Lehigh University Center for Excellence in Logistics and Distribution

1. A Systems Approach to Preparation for Global ERP ImplementationAvantor Performance Materials, Inc. Lehigh University Center for Excellence in Logistics and Distribution By Professor Emory W. Zimmers, Jr.

2. Agenda • Background of Avantor Performance Materials • Business Problem Statement • Systems Approach/ Research Methodology • Lessons learned/Potential industry application • Summary Observations

3. Background - Avantor • Avantor Performance Materials, formerly Mallinckrodt Baker, is a specialty chemical manufacturing company which was founded in 1867 • Expanded through several mergers and acquisitions, now a $500 million global company serving pharmaceutical, laboratory and microelectronics industries Deventer, The Netherlands Phillipsburg, NJ Paris, KY Mexico City, Mexico Selangor, Malaysia

4. Background – Avantor’s Systems • Acquisitions and growth Additional legacy systems and bolt-ons • Five distinct information management/ logistics systems • Operating via local work-arounds • Significant learning curves • No integration/visibility of geographic supply chains

5. Avantor’s Objective • Implement a global Enterprise Resource Planning (ERP) system • Standardize to a global platform • Incorporate best practices in Master Scheduling/MRP/ Logistics • Integrate global supply chain- realize synergies/visibility • Create a platform for future acquisitions

6. Business Problem Statement • Limited understanding of the impact that a new, global ERP system will have on current operations at each geographic location • Lack of confidence in the data integrity required to feed a new, global ERP system

7. Systems Approach/Research Methodology • Five Step Process • Train Business Process Owners (BPOs) and Subject Matter Experts (SMEs) on our systems approach • Determine the scope, priorities and deliverables • Conduct process and data mapping sessions with BPOs and SMEs • Document and verify maps and data • Cataloginformation on SharePoint for future reference and global visibility

8. Systems Approach/Research Methodology Actions • Conducted over ten training sessions company-wide • Followed standardized methods, for example: • Suppliers • Inputs • Process • Output • Customers Lessons Learned • Training creates ownership/accountability from BPOs

9. Systems Approach/Research Methodology Lessons Learned • 80/20 analysis identifies appropriate priorities and time allocation • “Fresh eyes” are valuable to facilitate discussions Actions • Identified high level processes and sub-processes • Defined boundaries for each process (Start/Stop) • Conducted Pareto Analysis (80/20) of the processes and data • Outlined data dictionary composed of critical data fields • Assigned ownership of processes and data fields to Business Process Owners (BPO)

10. Systems Approach/Research Methodology • Training • Scope • Mapping • Documentation & Verification • Cataloging Lessons Learned • Unearth “tribal knowledge” • Document improvement opportunities for future reference Actions • Used interactive process • Utilized “brown paper” mapping • Indentified missing data • Performed gap analysis • Developed data dictionary • Brainstormed critical factors and improvement opportunities

11. Systems Approach/Research Methodology Lessons Learned • Require BPOs sign offs • BPOs gain substantial new knowledge of their business processes • Don’t over-estimate data accuracy (“Garbage in- Garbage out”) • Opportunities existfor more advanced algorithms (data integrity analysis) Actions Processes • Created Visio process maps • Developed process efficiency measures Data • Ran data integrity queries/algorithms • Analyzed by data usage history • Developed a heuristic process for measuring data accuracy and impact • Assigned ownership to each data field

12. Systems Approach/Research Methodology

13. Systems Approach/Research Methodology

14. Systems Approach/Research Methodology Lessons Learned • Searchable design with hierarchical features improves access • Electronic archives are essential PBG-QTC-PayingBills-FINAL-20100528 Actions • Created hierarchical labeling system Location - Key process - Sub-process - Draft – Date • Cataloged the documentation and supporting information electronically into SharePoint, an online database

15. Summary Observations Comments from Avantor executives: • “Understanding our current business processes permits us to know (up front) the impact on our operations/supply chains resulting from a new ERP system.” • “We’ll also be able to better select an appropriate vendor/system ---and to anticipate problems before they occur during implementation.” • “ At the end of the day, it’s all about data!” • “The CELDi/Lehigh systems approach added a depth of understanding that will surely permit a successful systems conversion.”

16. Questionsand Discussion