Business Confidential - Merck & Co., Inc.

Whitehouse Station, NJ USA

SUMMARY LEAN/MPS ASSESSMENT

PLANT/ VSM: Arecibo

DATE: April 3, 2007

OVERALL SCORE: 3.22

LEAN/MPS Assessment:

SCORE

Indicators Tools

5S and Housekeeping
Metrics and Continuous Improvement Process Standard Work
5.00
Lean/ Six Sigma Integration VSM Management
0.00
Supply Chain Integration Visual Controls

Plant Maintenance Leadership - IPT, COE and Site

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Establishing
Improvement
Flow

Skills

Areas for Improvement

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Jan 2006 2.00 1.00 1.00 4.00 2.00 3.00 4.00 1.00 1.00 3.00 3.00 3.00
Jun 2006 2.50 1.50 1.50 4.50 2.00 3.00 4.50 2.00 2.00 3.00 3.00 3.00

Current 2.63 3.58 1.42 4.75 2.69 4.00 4.50 2.00 1.58 4.50 3.00 3.22

Date printed: 04/23/2017 Page 1 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

5S and Housekeeping
- Regular audits for continuous improvement of 5S program
Principles: 5S System - Evidence of projects showing actions being generated and PLANT/ VSM: Arecibo
completed on the basis of the internal audits
- Plant wide program for 5S
Results - Implementation includes all support areas including DATE: April 3, 2007
Maintenance, Engineering, Finance, etc

AVERAGE
5S SYSTEM RESULTS
SCORE

SCORE 2.00 3.25 2.63

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Walkthrough and - No 5S system in place

5S System Show Me Project
plans - Some education possible, but little evidence of implementation

Walkthrough and - Production area is not organized according to operator needs

Results Show Me - Some areas appear disorganized, piles of paper etc
1
Walkthrough and
5S System Show Me Project - Basic 5S program has been started in some areas.
plans

Walkthrough and - Labeling or identification system is rudimentary and unclear; Daily cleaning of work area
Results Show Me - Inconsistent implementation
2
Walkthrough and
5S System Show Me Project - 5S implementation is completed in most areas
plans

Walkthrough and - Labeling system marks tools, processes, inventory and flow; Work areas and machines are clean and
Results Show Me organized
3
Walkthrough and - 5S system is standardized, well documented (checklist) and audited
5S System Show Me Project
plans - Evidence of continuous improvement efforts

Walkthrough and - Areas in production and support organizations are clean and well organized
Results Show Me - Widespread implementation throughout the manufacturing area
4
Walkthrough and - Regular audits for continuous improvement of 5S program
5S System Show Me Project
plans - Evidence of projects showing actions being generated and completed on the basis of the internal audits

Walkthrough and - Plant wide program for 5S

Results Show Me - Implementation includes all support areas including Maintenance, Engineering, Finance, etc
5

Date printed: 04/23/2017 Page 2 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Standard Work
- Routine review of leader standard work. Transitions between
leaders is eased by Std. Work
Principles: Leader Driven
- IPT and COE leaders champion standard work to drive
PLANT/ VSM: Arecibo
consistency throughout the organization
- All recurring operations and procedures covered by standard
work procedures. DATE: April 3, 2007
Usage - SW is used as daily working record by operators and
supervisors site-wide (Production and support)
-75% improvement in cycle times

- SW & Process definitions are easily revised to reflect best

Revision
practices
Process
- SW updates and improvements are routine

Leader Revision AVERAGE

Usage
Driven Process SCORE

SCORE 3.00 4.50 3.25 3.58

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Leader Walkthrough and

- Some standard work done on an ad hoc basis, procedures governed by SOPs or not at all
Driven Show Me

Walkthrough and - No consistency between individuals / shifts.

Usage Show Me - Process information is inaccessible or ignored

Revision
1
Walkthrough and
- Documentation process is cumbersome and hinders revision
Process Show Me

Leader Walkthrough and - Limited accountability around Standard work. Largely a check the box exercise
Driven Show Me - Deployment inconsistent, some team leaders involved, some not.

Walkthrough and - Employee's daily routines vary depending on the needs of the day
Usage Show Me - Some evidence of standard work done in limited areas

Revision Walkthrough and

2 Process Show Me - Little evidence of improvement to SW documentation

Leader Walkthrough and - Strong evidence of standard work procedures in most areas
Driven Show Me - Some evidence on continuous improvement and revision control

- Standard work is being implemented at production level

Walkthrough and
Usage Show Me - Documentation very visible and at point of use
- Most standard work procedures are posted by the specific work areas
- Evidence of improvements in the standards - revisions
Revision Walkthrough and
- Some editing and updating done
3 Process Show Me
- Streamlined process for revising documentation

Leader Walkthrough and - Routine review of subordinates standard work, regularly reviewed and revised
Driven Show Me - IPT and COE leaders understand value of standard work

-Standard Work forms are understood and used in production and support processes
Walkthrough and
Usage Show Me - SW used to support continuous improvement
- 50% improvement in cycle times

Revision Walkthrough and

4 Process Show Me - Evidence of improvements in "standard work" shown, such as revisions and updates

Leader Walkthrough and - Routine review of leader standard work. Transitions between leaders is eased by Std. Work
Driven Show Me - IPT and COE leaders champion standard work to drive consistency throughout the organization

- All recurring operations and procedures covered by standard work procedures.

Walkthrough and
Usage Show Me - SW is used as daily working record by operators and supervisors site-wide (Production and support)
-75% improvement in cycle times

5
Date printed: 04/23/2017 Page 3 of 15
 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Revision Walkthrough and - SW & Process definitions are easily revised to reflect best practices
5 Process Show Me - SW updates and improvements are routine

Date printed: 04/23/2017 Page 4 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

VSM Management
- Organization provides VSM information on a frequent and regular
Principles: basis (1/wk- 1/mth)
PLANT/ VSM: Arecibo
Information - Robust procedures in place for simple updates
- Multiple VSMs managed and routinely updated on a site basis
DATE: April 3, 2007
- CTE improved at least 30% from baseline

Site - VSM teams are all truly multifunctional, with representatives from
Involvement all functional areas, from engineering to labs, maintenance,

-VSMs actively being used to manage and improve all processes

VSMs drive
and drive CI efforts
project
- Demonstrated results, improvements show specific
initiation
improvements in CTE and flow

VSMs drive
Site AVERAGE
Information project
Involvement SCORE
initiation

SCORE 1.00 1.50 1.75 1.42

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Interview with MPS -VSMs are complete but are not being updated
Information and IPT Leader and
show me - Limited information and consistency across value stream maps
Site Interview with MPS
- Isolated VSM team
Involvement and IPT Leader

VSMs drive Interview with IPT

project CSM and FSM are not used to monitor process and generate opportunities
1
Leader & Look @
Prioritization List
initiation
Interview with MPS - Maps are updated every 6 months
Information and IPT Leader and - Good level of consistency but information is not completely up to date or not routinely updated.
show me
- Data typically includes only averages with no view of time based data nor shape of the distribution

Site Interview with MPS

- Organizational involvement in value streams is limited
Involvement and IPT Leader

VSMs drive Interview with IPT

project - CSM and FSM are sometimes used to monitor process and find opportunities
2
Leader & Look @
Prioritization List
initiation
Interview with MPS - Map are updated at least every 3 months or as major projects are completed
Information and IPT Leader and - Data consistent and being updated to reflect improvements
show me
- CTE calculations are updated and show continuous improvements
Site Interview with MPS
- Efforts to increase broader organizational involvement in maintaining and using VSM
Involvement and IPT Leader

VSMs drive Interview with IPT

project Leader & Look @ - CSM and FSM are used on a regular basis to monitor process and find opportunities
3 initiation Prioritization List

Interview with MPS - Maps are being updated on a regular (1 Mth) basis as improvements are made
Information and IPT Leader and - Consistent, inclusive maps with all required, pertinent information
show me
- CTE improved at least 20% from baseline
Site Interview with MPS
- Broad organizational involvement in development and review
Involvement and IPT Leader

VSMs drive Interview with IPT

project - CSM and FSM are tightly linked to continuous improvement activities
4
Leader & Look @
Prioritization List
initiation
- Organization provides VSM information on a frequent and regular basis (1/wk- 1/mth)
Interview with MPS - Robust procedures in place for simple updates
Information and IPT Leader and
show me - Multiple VSMs managed and routinely updated on a site basis
- CTE improved at least 30% from baseline
Site Interview with MPS - VSM teams are all truly multifunctional, with representatives from all functional areas, from engineering to labs,
Involvement and IPT Leader maintenance,
VSMs drive Interview with IPT -VSMs actively being used to manage and improve all processes and drive CI efforts
project Leader & Look @
- Demonstrated results, improvements show specific improvements in CTE and flow
5 initiation Prioritization List

Date printed: 04/23/2017 Page 5 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Visual Controls
- Production / Cell / Quality & Performance metrics
communicated daily on work cell boards
Principles: Use of Visuals
- Visual controls evident at team, IPT, COE and site levels
PLANT/ VSM: Arecibo
- Quantified evidence of improvements
- Visuals are self-explanatory. Consistent use and
Clarity DATE: April 3, 2007
deployment.

Visuals regularly analyzed to identify top problems and

Accountability
lead to root cause problem solving

Use of AVERAGE
Clarity Accountability
Visuals SCORE

SCORE 4.75 4.50 5.00 4.75

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Use of Visuals Walkthrough - No visual boards for production metrics or general communication

Clarity Walkthrough - Production, Opp, and Metrics are not tracked visually

1 Accountability Walkthrough Little or irregular review of visuals- too vague for action

Use of Visuals Walkthrough - Some visual boards with limited information

- Visuals are hard to understand, and are not updated

Clarity Walkthrough
- Operator knowledge of boards is limited

2 Accountability Walkthrough Visuals occasional drive specific actions on a major issue

- Some process improvement and production info is visual

Use of Visuals Walkthrough

- Discipline in completeness and updates are inconsistent

Clarity Walkthrough
- Operator and Supervisor able to describe information

Accountability Walkthrough Visuals lead to specific actions on small and large problems
3
- Production / Cell / Quality & Performance metrics communicated daily on work cell boards
Use of Visuals Walkthrough
- Widespread use of visual control includes action items and current status of actions

Clarity Walkthrough - Visuals contain necessary content. Some lapses in data consistency and timeliness

Accountability Visuals drive team activities and lead to specific actions for both team and process issues
4 Walkthrough

- Production / Cell / Quality & Performance metrics communicated daily on work cell boards
Use of Visuals Walkthrough - Visual controls evident at team, IPT, COE and site levels
- Quantified evidence of improvements

Clarity Walkthrough - Visuals are self-explanatory. Consistent use and deployment.

Accountability Walkthrough Visuals regularly analyzed to identify top problems and lead to root cause problem solving
5

Date printed: 04/23/2017 Page 6 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Leadership - IPT, COE and Site

- Work teams are empowered, involved and trained in problem
Principles: IPT
solving/ investigations
PLANT/ VSM: Arecibo
- All COE members are aware of production needs, and respond
COE rapidly DATE: April 3, 2007
- Demonstrated evidence of COE CI and realization of site goals

- Revolutionary Changes, Strong evidence of continuous

Site improvements, aggressive targets
- Improvements directly tied into site financial targets and goals

- Operators using MPS standards in many areas

MPS Standards - Several requests for updates to the MPS standards have been
initiated by the organization

MPS AVERAGE
IPT COE Site
Standards SCORE

SCORE 2.00 2.50 3.50 2.75 2.69

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Observe IPT Interactions &

IPT Interview with Plant Manager - IPTs members are distracted and not focused on production issues

Observe IPT Interactions &

COE Interview with Plant Manager - Organization still in functional groups with own internal timelines and behaviors
Observe COE and IPT
Site Interactions & Interview with - No site wide systematic improvements
Plant Manager

MPS
1 Standards
IPT and COE leads No or limited knowledge of standards

Observe IPT Interactions &

IPT Interview with Plant Manager - "IPT" may be formed but performance accountability is low

Observe IPT Interactions &

COE Interview with Plant Manager - "COEs" may be formed but performance accountability is low
Observe COE and IPT
Site Interactions & Interview with - Incremental changes with a few targeted Projects
Plant Manager

MPS
2 Standards
IPT and COE leads - Some leaders know of the standards, used in some areas

Observe IPT Interactions &

IPT Interview with Plant Manager - Performance metrics use is sporadic, not widely deployed

Observe IPT Interactions & - Organization and COEs aligned around value streams.
COE Interview with Plant Manager - Some evidence of CI activities
Observe COE and IPT
Site Interactions & Interview with - Some radical changes in target areas with expectations for continual improvement
Plant Manager

MPS
3 Standards
IPT and COE leads - MPS leaders are aware of the standards and use them to support their MPS projects

Observe IPT Interactions &

IPT Interview with Plant Manager - Performance requirements are clearly communicated and understood by all members of IPT/ COE

Observe IPT Interactions & - COEs held accountable for performance goals and driving CI efforts
COE Interview with Plant Manager - All support functions are integrated into the COE - labs, Maintenance etc.
Observe COE and IPT - Broad goals for organization with appropriate accountability
Site Interactions & Interview with
Plant Manager - CI efforts being directly led by top site management
MPS
4 Standards
IPT and COE leads - High level of awareness amongst operators and supervisors around standards.

Observe IPT Interactions &

IPT Interview with Plant Manager - Work teams are empowered, involved and trained in problem solving/ investigations

Observe IPT Interactions & - All COE members are aware of production needs, and respond rapidly
COE Interview with Plant Manager - Demonstrated evidence of COE CI and realization of site goals
Observe COE and IPT - Revolutionary Changes, Strong evidence of continuous improvements, aggressive targets
Site Interactions & Interview with
Plant Manager - Improvements directly tied into site financial targets and goals

MPS - Operators using MPS standards in many areas

5 Standards
IPT and COE leads
- Several requests for updates to the MPS standards have been initiated by the organization

Date printed: 04/23/2017 Page 7 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Establishing Flow
- Balanced utilization based on required capacity
Principles: Customer Pull and synchronized according to flow/ efficiency PLANT/ VSM: Arecibo
- WIP reduced 80% from baseline
- Constant demand products are pulled through on
DATE: April 3, 2007
predictable cycle times
Level Flow/ Takt times - WIP, components, and final goods are flowed
based on use and pulled by customer (internal and
external) needs

- Production is driven completely by highly

disciplined kanban (pull signal) control
Kanban Discipline
- Pull system integrates into supply and materials
as well as internal processes
- Kanban levels are managed and modified as
WIP Levels demand/processes change.
-Optimized inventory levels at point of use

Customer Level Flow/ Kanban AVERAGE

WIP Levels
Pull Takt times Discipline SCORE

SCORE 4.50 3.75 4.75 3.00 4.00

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Customer Pull Production Control - Production is pushed based on monthly forecast and MRP system
Level Flow/ Takt Interview Planner Buyer
- Production planning shows "hills" and "valleys" that drive higher inventory. No evidence of
times demand smoothing
Kanban Walkthrough and Interview Planner/
- Material is pushed through the system
Discipline Buyer & Material Handlers

1
Walkthrough and Interview Planner/
WIP Levels Buyer & Material Handlers - Production is batched. WIP is not managed

- Some understanding of pull systems- but limited experience

Customer Pull Production Control
- Little deployment of pull within the facility
Level Flow/ Takt Interview Planner Buyer - Production pace differs from day to day although goal has not changed
times
Kanban Walkthrough and Interview Planner/ - Some understanding of demand signals
Discipline Buyer & Material Handlers - Isolated implementation of pull based kanbans

2
Walkthrough and Interview Planner/
WIP Levels Buyer & Material Handlers - WIP replacement is inconsistent and not capped
- Basic understanding of pull, key processes working directly to demand
Customer Pull Production Control - Pull established in some selective areas
- WIP reduced 50% from baseline
Level Flow/ Takt Interview Planner Buyer - Some leveling. Schedules show major part numbers into a routine sequence
times
Kanban Walkthrough and Interview Planner/ - Kanban is partially implemented and is occasionally followed
Discipline Buyer & Material Handlers - Several Kanban types are used to fit facility and process needs
- Inventory is managed but still driven by MRP.
3
Walkthrough and Interview Planner/
WIP Levels Buyer & Material Handlers - overproduction and underproduction still occurs regularly
- Demand is used to determine optimal cycle times and work is balanced with needs
Customer Pull Production Control - Majority of manufacturing driven by customer pull
- WIP reduced 65% from baseline
Level Flow/ Takt Interview Planner Buyer - Sequence of Rx is consistent. Rhythm wheel implemented where appropriate.
times
Kanban Walkthrough and Interview Planner/ - Many Kanban systems are in place, covering most operations, but deviations or disruptions
Discipline Buyer & Material Handlers are common

4
Walkthrough and Interview Planner/
WIP Levels Buyer & Material Handlers - Kanbans regulate inventory levels at most internal process sites
- Balanced utilization based on required capacity and synchronized according to flow/
Customer Pull Production Control efficiency
-- WIP reduced
Constant 80% from
demand baseline
products are pulled through on predictable cycle times
Level Flow/ Takt Interview Planner Buyer - WIP, components, and final goods are flowed based on use and pulled by customer (internal
times
and external) needs
Kanban Walkthrough and Interview Planner/ - Production is driven completely by highly disciplined kanban (pull signal) control
Discipline Buyer & Material Handlers - Pull system integrates into supply and materials as well as internal processes
- Kanban levels are managed and modified as demand/processes change.
5
Walkthrough and Interview Planner/
WIP Levels Buyer & Material Handlers -Optimized inventory levels at point of use
Date printed: 04/23/2017 Page 8 of 15
 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Continuous Improvement
- Workers fully responsible for initiating and leading daily waste
Waste
Principles: Elimination
elimination/ preventive problem solving PLANT/ VSM: Arecibo
- CI activities are identified and driven from area visual team boards
- All improvement projects (production and support) are prioritized in a
Prioritization DATE: April 3, 2007
site wide matrix
- Root Cause analysis ingrained into the culture of the organization
Root Cause
- Evidence of Root Cause analysis in all areas, from IPT teams through
Analysis
site staff
- Routine use of Kaizen events to focus resources on key problems
Kaizen and
identified as part of the overall CI initiative
Kaizen
- Kaizen events are a small part of the CI effort, with CI efforts also
Events
done at the team and six sigma project levels

Root Kaizen and

Waste AVERAGE
Prioritization Cause Kaizen
Elimination SCORE
Analysis Events

SCORE 4.50 4.50 4.50 4.50 4.50

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Waste Observe IPT

Interactions - Improvement activity only carried out with trainer or consultant
Elimination
Prioritization Show Me List - Prioritization of projects does not occur
Root Cause Interview Line and - Operations is a constant state of "firefighting"
Analysis IPT Leaders - Problem solving techniques/ project management skills are lacking
Kaizen and
1 Kaizen Events
IPT and COE leads - No event planning

Waste Observe IPT - Improvement activities only when necessary; Initiated by management using waste walks
Elimination Interactions - Improvements driven by events only. Such as Kaizen events or isolated projects
Prioritization Show Me List - Improvement are focused on specific areas/ the entire value stream is not considered
Root Cause Interview Line and - Most common response to problems is to work around. Some cause analysis
Analysis IPT Leaders - Evidence of old problems coming back
Kaizen and
2 Kaizen Events
IPT and COE leads - Some (drive-by) Kaizen events held, but are isolated events rather than part of larger CI initiatives

Waste Observe IPT

- A reactive problem solving team that focuses on monthly waste elimination
Elimination Interactions

Prioritization Show Me List - Prioritization amongst value stream

Root Cause Interview Line and
- Leaders ask why and pursue root causes for large and small problems
Analysis IPT Leaders

Kaizen and - Kaizen events routinely held with documented successes

3 Kaizen Events
IPT and COE leads
- Plans going forward for additional events on an ongoing basis
Waste Observe IPT
- Kaizen is considered part of the job with weekly improvement activities
Elimination Interactions

Prioritization Show Me List Prioritization in production area only

Root Cause Interview Line and - Leaders regularly expect cause analysis and pursue root causes
Analysis IPT Leaders - Projects target root causes and problems are solved using proven techniques
Kaizen and - Event management system is in place and used to and manage Kaizen events
4 Kaizen Events
IPT and COE leads
- Kaizen events used to improve targeted areas within an overall improvement strategy
Waste Observe IPT - Workers fully responsible for initiating and leading daily waste elimination/ preventive problem solving
Elimination Interactions - CI activities are identified and driven from area visual team boards
Prioritization Show Me List - All improvement projects (production and support) are prioritized in a site wide matrix
Root Cause Interview Line and - Root Cause analysis ingrained into the culture of the organization
Analysis IPT Leaders - Evidence of Root Cause analysis in all areas, from IPT teams through site staff
- Routine use of Kaizen events to focus resources on key problems identified as part of the overall CI
Kaizen and IPT and COE leads
initiative
Kaizen Events - Kaizen events are a small part of the CI effort, with CI efforts also done at the team and six sigma project
5 levels

Date printed: 04/23/2017 Page 9 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Plant Maintenance
Maintenance
Principles: Schedule
- Predictive Maintenance is used PLANT/ VSM: Arecibo
Equipment - Visual monitoring compared to historical expected
DATE: April 3, 2007
Monitoring operational performance (Use of SPC)
- Regular use of maintenance checklist by operators prior to
operation
Maintenance - Evidence of corrective actions being initiated by operators
Checklist due to their checks
- Minor repair and adjustments, where appropriate, being
addressed by operators.

- Maintenance mindset is embedded. Workers are trained and

Ownership will correct/improve flaws
Mentality - Operators, through applicable channels, initiate corrections
and repairs on "their" equipment

Maintenance Equipment Maintenance Ownership AVERAGE

Schedule Monitoring Checklist Mentality SCORE

SCORE 2.00 1.00 3.00 2.00 2.00

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Maintenance Interview
Maintenance - Maintenance schedule does not exist
Schedule
Equipment Interview
Maintenance - No monitoring- Equipment only fixed/ maintained when broken
Monitoring
Maintenance Interview
- Operators do not examine machinery before use
Checklist Maintenance & Line

Ownership
1 Mentality
Interview Line - Maintenance organization isolated from operation
Maintenance Interview
Maintenance - Maintenance schedule is ad hoc and hard to find
Schedule
Equipment Interview
Maintenance Monitoring of Critical Equipment Only. Majority of equipment only fixed/maintained when broken.
Monitoring
Maintenance Interview
- Operators do an ad hoc walk around before operation
Checklist Maintenance & Line

Ownership
2 Mentality
Interview Line - Operators are not expected to inspect equipment

Maintenance Interview
Maintenance - Maintenance schedule is regular and @ point of use
Schedule
Equipment Interview
- Regular monitoring of equipment
Monitoring Maintenance

Maintenance Interview
- Some standard maintenance checks before operation
Checklist Maintenance & Line

Ownership
3 Mentality
Interview Line - Inspection and cleaning by operators

Maintenance Interview
Maintenance - Appropriate timetable for preventive maintenance @ point of use
Schedule
Equipment Interview Visual and electronic monitoring of equipment. No historical trending or data analysis of operational
Monitoring Maintenance performance
Maintenance Interview
- Use of maintenance checklist by operators prior to operation
Checklist Maintenance & Line

Ownership
4 Mentality
Interview Line - Operators are trained to monitor and look for flaws

Maintenance Interview
Maintenance - Predictive Maintenance is used
Schedule
Equipment Interview
- Visual monitoring compared to historical expected operational performance (Use of SPC)
Monitoring Maintenance

- Regular use of maintenance checklist by operators prior to operation

Maintenance Interview
- Evidence of corrective actions being initiated by operators due to their checks
Checklist Maintenance & Line
- Minor repair and adjustments, where appropriate, being addressed by operators.
Ownership - Maintenance mindset is embedded. Workers are trained and will correct/improve flaws
5
Interview Line
Mentality - Operators, through applicable channels, initiate corrections and repairs on "their" equipment

Date printed: 04/23/2017 Page 10 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Supply Chain Integration

-True changes in customer demand drive appropriate
Principles: changes in the entire value stream PLANT/ VSM: Arecibo
Demand
- Signals implemented both up and downstream for receipt
Management
and delivery DATE: April 3, 2007
- 12 Inventory turns a year
- Suppliers linked into our production system
Supplier - Supplies are pulled into production via mature Kanban
Certification and systems for the majority of key components.
Integration - Suppliers involved and integrated with operations and its
objectives. Supplier certification >80%

Shipment - Small frequent shipments, kanban driven (aligned with

Frequency actual consumption), visual controls with little paper

Supplier
Demand Certification Shipment AVERAGE
Management and Frequency SCORE
Integration

SCORE 1.25 1.50 2.00 1.58

COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Demand Interview Planner/ Buyer &

- Organization is unable to recognize or react to changes in demand
Management Warehouse

Supplier - Purchasing from suppliers is divorced from production needs (completely separate and isolated
Interview Procurement &
Certification Warehouse & Quality organization)
and Integration - Suppliers are not trusted and are not partners

Shipment Interview Procurement &

1 Frequency
Planner/ Buyer &
Warehouse
- Large volumes and large batch sizes are fixed

Demand Interview Planner/ Buyer &

Warehouse - Even when the demand is constant, production varies. Can not recognize demand changes quickly
Management
Supplier
Interview Procurement & - Supplier certification program in existence though use is limited
Certification Warehouse & Quality - Purchasing done on a P.O. by P.O. basis
and Integration
Shipment Interview Procurement &

2 Frequency
Planner/ Buyer &
Warehouse
- Large infrequent shipments of materials, paper driven, little use of visuals

Demand Interview Planner/ Buyer & - Some demand variation are handled smoothly, others are not recognized quickly enough
Management Warehouse - 3 Inventory turns a year
Supplier - Suppliers linked into our customer demand planning
Interview Procurement &
Certification Warehouse & Quality - Evidence of suppliers being able to respond to our changes in demand
and Integration - Suppliers have limited view into our operations. Initial attempts to certify suppliers (>20%)

Shipment Interview Procurement & - Shipments begin to be aligned to short term usage requirements.
3
Planner/ Buyer &
Frequency Warehouse - Some suppliers use Kanban based systems to ship to Merck.

Demand Interview Planner/ Buyer & - Varying demand is recognized and managed on a daily basis
Management Warehouse - 6 Inventory turns a year
Supplier - Suppliers have linked JIT supply strategy to respond to our changes (driven by changes in customer
Interview Procurement &
Certification Warehouse & Quality demand).
and Integration - Suppliers have insight into our needs and objectives. Supplier certification >50%

Shipment Interview Procurement & - Fixed rhythm times, predictable cycle times for replenishment
4
Planner/ Buyer &
Frequency Warehouse - most key materials are pulled into the factory as they are consumed
-True changes in customer demand drive appropriate changes in the entire value stream
Demand Interview Planner/ Buyer &
- Signals implemented both up and downstream for receipt and delivery
Management Warehouse
- 12 Inventory turns a year

Supplier - Suppliers linked into our production system

Interview Procurement &
Certification Warehouse & Quality - Supplies are pulled into production via mature Kanban systems for the majority of key components.
and Integration - Suppliers involved and integrated with operations and its objectives. Supplier certification >80%

Shipment Interview Procurement & - Small frequent shipments, kanban driven (aligned with actual consumption), visual controls with little
5 Frequency
Planner/ Buyer &
Warehouse paper

Date printed: 04/23/2017 Page 11 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Lean/ Six Sigma Integration

- BBs leading training efforts on data and root causes
Principles: analysis
PLANT/ VSM: Arecibo
- BB projects targeted to solve difficult process issues as key
Program to
projects to meet MPS goals
leverage 6
- BB and GB training done proactively to prepare for MPS and DATE: April 3, 2007
sigma BBs
lean improvements
- Formal knowledge management program to support Six
Sigma/ Lean sharing with accountable roles

Demand for - Cultural demand for six sigma/ lean skills throughout
skills organization

- Comprehensive library of well documented past projects for

Knowledge reference
Management - Clear evidence of knowledge sharing and spread of past
projects "lessons learned"

Program to
Demand Knowledge AVERAGE
leverage 6
for skills Management SCORE
sigma BBs
SCORE 4.50 4.50 4.50 4.50
COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Program to leverage Interview Plant

Manager/ or MPS - No knowledge of six sigma methodology
6 sigma BBs Leader

Demand for skills Interview Line - Knowledge sharing networks are weak, informal or non existent
Knowledge
1 Management
Interview MPS Leader - Superficial fixes leads to reoccurring problems

Program to leverage Interview Plant

Manager/ or MPS
- No knowledge management program to leverage Six Sigma skill set
6 sigma BBs Leader - Lean and six sigma are two different programs, being managed separately

Demand for skills Interview Line - Education about six sigma/ lean skills is ongoing

Knowledge
2 Management
Interview MPS Leader - No library of documented past projects for reference

Program to leverage Interview Plant

Manager/ or MPS - Some GB and BB involvement in MPS, but still on an ad hoc basis
6 sigma BBs Leader

Demand for skills Interview Line - Demand for six sigma/ lean skills in pockets of organization

Knowledge Interview MPS Leader - Documented evidence of GB and BB projects directly linked to MPS/lean initiatives
3 Management

- Programs meshing well, with BBs leading key MPS improvement projects
Program to leverage Interview Plant
Manager/ or MPS - GBs integrated into the MPS improvement plans, GBs being trained and leading Kaizen events and
6 sigma BBs Leader
other CI projects
Demand for skills Interview Line - Some demand for six sigma/ lean skills in the organization

Knowledge
- Projects clearly linked into the overall MPS strategy
4 Management
Interview MPS Leader

- BBs leading training efforts on data and root causes analysis

Program to leverage Interview Plant
Manager/ or MPS
- BB projects targeted to solve difficult process issues as key projects to meet MPS goals
6 sigma BBs Leader - BB and GB training done proactively to prepare for MPS and lean improvements
- Formal knowledge management program to support Six Sigma/ Lean sharing with accountable roles

Demand for skills Interview Line - Cultural demand for six sigma/ lean skills throughout organization

Knowledge Interview MPS Leader

- Comprehensive library of well documented past projects for reference
Management - Clear evidence of knowledge sharing and spread of past projects "lessons learned"
5
Date printed: 04/23/2017 Page 12 of 15
 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Metrics and Continuous Improvement Process

Principles: - All Core Metrics in place and fully standardized within the
PLANT/ VSM: Arecibo
site. All employees fully understand the metrics and are
committed to improving performance DATE: April 3, 2007
Metrics and
- Performance is rigorously analyzed and unfavorable results
Continuous
are accompanied with action plans and controls established
Improvement
- Core Metrics are the basis of daily discussions and
walkthroughs and have become the basis of continuous
improvement

Metrics and Continuous

Improvement
SCORE 3.00 3.00
COMMENTS:

SCORE FACTOR SOURCE DESCRIPTION

Metrics and
Walkthrough - No core metrics and No metrics Continuous Improvement process in place
Continuous
and Show Me - Some education possible but No evidence of implementation
Improvement
1
Metrics and - Some Core Metrics in place
Walkthrough
Continuous - Some evidence of DMAIC process being utilized for continuous improvement
and Show Me
Improvement
2
Metrics and
Walkthrough - All Core Metrics in place
Continuous
and Show Me - Performance is analyzed but only some evidence of action plans and some controls established
Improvement
3
Metrics and - All Core Metrics in place and fully standardized within the site
Walkthrough
Continuous - Performance is rigorously analyzed and all unfavorable results are accompanied with action plans
and Show Me
Improvement and controls established
4
- All Core Metrics in place and fully standardized within the site. All employees fully understand the
metrics and are committed to improving performance
Metrics and
Walkthrough - Performance is rigorously analyzed and unfavorable results are accompanied with action plans and
Continuous
and Show Me controls established
Improvement
- Core Metrics are the basis of daily discussions and walkthroughs and have become the basis of
5 continuous improvement

Date Printed: 04/23/2017 Page 13 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

Score Summary PLANT/ VSM: Arecibo

DATE: April 3, 2007

OVERALL SCORE: 3.22

Current
Category Comments
Score

5S and Housekeeping 2.63

Standard Work 3.58

Basic

VSM Management 1.42

Visual Controls 4.75

Leadership - IPT, COE and Site 2.69

Establishing Flow 4.00

Intermediate

Continuous Improvement 4.50

Plant Maintenance 2.00

Supply Chain Integration 1.58

Advanced

Lean/ Six Sigma Integration 4.50

Metrics and Continuous

Improvement Process 3.00

Overall Score 3.22 out of 5

Date printed: 04/23/2017 Page 14 of 15

 Business Confidential - Merck & Co., Inc.
Whitehouse Station, NJ USA

PLANT/ VSM: Arecibo

Date April 3, 2007

SCORE

Indicators Tools

5S and Housekeeping
Metrics and Continuous Improvement Process Standard Work
5.00
Lean/ Six Sigma Integration VSM Management
0.00
Supply Chain Integration Visual Controls

Plant Maintenance Leadership - IPT, COE and Site

Continuous
Establishing
Improvement
Flow

Skills

Date printed: 04/23/2017 Page 15 of 15