1

MMD Strategy

Co
m
pl

World-class supplier and

best in regulatory
compliance & safety

Agile end-to-end supply

chains and best-in-class
COGS and working capital

Biologics
Build large molecule
capabilities and mindsets

Achieve
world-class
manufacturing &
supply status
by 2020

Innovation

Excellence in key
technologies and approaches
to platforms and operations

an
Pl

Develop new and enhanced

leadership capabilities

op
le

Diverse Talent

it
of
Pr

Achieve world-class
manufacturing & supply
status by 2020 by
delivering uninterrupted,
unconstrained, highestquality supply at the lowest
cost and shortest lead times
2

Responsiveness

Pe

BUSINESS GOAL

Stability

ly
pp
Su

Be the most-trusted and

competitive supplier of
pharmaceuticals, vaccines,
biologics, and animal health
products to the worlds
patients and customers,
supporting the companys
mission and enabling growth

ia
nc
e

VISION

MMD Beyond 15 Strategy

Aligned with Enterprise Strategy

2015 - 2019

2020 2025

Accelerate

Break Away

Accelerate world-class manufacturing in key

technology platforms, end-to-end supply chain
excellence and best-in-class commercialization
and integration.

Achieve industry leadership position in key

technology platforms and operational
excellence.

Accelerate (2015-2019): Strategic Challenges

1

Stability

Being a true worldclass supplier and

3
best in regulatory
compliance

Responsiveness

Agile supply chains and

best-in-class COGS and
working capital

Innovation

Stay ahead of the

competition (E2E).
Excellence in new
product launches

Biologics capability

Right capability at the

right time; build large
molecule capabilities and
mindsets

2016 MMD Year 1 Key Focus Areas

MMD 2016 Key Focus Areas

Objectives

1. Ensure compliance
2. Assure full supply & revenue (World Class Supplier)
3. Top quartile safety performance
4. Deliver ZEPATIER launch
5. Achieve profit plan & working capital commitments
6. Accelerate talent development and enhance people engagement
Operationalize Quality

Improve Supply Chain

Planning

Safety Cultural
Transformation & EHS
Systems Ownership

Biologics Capability

End-to-End Risk
Assessment &
Mitigation

Diverse Talent
Strategy

Priorities

Performance
Metrics
4

Compliance

Supply

People

Profit Plan

2016 MMD Division Objectives

Customer

Innovation

People

We will create shared value with

our key customers

We will drive Innovation in all facets of

our business as the basis of our core
strategy and competitive advantage

We will create an inclusive and diverse

environment where top talent seeks to
build a career and deliver for Merck

World
World Class
Class Supplier
Supplier (highest
(highest quality,
quality,
shortest
lead
time,
lowest
shortest lead time, lowest cost)
cost) with
with top
top
performance
on
measures
focused
performance on measures focused on:
on:
-- Focus
Focus 40
40 Sites
Sites (robust
(robust supply,
supply,iOTIF)
iOTIF)
-- Paced
Paced production
production to
to takt
takt (Lead
(Lead Time
Time
Reductions)
Reductions)
-- Create
Create pull
pull from
from customers
customers to
to suppliers
suppliers
(Darwin,
(Darwin, S&OP)
S&OP)
-- Minimize
Minimize Tier
Tier 77 repeats
repeats

Focus
Focus on
on OTIF
OTIF (differentiated
(differentiated for
for top
top
customers),
customers), iOTIF/LIFR
iOTIF/LIFR (Internal
(Internal &&
External)
External)
Fully
Fully embed
embed Executive
Executive S&OP
S&OP process
process

Quality/Compliance
We will ensure the highest standards of
quality and conduct all activities in an
ethical and compliant manner

Meet
Meet or
or exceed
exceed targets
targets in
in
-- Reduce
Product
Reduce Product Recalls
Recalls
-- Data
Data Integrity
Integrity program
program
-- Permanent
Permanent inspection
inspection readiness
readiness
-- Prevent
Prevent major
major supply
supply interruptions
interruptions due
due to
to
quality
issues
quality issues
-- Achieve
Achieve RIR/LTIR
RIR/LTIR targets
targets (Safe
(Safe by
by Choice)
Choice)
-- Create/verify
effectiveness
of
high
Create/verify effectiveness of high risk
risk work
work
sub-systems
sub-systems
-- Implement
Implement all
all 37
37 Safety
Safety Standards
Standards (HH)
(HH)

Fully
Fully deliver
deliver && sustain
sustain on-time
on-time ZEPATIER
ZEPATIER
launch,
including
upside
launch, including upside scenario
scenario and
and
lean/flexible
lean/flexible supply
supply chain
chain designs
designs
Ensure
Ensure excellence
excellence in
in on
on time
time filings
filings &&
launches
(4
biologics
/
9
small
launches (4 biologics / 9 small molecules)
molecules)
Create
Create long-term
long-term blueprint
blueprint for
for implementation
implementation
of
of variable
variable batch
batch size,
size, rapid
rapid turnaround
turnaround
technology
platform
for
technology platform for oral
oral solid
solid dosage
dosage
products.
products.

Operational Excellence
We will deliver continuous productivity
& operational efficiency with a focus on
One Merck as an integrated business
Improve
Improve Supply
Supply Reliability
Reliability

-- Fully
Fully integrated
integrated end
end to
to end
end supply
supply chain
chain
-- Systemically
Systemically solve
solve cross-network
cross-network issues
issues
(equipment
(equipment reliability,
reliability,fundamental
fundamental data
data &&
planning/forecasting,
planning/forecasting, root
root cause
cause analysis)
analysis)
-- Connection
Connection of
of internal
internal && external
external suppliers
suppliers
-- End-to-End
End-to-End Risk
Risk Assessment
Assessment && Mitigation
Mitigation

Lead
Lead Time
Time Reductions
Reductions (90
(90 day)
day)
Optimize
Optimize product
product and
and SKU
SKU portfolio
portfolio
Deliver
Deliver 2%
2% production
production efficiencies
efficiencies on
on aa
constant
constant volume
volume basis
basis (ex
(ex Network)
Network)
Improve
Improve utilization
utilization of
of manufacturing
manufacturing facilities
facilities
through
through Network
Network actions
actions
Increase
Increase percentage
percentage of
of diverse
diverse suppliers
suppliers

Build
Build organizational
organizational capabilities
capabilities to
to support
support
new
MMD
strategy
new MMD strategy
Drive
Drive manager
manager accountability
accountability for
for talent
talent
management,
employee
performance
management, employee performance and
and
development
development
Increase
Increase employee
employee engagement
engagement
Build
a
diverse
Build a diverse and
and inclusive
inclusive workforce
workforce
Safe
by
Choice:
behavioral,
Safe by Choice: behavioral, cultural,
cultural, and
and
leadership
transformation
leadership transformation

Financial Performance
We will be a great investment by
delivering on our Financial Plans and
Growth Objectives
Deliver
Deliver P&L
P&LTarget:
Target: $1.6B
$1.6B
Meet
Meet or
or Exceed
Exceed Working
Working Capital
Capital and
and Cash
Cash
Flow
Flow goals:
goals:
-- $8B
$8B Payable
Payable (pull-through)
(pull-through)
-- $5.6B
$5.6B Inventory
Inventory (year-end)
(year-end)
Achieve
Achieve Capital
Capital spending
spending plan
plan

2016 Supply Chain Objectives

MMD
Meet this

Customer
We will create shared value with
our key customers
World
World Class
Class Supplier
Supplier (highest
(highest quality,
quality,
shortest
shortest lead
lead time,
time, lowest
lowest cost)
cost) with
with top
top
performance
performance on
on measures
measures focused
focused on:
on:
-- Focus
Focus 40
40 Sites
Sites (robust
(robust supply,
supply,iOTIF)
iOTIF)
-- Paced
Paced production
production to
to takt
takt (Lead
(Lead Time
Time
Reductions)
Reductions)
-- Create
Create pull
pull from
from customers
customers to
to suppliers
suppliers
(Darwin,
(Darwin, S&OP)
S&OP)
-- Minimize
Minimize Tier
Tier 77 repeats
repeats

Focus
Focus on
on OTIF
OTIF (differentiated
(differentiated for
for top
top
customers),
iOTIF/LIFR
(Internal
customers), iOTIF/LIFR (Internal &&
External)
External)
Fully
Fully embed
embed Executive
Executive S&OP
S&OP process
process

SUPPLY CHAIN
Additional Specifics:
1.
1. Lead
Lead Darwin
Darwin -- Business
Business outcome
outcome realization
realization for
for 2016
2016
2.
Lead
Master
Data
Improvement
in
collaboration
2. Lead Master Data Improvement in collaboration with
with
different
MMD
functions
(KPI:
<X>%
or
greater
on
different MMD functions (KPI: <X>% or greater on MRT
MRT
score)
score)
3.
3. Accelerate
Accelerate deployment
deployment of
of Integrated
Integrated S&OP
S&OP process
process (Site,
(Site,
Market,
Market, Region,
Region, Global
Global &
& IEO)
IEO)
4.
4. Lead
Lead Supplier
Supplier S&OP
S&OP development
development of
of aa solution
solution for
for &
&
delivery
of
aggregated
forecasts
by
2Q16
&
beyond
delivery of aggregated forecasts by 2Q16 & beyond
5.
5. Develop,
Develop, standardize
standardize and
and implement
implement US
US E2E
E2E
import/export
processes
to
drive
compliant
import/export processes to drive compliant and
and reliable
reliable
flow
flow of
of info,
info, docs,
docs, and
and materials
materials from
from supplier
supplier to
to customer.
customer.
Develop
Develop plan
plan for
for international.
international.
6.
Develop
&
install
6. Develop & install aa horizontal
horizontal Tier
Tier Process
Process (rebuild
(rebuild Tiers
Tiers
33- 7)
7)
Develop
Develop aa process
process for
for identifying
identifying instability
instability in
in the
the
supply
supply chain
chain
7.
7. Meet
Meet Customer
Customer Centricity
Centricity Objectives
Objectives :: CustomerCustomerfocused
focused initiative
initiative (e.g.,
(e.g., incorporated
incorporated into
into existing
existing Tier
Tier
process)
process) to
to hit
hit customer
customer targets,
targets, S&OP,
S&OP, Innovation
Innovation etc
etc

2016 Supply Chain Objectives

MMD
Meet this
Innovation
We will drive Innovation in all facets of
our business as the basis of our core
strategy and competitive advantage
Fully
Fully deliver
deliver && sustain
sustain on-time
on-time ZEPATIER
ZEPATIER
launch,
launch, including
including upside
upside scenario
scenario and
and
lean/flexible
lean/flexible supply
supply chain
chain designs
designs
Ensure
Ensure excellence
excellence in
in on
on time
time filings
filings &&
launches
launches (4
(4 biologics
biologics // 99 small
small molecules)
molecules)
Create
Create long-term
long-term blueprint
blueprint for
for implementation
implementation
of
of variable
variable batch
batch size,
size, rapid
rapid turnaround
turnaround
technology
technology platform
platform for
for oral
oral solid
solid dosage
dosage
products.
products.

SUPPLY CHAIN
Additional Specifics:
1.
1. ZEPATIERZEPATIER Reduce
Reduce LT
LT 585
585 dd ->
-> 260
260 dd to
to enable
enable 10MM
10MM tab
tab
production
by
EOY
production by EOY
Drive
Drive the
the 50+
50+ projects
projects that
that reduce
reduce Lead
Lead Time
Time
2.
E2E
Global
Launch
Process:
Complete
the
design
2. E2E Global Launch Process: Complete the design of
of the
the
E2E
E2E launch
launch process
process &
& deploy
deploy (IDST
(IDST interface,
interface, Value
Value Chain,
Chain,
Planning)
Planning) with
with performance
performance measures
measures
3.
Supply
Chain
Design
Process
3. Supply Chain Design Process (Hoshin
(Hoshin Challenge
Challenge ## 1):
1):
Install
Install the
the standard
standard supply
supply chain
chain design
design process
process (new
(new
supply
supply chain
chain design)
design) by
by Q1,
Q1, 2016
2016 &
& integrate
integrate w/other
w/other
processes
processes
4.
4. Supply
Supply Chain
Chain Innovation
Innovation Forum
Forum Install
Install aa process
process to
to
proactively
ID,
Experiment
with
Innovative/
New
ideas,
proactively ID, Experiment with Innovative/ New ideas,
Tools,
Tools, Methods
Methods across
across SCM
SCM
5.
Integration
Capability:
5. Integration Capability: Create
Create capability
capability (team
(team && process)
process)
to
to effectively
effectively integrate
integrate and
and achieve
achieve business
business value
value in
in
acquisitions
acquisitions
6.
6. Lead/
Lead/ Co-Lead
Co-Lead creation
creation &
& execution
execution in
in partnership
partnership with
with
LOB
LOB (to
(to ensure
ensure value
value creation)
creation) of
of Small
Small Molecule,
Molecule,
Vaccine
and
Bio-Sterile
Manufacturing
&
Packaging
Vaccine and Bio-Sterile Manufacturing & Packaging
strategy/
strategy/ hoshins
hoshins

2016 Supply Chain Objectives

MMD
Meet this

Operational Excellence
We will deliver continuous productivity
& operational efficiency with a focus on
One Merck as an integrated business
Improve
Improve Supply
Supply Reliability
Reliability

-- Fully
Fully integrated
integrated end
end to
to end
end supply
supply chain
chain
-- Systemically
Systemically solve
solve cross-network
cross-network issues
issues
(equipment
(equipment reliability,
reliability,fundamental
fundamental data
data &&
planning/forecasting,
planning/forecasting, root
root cause
cause analysis)
analysis)
-- Connection
Connection of
of internal
internal && external
external suppliers
suppliers
-- End-to-End
End-to-End Risk
Risk Assessment
Assessment && Mitigation
Mitigation

Lead
Lead Time
Time Reductions
Reductions (90
(90 day)
day)
Optimize
product
and
SKU
Optimize product and SKU portfolio
portfolio
Deliver
Deliver 2%
2% production
production efficiencies
efficiencies on
on aa
constant
volume
basis
(ex
Network)
constant volume basis (ex Network)
Improve
Improve utilization
utilization of
of manufacturing
manufacturing facilities
facilities
through
Network
actions
through Network actions
Increase
Increase percentage
percentage of
of diverse
diverse suppliers
suppliers

SUPPLY CHAIN
Additional Specifics:
1.
1. Improve
Improve Supply
Supply ReliabilityReliability- Drive
Drive Integrated
Integrated S&OP
S&OP (see
(see
Customer
objective
Customer objective
2.
Lead
2. Lead Time
Time Reduction:
Reduction:
Lead
Lead the
the lane
lane work
work for
for the
the 11
11 lanes.
lanes. Renew
Renew (9)
(9) and
and
Kick
Off
(2)
Kick Off (2)
Set
Set targets
targets in
in collaboration
collaboration with
with LOB
LOB
Inventory
by
node
Inventory by node
Accomplish
Accomplish the
the above
above through
through Standard
Standard Work
Work (E2E
(E2E
Planner),
Planner), MPS,
MPS, VSM/
VSM/ Line
Line Design
Design and
and Site
Site alignment
alignment
with
with priorities
priorities
3.
3. Lead
Lead the
the SKU
SKU rationalization
rationalization project
project Lead
Lead Supplier
Supplier
S&OP

development
of
a
solution
for
&
delivery
S&OP development of a solution for & delivery of
of
aggregated
forecasts
by
2Q16
&
beyond
aggregated forecasts by 2Q16 & beyond
4.
4. Improve
Improve Utilization
Utilization through:
through:
Design
and
Implementing
Design and Implementing strategic
strategic asset
asset
management
management process
process
Partner
Partner on
on sourcing
sourcing strategies
strategies
5.
5. Risk
Risk Management:
Management: Develop
Develop && execute
execute Supply
Supply Chain
Chain Risk
Risk
Management
process

connect
to
enterprise
risk
process
Management process connect to enterprise risk process

2016 Supply Chain Objectives

MMD
Meet this

Quality/Compliance
We will ensure the highest standards of
quality and conduct all activities in an
ethical and compliant manner
Meet
Meet or
or exceed
exceed targets
targets in
in
-- Reduce
Reduce Product
Product Recalls
Recalls
-- Data
Data Integrity
Integrity program
program
-- Permanent
Permanent inspection
inspection readiness
readiness
-- Prevent
Prevent major
major supply
supply interruptions
interruptions due
due to
to
quality
quality issues
issues
-- Achieve
Achieve RIR/LTIR
RIR/LTIR targets
targets (Safe
(Safe by
by Choice)
Choice)
-- Create/verify
Create/verify effectiveness
effectiveness of
of high
high risk
risk work
work
sub-systems
sub-systems
-- Implement
Implement all
all 37
37 Safety
Safety Standards
Standards (HH)
(HH)

SUPPLY CHAIN
Additional Specifics:
1.
1. Ensure
Ensure to
to be
be in
in compliance
compliance with
with the
the serialization
serialization
requirements
requirements for
for SC
SC
2.
2. Process
Process standardization
standardization and
and optimization
optimization of
of Trade
Trade
Operations.
Operations. Internal
Internal Audit
Audit process
process
3.
3. QMS
QMS revision
revision and
and implementation.
implementation. Permanent
Permanent
inspection
readiness
inspection readiness
4.
4. Artwork
Artwork Center
Center Excellence
Excellence
5.
5. Develop
Develop the
the discipline
discipline on
on inventory
inventory control
control by
by setting
setting
the
the governance,
governance, infrastructure
infrastructure and
and interdependencies
interdependencies
needed.
needed. (IQV
(IQV process)
process)
6.
Keep
Improving
6. Keep Improving Security,
Security, Safety
Safety and
and EHS
EHS posture
posture
(Sponsor
(Sponsor Safe
Safe by
by Choice
Choice Program/Culture).
Program/Culture). All
All
compliance
compliance Training
Training completion.
completion. Ensure
Ensure no
no supply
supply
issues
issues due
due to
to quality
quality issues.
issues.
7.
7. Maintain
Maintain and
and enhance
enhance Compliance
Compliance Councils
Councils
8.
100%
Safe
by
Choice
training
attendance
8. 100% Safe by Choice training attendance and
and 00
RIR/LTIR
RIR/LTIR target
target for
for SCM
SCM

2016 Supply Chain Objectives

MMD
Meet this

Quality/Compliance
We will ensure the highest standards of
quality and conduct all activities in an
ethical and compliant manner
Meet
Meet or
or exceed
exceed targets
targets in
in
-- Reduce
Reduce Product
Product Recalls
Recalls
-- Data
Data Integrity
Integrity program
program
-- Permanent
Permanent inspection
inspection readiness
readiness
-- Prevent
Prevent major
major supply
supply interruptions
interruptions due
due to
to
quality
quality issues
issues
-- Achieve
Achieve RIR/LTIR
RIR/LTIR targets
targets (Safe
(Safe by
by Choice)
Choice)
-- Create/verify
Create/verify effectiveness
effectiveness of
of high
high risk
risk work
work
sub-systems
sub-systems
-- Implement
Implement all
all 37
37 Safety
Safety Standards
Standards (HH)
(HH)

10

SUPPLY CHAIN
Additional Specifics:
1.
1. Ensure
Ensure to
to be
be in
in compliance
compliance with
with the
the serialization
serialization
requirements
requirements for
for SC
SC
2.
2. Process
Process standardization
standardization and
and optimization
optimization of
of Trade
Trade
Operations.
Operations. Internal
Internal Audit
Audit process
process
3.
3. QMS
QMS revision
revision and
and implementation.
implementation. Permanent
Permanent
inspection
readiness
inspection readiness
4.
4. Artwork
Artwork Center
Center Excellence
Excellence
5.
5. Develop
Develop the
the discipline
discipline on
on inventory
inventory control
control by
by setting
setting
the
the governance,
governance, infrastructure
infrastructure and
and interdependencies
interdependencies
needed.
needed. (IQV
(IQV process)
process)
6.
Keep
Improving
6. Keep Improving Security,
Security, Safety
Safety and
and EHS
EHS posture
posture
(Sponsor
(Sponsor Safe
Safe by
by Choice
Choice Program/Culture).
Program/Culture). All
All
compliance
compliance Training
Training completion.
completion. Ensure
Ensure no
no supply
supply
issues
issues due
due to
to quality
quality issues.
issues.
7.
7. Maintain
Maintain and
and enhance
enhance Compliance
Compliance Councils
Councils
8.
100%
Safe
by
Choice
training
attendance
8. 100% Safe by Choice training attendance and
and 00
RIR/LTIR
RIR/LTIR target
target for
for SCM
SCM

2016 Supply Chain Objectives

MMD
Meet this

Financial Performance
We will be a great investment by
delivering on our Financial Plans and
Growth Objectives

Deliver
Deliver P&L
P&LTarget:
Target: $1.6B
$1.6B
Meet
or
Exceed
Meet or Exceed Working
Working Capital
Capital and
and Cash
Cash
Flow
goals:
Flow goals:
-- $8B
$8B Payable
Payable (pull-through)
(pull-through)
-- $5.6B
$5.6B Inventory
Inventory (year-end)
(year-end)
Achieve
Achieve Capital
Capital spending
spending plan
plan

11

SUPPLY CHAIN
Additional Specifics:
1.
1. Meet
Meet or
or exceed
exceed (if
(if additional
additional stretch
stretch targets
targets given)
given)
Supply
Supply Chain
Chain budget
budget of
of 427
427 MM
MM
Each
Each budget
budget owner
owner measured
measured on
on monthly
monthly
performance
performance &
& Qtr
Qtr update
update to
to forecast
forecast
2.
2. Meet
Meet Inventory
Inventory target
target of
of 5.8B
5.8B (EY).
(EY). Measure
Measure risks
risks and
and
track
track monthly
monthly through:
through:
E2E
E2E Planner
Planner standard
standard work
work
Value
Value Chain
Chain Management
Management improvements
improvements tracking
tracking
Process
Process Indicators
Indicators established
established by
by COE
COE

2016 Supply Chain Objectives

SUPPLY CHAIN

MMD
Meet this
People
We will create an inclusive and diverse
environment where top talent seeks to
build a career and deliver for Merck
Build
Build organizational
organizational capabilities
capabilities to
to support
support
new
MMD
strategy
new MMD strategy
Drive
Drive manager
manager accountability
accountability for
for talent
talent
management,
employee
performance
management, employee performance and
and
development
development
Increase
Increase employee
employee engagement
engagement
Build
a
diverse
Build a diverse and
and inclusive
inclusive workforce
workforce
Safe
by
Choice:
behavioral,
Safe by Choice: behavioral, cultural,
cultural, and
and
leadership
transformation
leadership transformation

12

Additional Specifics:
1.
1. Build
Build organizational
organizational capabilities
capabilities to
to support
support new
new MMD
MMD strategy
strategy
1.
1. Darwin,
Darwin, Lean,
Lean, CorpU
CorpU Supply
Supply Chain
Chain Leader
Leader Training,
Training, Safe
Safe by
by
Choice,
SCM
Training
Academy
Choice, SCM Training Academy
2.
2. Drive
Drive manager
manager accountability
accountability for
for talent
talent management,
management, employee
employee
performance
performance and
and development
development
1.
1. Succession
Succession adherence
adherence >95%
>95% ;; Band
Band 400
400 key
key talent
talent movement
movement
>10%
>10%
2.
2. Quick
Quick survey
survey in
in April/May:
April/May:
1.
My
manager
1. My manager gives
gives me
me regular
regular feedback
feedback on
on my
my
performance
performance
2.
2. Ive
Ive discussed
discussed development
development with
with my
my manager
manager in
in 2016
2016
3.
3. Increase
Increase employee
employee engagement
engagement
1.
1. Engagement
Engagement index
index 77%
77% (SCM
(SCM 2014:
2014: 78%)
78%)
2.
Innovation
63%
(SCM
2014:
61%)
2. Innovation 63% (SCM 2014: 61%)
1.
1. SCM
SCM 2014:
2014: Merck
Merck is
is more
more action
action oriented
oriented than
than
bureaucratic:
38%
bureaucratic: 38%
2.
2. Action
Action ask
ask team
team what
what is
is in
in the
the way
way of
of getting
getting their
their job
job
done?
done? Take
Take actions
actions
3.
3. Immediate
Immediate Manager
Manager 80%
80% (SCM
(SCM 2014:
2014: 81%)
81%) quick
quick survey
survey
(above)
(above)
4.
4. Development
Development 65%
65% (SCM
(SCM 2014:
2014: 64%)
64%) quick
quick survey
survey (above)
(above)
4.
4. Build
Build aa diverse
diverse and
and inclusive
inclusive workforce
workforce

MMD Key Performance Indicators (KPIs)

2016 Key Outcome Metrics
Compliance (Incl. Safety):
Recalls
Inspection Outcomes
Recordable Injury Rate / Lost Time
Injury Rate (RIR / LTIR)
Corporate/Division Compliance
Goals 1

Supply:
On Time in Full (OTIF) Overall & Top
10 Customers
Line Item Fill Rate (LIFR)
First Pass Quality (FPQ)
Product/SKU Optimization 1
New Product File and Launch 1

Profit Plan:
Total P&L vs. Plan (ex-FX)
Discards vs. Plan (ex-FX)
Working Capital (Payables &
Inventory)
Capital Spending 1

People:
Development of Key Talent
Retention of Key Talent 1
Diversity 1
Engagement 2

Color Code Legend

150% of target

100% of target

75% of target

Note 1: Updated Quarterly

Note 2: Updated at Year-End

2016 MMD Key Performance Indicators (KPIs) Targets

Key Outcome Metrics

Strategy
Compliance (incl.
Safety)
Recalls (Number &
Index)

Inspection Outcomes

Target
HH: 9 +/-2
recalls, 130
index
AH: 10 +/-2
recalls, 120
index
0 Unfavorable
Outcomes*

Recordable Injury
.42/.16 exRate / Lost Time
WP, .82/.26
* # of inspection
Injury
Rateoutcomes
(RIR /that lead to a stock out or failure to
WP
launch a product on time.
LTIR)
Corporate & Division
Compliance Goals

Meet all
Requirement
s

Supply
On Time in Full (OTIF)
Overall & Top 10
Customers

Total P&L vs. Plan (exFX)

14

Target
-3%
Favorable

Overall 90% (FY)

Top 10 90% (Q4)

Line Item Fill Rate

(LIFR)

96% (FY)

First Pass Quality

(FPQ)

92% (FY)

Product/SKU
Optimization
New Product File and
Launch

Profit Plan

Target

People
Development of Key
Talent

15 Brand Reviews /
90% Approved
Work Complete

90%

Target
10%

2016 MMD Key Performance Indicators (KPIs) Targets

Additional Enabling / Supporting Metrics

Strategy
Compliance (incl.
Safety)

Target

Supply

Target

Total Deviations

-20% vs. 15

Internal On Time in Full

(iOTIF)

90% (FY)

Safe by Choice
Program

All Sites
Implemented
*

Inventory Replenishment
Level (IRL)

80% (FY)

Implement EHS Safety

Standards

Implement
37 Standards
(HH)

Master Data Accuracy

(MRT-SCOR)

97% (Q4)

Lead Time Reductions

TBD

MMD Supplier Diversity

Profit Plan

Target

* Excluding announced network actions and inactive sites

15

People
People (11 metrics, max
22 pts.)

$274MM

Target
14 points