Boris Cononetz, Jr.

1. Boris Cononetz, Jr. I.T. Manager, PLM

2. The Exponential Value of PLM Strategic PLM Adoption from Substitution to Scale to Structure

3. Company Background • Medtronic Emergency Response Systems (ERS) • Based in Redmond, WA • 1,100 employees worldwide • Over $400 million in sales • Automated External Defibrillator (AED) • Medtronic, Inc. • Based in Minneapolis, MN • 31,000+ employees worldwide • Over $11 billion in sales • CRDM, ENT, Vascular, Cardiac Surgery • Every 5 seconds a Medtronic product saves or significantly improves a life somewhere in the world

4. Embarking on the PLM Journey • Strategic Point-of-View • What business drivers, trends, or objectives are driving change? • Is the organization ready and willing for the change? • How will PLM impact the business? • How will the results be captured and measured? • What is the process for breaking down barriers? • What are the conditions of various processes? • Tactical Point-of-View • Who will sponsor the initiative? • How will the project be implemented? • What are the issues and pains being felt? • How will these issues be managed? • When, who, and how will communication flow throughout the organization? • What is the level of expertise on understanding PLM? • Will internal and/or external resources be utilized?

5. Expectations and scope management Issue management Communication channels Resource administration Risk mitigation Strategic Tactical PLM Strategic Roadmap • Align with business vision and goals • Identify opportunities • Cross project solution leveraging • Effective and efficient communication • Bridge between executives and users • Establish escalation process

6. Medtronic ERS Business Needs • Strategic Alignment • Speed product development lifecycle • Enable global collaboration with design partnersand suppliers • Support outsourcing initiatives • Improve effectivity and efficiency of existing business processes • Tactical Alignment • Improve design transfer process and enable management of prototype to production material in ERP • Implement electronic document creation, review, and approval • Comply with FDA 21CFR Part 11 regulation • Secure access to product information and documentation throughout a product’s lifecycle

7. Medtronic ERS Business Case • Build business value • Establish business priority • Identify candidate processes and map interrelations • Conduct proof-of-concept / pilot • Develop metrics and associated savings • Conduct technical review and references • Capture short- and long-term benefits • Present PLM vision and roadmap to sponsors • Use a phased approach for implementation • Provide value quickly and continually

8. 2 PLM Planning and Phases Process EXECUTIVE SPONSOR ECONOMIC BUYERS EXEC COMMITTEE CHAMPION ECONOMIC BUYER EXEC SPONSOR RISK COST / BENEFIT CHARTER GO / NO GO Gate PLM Kickoff Business Value Priority Final Proposal And Approvals Business Value Socialized CXO References Sponsorship “End State” Value Drivers Executive Presentation Pain Identified BPM ImplementationMetrics Business Process Map BPO Implementation Planning ImplementationPlanning Implementation Phases IT MGT Technology Review Fit Option Review Technical Validation POC / Pilot ITTECH Implementation Solution Planning +2 Kickoff Go Live +3 +1 T 0 Project Funding Approved

9. Strategic Funding Future Phases PLM Kickoff Business Value/ Priority Business Realignment Planning/ Process Map Benefits/ Metrics Presentation, Proposal, and Approval Resource Alignment Issue Mgnt Tactical Implementation Phase 3 SOW Testing Value Implementation Lessons Learned Phase 2 Benefits SOW Build Testing Rqmnts Implementation Lessons Learned Phase 1 Design Testing Build SOW Rqmnts Design Build Rqmnts Design Time Strategic and Tactical Alignment

10. Project Phase Planning • Phase Principles • Implement strong, wide foundation – Initial business value • Build upon previous phases – Incremental value • Re-execute business need and justification process between phases – Continually driving alignment • Time box phases • Establish sequencing – “Leap frog” • Plan for the Known and Unknown • Interdependencies – Process, model, and data • Internal and external forces • Mitigate resources, budget, schedule, scope/requirements • Deviations – Business changes • Infrastructure and integrations

11. Incremental Phase N Filling out PLM roadmap QuantifiedIncremental Value IncrementalPhase 2 Build upon initial phase, plus add More sophisticated or extended model tailored to client needs QuantifiedIncremental Value Scope and Value Provided Project Initiation Proof of ConceptPhase 1 Quantified Value Days T1 T2 T3 Incremental Delivery of Business Value A Program Phase is a set of focused, integrated actions and changes that enable rapid realization of identified benefits to business

12. Balancing Value and Speed • Determine the tolerance of the business • Speed, functionality, or both • Be aware: Business is changing all the time • Locate Sweet Spot by balancing Value and Speed • Repeat this cycle to achieve maximum business value over time

13. Substitution, Scale, and Structure • Substitution – Keeping the business running • Convert manual to automated • Transition from paper to electronic • “Lean out” processes • Scale – Doing more than before • Leverage online collaboration • Implement internal and external access • Improve speed and accuracy • Structure – Doing what could never be done before • Expand data integration – Single source of the truth • Facilitate end-to-end product lifecycle visibility • Extend data integration beyond traditional PLM areas • Enable distributed activities across key resources

14. Phase 5 Phase 4 Phase 3 Project Management Full-Text Search Phase 2 Supplier Collaboration Integrated Test/SW Storage Phase 1 Process/Method Sheet Management Configured Product QSD Training Material EPR Integration Product Registration ERP Integration New Product Development Bill-of-Materials Management Part Management Change Control DMR, DHF, and QSD Management Media Storage & Control Records Retention Medtronic ERS Implementation Roadmap

15. Medtronic ERS PLM Evolution MR6 Eng Central Migration MR3 & 4 Program, Supplier & Full-text Search Centrals Structure P3C Configured Products Integration MR2 Quality System & Training P3A MDT EPR Integration Scale Scope P1 Document and Change Management P2 ERP Integration P4 Ops Doc Management Substitution P3B High Availability MR1 V10 Upgrade MR5 EC Proof-of- Concept Infrastructure 1999 2000 2001 2002 2003 2004 2005 2006 2007 Time

16. Strong executive management support Policy steering committee to resolve and recommend policies Open and constant communication Focus on process first, tool second Obtain business buy-in Manage scope and resources Budget for contingencies Strong core team – SME’s from key departments Build internal knowledge and expertise Plan and budget for growth Design for capacity and robustness Develop internal terminology dictionary Plan for varying level of computer skill levels Audits Business imperatives ROI analysis Project metrics, requirements, and objectives Impact on users and the business Success Factors Sponsorship Change Management Project Planning Infrastructure Training Interruptions Value Realization

17. Benefits Realized 100% of product documentation on-line 600% reduction in document approval and processing times 98% reduction in product information retrieval times 75% reduction in floor space utilization in Doc Center 65% reduction in engineering change through-put 30% increase in item master accuracy (99.998% accurate) 25% increase in supplier drawing accuracy Metrics $150K annual savings in labor for document distribution $140K savings in improved searching with full-text search $25K per month savings in scrap for printing literature Compliancewith FDA 21CFR Part 11 regulation TangibleResults

18. Evolution of Business Needs • Facilitate growth in outsourcing of product design, software development, and manufacturing • Design anywhere; build anywhere • Extend supplier collaboration by providing design input, test data, and real-time metrics • Enable management and control of non-product related documentation • Implement web services to replace “point-to-point” integrations • Provide on-line ordering and configuration of products, services, and accessories • Extend data collection and interaction to non-traditional PLM groups, e.g., Business Development and Clinical

19. EPR PLM Roadmap at Medtronic ERS Medtronic Global User Access Supplier Internet Access Web Access & Full-Text Search Medtronic Corporate Systems Customer Relationship Management MFG/Pro ERP Collaboration Tools Supplier Collaboration QAD andMx1 Integration Supplier Doc Access and ECR Process Web-based Eng Change Management Web-based Document Management Enterprise Product Registry Engineering Central Engineering Change Process Document Management eSourcing Training Database Supplier Collaborative Web Interface Web-based ProductConfiguration Web-based Project Management Legend MCAD Direct Integration ECAD Direct Integration Current Project Management Product Design& Configuration 2006/2007

20. Key Take-Away Messages • Align business needs and metrics to strategicand tactical objectives simultaneously • Implement PLM with a planned beginningand end • Build continuous value of PLM based on business process modifications • Transform PLM • Substitution Scale Structural

23. Extra slides…

24. Product &Equipment Design (MCAD / ECAD / EDA) Software Design (CASE) Graphics Viewer& Markup RequirementsManagement Production Control (ERP / MES) Enterprise Design Control Device MasterRecord Design HistoryFile Partner DesignCollaboration CAPAManagement Product Config / BOM Management DesignSpecifications Packaging &Label Control Supplier QualityManagement CAD DataManagement RequirementsManagement Document & Change Control Project & Program Control Document Authoring (MS Office) Document Search& Retrieval ElectronicChange Control ProjectManagement ProgramDashboards Project Authoring (MS Project) Full Text Search PDF Rendering DocumentLibrary Closed-LoopImplementations TasksDeliverables TeamCollaboration PLM Platform Reporting Security Access Part 11 Compliance Approval Routes Notification Alerts Enterprise Architecture PLM Footprint

25. Business Process Mapping Document Management Part And BOM Management Project Management • Supplier • Collaboration Product Development -Design History Files -Quality System Docs -Artwork -Physical/Elect. Media -Service Contracts -Full-text Search -Device Master Records -Product Labeling -Regulatory Checklist -Agency Checklist -Safety Risk Mgnt -Environ. Health/Safety -Test Software -General Doc Mgnt -Software App Mgnt -Marketing Collateral -Price Lists -MS Office Integration -Item Master Mgnt -Prototype Item Masters -Product Hold -Item/PS Bulk-load -Variant Mgnt -EPR Registration -PS Management -BOM Reporting -AVL Management -IM’/PS Export -Project Management -Design Partner Access -Program Dashboard -Program Management -DHF Report -MS Project Integration -Supplier Access -Product Doc Access -Product Struct. Access -ECR (RDC) Process -SDN Process -Supplier Sourcing -Buyer’s Desktops -Part Quality Plans -Supplier Scorecard -Purchasing Scorecard -Quotation Process -RFQs -Supplier Admin -Eng. Change Process -Design Transfer Process -VVQ Process -Requirements Mgnt -Issue Management -DMR Report -Prototyping Process -Clinical Data Mgnt -Prototype Costing Mgnt

26. Standard Implementation Phase Timeline Business Process Mapping/Fit Analysis Activity Business, IM, QA, Customer Buy-in Follow on Activity Planning Specification Development Key Event / Milestone Specification Consensus Development / CRP 1 Development / CRP 2 Execution Development / CRP 3 Infra / Scalability Testing Legacy Data Load / Test 1 Data Migration Legacy Data Load / Test 2 URS / SRS / PRS / VP Validation & Validation Go Live Production Presentation/Alignment Building Organizational CRPs Training Readiness Go Live We are here