Mallinckrodt Inc. Information Services Overview and ERP Strategy IS6800 Presentation Mike Cornish Kathleen Delpha Mary

1. Mallinckrodt Inc. Information ServicesOverview and ERP StrategyIS6800 PresentationMike CornishKathleen DelphaMary ErslonOctober 2004

2. Mallinckrodt Inc. • Mission: Sustain breathing, diagnose disease, and relieve pain • Respiratory, Imaging and Pharmaceuticals businesses

3. Mallinckrodt IS – Guiding Principles

4. VP-CIO THC

5. Major IT Decisions

6. Mallinckrodt Governance • Closest to Federal model • Business IT executives work with finance, “shared services,” business presidents to align with business objectives and minimize side efforts • Monthly operating review meetings • “Old” Mallinckrodt, IS and internal operations was “a hobby” • Now – businesses involved in IS metrics because the root cause of problems is often a system cause!

7. Metrics • 70 Sites • Total IS Headcount: 185 • Approx. Mallinckrodt headcount 11,000 • 30 Major software applications • 12 Concurrent major projects (JDE/BPCS) • 250+ Other projects • 6000 Desktops • 5,000+ Help desk calls / month • IS Budget in 2004 is 1.3% of Total Sales

8. IS Budget • IS budget, at 1.3% of total sales, is extremely low (industry avg 3-5%) • Both expenses and head count reduced by half since FY00 • Systems consolidation, not “bare bones” • Management more focused on internal operations, standardization, centralization • President of one business: “Service is better than ever”

9. FY05 I/S Budget Analysis Expense Headcount • Operating well below 50% of pre-acquisition costs • Source of savings: • Site consolidation • Leverage of buying power • Aggressive cost management • Implementation of standard systems • Operating at 50% of pre-acquisition headcount • Source of savings: • Site consolidation • Business ownership • Business alignment • Implementation of standard systems FY05 I/S Expense: 1.3% of sales

10. What is ERP? • Software solution that addresses the enterprise needs, taking the process view of an organization to meet the organizational goals, tightly integrating all functions of an enterprise • Facilitates company-wide integrated information systems, covering all functional areas

11. What drives ERP? • Business • Business development – new areas, products, services • Ability to face competition • Efficient processes required to push the company into top gear • Customer Satisfaction • IT • Present software does not meet business needs • Obsolete hardware/software difficult to maintain

12. Problems Tackled By ERP Systems • Material shortages • Productivity • Inventory problems • Quality problems • Customer Service • Cash management

13. Mallinckrodt ERP • Enterprise-wide integration of finance software • JD Edwards (JDE) • BPCS for manufacturing facilities • Business Planning and Control Systems • “TRON” for nuclear facilities

14. Enterprise Resource Planning (ERP) THC Canada – Systems Integration Integrate LPI c/s Tyco Acquisition Integrate LF c/s TJ move SOX Juarez split R&D Process Plymouth rollout Resp Dist To Atlanta Lafayette close Irvine close Integrate Plymouth Cust svc Shift dosage To Hobart Joliet DC Carlsbad rollout Contr Policy Galway Supply chain Specialty Chem to MBI Ottawa Interco S&OP 2001 2002 2003 2004 O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S BPCS - TJ BPCS - Plymouth LF - JDE TC - USS BPCS Raleigh TC - Sherwood TC - Partner ATL –JDE Varsity JDE-LPI Demo/Loaner/Eval MIMIX Recall Trade-Ins JDE Respiratory BPCS – Irvine TC - Kendall BPCS/JDE - Galway Contract Consol. Hobart / STLP consol. JDE - DRP TRON BPCS LF Ottawa – sales tax IS Org formed Combi-tube Xfer TC- SS integration Pharma JDE / BPCS The only constant has been change…. Microsoft patches / Active Directory

15. Application Portfolio EDI / WebMethods Cust Orders, ack, SNs Invoices Inter-Divisional CRP Inter-Divisional POs Indirect Sales Chargeback claims Bid Awards Interplant Varsity, EMS TRON Direct Sales/ Pharmacy Transportation/ Export BPCS JDE Partner Customer Pricing Rebates/chgbacks Indirect Sales Product FG Inventory Net Requirements Shop Floor, MPS, MRP, Raw Material Purchasing, BOM Order Management, Distribution, Financials Contracts/Pricing Indirect Sales Rebates Chargebacks (dist rebates) Customer/Product Sales Rebates/chgbacks Data Whse Product, Customers BOMs Shipments Sales Financial Customers Products Sales Rebates Customer/Product Sales Rebates/chgbacks Contracts Contracts Legacy Applications TESS Field Service Factory Service PRMS, Oasis, Mapics COPS THC Whse Cognos Comp Sales Analysis Sales Force Commissions

16. Commercial Applications as of 7/04 FY05 FY05 FY06 FY05 FY05 FY06 FY05 FY05

17. Manufacturing Applications as of 7/04 FY05 FY05 FY05 FY06 FY06 FY05 FY06 FY05

18. Focus Areas • Internal controls • Operational excellence in I/S and Mallinckrodt businesses • Enable business consolidation via ERP consolidation • Expand supply chain capabilities (VMI / CRP / RFID) • Support organic growth initiative through PLM strategy • Leverage buying power across Tyco via sourcing teams • Proactively explore opportunities for leverage across Tyco