Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to completion of

Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to completion of various local legal and regulatory obligations.

Rethinking Global Network Design

Oscar PerezVice President – Delivery SolutionsPfizer Global Logistics & Supply

Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to

completion of various local legal and regulatory obligations.

Today’s Discussion

• Global Delivery Chain

• Global Logistics & Supply Evolution

• Market Logistics Network Model

• What’s next

• Q&A



What Is Driving Our World?

CONVEYANCE INTEGRITY:

ECONOMIC, POLITICAL, COMPLIANCE & SECURITY

INTERNATIONAL TRADE

TRANSPORTATION

GLOBALIZATION: SUPPLY CHAIN,

CUSTOMERS, SUPPLIERS

PFIZER STRATEGIES:

CORPORATE, COMMERCIAL, PGM, ETC.

SUSTAINABILITY

INFORMATION TECHNOLOGY

This defines who we are and what we’re aboutWorking together for a healthier world

Mission This explains how we will achieve our PurposeApplying innovative science to improve world health

• Discover, develop and ensure access to safe and effective medicines• Partner with key stakeholders and earn their trust• Build productive and enduring relationships with governm’ts &

communities• Make Pfizer a great place to work• Create long-term value for shareholders

Our Mission is based on these commitments to stakeholders. Wemust focus on creating value and earning trust for all our

stakeholder groups.

• Refocus and optimize the patent-protected portfolio• Find new opportunities for established products• Grow in emerging markets• Invest in complementary businesses• Instill a culture of innovation and continuous improvement

Commitments

StrategiesThese build on the priorities and represent the best opportunities to invest in our future, create value with science and technology and deliver innovative health care.

• Maximize revenues• Manage costs• Strengthen our culture• Meet our commitments to stakeholders• Engage each other

This is where the work begins. These represent the fundamentals for doing business successfully.Enduring Priorities

These underlie all we do, guiding how we behave and how we run our business.

• Customer Focus• Integrity• Respect for

People• Teamwork• Innovation

• Performance• Community• Leadership• Quality

Purpose

By executing on all these elements of Our Path Forward, we will lay the groundwork for a promising future for Pfizer

Values



Organization Framework

Commercial Businesses

PGMCustomer interface

Operations

PGM Operating Units

• Business interface/partnership• Site operational leadership

Network Performance

• Leadership / guidance on efficiency and effectiveness of operations

• Operational Excellence• Contract Manufacturing• Pfizer Global EngineeringNetwork Performance

Strategy & Supply Network Transformation

Quality

Global Manufacturing Services (GMS)

Network Enabling Functions(Finance / HR / IT / Procurement / EHS)

PC/Onc EP

PC Onc. EP

ConsEM NutriAHSpec/Bios/Vac

EM NutriConsAH

BiosCM

ConsCM

NutriCM

Global Logistics & Supply

Rx Contract Mfg (CM)Global

Spec

&Vac

Key impact on Global Logistics & SupplyThe new Business Units

Primary Care

Specialty Care

Oncology

Established Products

Emerging Markets

• Support for new product launches: Life-Cycle-Management and new innovative products • Increase in Direct Sales and roll-out of DTP in EU; channel management (i.e. home delivery)• Customer focus. Local solution but global knowledge transfer; High and diverse service level requirements.

• Increase in Direct Sales to support top line growth at Point-of-Sale; broad portfolio• Speed to market critical for supply chain (especially for product (re-) launches)• Efficient distribution: High cost sensitivity, larger shipments with reduced SLAs• High volume increase and fluctuations; Potential acquisition of generics companies & products

• Development and licensing of innovative products (cold chain, hospital products, home delivery)• Acquisitions of small specialized companies (i.e. Encysive)• More specialty products (biotherapeutics, human vaccines, special devices)• Focus on service quality (special processes & channels)

• Development or licensing of innovative products (cold chain, special devices, hospital products)• Acquisitions of small specialized companies• More specialty products (biotherapeutics, special devices); Focus on service quality (special processes & channels): “deliver the right drug at the right time for each patient”

• High growth (especially for inline and local products); specific and changing regulatory environments & customer requirements; Roll-out Market Logistics model (i.e.BRIC, Turkey / CEER / AFME) Supply reliability and safety, strong focus on network infrastructure, service quality; lead time; In-licensing of local brands or products for developing markets (global access)

Our Path Forward

Animal Health• High volume of cost sensitive cold chain products (vaccines); increase (especially for inline and local products); New product development and acquisition (i.e. SP EU); New Channel models;Strong growth, channels and value propositions; specific PAH network required;

DELIVERY CHAIN MANAGEMENT

• Delivery chain

design & planning

• Product

• Market

• Network

PLAN

Supplier integration & coordination

ALIGN

To-the-Market supply and

delivery management

In-the-Market supply and

delivery management

*----------EXECUTE------------*

Delivery chain performance management

VALIDATE

Business Process &

Data Management

COMMUNICATE

HOLISTIC PROCESS INTEGRATIONHOLISTIC PROCESS INTEGRATION

•Differentiate between management of supply structures (plants, contract manufacturers and suppliers) and the operational process to deliver their output.

•Manage the delivery process holistically, recognizing the interdependence of major elements: strategy & policy, planning, network design, operational execution, finance, performance management, compliance and information / process management.



NETWORK DESIGN ELEMENTS

• Differentiate between management of supply structures and the operational process to deliver their output.

• Holistic management of the delivery process, recognizing the interdependence of major elements: strategy & policy, planning, network design, operational execution, finance, performance management, compliance and information / process management.

• Strong focus for accountability and results (supply assurance, asset management, aggressive cost management, compliance, talent management, etc.).

• Align with commercial and PGM operations and strategies.

• Capture & build upon Wyeth best practices, talent and business support processes.

• Ensure implementation of an integrated Information Technology systems strategy and platform integrating SAP and other systems across delivery chain constituents.



VALUE PROPOSITION

PERFORMANCE, VELOCITY, SECURITY, COMPLIANCE

Delivery Chain Performance Management: Process, Talent, Asset, Execution

Delivery Chain Services & Operations

GlobalStrategic Trade

ManagementCompliance

Strategy & PolicyFormulation

• Holistic Delivery Chain Management

• Enable Initiatives (Commercial, PGM, etc.)

• Process Development & Harmonization

• Integration of Stakeholders

• Supply Assurance

• Organization & Talent Management

• Trade Management Policy Contribution

• Accountability & Results







• What’s next

• Q&A

Evolution of Global Logistics and Supply

2000 2003 2006 2008 20092001

•Integration US/ Canada Logistics and Supply Points into PGM

European Distributio

n Study

Establishment of European Market Logistics20 Markets

Integration of Supply Chain and Global LogisticsExpansion of ML to Emerging Markets (Russia and Turkey)

Expansion to ASIA-PACRemaining LAAnd AfME

Integration of Mexico and Brazil

Warner Lambert

Pharmacia

Wyeth

Pfizer Logistics Network

Global Logistics

Distributor

Transition

No Affiliate

Logistics Center

Global Logistics Provides Secure And Reliable Delivery Of Products

Int’lplants/CMs

Supplypointmovement

Inboundfreight

Plants/CMs

Warehouse

Outboundfreight

Clinics/patients

Inboundfreight

Customsimport/export

3PL

Int’l

Wholesaler

Retailers

Sales rep

Compliance

Work to speed time through customs

Use internal knowledge to optimize product movement

Work to optimize time, eg, in-transit quarantine

Manage 3PLs and freight systems

Manage PFE warehouses

Design and optimize deployment routes

Develop and implement conveyance security strategy

Develop and ensure conformity with policies

Respond to internal/external trends & optimize value (tax) through supply chain/logistics design

Product security

Strategic alignment with Pfizer businesses

Strategic Guidelines

• Leverage Pfizer volume– Combine operations for the businesses– Negotiate better rates

• Pursue opportunities for regional distribution– Establish regional hubs / integrated operations with LC’s

• Outsource for flexibility– Rationalize logistics services provider base– Standardize towards activity based contracts

• Improve costs – Capture synergy opportunities (Pharmacia)– Improve operational efficiency and effectiveness

• Enhance Customer Service– Establish Service Level Agreements ( country / business )– Ensure Alignment with Trade Policies

Outsourcing Strategies • Stabilization Phase (2003 - 2005)

• Strategic Objectives• Stabilize business • Capture immediate opportunities• Harmonize agreements

• Activity Based Costing where appropriate• Pfizer T& C respected

• Activities• Extend current relationships if they help meet strategic objectives• Engage in local RFP process as necessary

• Harmonization Phase (2006 – 2009)• Strategic Objectives

• Distribution Operations Outsourced• Move towards regional Logistics Service Providers (LSP’s)• Capture additional operational and process efficiencies

• Activities• Engage in regional/pan European RFP process• Optimize distribution network based on new business / trade strategies• Leverage global provider relationships

Realigning Markets for the Network of the Future

North Europe

South Europe

Mid Europe

Nordics / CEER / Benelux North Europe / Nordics

South Europe

Mid Europe / CEER

2006 2009

Regional Consolidated Market Non-Consolidated Market

Change Management… Q & A

• Global Logistics does not know my market!… know logistics and its common, essential elements… normally transfer local staff and upgrade as possible… do not work in isolation

• If we transfer responsibility we will lose the ability to control our customer relations and sales.

… it’s a partnership not a separation… trade policy, developed by the market, determines objectives

• The conditions in my market are different / unique.… it’s a partnership not a separation

… operational aspects of distribution (fulfillment, transport, compliance, returns, claims) are essentially the same

• Why jeopardize sales to effect a comparatively small savings.… sales are not in jeopardy; changes, if they occur, are carefully planned and executed

… often, you are paying too much for services and managing performance selectively

… local focus on logistics part-time with no professional support and guidance

Questions and Concerns

• We have been working with our distribution agent for many years. They know us and we have a very good relationship.

… understand and we evaluate possibilities for continued relationships under different terms

… in many cases (particularly % of sale agreements) they are overcharging for services

… it is precisely because of this that the nature of the relationship and services provided needs to be reviewed

• We just negotiated a new contract so we cannot change in the near term.

… existing contracts are reviewed and consequential actions are taken within the possibilities that exist at the time

• There are only a few logistics providers in our market and we have already secured the best.

… perhaps, however, professional management elevates the services and the cost / performance ratio of even the best providers

… look to leverage global advantage in alliances







• What’s next

• Q&A

Overview of Methodology• Phase I - Internal Planning

– Guidelines and tools

• Phase II – Stakeholders Awareness and Buy In– Communication and alignment

• Phase III – Understanding the Market– Building a knowledge database (data, strategies, issues…)

• Phase IV - Assess, design, change, enhance…– Analyzing, prioritizing and proposing solutions

• Phase V – Financial aspects– Financial impact prior and post integration

• Phase VI – Detailed Planning– Develop implementation Plan

• Phase VII – Implementation– Monitor progress, mitigate delays and measure results

Detailed Planning

Financialaspects

People

Processes

Infrastructure

Understandingof market

Awareness & buy-in

Implementation

InternalPlanning

Key DriversOrganizational Design

• Aspects to consider when deciding where to locate and how to staff and organize the team

– Market Size – Number of Markets / Market reach / Geography

• Location of markets and accessibility / Travel time & frequency– Commercial Distribution Model

• In-house, outsourced or distributor model– Scope

• Management of WPO, Consumer, Nutritionals, AH, Mktg Aids and DP (others?)– Skills & competencies, Experience and potential of Market Logistics and Local Team

• High performing vs. low performing team• Experienced or new colleagues (ML and local team)• Process robustness

– Strategic vs. Operational Focus– Mature vs. Emerging Market

• Activity fluctuations and multiple initiatives– Distribution Network

• Single vs. Multiple LSP’s / LSP effectiveness and Service Performance– Culture and Language

Scope: identify a potential external supplier for warehousing and/or distribution of pharmaceutical products

Areas to be assessed:: Warehouse operationsTransportationSOXBusiness Continuity Planning)QualityComputer System ValidationAsset ProtectionEHS (facility, environmental)Fire Protection

Overview LSP Due Diligence Assessments

1. Initial meeting with each potential suppliercontent: discuss content & timing of assessments, explain Pfizer quality agreement and general expectations (IT, security, logistics, etc)

2. Carry out one overall assessment at each supplier’s main depotcontent: check if supplier would generally meet Pfizer expectations (quality, logistics, security); if outcome is negative, no further assessments required

3. If outcome is positive: carry out due diligence assessments at each depot (and at head quarter, if appropriate).

4. Generate & communicate assessment reports and discuss outcome/gaps -

5. If a supplier is chosen, assessment results & action plan need to be included in the contract

Overview LSP Due Diligence Assessments

Success Factors• Be prepared to present a compelling case for change• Prepare “Global” tools and solutions• Anticipate potential concerns specific to each market and prepare

to offer effective answers and solutions • Focus on the people and organization aspects as much as on the

operational aspects• Understand baseline for budget and budget assumptions• Don’t underestimate resistance, include change management in the

plan…• Commit to deliver some quick wins: Identify and solve 1-2 key

problems that are important for the business early in the process• Consistent and continuous measurement and communication of

results is critical• Effective partner selection

GL&S Expertise

• Innovative Distribution Models– Direct to Pharmacy/Direct to Patients– Pre-Wholesale & Distributor

• Defining & Optimizing Supply Networks– Network structures– Transportation network design

• Service Performance & Metrics/KPIs– Service Level Agreements (SLAs)– Benchmark service, costs, quality

• Compliance & Validation– Site Audits & Assessments

• Outsourcing & Procurement– Negotiations/Activity based

costing models– Harmonized contract guidelines

• Innovation & Technology Team– Site remediation & optimization – New technologies & best practices

• Continuous Improvement (Right First Time)

• Good Distribution Practices & Good Manufacturing Practices (GDP, GMP)







• What’s next

• Q&A

Strategic Drivers

A. Effectively manage a more diverse and fragmented stakeholder landscape

B. Proactively support the business (BU’s) revenue growth strategies

C. Present “One Voice” to stakeholders and fully leverage our value both internal (PGM) and external (business)

D. Drive development of holistic Delivery Chain processes and a well coordinated long-term organization and network strategy

E. Ensure the seamless integration of suppliers and products into the GL&S delivery chain network

F. Enable coordination, information flow and knowledge transfer



Working together for a healthier world

Documents

Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to completion of