand the process framework – how it works and
What is an process
What is an activity
Understand the role of the Value Stream Leaders/GPOs – start using, supporting and spreading the new terminology
Stay connected – provide feedback, work with Value Stream leaders and help us collectively to get this right
What is challenging
How would you suggest next steps
What specific messages can we give
How do we get the right people identified

34. Next Steps

35. But the Process Framework only Tells us “the What”
They can probably look around and see many examples of where silos or even process only has caused significant problems.
Have stacks of legos loose, have ones build with one primary color already
Our Value Streams and Strategic Direction/ Objectives Tell Us the How and What For….

36. Business Process Framework (Michelle Sheedy)
Hospira Value Streams
Insight to Strategy
Risk to Mitigation
Idea to Market*
Market to Sell
Forecast to Plan
Plan to Finished Goods*
Finished Goods to Customer
Order to Cash
Sell to Service
Market to Retire
Record to Report
Source to Pay
Acquire to Retire
Recruit to Attrition
Value streams may change from time to time so the majority of process information/knowledge will be tied to the process level (not the value stream)
Owners will evolve and change
Some value streams will collapse or change boundaries (which processes it covers)
There may be separate owners based on major product line. However, these owners generally work together to provide as much continuity as possible
Please check the homepage for the most recent picture
Define to Implement
Support to Retire
Awareness to Implement
Issue to Satisfaction
Business Process Framework (Michelle Sheedy)
Pharma = Templeman & Schott
Device = DeWitt & Pelletier
Consumables = Schechter
Biologics = Hahn & Noffke

37. Hospira Value Streams and Processes
GETTING STARTED WITH PROCESS
THE HOSPIRA PROCESS FRAMEWORK
VALUE STREAMS AND GLOBAL PROCESSES
Click here to understand:
What do we mean by process?
What is a value stream?
What are value stream leaders and global process owners
What is a framework
Click here to connect to:
The Framework Customized for Hospira
Key Attributes Of our Processes & Activities
Click here to connect to:
See the Hospira Value Streams and their leaders
Understand which processes are covered by which value streams
Additional content on Value Streams and Processes
TOOLS AND TEMPLATES
THE PROCESS PERSPECTIVE
HOSPIRA 101
Click here to connect to:
Example templates for various process mapping/modeling activities
The ARIS tool (Process Modeling Enterprise Wide)
Sources of good process tools/templates
Click Here to access helpful documents about Hospira’s
Processes
Data
Product Flows
Click here to read about/talk about:
Hospira specific process efforts
External process viewpoints, perspectives, best practices

38. Business Process Management Services
Enterprise Performance Enablement
Performance/ Assessment / Improvement
Process Enabling/ Alignment/ Knowledge
Program execution /mobilization
Alignment/Dependencies
Strategic KPIs
Driving performance culture
Eliminate KPI conflict
Establish VS KPIs
Enterprise wide program/ project management assistance
Name 1
Name 2
Name 3
Performance assessment techniques (standard work, KPI evaluation)
Skilled performance improvement resources (Lean, Six Sigma)
Capability/skill building (academy)
Advanced and accelerated improvement techniques
Diagnostics/Evaluations
Name 4
Overall knowledge management foundation
VSL/GPO ownership tracking
Process Modeling Tools
Benchmarking membership point
Process education series
Process data (policies, documents, data, etc.)h
Technology/Tools
Senior Leadership Support
* Structure as of early 2013