Indiana Logistics Summit

1
Indiana Logistics Summit

• October 19, 2005

2
Supply Chain Strategy Real Estate

• Overview Becton Dickinson - BD
• Strategic Decision Making
• Network Rationalization
• Site Criteria
• Building Design

3
BD Company Overview

• Medical Technology Company serving Healthcare
  Institutions, Life Science Researchers, Clinical
  Laboratories, Industry and General Public
• 5.3 Billion Revenue (50 North America)
• 3 Divisions
• Medical Device Ex. Needles Syringes Catheters
  Surgical Blades
• Bioscience Research Tools which Study Genes,
  Proteins Cells
• Diagnostics Microorganism Mgmt Blood
  Collection Products
• 25,000 Employees Worldwide
• 59 Manufacturing Plants Globally
• U.S.A.
• 4 DCs - 1.4mm Sq.Ft Expanding in 2006 to 1.75mm
  Sq.Ft
• Constructing new DC Plainfield, IN - 653,000 sf
  exp. to 970,000 sf
• NYSE BDX

4
Strategic Decision Making Supply Chain Real
Estate

• Distribution Orientation
• Planning or Reacting?
• Trigger event Service, Cost, Space, Sudden
  Change in Business Requirements,
  Acquisition/Divestiture
• 3 5 year planning for growth, inventory
  rationalization
• Business Case over IRR hurdle
• Internal Selling

5
Network Design

• Network Design is a Balance
• Service requirements - (cycle time, order fill,
  last mile)
• Total Cost to Serve - (Distribution,
  Transportation Inventory Carry Cost Safety
  Stock)
• Risk
• Optimized Network Optimizing Constraints
• Optimal of DCs with sufficient capacity in
  Optimal geographic locations with Optimal
  Transportation Inventory Costs which will
  meet/exceed Customer Expectations

6
Location Selection Key Drivers

• Location - driven in general by optimization of
  transportation costs
• Centers of Gravity Manufacturing Customers
• Key Factors to selecting one City over another
• Existing Operations Incumbent factor
• Existing educated labor base within community
• Transportation Equipment Availability
• State, County Local tax training incentives
• Availability of Investment Grade Land
• Sophistication of Local Government concerning
  planning efficient, rules based decision
  making.
• Supportive, Responsible Seasoned

7
Building Design

• Key Factors, Changes
• Building Height 40 clear - MHE
• Velocity vs. Storage Density
• T5 motion lighting
• Climate Control reinforced roof
• Security built into site layout
• ESFR sprinklers to NFPA standard
• Building to FM standard