About IHS Inc. Founded in 1959 : To provide product catalogues for aerospace engineers

Copyright © 2009 IHS Inc. All Rights Reserved. January 2009

About IHS Inc. • Founded in 1959: To provide product

catalogues for aerospace engineers

• Today: Leading provider of critical technical information and insight, decision support tools, and related services

• 55,000 customers in over 100 countries• ISO9001 company with 3,500 employees

Strong, Growing Products and Financials

• IPO Nov 2005• Public, NYSE IHS• FY09 revenue: $967M (+ 15%)• EBITDA: $279M• 50% of revenue outside of US

Security

Energy

Environment

ProductLifecycle


Proliferation of Environmental regulations Geographic and medical device compliance lists

RoHS v2 Recast

UN Stockholm Convention on Persistent Organic Pollutants

Norway PoHS

China RoHS

Japan

REACH SVHC

Customer RFP Driven (Chemicals and Materials)Customer RFP Driven (Chemicals and Materials)

IBM, Dell, HP, Cisco…IBM, Dell, HP, Cisco…

Kaiser, Premier, Novation, Amerinet …Kaiser, Premier, Novation, Amerinet …

Thales, Airbus …Thales, Airbus …

Health Canada Health Canada

Canadian Chemical ManagementCanadian Chemical Management

EU Medical Device DirectiveEU Medical Device Directive

US Code of Federal Regulations; Food and Drug AdministrationUS Code of Federal Regulations; Food and Drug Administration

US California Proposition 65US California Proposition 65

……


Here are at least five good reasons to act …Fears surrounding ‘toxic’ substances used in our products

Deca-BDE?

Phthalates?

Cadmium?

DEHP?

Lead?


Chemical Management – not optional for the supply chain.

What are your priorities?

IMPORTANCE

URGENCY

Low

Low High

High

RegulationsTracking and interpretation; alerts

Standards & ListsStandards for matl. composition declaration and chemical lists

Content:Material composition, SVHC, Compliance, Registration, Obsolescence, Alternatives

System of Record & AnalysisMDS, part and material composition mgmt; List reporting; BOM and risk analysis

Notification: OutboundPublish to downstream users

Verification & AuditingPhysical substance testing, process and content auditing

Notification: InboundAggregate and manage from upstream suppliers

Green Inventory OptimizationDuplication across enterprise, safer and less costly alternatives

A1

A2

E

B

C

D1

A2

D2

F

A1

A2

D2

F

E

B

C

D1

A2

D2

F

Place enabler in appropriate quadrant for your company

B

C

D1

D2

A2

A1

E


Who is Impacted?Impact is cross-functional and global

Global Supply Chain: Impact to continuity of supply; Disruption due to material obsolescence and availability.

Global Manufacturing: Supply chain disruptions have already impacted material availability, costs and lead-times for production.

Global EHS: Product stewardship regulations and customer demands continue to proliferate globally. Lack of systems and information to respond is inefficient and resource intensive.

Global and Local Regulatory: Additional label reviews, change package reviews and approvals, tech file/design dossier updates and submissions, reviews for PMA and 510(k) impact. Assessments needed for global impact to registrations.

R&D: Identification of alternate materials and costly, unscheduled product redesign.

Global PSM: Collection of material content data from suppliers. Identifying alternate suppliers in compliance with global requirements. Increased supplier management.

Global Sales & Marketing: Inability to quickly and accurately respond to customer material content requests and RFP’s such as Kaiser and Premier.

Global Ethics & Compliance: Adherence to Code of Conduct., 2


Priority Declarable Substance List (PDSL)Aerospace and Defense Standard Substance List


Make vs. Buy: Calculation Model Economies of Scale with Industry Standardization

Make: In House Do it Yourself (Independent)

Buy: Outsource (Third Party Specialist)

Buy: Economies of ScaleOutsource + Industry

Standardization

Time

$

ee


Impact to Supply ChainDisruption of Supply Chain: Lessons Learned from RoHS

1.5x

3x

1.35x

0

0.5

1

1.5

2

2.5

3

Mosfet Tantalum Capacitor Op Amp

Individual Manufacturer Price Book Examples 5/30/2008

RoHS Compliant Alternative Traditional Pb Part

Chemical Restrictions Impacting Margin: RoHS Lead Restrictions = 35% to 300%

Increase in Costs for Leaded Parts

Chemical Restrictions Impacting Obsolescence: SVHC Publication was a significant factor in the 300% increase of End of Life (EOL) documents

for electrical components in 2008

Chemical Registration

Deadline

Chemical Registration

Deadline

SVHC Publication

SVHC Publication

4


Just how big of a deal is this to medical industry?It’s a very, VERY big deal!

Rank Company Fortune 1000 rank $ millions

1 Medtronic 196 $13,515.00

2 Baxter International 219 $12,348.00

3 Boston Scientific 320 $8,050.00

4 Becton Dickinson 347 $7,158.50

5 Stryker 375 $6,718.20

6 St. J ude Medical 520 $4,363.30

7 Zimmer Holdings 543 $4,121.10

8 Beckman Coulter 675 $3,098.90

9 C.R. Bard 791 $2,452.10

10 Teleflex 797 $2,420.90

11 Biomet 808 $2,383.30

12 Applied Biosystems 811 $2,361.50

13 Dentsply International 847 $2,193.70

14 Varian Medical Systems 876 $2,104.90

15 K inetic Concepts 938 $1,877.90

16 Hill-Rom Holdings 942 $1,862.00

17 Bio-Rad Laboratories 977 $1,764.40

18 Invacare 983 $1,755.70

$80,549.40

Only one of these companies did not

participating in today’s webcast.

2009 Fortune 1000:

Top Medical Products & Equipment


Redesign Timelines from IHS Medical WebinarUnderstand/Scope Timeline and Costs

31.8%

20.5%

30.7%

8.0%

4.5%

4.5%

0% 5% 10% 15% 20% 25% 30% 35%

More than 18 months

12 - 18 months

6 - 12 months

3 - 6 months

1 - 3 months

Less than 1 month

82%

Redesign or certifying your primary product/line would take?


Example Scenario from a current IHS Project

33% of OEM’s Parts found to be out of compliance to various regulations

79% of those parts had a supplier recommended replacement.

21% of those parts had no supplier recommended replacement

Impact to Product DesignUnscheduled Product Redesigns – Long Pole in Tent

What is your average timeline for product

redesign and certification - 6, 12 or

18 months.

5

What would be the impact if forced to engage in an unscheduled redesign and certification of 21% of our

non-compliant parts?


LIVE Audience Poll Question: To introduce a new part or establish material

compliance, which factors play a role in part evaluation? (check all that apply)

87.5%

79.1%

77.0%

72.9%

68.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Technical Fit (e.g. Form,

Fit, Function)

Material Disc losure &

Composition

Compliance Status

Reliability

Lifecycle Analysis &

Supply Continuity

Live Audience Poll: Supply & Demand Chain Executive Webcast "Redesigning Medical Supply Chains" featuring IHS October 15, 2009

Webinar Live Polling: Solution needs to support Compliance, LC ….

TECHNICAL FIT: More important than

compliance itself.


Predictive Characteristics

IHS Electronics Database: Provides Lifecycle Visibility

Ignore lifecycle at a great cost and a great risk

Two primary lifecycle methods:1. Predictive planning algorithms - commodity analytics

• Fill data gap

• Validates supplier responses2. Supplier response

• Typically less than < 50% response

Package

Memory Density

Memory Organization

Supply Voltage

Speed

5

3

4

2

1

Illustrative example of key Technology Group attribute drivers (SRAM) and Sales Data

6ASales Trends

Package

Memory Density

Memory Organization

Supply Voltage

Speed

5

3

4

2

1

Illustrative example of key Technology Group attribute drivers (SRAM) and Sales Data

6ASales Trends

Semiconductors and Components:A Product Lifecycle Point of View

Introduction

Growth

Maturity Decline

Phase-out

ObsoleteToday

YTEOL

LTB Notice

LTB

New Product

Introduction (NPI)

Product Change

Notification (PCN)

End of Life (EOL) or

Discontinuance (PDN)

Case Study: Medical OEM undertook compliance program investment without full visibility in part status Missed 11% of parts obsolete or on LTB after re-design was complete.


Best Practice: You Need Access to AlternativesAlternative parts, materials, and supplier evaluation


IHS is uniquely positioned to address REACHInformation critical to comply, manage risk, optimize performance

• Which regulations apply to me and what they impact?

• Which localized versions, requirements, and legal obligations?

• Which of my business plans and products are exposed to risk?

• How do I establish my supplier, material, and compliance requirements?

• How do I aggregate and process high volumes of complex/disparate data?

• How do I monitor supply chain performance and escalate critical issues?

• How do I maintain supplier, material and product compliance information?

• How do I measure and report the current state of compliance and risk?

• How do I monitor constant regulatory changes and supply chain realignment?

• How do I declare compliance and material composition to stakeholders?

• How do I manage changes upstream and downstream within supply chains?

• How do I verify the receipt or acknowledgement of documents & information?

• How do I identify, compare and select compliant, lower-risk alternatives?

• How do I evaluate, compare and drive greater business performance?

• How do I optimise a product portfolio to improve market position?

Copyright © 2009 IHS Inc. All Rights Reserved. January 2009 16


Consistent and Clear Format


Assemblies

ComponentsChemicals

Fasteners

Raw Materials

Compliance Data CollectionAll Parts (AVL): Electronic, Mechanical, Sub-Assemblies…

Adhesives

Plastics

Custom Mechanical

Cables


IHS’ ISO9001 ProcessOver 50M parts,1B attributes employing over 45 logic checks per part

SE Suppliers’ - Part

Composition Data Expertise Classify

Standardize

Aggregate

Enrich

ISO 9001 ISO 9001 ProcessProcess

QA

√

Logic Checks• CAS Numbers• Substance Names• Computational

Consistency, etc.

Comply Plus

Material Composition Database

? # of Article & Preparation

? # suppliers

Component Management Tool

Existing Material and SDS Content

PLMPLM

Not Not optionaloptional


AVX ComponentFull Material Disclosure Example (Before IHS Processing)


After


Availability FMD in IPC1752 Format Sample - 1.4M Full Material Disclosure (FMD) Documents

Availability of FMD Data in IPC1752 Format

0%

20%

40%

60%

80%

100%

FMD's provided in IPC1752 format FMD provided in other formats

Manually normalize data from all formats - XLS, XML, Word, HTML, PDF – for bulk loading into EMARS

Manually normalize data from all formats - XLS, XML, Word, HTML, PDF – for bulk loading into EMARS


Optional – IHS Composition Database ComplyPlus can house CAS level composition data for analysis

Supplier Audit and Content Verification

Standards-based Material

Composition Sourcing

Material composition system of record for articles,

preparations and substances

Green Inventory Optimization

BOM Analysis Systems and other enterprise systems

Content: Material Composition Sourcing

With logic checks

Integration

Safer Alternatives (based on green chemistry)

Physical Inventory

System of Record: Use Models

• SVHC, SIN list, etc. matching

• Material compliance design reference

• Material composition; Preparation SDS

• EU substance database queries

• (M)SDS Management

Sourcing

Reports

Sourcing

Updates (reference)

Notification to down stream users

E

C

D2

F

B

A2

• Global Environmental Regulation Tracking, Interpretation and Business Impact Analysis

• Alerts on developments

A1

Compliance & Audit Reports


Inbound Notification

D1







Material composition system of record for articles,

preparations and substances



BOM Analysis Systems and other enterprise systems


With logic checks


With logic checks

Integration

Safer Alternatives (based on green chemistry)

Physical Inventory

System of Record: Use Models

• SVHC, SIN list, etc. matching

• Material compliance design reference

• Material composition; Preparation SDS

• EU substance database queries

• (M)SDS Management

Sourcing

Reports

Sourcing

Updates (reference)

Notification to down stream users

E

C

D2

F

B

A2





A1



Inbound Notification

D1


Store/manage/access (Parametric Data)•SVHC/Hazardous materials•Full material composition•REACH declaration of compliance

Store/manage/access (Documents)•REACH CoC document•Safety Datasheet (SDS)•Product Datasheet•Full Material Declaration document•Other documents

Access•Traditional licensed and installed application vs. SaaS•Connection between systems for key data points

Report• On part contents against Hazardous

Substances Lists of interest (SVHC-15, SIN List, 67/54/EEC, PDSL, etc.)

• By collections of items (electronic components, specific manufacturer’s parts, preparations, plastics, paints, etc.)

Simulate• Where Used: Find all articles and

preparations containing a specific substance (such as proposed SVHC)

• What-if scenarios: If the entire SIN list became SVHC, how would that affect my supply chain?

IHS Comply PlusCompliance Data System of Record and Analysis


Part and Manufacturer Information

REACH, PDSL and Other Compliance

Information.

Part Substances, Weight, Pct.

Contribution (If Sourced)

IHS Comply PlusProduct and Material Compliance Analysis

Copyright © 2009 IHS Inc. All Rights Reserved. January 2009 26

Material Composition Information Can be Stored, Aggregated from all Sub-Components, Compared Against Various Lists and

Thresholds, and Summarized at the Part Level

Indicators and Reports Update Dynamically Based on Updates Made to Substance Lists

Supports REACH, PDSL, SIN 1.0, Custom Lists, Many Others

IHS Comply PlusProduct and Material Compliance Analysis and Expanded Part Data

View Composition Information by % or

Weight

And

Identify % of Composition with CAS


Analysis and Reporting


Suppliers

• BOM load and analysis

• Parts Attributes

• Parts Reused

Part and Material Compliance and Composition Info.Competency:

OEM Competency:• Collecting publicly available data not core competency

• Focus on OEM market and market IP

• Core work starts once data returned - EOL. redesign, supplier selection

• Focus on engineering/supply chain decisions

• Leverage supplier relationship for escalation

• Aggregating technical/composition data core competency

• ISO 9001 certified data collection process

• Data validation with cooperative supplier escalation

• over 50M components, 1B attributes and 10,000 MFR processed

• Third party expertise recognized by regulatory agencies – UK BERR

Leveraging Core CompetenciesEnables OEM to drive differentiation and value

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