A “Process Driven” Hospira
Introduction to the Framework
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Hospira at a glance
The World’s Leading Provider of
Injectable Drugs and Infusion Technologies
• Market leadership positions in:
– generic injectable pharmaceuticals globally
– biosimilars in Europe and Australia
– medication management systems globally
• 70+ years experience; public independent company since 2004
• 2011 annual revenues of $4.1B
• 15,000 employees
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Our philosophy
Vision
Advancing Wellness™… through the right people
and the right products
Unwavering Commitment to ...
Values

Integrity

Ownership/Accountability

Speed



Entrepreneurial Spirit


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Our customers and patients, delivering on
our promise by serving their needs with
integrity, trust and innovation
Our employees, by embracing diversity of
thought and cultural perspective, fostering an
environment of empowerment, fairness and
respect
Our shareholders, by safeguarding their
investment and providing a fair return
Our communities, acknowledging our social
responsibility through active citizenship and
thoughtful giving
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Hospira addresses critical healthcare needs
Key Products
Specialty Injectable
Pharmaceuticals (SIP)
• portfolio of ~200 products
• many differentiated
Medication Management
Systems (MMS)
• ~575,000 installed
devices globally
Customers
Hospitals
and alternate site
healthcare providers
Critical Needs
To reduce:
• costs
• medication errors
• infections
To improve:
• patient safety
• worker safety
• productivity
3
Hospira product categories
2011 Net Sales
$4.1B
Specialty Injectable Pharmaceuticals (SIP)
Other
Pharma
• Generic injectables
• Proprietary drugs
• Biosimilars
12%
Medication
Management
Systems
24%
Medication Management Systems
Specialty Injectable
Pharmaceuticals
(SIP)
• Infusion devices, dedicated administration sets, software
and services
• Gravity administration sets
63%
Other Pharma
• Large volume solutions
• One2One™ contract manufacturing services
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Driving operational and quality excellence
• We are reinforcing the foundation and preparing the
organization for global expansion
• We are making sustainable change in our process and
quality procedures across our global manufacturing
footprint
• We are investing in the future with strategic capacity,
best-in-class processes and people
• Quality improvement and remediation efforts will
position
us favorably for long-term success
12
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Driving Process Behavior - Background
• Hospira has made a commitment to become a more
“process driven” organization – desiring to increase
integration and collaboration between functions and
locations
• This is a 5-7 year cultural journey which was started in
2011
• The Journey included
– Laying foundations for process work to evolve in the
overall enterprise
– Enabling specific projects or initiatives to improve process
– Creating language and tools for people to utilize in process
efforts
– Providing more clarity on process ownership and
accountability
Process Charter – Vision/Mission
• VISION: Hospira, will be known as a process-driven
enterprise, that
– supports, empowers and energizes employees,
– encourages their initiative to work across silos,
– enables and allows its people to perform process work to
achieve desired corporate objectives.
• Mission: The process platform will enable:
– Hospira wide process understanding,
– competency to manage,
– frameworks to define, measure and sustain process focus
in our company at the right levels at the right time for the
defined outcome.
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Why a Process Enterprise
• Process enterprise enables people to do process work
• A Process Enterprise defines and organization by
behaviors and attitudes of all personnel
– not purely defined by organization chart
A process-managed enterprise supports, empowers and
energizes employees, encourages their initiative, enables and
allows its people to perform process work.
Process work is
work that is focused on the customer,
directed toward achieving results rather than being an end
in itself,
follows a disciplined and repeatable design.
Michael Hammer, Agenda
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In a process centric organization, all
employees can answer…
• What process or processes are you a part of?
• How does the process create value for customers?
How do you personally contribute to value? How do
others?
• What do people immediately before and after you in
flow of process do?
• By what measure does Hospira judge performance of
your process? What is current level of that measure?
• What other processes interface with yours? What do
these processes need from yours? What does yours
need from them?
• What efforts to improve your process are now under
way?
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Business Process Thinking Check List
By Michael Hammer, the author of Agenda
What is a Business Process?
• Designed group of related tasks that work together to create a result of
value for a particular customer
• Characteristics of a process
–
–
–
–
–
–
–
has defined triggers (initiating events)
has defined inputs
adds value
produces defined outcomes and deliverables
has customers (internal or external)
normally crosses existing organization or functional boundaries
Measurable
A process is not a…. Methodology , standard
operating procedure, training document, system,
transaction
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What isn’t crystal clear?
Processes should follow the
direction of an overall value
stream.
People Report to Functions
Value Stream
4
People perform “activities”
which should align to processes.
Activity
Finance
Operations
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AR
AP
FA
1
2
Process 3
1
2
3
SC
Procurement
Quality
4
We know how our functions are
organized
It is not consistently clear what
activities/hand offs are performed by
each function
We have not used consistent
terminology in our processes – making
it difficult for decision making,
ownership, etc.
Value Streams with Owners
responsible for providing direction
and clarity
Why a Framework?
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Process is a Fundamental Component
Process & Tools
Continuous
Improvement
Process
Frameworks Techniques
Process KPIs
Measurement
Communication
& Education
Technology
Enablement
LEAN in
Operations
Product and
Commercialization
Excellence
→ 1
Business Results
Process work and enabling Tools
Primarily Process work
→ 3
→ 4
→ 5
Process Driven Organization
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→ 2
An Enterprise Framework?
• Originated in IT
– Large Transformation
Programs
– ARIS Modeling Tool
– Previous GPO/Global
Construct
• Focused on Driving
Common Language
• Still in the Early
Stages
Framework Objectives
• Common Frame of reference/translation tool
– Internally
• Within a group
• Across groups
• Globally
– Externally
• Benchmarking Partners
• Integrators Consultants
• Outsourcers
• Consistent Method of Organization
– Integrated view of process (non-silo)
– Supports standardization
– Helps map processes to functions
– Helps identify ownership
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Components of a Framework
•
•
•
•
•
•
•
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Vocabulary
Structure
Naming Conventions
Templates/Tools
Decomposition Rules
Modeling Rules/Guidelines
Repository Structure
Processes Should Be Grouped into a
Framework (Sometimes also called “architecture”)
• Common Frame of Reference
• Consistent Method of
Organization
• Ease of Navigation
Frameworks are increasingly being used as a
translation tool with external partners.
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Hospira’s framework should …
• Define all business activities,
organized by process
• Allow processes grouped into
end-to-end chains – Called “Value
Streams”
• Provide One global common
business process framework
– underlying procedures and work
practices may vary by site or
region
• Drive process based performance
metrics
– Enterprise excellence vs.
functional excellence
– Common industry framework
enables benchmarking
Establish a common language
across the enterprise
Many frameworks to choose from
APQC (American Productivity and Quality Center)
SAP
SCOR (Supply Chain)
etc
Product Management
Product Design
DCOR™
Sales & Support
CCOR™
Supply Chain SCOR™
Customer processes
Supplier processes
•
•
•
•
Hospira Process Framework (The HPF)
At Hospira we started with:
APQC general industry
+ Pharmaceutical industry
+ Automotive Industry
+ Aerospace/Defense
.
= comprehensive base
inventory list of 400 processes
classified into 12 process
categories
Can you visit me in Chicago???
This ???
Or This??
Framework Levels
Level & Name
Description
1
Process
Category
Highest level of process in the enterprise
Eg: Source to Pay
2
Process
Group
Group of related processes
Eg: Procurement
3
Process
Series of interrelated activities which convert inputs into
results (outputs)
Eg: Determine sourcing strategy
4
Activity
Key events performed when executing a process.
Eg: Negotiate Contract
5
Procedure
Step-by-step instruction on how to perform tasks within
activity
Eg: Step 1: Review vendor history
Drill down for more details
Base process inventory list sample
2 Develop and Manage Products and Services (10003)
(Pharma)
(Pharma)
(Pharma)
(5.0.0)
(5.0.0)
(5.0.0)
(5.0.0)
(5.0.0)
(5.0.0)
(5.0.0)
(AD)
(AD)
(AD)
(5.0.0)
(Pharma)
(Pharma)
(AD)
(AD)
category
2.1 Discover Products (12752)
2.1.1 Manage research (12753)
2.1.2 Perform research/ licensing (12757)
2.2 Manage product and service portfolio (10061)
2.2.1 Evaluate performance of existing products against market opportunities (10063)
2.2.2 Define product/service development requirements (10064)
2.2.3 Perform discovery research (10065)
2.2.4 Confirm alignment of product/service concepts with business strategy (10066)
2.2.5 Manage product and service life cycle (10067)
2.3 Develop products and services (10062)
2.3.1 Design, build, and evaluate products and services (10080)
2.3.1A (AD) Manage Configuration (11703)
2.3.1B (AD) Develop and implement manufacturing/services (11717)
2.3.1C (AD) Plan product resource requirements (11730)
2.3.2 Test market for new or revised products and services (10081)
2.3.3 Prepare for production (10082)
2.3.4 Compile and submit dossier (12763)
2.3.5 Manage regulatory requirements (12771)
2.3.6A Maintain product/process data (11740)
2.3.7A Manage transfers of product data (11751)
group
Process
3 Market and Sell Products and Services (10004)
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“Value Streams” Tie Core Processes Together to Achieve
Desired Business Results & They Cross Organizational Silos
Value Stream: e.g. Forecast to Plan
Integrated
KPIs
Core Business Processes (global)
3.3.1
Develop Sales
Forecast
4.1.2 Manage
Demand for
Products/ Services
8.1.1 Perform
Planning/ Budgeting/
Forecasting
7.5.4 Create IT Services & Solutions
The Collaborative Forecasting Tool Touches a
Subset of the Forecast-to-Plan Value Stream
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Value Stream
a.k.a. End-to-End Business
Process, is a designed group of
related core processes, tasks and
systems, spanning functions and
regions, that work together to create
and deliver ultimate value to
stakeholders; Value Streams are led
by an internal leader across a matrix
organization.
Business Process,
is a series of value-added activities
and tasks, performed by both people
and equipment, to purposefully
achieve a common functional goal
for one or more value streams; Core
Processes are owned by Global
Process Owners (GPO).
“Value Streams” Cross Organizational Silos
Value Stream: e.g. Forecast to Plan
Integrated
KPIs
Value Stream Leader
• Highly respected Hospira business leader
• Owns the value stream KPI and identifies
gaps requiring process work
• Accountable for driving process
improvements now and in the future
• Collaborates and work closely with
Global Process Owners associated with
the Value Stream
Business Processes (global)
3.3.1
Develop Sales
Forecast
4.1.2 Manage
Demand for
Products/ Services
8.1.1 Perform
Planning/ Budgeting/
Forecasting
7.5.4 Create IT Services & Solutions
Note: process ownership doesn’t imply it needs to be the
same from site to site or centrally managed.
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Global Process Owner
• Globally represents processes within
specific value stream/s
• Identifies ways to eliminate, streamline or
simplify a process
• Deliver global results across functions
and regions
• Design and manage business processes
• Represent process enterprise-wide in
decisions affecting processes
• Participates in technology selection and
deployment
Examples….
• What else can we do with a framework?
– Show ownership
– Show information about processes
•
•
•
•
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Maps
Information
Metrics
Training
Framework key messages
• As the world around us changes, so do business strategies and
organizations, but framework remains intact and withstands the
test of time
• Transformation efforts focus on process groups, such as P2P.
– Can’t manage transformation at the holistic framework level
• Transformation must consider all impacted functions but process
ownership must be with one organization with
representation/advice from impacted functions
• Process owners must collaborate and focus on complete end to
end process, not just their portion
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Success of a Framework
• Centralized management/maintenance
– While the processes and decisions are owned by the value
stream and process owners, centralized maintenance is
critical
• “Adopt before Adapt” to maintain external
benchmarking/reference links if at all possible
• Adopt, Govern and provide oversight before locking in
tools
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Realize we are in a multi-year journey…
So now what?
Key Messages - Process/Value Streams
• Common Process Language will be a critical component to us
moving to a process driven organization
• Process Names and the Process Framework Should stand the
test of time
• Centralized management/maintenance of process information is
critical to success
• Process owners must collaborate and focus on complete end to
end process, not just their portion
• Processes will need to be owned - typically by a function
• While Process focus is Critical, transformation efforts typically
target on groups of processes (value streams)
• Transformation efforts must consider all impacted processes,
value streams and functions
• Function is still important – keeping skills relevant, providing
structure and accountability within a discipline
32
What do we ask of you in general?
• Understand the process framework – how it works and
– What is an process
– What is an activity
• Understand the role of the Value Stream
Leaders/GPOs – start using, supporting and spreading
the new terminology
• Stay connected – provide feedback, work with Value
Stream leaders and help us collectively to get this right
–
–
–
–
What is challenging
How would you suggest next steps
What specific messages can we give
How do we get the right people identified
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Next Steps
But the Process Framework only Tells us
“the What”
Our Value Streams and Strategic Direction/ Objectives Tell
Us the How and What For….
Hospira Value Streams
Insight to
Strategy
Plan to Finished
Goods*
Record to
Report
Risk to
Mitigation
Finished
Goods to
Customer
Source to
Pay
Idea to
Market*
Market to
Sell
Order to
Cash
Sell to
Service
Acquire to
Retire
Pharma = Templeman & Schott
Device = DeWitt & Pelletier
 Consumables = Schechter
 Biologics = Hahn & Noffke

Market to
Retire
Recruit to
Attrition
Define to Implement
Support to Retire
Awareness to Implement
Issue to Satisfaction
Business Process Framework (Michelle Sheedy)

Forecast to
Plan
Hospira Value Streams and Processes
GETTING STARTED WITH PROCESS
Click here to understand:
• What do we mean by process?
• What is a value stream?
• What are value stream leaders
and global process owners
• What is a framework
TOOLS AND TEMPLATES
Click here to connect to:
• Example templates for various
process mapping/modeling
activities
• The ARIS tool (Process Modeling
Enterprise Wide)
• Sources of good process
tools/templates
THE HOSPIRA PROCESS
FRAMEWORK
Click here to connect to:
• The Framework Customized for
Hospira
• Key Attributes Of our Processes
& Activities
VALUE STREAMS AND GLOBAL
PROCESSES
Click here to connect to:
• See the Hospira Value
Streams and their leaders
• Understand which
processes are covered by
which value streams
• Additional content on
Value Streams and
Processes
THE PROCESS PERSPECTIVE
HOSPIRA 101
Click Here to access helpful
documents about Hospira’s
• Processes
• Data
• Product Flows
Click here to read about/talk about:
• Hospira specific process efforts
• External process viewpoints,
perspectives, best practices
Business Process Management Services
Enterprise Performance
Enablement
 Enterprise wide program/
project management assistance
 Alignment/Dependencies
Strategic KPIs
 Driving performance culture
 Eliminate KPI conflict
 Establish VS KPIs
Name 1
Program
execution
/mobilization
Name 2
Name 3
Performance/
Assessment /
Improvement
Name 4
 Overall knowledge
management foundation
VSL/GPO ownership tracking
 Process Modeling Tools
Benchmarking membership
point
 Process education series
 Process data (policies,
documents, data, etc.)h
Process Enabling/
Alignment/ Knowledge
Technology/Tools
Senior Leadership Support
* Structure as of early 2013
 Performance assessment
techniques (standard work, KPI
evaluation)
 Skilled performance
improvement resources (Lean,
Six Sigma)
Capability/skill building
(academy)
Advanced and accelerated
improvement techniques
Diagnostics/Evaluations