HSE Leadership at Dade Behring: An Executive Strategic Presentation

Paul D. Moss, CIH, ROHVice PresidentGlobal Health, Safety, Environment and

TravelORC Western OSH GroupSan Diego, CaliforniaJune 14th, 2006

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Global HSE Strategic Plan Agenda

• R-Y-G for 2011

• Current metrics and benchmark data

• New HSE Policy Statement/philosophical shift

• Program Emphasis in the future

• HSE funding

• Summary

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R-Y-G for 2011

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Global HSE: 2011

P ro ce sses S ys te m s F u n c tio n a l E xce lle n ce K e y In d ica to rs O rg an iza tion

G lo b a l H S E

•Common/global

•Baked into new product development

•Baked into due diligence process/any potential future M&A activity

•Consistent global HSE audit process

•Global Travel Program continues to leverage volume-based airline contracts, hotels and rental cars

•Strong contribution to the safety management of Global Fleet

•HIPAA

•Strong use of electronic training tools for GCM

•Automated MSDS

•Web-based Medgate/ASP

•Plugged into service and manufacturing

•Electronic Environmental Data Management tool

•Active members of external bodies

•Connected with appropriate regulatory agencies

•Strive for leadership in integrated health and wellness indicators; ultimate reduction of company subsidy costs on the health benefits side

•Sustainability section in Annual Report

•Work to reduce global injury/illness target to <0.95

•Work to decrease lost work days by 50% due to better case management and absenteeism management

•Corporate Budget: potential for moderate increase based on country needs/headcount

•Opex: moderate increase for Wellness

•Capex: increased to support/upgrade HSE systems

•All HSE site leaders report directly to the function

•Stronger global occupational health function

•Professionals sit on site Leadership Teams

•Strong bench

•Collaborative

•Balanced between team members and objective 3rd parties

•Utilize global HSE and HR resources to help rollout HSE awareness

G

Right on trackG Watch closelyY Action required

R

G

G

G

G

G

G

G

Y

G

G

R

G

G

Y

Y

G

Y

Y

Y

Y

G

R

G

R

G

G

G

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Current Metrics and Benchmark Data

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Global OSHA (Injury/Illness) Rates by Year

0

0.5

1

1.5

2

2.5

3

3.5

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Years

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006 YTD

*OSHA Target: <=1.2

Starting in 2007, I/I target rate will be lowered to 0.95*

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ORC Worldwide Benchmark for Injury/Illness Rates: 2005

• Allergan: 0.84

• Boehringer Ingelheim: 0.91

• Chevron/Texaco: 0.36

• Colgate Palmolive: 0.72

• Dade Behring: 0.96

• Dow Chemical: 0.36

• Eastman Chemical: 0.77

• Exxon/Mobil: 0.37

• FMC: 0.88

• General Motors: 0.35

• Intel: 0.29• Johnson & Johnson: 0.06• Kimberly Clark: 0.63• Occidental Petroleum: 0.47• Proctor & Gamble: 0.07• Purdue Pharma: 0.94• Raytheon: 0.93• Rohm and Haas: 0.95• Sanofi-Aventis: 0.35

Currently considered best of the best…under 1.0

(All Participating Companies Reporting Y-T-D)

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New HSE Policy Statement/Philosophical Shift

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Original Dade Behring Health & Safety Policy Statement (1996)

“It is the policy of Dade Behring to provide each of its employees with a healthful and safe workplace. Preventing occupational illness and injury is a major objective and is consistent with a strong health and safety culture supporting world class manufacturing and quality objectives. Health and safety will be given equal importance with production, quality and all other facility functions. Dade Behring will be a recognized industry leader in health and safety.

We will comply with all applicable health and safety regulations. We will establish uniform health and safety guidelines to be followed worldwide. Any condition or work practice which is not in compliance, or which is considered potentially hazardous, is unacceptable and must be reported at once to supervisory personnel. Appropriate action will be taken to ensure a timely and effective correction.”

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…So What Did All of that Really Mean?

• Does anyone have a definition for the words, “world class”?

• The word “will” appears five times in the statement vs. we do

• Prescriptive vs. descriptive?• Are employer vs. employee responsibilities

clear? Should they be?• Were our true corporate H & S goals spelled

out? Should they have been?

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It Gets Better…Original DB Environmental Policy Statement (1996)

“Dade Behring will conduct its business with respect and care for the environment. Environmental excellence is consistent with Dade Behring’s business strategy: To be a leader in the clinical diagnostic industry.We will:1. Meet or exceed applicable environmental regulations and corporate

policies2. Conserve natural resources and minimize the environmental impact of

our operations, products and services.3. Participate in local, state and Federal initiatives4. Establish a goal to continuously improve our environmental

performance by setting specific objectives, measuring our progress and communicating the results of our efforts.

…This policy will be communicated to all employees and contractors. Success of the environmental program requires the personal commitment of all employees.”

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Loopholes in the Environmental Statement

• The correlation to business strategy, is a weak statement

• “Participate in initiatives” or comply with the law…which one speaks louder as a company?

• No specific objectives or metrics are set

• “This policy will be communicated to all employees and contractors”…what about customers and the public?

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Possible Key Words/Definitions/Phraseology for a New Policy Statement

• Global• Compliance• Prevention• Communication• Continuous Improvement• Integrate H&S with the “E”• Defining customers• Leading Indicators• Proactive• Social Responsibility• Vendors

• Specific Goals• Commitment• Encourage• Sustainability• Safety• Health• Wellness• Protection• Reduction• Interventions• Transparency

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Today’s New HSE Policy and Principles

Policy

Dade Behring manages its global operations with a commitment to provide a safe and healthy work environment. We conduct business with respect and care for the environment while supporting a commitment to social responsibility. Health, safety and environmental protection are integral to the diagnostic products and services we provide.

Principles

We operate by the following principles:

•Compliance with all applicable health, safety and environmental laws and regulations, while establishing and applying responsible standards where laws and regulations do not exist

•Employment of management systems and procedures to identify and manage risk to human health, safety or the environment

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Today’s New HSE Policy and Principles (cont’d)

• Continuous improvement in safety, health and the protection of the environment with the vision of zero injuries, illnesses and incidents, and reduced waste generation and emissions

• Leading the organization to achieve and maintain the top quartile of leading and trailing health, safety and environmental indicators in our business sector

• Integration of health, safety and environmental considerations into business processes

• Ensuring that all employees are educated on and understand the value of active, healthy lifestyles and the competitive advantage this brings to our company

• Communication of a commitment to health, safety and environment to our employees, contractors, vendors and customers

• Support of these principles and participation by all levels of management and all employees in the company

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“Leading the organization to achieve and maintain the top quartile of leading and trailing health, safety and environmental

indicators in our business sector”

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ORC 05’ I/I Healthcare Competitors Benchmark Quartiles

Top Quartile (<1.0)

Allergan: 0.84

Boehringer Ingelheim: 0.91

Dade Behring: 0.96

Johnson & Johnson: 0.06

Purdue Pharma: 0.94

Rohm & Haas: 0.95

Sanofi-Aventis: 0.35

Top-Middle Quartile (>1.0-1.5)

Abbott: 1.01

AstraZeneca: 1.35

Baxter: 1.47

Bayer: 1.02

Schering-Plough: 1.18

Mid-Bottom Quartile (>1.5-2.0)

Amgen: 1.97

Edwards Lifesciences: 1.52

General Electric Healthcare: 1.54

Merck: 1.80

Bottom Quartile (>2.0)

Barr Laboratories: 2.69

Bristol-Myers Squibb: 2.04

Diagnostic/Healthcare/Pharma (only companies to share their numbers Y-T-D)

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What Programs Will Help Us Sustain Great Performance?

• Ergonomics programs• HSE self-assessments• 3rd party audits• Wellness Initiatives• Strong occupational Health Case Management for

Injuries/Illnesses• Targeting prevention programs based on type and

severity of injuries• Continued strong emphasis on global HSE web-

based training• Robust HSE data management tools

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“Ensuring that all employees are educated on and understand the value of

active, healthy lifestyles and the competitive advantage this brings to our

company”

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Health and Wellness Initiatives

• Corporate Wellness Committee created that has global representation

• Currently interviewing candidates for global occupational health and wellness position

• Wellness concepts will be tied into the HR/Benefits theme of consumerism

• Programs will be ultimately measured for ROI based on payback in the benefits arena

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“Integration of health, safety and environmental considerations into

business processes”

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2004 Business Continuity Planning

Crisis Management

Disaster Recovery

EmergencyResponse

Disaster Recovery

Crisis Preparedness Program Policy

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2006 Business Continuity Planning

Crisis Preparedness Program Policy

Emergency Response

Crisis Management

Disaster Recovery

Internal/ExternalCustomer Crisis Recovery

Ensure continued focus on disaster recovery plans

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“Continuous improvement in safety, health and the protection of the environment with the vision

of zero injuries, illnesses and incidents, and reduced waste generation and emissions”

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Environmental Sustainability Example

• Continue efforts to eliminate any hazardous materials from all Dade Behring products

• Ensure HSE is baked into R&D pipeline plans

• Continue ROHS (EU Reduction of Hazardous Substances) initiatives within R&D

• Continue waste electronics recycling initiatives as part of the European Directive on WEEE

• Continued efforts to remind employees and families of strong environmental culture (i.e., Earth Day events, recycling and proper disposal programs)

• Third party audits to assure environmental compliance

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GLOBAL HSE FUNDING

2006 2007 2008-09 2010 2011

Wellness Program

Costs

Total: 100K (already

approved)Total: 150K Total: 200K Total: 200K Total: 200K

Training Needs

125K GCM Web-Based BBP Training in French and Japanese

125K GCM Web-Based BBP Training in Italian and Portuguese

100K Driver Safety Training for Fleet Drivers

100K Driver Safety and Compliance

100K Driver Safety and Compliance

HSE Headcount

0 1 Specialist for DF and GCM

1 Mgr Int'l Health/Wellness

0 0

Achievement of these targets will result in incremental funding requirements across the enterprise during the planning period

• Corporate HSE spending potentially impacted throughout planning period by the need for appropriate global coverage; any reduction in staffing could potentially create risk to the business

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Summary

Regarding health and safety, develop, market and implement the occupational health and wellness strategy globally to ensure proactive measures and decrease the injury/illness rate further while heightening employee morale in the workplace

Within R&D, continue to bake HSE into the design and development stages, to ensure that our future products stay ahead of the strong environmental curve

Within Global Operations and Supply Chain, ensure that disaster recovery plans are in place, in both the supply chain and facility arenas, while we continue to strongly emphasize safety efforts in the warehousing and distribution process

Within Global Customer Management, ensure that proper HSE training and procedures are in place for our Field Service Engineers, while we continue to emphasize driver safety for sales and service as well; in addition, we need to ensure that we provide better guidance to our customers on instrument waste issues as well as product safety

Thank you for your attention! Questions?