Indiana Logistics Summit October 19, 2005

Supply Chain Strategy & Real Estate Overview: Becton Dickinson - BD Strategic Decision Making Network Rationalization Site Criteria Building Design

BD – Company Overview Medical Technology Company serving Healthcare Institutions, Life Science Researchers, Clinical Laboratories, Industry and General Public $5.3 Billion Revenue (~50% North America) 3 Divisions: –Medical Device: Ex. Needles; Syringes; Catheters; Surgical Blades –Bioscience: Research Tools which Study Genes, Proteins & Cells –Diagnostics: Microorganism Mgm’t; Blood Collection Products 25,000 Employees Worldwide 59 Manufacturing Plants Globally U.S.A. –4 DC’s - 1.4mm Sq.Ft; Expanding in 2006 to 1.75mm Sq.Ft –Constructing new DC: Plainfield, IN - 653,000 sf; exp. to 970,000 sf NYSE: BDX

Strategic Decision Making Supply Chain – Real Estate Distribution Orientation… Planning or Reacting? –Trigger event – Service, Cost, Space, Sudden Change in Business Requirements, Acquisition/Divestiture – 3 – 5 year planning for growth, inventory rationalization Business Case over IRR hurdle Internal Selling

Network Design Network Design is a Balance –Service requirements - (cycle time, order fill, “last mile”) –Total Cost to Serve - (Distribution, Transportation & Inventory Carry Cost – Safety Stock) –Risk Optimized Network = Optimizing Constraints –Optimal # of DC’s with sufficient capacity in Optimal geographic locations with Optimal Transportation & Inventory Costs which will meet/exceed Customer Expectations

Location Selection – Key Drivers Location - driven in general by optimization of transportation costs –Centers of Gravity: Manufacturing & Customers Key Factors to selecting one City over another: –Existing Operations – Incumbent factor –Existing educated labor base within community –Transportation Equipment Availability –State, County & Local tax & training incentives –Availability of Investment Grade Land –Sophistication of Local Government concerning planning & efficient, ‘rules based’ decision making. –Supportive, Responsible & Seasoned

Building Design Key Factors, Changes –Building Height – 40’ clear - MHE –Velocity vs. Storage Density –T5 motion lighting –Climate Control – reinforced roof –Security built into site layout –ESFR sprinklers to NFPA standard –Building to FM standard