Business Wire, Jan 13, :46. R. Michael Donovan & Co. Framingham Massachusetts, Successful ERP Implementation The First Time

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Erik Hutchinson
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1 More than half of i2 (NASDAQ: ITWO) customers listed as references on the company's Web site have not achieved a positive return on investment (ROI) from their i2 deployment. R. Michael Donovan & Co. Framingham Massachusetts, Successful ERP Implementation The First Time Business Wire, Jan 13, :46 It s not pretty out there. Companies have spent fortunes on ERP software and implementation only to find that business performance has not improved at all... nine out of 10 companies don t get it right the first time around The mechanistic model of information processing and control based upon compliance is not only limited to the computational machinery, but extends to specification of goals, tasks, best practices and institutionalized procedures to achieve the prespecified outcomes. Yogesh Malhotra, Syracuse University, School of Management, Syracuse, NY, USA, Why Knowledge Management Systems Fail, /08/2010 (C) Ithaca SCM All rights reserved. 1

Inventory Management Inbound Logistics Suppliers Sourcing & Procurement Order Management Planning CORE: Identity, Values Principles, Beliefs, Strategies, Competencies, Systems, Processes,

5 Inventory Management Inbound Logistics Suppliers Sourcing & Procurement Order Management Planning CORE: Identity, Values Principles, Beliefs, Strategies, Competencies, Systems, Processes, Measures Warehousing & Packaging Customer Service Outbound & Reverse Logistics Demand Management Customers 26/08/2010 (C) Ithaca SCM All rights reserved. 5 Adapted from Ibex Management (UK) Concept

6 On average, a 300 bed hospital will have at least 10 different groups of staff managing different aspects of the process for replenishing medical consumable, device & pharmaceutical items MOSTLY NURSES, SCIENTISTS, DOCTORS Supply Clerk visits imprest locs, identify replen reqs Data Entry Clerks Enters Distribution Supply Clerk Picks and Packs Information into system, Prints Pick Lists Imprest Replenishment Items Supply Clerk Delivers Stock Replenishment Items to Imprest Locations & Puts Away System Advises re-order requirements CSSD Tech visits imprest locs, identify replen reqs Technician Visits Imprest Locs, Scans Lists, Enters Replen to Max Stock Level Handwrite Details of Order on NSR Equipment / Resource Nurse & staff determine need for all Non-Stock Equipment / Resource Nurse & staff determine need for all Non-Stock Equipment / Resource Nurse & staff determine need for all Non-Stock Data Entry Clerks Enters Distribution Information into system, Prints Pick Lists Phone Supplier, Determine Price, Place Order Purchasing Officer - Supplier Names A-C, D-L, M-Z E/RN or other E/RN or other E/RN or other CSSD Tech Picks and Packs CSSD Tech Delivers Stock Replenishment Imprest Replenishment Items Items to Imprest Locations & Puts Away System Advises re-order requirements About $1.5 million per annum to Storeperson Picks and Packs Imprest Replenishment Items Technician Enters Distribution Information into STOCCA, Prints Buyer Checks Prompt Buyer Sorts Suppliers, Checks Essential Drugs List, Adds Low Items, Distribution Tax Invoice & Files Against Bin and Outstanding Orders Prints Orders for Fax or Phone Through SC1 Enters Non-Urgent Orders on MS Access Stand-Alone System Deliver to Deliver to Deliver to Delivers Stock Replenishment Receiving Pharmacy Technicians Signs for Receipt Checks manage Medical Consumables Items to Imprest Locations & & Puts Away Delivery Devices in 1 hospital only $130 SC2 Enters Order Into Homer SC3 Performs Mail Merge for MAXFAX SC1 Updates Order in MS Access db, Sends MAXFAX Supplier Customer Service receives order Supplier s transport operator delivers Receiving Clerks generate Delivery Docket, check Confirming Supplier Orders outer, place on pallet for internal distribution Supply Clerk 1 (SC1) sorts "Non-Stock" Requests million SC1 Enters per Non-Urgent Orders annum on in all Suppliers similarly pick, (Urgent/Non-Urgent) Daily MS Access Stand-Alone System pack, label, invoice sized Australian hospitals Sign Delivery Awaits Availability Send to Supply Fax to for Delivery of NM/Ward Staff to Forgetting Pharmacy, Catering, Send to Supply Sign Delivery Awaits Availability Fax to for Delivery of NM/Ward Staff to Linen, Bio-Medical Engineering, Maintenance, Nutrition Sign Delivery Awaits Availability Send to Supply Fax to for Delivery of NM/Ward Staff to Pharmacy Technician Puts Stock Away Storeperson Delivers to order locs Pharmacy Technician Enters Receipted Items into STOCCA Handwrite # of Cartons, Pallets etc. on Delivery Docket Homer System Updated with Receiving Data Numerous supply staff Potentially Chase Up Discrepancies & Non-Deliveries Equipment / Resource Nurse & staff determine need for all Non-Stock E/RN or other Deliver to Fax to Send to Supply Sign for Delivery Delivery Awaits Availability of NM/Ward Staff to Scientists & staff determine need for all consumables Scientist or other NM Delivers to NM Faxes to NM Sends to Supply Sign for Delivery Delivery Awaits Availability of NM/Ward Staff to Professional / clinical Nurse Manager (NM) or other staff determine need for all consumable & devices NM Delivers to NM Faxes to NM Sends to Supply Sign for Delivery Delivery Awaits Availability of NM/Ward Staff to Professional / clinical staff determine need for all consumable & devices 26/08/2010 (C) Ithaca SCM All rights reserved. 6 Nurse Manager (NM) or other NM Delivers to NM Faxes to NM Sends to Supply Sign for Delivery Delivery Awaits Availability of NM/Ward Staff to

7 18% - 22% of current stock on hand of medical consumables & devices is waste -at ONE 300 bed hospital = $1.3 million. - at all similar sized hospitals in Australia = $115 million 26/08/2010 (C) Ithaca SCM All rights reserved. 7 Efficient Health Care Response, CSC 1996, DASH Report, PfriceWaterhouseCoopers 2000, Ithaca Supply Chain Management Studies at The Alfred, Goulburn Valley Health, Westmead Hospital, Northern Hospital, Western Hospital, Hurstville Community Private Hospital, The Bays Private Hospital

8 Of what remains, another 25%-30% of all items are excess to requirement at any given time. - at ONE 300 bed hospital = $2 million - at all similarly sized Australian hospitals = $177 million 26/08/2010 (C) Ithaca SCM All rights reserved. 8 Efficient Health Care Response, CSC 1996, DASH Report, PfriceWaterhouseCoopers 2000, Ithaca Supply Chain Management Studies at The Alfred, Goulburn Valley Health, Westmead Hospital, Northern Hospital, Western Hospital, Hurstville Community Private Hospital, The Bays Private Hospital

PikPak.com.au. China Fox Group Pty Ltd. Jan-09. www.pikpak.com.au - service on demand

PikPak.com.au. China Fox Group Pty Ltd. Jan-09. www.pikpak.com.au - service on demand PikPak.com.au www.pikpak.com.au - service on demand Jan-09 China Fox Group Pty Ltd Introduction Pik Pak lets you focus on winning customers while we pick, pack and ship orders for you. FREE MEMBERSHIP