Sustainability, Safety and Social Responsibility 2011 Report
Table of Contents
Introduction: One Surgeon. One Patient. Approximately one million times per year, Biomet s products are used to help one surgeon or clinician treat one patient. We approach our work as if each product we make is meant for a member of our own family. Our customers and their patients are not abstractions to us; they are real people whose individual needs we strive to meet with innovative, personalized solutions. This approach and philosophy is the foundation of our corporate theme, One Surgeon. One Patient. The One Surgeon. One Patient. perspective applies beyond our day-to-day interactions with customers. To do our best for our customers and their patients, we must promote the well-being of our team members and the communities in which we do business. We must care not only about what we do, but how we do it. In this report, Biomet outlines its efforts to improve our environment, the health and safety of our team members, and our efforts to fulfill our social responsibility to the communities in which we do business. Sheila Fraser, recipient of a Biomet implant used to treat bone deformity as a result of osteosarcoma Sustainability, Safety and Social Responsibility 2011 Report 1
Environmental Sustainability Biomet is committed to doing business in an environmentally responsible manner. We continually invest in operational improvements to reduce resource consumption and waste. Our responsibility as caretakers commits us to making the smallest impact possible on the environment. This is not only good citizenship, but good business; by improving our efficiency in manufacturing and reducing waste, the company improves its financial strength. Sustainability, Safety and Social Responsibility 2011 Report 2
Energy and Carbon Footprint Over the last several years, Biomet has worked to minimize its carbon footprint (as measured as Tons of Carbon/sq foot). While our overall carbon footprint has increased 1.7% over our baseline year of 2007, we have made great strides toward reducing the environmental impact of our global manufacturing. At Biomet s Warsaw facility, the company s headquarters and largest manufacturing plant, the carbon footprint is 5% below its 2007 baseline, despite significant expansion of the plant s output and population. While we are pleased with our progress in Warsaw, we have set goals and taken further actions to achieve even greater reductions. Biomet is exploring collaborations with Asian universities to initiate a conservation program patterned after the accomplishments in the United States. Biomet is also now a member of Business for Social Responsibility (BSR), a world leader in corporate social responsibility research and consulting. As a member company, Biomet s facility leaders have access to best practices and training seminars. Our focus will first be at our growing facilities in China; for every kilowatt-hour of electricity consumed in China, there is 30% more carbon emitted than in the U.S. or Europe, because most of China s power is generated by coal-fired plants. BSR will train Biomet s facility managers in China to conduct energy audits and implement energy reduction plans. In 2011, Biomet entered into a program with the Purdue University (Indiana, U.S.A.) Environmental Engineering Department to complete a full energy efficiency study of the Warsaw campus. The study has identified opportunities to reduce electricity usage. By executing on the recommendations for improved management of lighting, idle equipment and peak power demand use, we will reduce our carbon footprint another 10% (1500 metric tons of C02) over the next 24 months, saving $70,000 annually. Several projects will be implemented, including: Occupancy lighting HVAC efficiency Compressed air leak detection Management of idle machine energy usage. Growth in our Asian manufacturing facilities is the primary reason our carbon footprint has increased since 2007. In Europe, the carbon footprint of Biomet s facilities has remained essentially flat. Biomet has registered with the Carbon Reduction Commitment (CRC), a set of regulations initiated by the U.K. government aimed at reducing carbon emissions 80% by 2050. Biomet has committed to generating baseline data, and to achieve yearly carbon reductions. The company has invested in expert consulting services to help with this effort. Biomet s private equity sponsors are very active in driving Sustainability and Business Responsibility initiatives within their portfolio companies. The sponsors expect management to be fully engaged in the effort, and to report progress on a quarterly basis. Sustainability, Safety and Social Responsibility 2011 Report 3
Recycling Every Biomet site has an active recycling program. Many of the products we produce are made of expensive metals such as titanium, cobalt chrome and stainless steel. So it is good business practice to return unused or scrap materials to a recycling agency or reuse the materials within our processes. By doing so, we also contribute to the conservation of limited resources. In 2010, Biomet used 563,000 pounds of recycled cobalt chrome in our investment casting facility in Fairlawn, NJ a 100% increase over 2007. In addition, another 200,000 pounds of metal was recycled at our other manufacturing plants. Biomet also recycled 350,000 pounds of corrugated cardboard and paper in its facilities throughout the world. Chemical Elimination/Reduction In 2010, Biomet launched an initiative to use aqueous based solutions instead of chemicals in our cleaning processes. This effort has focused on reducing the use of toluene, acetone, and mineral spirits. Biomet s extensive effort involved manufacturing and quality engineers to ensure all necessary validations and testing were completed. Reducing the proportion of chemicals used also improved the safety and quality of the work environment for our team members. Sustainability, Safety and Social Responsibility 2011 Report 4
Health and Safety Team member safety is of paramount concern. Each of our facilities around the world has an active health and safety program dedicated to continuous improvement of our work environment and the well-being of our team members. Global Safety Initiatives Health and Safety Committees Each site has a committee represented by various functions. A key goal of the committees is to raise awareness, drive best practices, and eliminate team member injuries. Personal Protective Equipment (PPE): Biomet s facilities have made consistent use of personal protective equipment a top safety priority. All facilities require safety glasses with side shields in laboratories and manufacturing areas. PPE has been standardized for foundry operators, including fire retardant suits, boots, and face shields. Noise level monitoring is in place in all facilities. Requirements for protective gloves have been developed and implemented across various operations. Fire and Chemical Safety Over the last year the Warsaw team has completed a comprehensive review of our processes, procedures, and equipment. The alarm system has been upgraded, fire extinguishers matched to their intended use, and explosion proofing implemented in indicated areas. Across all facilities, equipment that is used for lights out production have been fitted with automated fire extinguishing systems. Biomet s UK facilities have implemented several significant improvements in emergency response to chemical spills, including: Standard Personal Protective Equipment Emergency Response Team Eyewashes and showers Hazard evaluations have been carried out for all jobs in Biomet s Valencia, Spain facility and job function safety data sheets have been created. Repetitive Motion Abatement Biomet has invested over $5 million in the past two years to install automation and robotics to reduce and mitigate injuries associated with repetitive motion. Sustainability, Safety and Social Responsibility 2011 Report 5
Machine Guarding All equipment worldwide is now required to have interlocks or be fitted with guarding that prevents operators from reaching into equipment during operation. Biomet has implemented the Lean Manufacturing 5S program (which focuses on order as well as cleanliness) at all sites, resulting in a significant reduction in trips, slips, and falls. Biomet s corporate validation process (installation qualification, operation qualification, and product/ process qualification) requires a full safety review. Safety Statistics In Biomet s two UK facilities, the level of reportable incidents has been reduced to its lowest level since fiscal year 2005 (Figure 1). The Warsaw facility has also seen an 80% reduction in its recordable incident rate since 2006 (Figure 2). Biomet s facility in Valencia, Spain celebrated one year without a recordable incident. Biomet Microfixation in Jacksonville, Florida and Biomet 3i in Palm Beach Gardens, Florida both had no lost time accidents in 2010, a declining number of total injuries and injury rates far below industry standards. The improved safety performance at these facilities is due, in part, to better access to safety procedures and emergency information, job-specific safety training, and rigorous measurement and accountability. Reportable Injury Rate U.K. (Lost Time > 3 Days) 5 Figure 1 4 3 2 1 Number Incidents FY05 FY06 FY07 FY08 FY09 FY10 FY11 0 Swindon Bridgend OSHA Recordable Injury Rate Warsaw facility 6 5 Figure 2 4 3 2 OSHA Rate 1 CY06 CY07 CY08 CY09 CY10 CY11 0 Sustainability, Safety and Social Responsibility 2011 Report 6
Social Responsibility Biomet s success has been built upon the dedication of its team members. Investing in the communities in which we live and work is the same as investing in the well-being of our team members, and in the future of the company. Supplier Diversity Biomet strives to create a business environment that ensures diverse business participation in an open, fair, and inclusive purchasing process. We believe that expanding our qualified diversity supplier network is the right way to build stronger communities and our organization. Our support of supplier diversity efforts employs several strategies: Management Commitment. Biomet senior management provides the guidance and leadership to ensure that the corporation achieves our diversity business goals. These goals include year-over-year growth in our diversity procurements and the expansion of the number of diversity suppliers with which we conduct business. Supplier Sourcing and Qualification. Biomet seeks to create an inclusive supply chain where capable, qualified, diverse suppliers participate in the procurement process. We accomplish this through research, networking, registration of suppliers, on-site supplier visits, and by opening bid opportunities to diverse suppliers. Tier 2 Reporting Program. Biomet s commitment to supplier diversity extends beyond its prime suppliers. We require our prime suppliers to report on their activities that support our supplier diversity development efforts within their supplier network. Community and Business Outreach. Through our corporate membership in the Indiana Minority Supplier Development Council (IMSDC), Biomet supports regional programs that create opportunities for diverse suppliers. These opportunities include networking with corporations and learning strategies for improving their businesses. Training and Education. Biomet continually works to create awareness of its supplier diversity efforts within our organization. By conducting supplier diversity training with Supply Management and other internal departments, our team members are made aware of the importance of our diversity program. They are also provided the tools to identify, engage, and develop our diverse supplier base. Sustainability, Safety and Social Responsibility 2011 Report 7
Charitable Donations and Grants Biomet is committed to giving back to the communities in which it does business, and to improving patient care by supporting the ongoing education of healthcare professionals. In fiscal year 2011, Biomet provided hundreds of grants and charitable donations to assist a variety of organizations doing good work on behalf of vulnerable and underprivileged populations. Biomet s grants and donations included: National sponsorship of the Arthritis Foundation Charitable donations to the United Way Charitable donations to the American Red Cross for disaster relief Donations and grants to assist in the delivery of orthopaedic care to underprivileged patients throughout the world Donations for the improvement of local communities, including a homeless shelter in Warsaw, Indiana. Grants to the Orthopaedic Research and Education Foundation to support orthopaedic residency education Donations to improve graduation rates for at-risk high school seniors Donations and participation in the American Heart Walk Funding to purchase calling cards for deployed troops Team members from Biomet s Warsaw, Indiana corporate headquarters participated in the Arthritis Foundation s annual Arthritis Walk. Sustainability, Safety and Social Responsibility 2011 Report 8
Donations to Ronald McDonald House and Children s Hope House, providing support for the housing of families with ill children Donations for the St. Jude s Foundation and Riley Children s Foundation for patient education and the treatment of indigent patients and children in need. Support of CASA, an advocate for victimized youth Donations for local food and afterschool programs for underprivileged children. Donations for local programs that provide aid to underprivileged residents. Biomet s Friends in Need Program In 1992, Biomet initiated its Friends in Need program to help indigent patients receive needed orthopaedic care. The Friends in Need Program creates a partnership between Biomet, the patient s physician, and the hospital. All partners donate their services and goods to the delivery of care to patients in need. Since its inception, the Friends in Need program has helped hundreds of patients receive needed care that would otherwise have been out of reach. Biomet is also dedicated to contributing to worldwide disaster relief, having made substantial donations to the relief efforts in Haiti and Japan. Sustainability, Safety and Social Responsibility 2011 Report 9
The Road Ahead Biomet is proud of the contributions its team members throughout the world have made to their work place and communities. And every day, we challenge ourselves to do even more. Biomet has ambitious plans to improve our sustainability and safety programs in the coming year by: Devoting additional resources to optimizing and reducing energy usage in our two Asian facilities. Optimizing transportation and consolidating shipments through our new European Distribution Center in the Netherlands, thereby reducing fuel and materials consumption. Implementing shell pressing in Berlin to reduce our usage of titanium metal. Introducing induction heating in Berlin to save energy and reduce heat emissions. Greater deployment of robots to help reduce waste and improve safety for team members. About Biomet Established in 1977, Biomet is a leading global musculoskeletal company committed to its customers, their patients, our Team Members and the communities in which we live and work. Biomet s product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, autologous therapies and dental reconstructive implants; fixation products, including electrical bone growth stimulators, internal and external orthopedic fixation devices, craniomaxillofacial implants and bone substitute materials; spinal products, including spinal stimulation devices, spinal hardware and orthobiologics; and other products, such as arthroscopy products and softgoods and bracing products. Sales in fiscal 2011 (which ended on May 31, 2011) exceeded $2.7 billion. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries Expanding safety training to reduce injuries currently distribute products in approximately even further. 90 countries. Biomet is privileged to help our customers improve the lives of their patients. That s our business and our passion. We are equally passionate about helping to improve the lives of our team members and our neighbors, by conducting our business in a sustainable, safe, and socially responsible fashion. As in all our endeavors, we are committed to improving our performance every day. Sustainability, Safety and Social Responsibility 2011 Report 10
All trademarks herein are the property of Biomet, Inc. or its subsidiaries unless otherwise indicated. P.O. Box 587, Warsaw, IN 46581-0587 800.348.9500 x 1501 2011 Biomet Orthopedics biomet.com Form No. BIV0069.0 REV121511