39 2021 ESG Report Appendices Transparency Healthy workforce and communities Responsible supply chain Climate change Introduction Product impact Inspiring quality in manufacturing Like many companies around the world, BD is experiencing unprecedented supply chain challenges resulting in limited availability of, and access to, raw materials, as well as shipping and transportation delays, labor shortages and back-order situations. These impacts are felt across almost every industry and in our everyday lives. We are working diligently to mitigate the challenges, both at BD and across our supplier base, while continuing to invest in innovations and technologies to address demand surge and market dynamics. We remain committed to delivering the highest level of quality, transparency and continuity as we work in close partnership with our customers, suppliers, transportation providers and government stakeholders to minimize the impact of the supply chain crisis, so healthcare providers can continue to deliver uninterrupted patient care. Our approach to risk management includes the constant monitoring of the quality of our products using quality tools, statistical trends, quality-control data and automated high-speed inspections and manufacturing execution system (MES) data monitoring. These data points are integrated into our single, unified operating system, the BDPS, as a framework for high-quality operational excellence. The use of this system is taught through our global LEAN Academy with over 90 percent of our worldwide manufacturing sites actively using this approach. At BD, we believe quality is everyone’s responsibility. Our 40,000+ manufacturing associates are committed to a culture of quality that empowers each associate to be accountable to stop production if they see any problem with a product. We are proud of our global supply chain associates for their continued commitment to quality customer and patient care, which has helped us to ensure business continuity and a high level of quality care throughout the global COVID-19 pandemic. Inspiring quality through our suppliers A strong supplier quality program is key to ensuring that BD products meet the highest standards of quality. The Quality team partners with the Procurement team so that systems and controls are in place to select, qualify and monitor suppliers. Key aspects of the program include qualification of suppliers based on risk, auditing and monitoring of supplier performance, and managing supplier changes. In 2021, BD focused on developing harmonized global processes for managing supplier quality to improve efficiency. The new harmonized global processes will be launched in 2022. BD also released version 2.0 of the Supplier Change Request Portal, which enables suppliers to directly communicate potential changes to BD and receive responses from BD. Key updates were made based on user feedback to improve the overall experience of the Supplier Change Request Portal. Inspiring quality through performance monitoring One of our core values is “we do what is right.” When an issue has been identified, initiating a field action, such as recalling a product from the marketplace, we do what is right for our patients and end users. In FY 2021, we launched a new digital communication pathway in North America designed to streamline and simplify the way we inform our customers of product field actions with greater transparency, real-time updates and a simple, intuitive user interface. Post-market surveillance data is key to delivering patient safety and is a valuable data point in our product development life cycle which incorporates quality performance inputs into any future product development or enhancement activities. Key Quality Indicators FY19 FY20 FY21 Number of FDA Class I recalls 4 10* 3 Number of FDA Class II recalls 33 25 25 Number of FDA Class III recalls 7 11 10 Products listed in FDA MedWatch Safety Alerts See FDA’s MedWatch: The FDA Safety Information and Adverse Event Reporting Program Number of serious injuries and deaths related to BD products See FDA’s About Manufacturer and User Facility Device Experience (MAUDE) Number of FDA warning letters received 0 0 0 Number of FDA warning letters resolved 1 0 0 *Increase in FDA Class I recalls in FY 2020 (7 of 10) related to BD Alaris™ System. BD production system The size and complexity of our manufacturing and supply chain network call for a consistent approach by every associate to identify and eliminate waste in every part of our operation and supply chain activities. The BD Production System (BDPS) is the application of LEAN principles, practices, tools and techniques designed to optimize quality, delivery and cost while improving safety. It is a systematic approach to eliminating the sources of loss from entire value streams to close the gap between actual performance and the requirements of customers and shareholders. The BDPS provides performance visibility, control, management practices and mechanisms that are designed to drive culture change and greater effectiveness across the entire organization, increasing customer value. The deployment of the BDPS in FY21 extended to more than 50 manufacturing sites actively involved in the implementation. The expansion of BDPS principles also continued in FY21 with initial deployment outside of manufacturing to the rest of the integrated supply chain to drive a consistent end-to-end approach.