IT value adding at Cook Medical

Jithendra Nair MBA, PGDCS, PMACS

Director Information Technology (Asia Pacific)

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CIO summit 2013 - Brisbane

Agenda

• Quick summary about Cook Medical;

• e-Supply chain in the Medical Devices Industry – what it looks like in Australia, Japan and China;

• Benefits of EDI for the health industry;

• OCR 2 XML in Japan – project overview;

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About Cook

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• USA headquartered medical device company specialising in the manufacture of minimally invasive medical devices.

• Founded by Bill Cook, who made his first catheter in his spare room in Bloomington, IN, USA, in 1963.

• World’s largest family owned medical device company, employing over 10,000 people with annual sales of > $2 billion.

• Manufacturing base here in Brisbane with over 500 staff, exports 90% of manufactured products here to 126 countries (Globally 9 manufacturing sites)

Cook APAC Head Office, Brisbane

About Cook product diversity

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The company integrates minimally invasive medical device design, biopharma, gene and cell therapy and biotech to enhance patient safety and improve clinical outcomes in the fields of: Aortic intervention; Interventional radiology; Critical care medicine; Gastroenterology; Peripheral vascular medicine; Bone access and oncology; Interventional cardiology; General surgery and soft tissue repair; Urology; and Assisted reproductive technology,

gynaecology and high-risk obstetrics.

Cook Cervical Ripening Balloon

5 National E-Health Transition Authority

www.nehta.gov.au

e-Supply chain in action

Health

Department

Supplier 2

Importer

Supplier 3

Distributor

Supplier 4

Wholesaler

Supplier 1

Manufacturer

Health

Department

Hospital

Product and Price

Synchronisation

Supplier 5

Hospital

Hospital

GS1Net

NPC

Other Data

Recipients

Retail Pharmacy,

Private Hospitals

Product data is common to all - Price data is customer specific

EDI how it works

1. Hospital updates Cook’s catalogue from the NPC on to their ERP system;

2. Cook receives purchase order from hospitals;

3. Order is processed to DC;

4. POR’s including dispatch notice, invoices and credit notes are generated.

Return on EDI Investment (ROI)

Cook Medical

Shanghai warehouse

ROI (example of 1 order with 10 line items) Manual EDI

Faxed / email order comes in 2 mins EDI auto

Customer service picks up and passes to right staff 2 mins no pickup required Purchase Order (PO) is checked and entered in internal ordering system for correctness - product / price 5 mins

PO processed with only the line item with errors rejected or substituted & processed

if Error in PO, call up hospital and fix error 30 to 45 mins auto

NEW approved PO is re-faxed, CSR picks up and processes PO 6 mins auto

Total time Up to 1 hour / order of 10 line items 3 minutes

Cost approximately $5.50 per order of 10 line items .50c

@ 1000 orders per day savings add up $5,500 $500

@ 25,000 order per month savings really add up $137,500 $12,500

Benefits to date

Helps maintain Cook’s position as an innovative market leader.

Real-time access of Cook’s product catalogue for its customers via NPC.

Customer service team on both sides work with lower error rates, thereby providing efficiency and savings in supply-chain.

Customers can choose to receive electronic shipping advices, dispatch notices, Invoices, Credit notes etc.

Headcount savings were redeployed to other tasks.

Cook Medical Shanghai warehouse

• 950 active customers • 188 full EDI customers in Australia representing 32% of Australia sales and growing

Benefits cont’d

Works to maximise: Right product at the Right time delivered to the Right place to the Right patient!!!

85% + of Accounts Receivable delays due to pricing inaccuracy – EDI and NPC mitigate delayed payment.

Past practice of sending CD’s with pricing to over 800 customers, when less than 5 customers could upload data – now all customers can access data accurate to 3am same day, 365 days per year.

Time spent by Customer Service and Accounts correcting errors at either SC end can leave a negative impression – EDI negating a negative!

Projects involve cross-functional participation and promote team play.

Impact: All of the benefits discussed goes a long way to reducing patient and healthcare costs

Fenestrated stent graft

EDI future efforts

Expanding valuable experience from Australia to Japan, China and South Korea. The ultimate vision is to have all of Cook Medical trading partners operating using a single global standard for EDI. Enhancement to systems to permit split orders – deferred ship (system defaults currently to most urgent timeframe) Impact: Effective EDI will help save overall healthcare cost and enhance savings to patients and governments world-wide.

Clean room at Eight Mile Plains, Brisbane Custom stent graft manufacturing

OCR 2 XML in Japan – Canon partnership

Cook started partnering with Canon in 2010 in relation to solutions not just leasing printers/faxes/scanners (MFP’s). Cook implemented UNIFLOW in its three buildings in Brisbane which allowed us to utilize one printer driver for any printer on the network that allowed follow-me printing. We will expand this feature to China and Japan offices in the near future by deploying remote UNIFLOW servers.

NCircle Nitinol tipless Stone extractor

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Cook-Canon OCR2XML program

• Purchase orders written in Japanese character set;

• Line item extraction required;

• Recognition of customer and product delivery location/s;

• Purchase Orders / type vary between customers .

OCR2XML – the challenge?

Expansion strategy – do the same in China and Taiwan; and ; at some stage look at using the same product to streamline processing of supplier invoices in to Cook’s accounts payable system

Cook-Canon OCR2XML program

OCR2XML – is a project we are working with Canon presently; - Cook Japan office receives approximately 450 purchase orders per day; which will increase

to 1200 faxes a day in Q1 2014; slow adoption rate of EDI in Japan;

- We decided to use technology to solve the PO input issue instead of employing more people and avoid costly delays due to typing mistakes;

- Canon’s IRIS solution allows for scanning of faxes in Japanese language and OCR-ing it based on given capture criteria; and ; master look up tables;

- The data extracted has to then be converted to an XML file, so as to allow automatic import in to our ERP systems; (similar to EDI);

We are hoping to go-live with this project in early October.

3 month turn-around from Canon on this project

Questions

Thank you