Sustainability. 20 Nobel Biocare Annual Report 2013 Sustainability. Human Resources Training & Education. Research & Development Innovation very high
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1 20 Nobel Biocare Annual Report 2013 Sustainability Sustainability. At Nobel Biocare, we aim to create value for patients and customers through the benefits of the products and solutions we provide. But we believe that advancing implant-based tooth restorations extends beyond our products, solutions and services to our actions as a responsible corporate citizen. Materiality According to the Global Reporting Initiative (GRI), the sustainability topics that are most material are those that have a direct or indirect impact on an organization s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large. To assess Nobel Biocare s material topics we defined, in the context of a materiality workshop with key internal stakeholders, those issues and activities that are most important to us, all our stakeholders, the economy, environment, and society, and therefore merit particular focus in our sustainability report. The materiality topics were defined and rated as follows: Human Resources Training & Education Innovation very high Products Product Responsibility Product Design Operations Supplier relations Quality management al certification Lobbying & Public Policy Patents Human Resources Employer reputation high Energy consumption Water consumption Emissions Waste Transport & Travel Access to products & Affordability Philanthropy Materials used R&D Ethics Clinical Studies Products Responsible Marketing and Communication Practices Stakeholder Dialogue medium Public funding Operations Standards for Suppliers and Monitoring Human Recources Occupational Health & Safety Diversity & Equal Opportunities low Dental health care literacy low medium high very high Relevance for Stakeholders Relevance for Nobel Biocare
2 Nobel Biocare Annual Report 2013 Sustainability 21 Human resources At Nobel Biocare, we place a great strategic focus on building and nurturing a strong, efficient and effective workforce and being the industry s best employer. We invest constantly in improving our company as an employer and developing our people. In 2013, we focused our HR strategy to further improve our ability to attract, develop, and hold on to skilled people. Hire Staffing policy Develop Talent management Succession planning Salesforce development Leadership development Retain Performance management Engaging employees Compensation and benefits scheme Retire Staffing policy To attract the best people, we continue to leverage our strong brand. We carefully and diligently search for and recruit candidates, and hire the best fit. We see each open position as a key business decision, so our recruitment processes are geared to identifying the key skills, knowledge, motivation and attitudes required in the successful candidate. We actively consider all applicants regardless of their gender, ethnic origin, disability, sexual orientation, creed, or age. In the long term, our success will largely be determined by our ability to develop skills to meet the needs of the business. We help employees grow through internal and external education programs to enhance employee knowledge, as well as through performance monitoring, succession planning and expert and leadership training. All our employee development activities are outlined and supported by a comprehensive set of policies, guidelines and stringent HR governance. Our leaders are critical pillars for our success. To ensure their leadership competence we continued to roll out the leadership development program launched in 2011 that includes learning programs for first-line and middle management levels as well as for senior and executive leaders. Finally, we completed a talent pipeline and succession planning program to ensure that we have the right skills in place and a successor if a key employee leaves the organization. The current skill level of each position holder and potential successor has been assessed, and we tailored development plans for each one. For all employees a training program on project management was launched in A joint project management methodology helps to increase the efficiency and effectiveness of our work, as it requires the prioritization of tasks, capacity management, ensures alignment with our strategy and enhances the quality of all projects in term of work deliverables. We want to offer our employees a great place to work by giving them the opportunity to grow, be heard, and be recognized for their effort and achievements. Our performance management process provides a framework for employees to continually challenge and develop themselves and to achieve higher goals and levels of performance. Goals are linked to overall company strategy. We see it as a leadership responsibility to create an environment in which every employee is given the opportunity to maximize their potential and contribute to our company s long- and short-term objectives. Listening and acting on our employees needs and opinions is part of our dialog with our employees. We regularly conduct global surveys where employees can share their views of the strategy, culture and working environment at Nobel Biocare. Based on this feedback, we take specific action in areas where employees responses to the survey reveals scope for improvement. The results of the 2012 employee survey showed a clear improvement in all areas, especially those highlighted by employees in the previous survey. The next survey will be done in As a leader in our industry, we constantly review our compensation and benefit plans to ensure that they are competitive. Compensation at Nobel Biocare is based on a globally standardized system that ensures transparent and performance-oriented remuneration and incentives for all employees. Regular benchmarking against competitors and the industry helps to set base salaries in line with the demands and responsibilities of each position. Our bonus schemes reward outstanding results that support our strategic objectives. Bonuses reflect both individual and overall business performance as of 2013, bonuses will more directly reflect the needs of the business by awarding 70% according to company performance and 30% according to individual performance. Research and development, product responsibility As the pioneer in our industry, we have a record of unmatched scientific and innovation capability. We focus our research, science and development activities on core areas where we can have the greatest medical and commercial impact best meeting our customers and their patients needs. Recognizing the importance of innovation for Nobel Biocare, we have shifted considerable focus from other business areas to these areas in line with our strategy.
3 22 Nobel Biocare Annual Report 2013 Sustainability Selected publications on clinical trials 2013 Products/Concepts Researchers Follow-up Number Cumulative Publication of implants/ survival rate frameworks (CSR) TiUnite implants NobelActive Kolinski ML, Cherry JE, et al. 3 years % J Periodontol Jun 27. NobelActive (NA) Gultekin P, et al. 15 months 43 NA 100% NA Int J Oral Maxillofac Implants May-Jun;28(3): NobelReplace Tapered Groovy (NR) 50 NR 100% NR Replace Select Tapered Pettersson P, Sennerby L. 5 years % Clin Implant Dent Relat Res Jul 2. Brånemark System Mk III & Mk IV TiUnite Mozzati M, Gallesio G, et al. 11 years % J Oral Implantol Oct 31. NobelDirect Baer RA, Shanaman R, et al. 3 years % Implant Dent Aug;22(4): Long-term TiUnite superiority over machined surface Brånemark System TiUnite Polizzi G, Gualini F, et al. 9 years 243 TiUnite 96.6% TiUnite Int J Prosthodont Jul-Aug; 26(4): Machined 247 Machined 90.3% Machined Brånemark System TiUnite Rocci A, Rocci M, et al. 9 years 65 TiUnite 95.5% TiUnite Int J Oral Maxillofac Implants May-Jun;28(3): Machined 55 Machined 85.5% Machined NobelProcera NobelProcera CAD/CAM zirconia Pozzi A, Holst S, et al. 5 years 26 ZiB 100% ZiB Clin Implant Dent Relat Res Aug 5. cross-arch implant bridges (ZiB) TiUnite implants 170 implants 100% implants NobelProcera CAD/CAM Mandibular Katsoulis J, Wälchli J, et al. 4 years 101 (Ti ODB) 95.4% TiODB Clin Implant Dent Relat Res Aug 5. Titanium Over Denture Bars (Ti ODB) Replace Select Tapered 98.5% implants NobelGuide TiUnite implants Polizzi G, Cantoni T. 5 years % Clin Implant Dent Relat Res Jun 23. All-on-4 treatment concept Zygoma Maló P, de Araújo Nobre M,et al. Up to 7 years 747 Zy 97.3% Zyg Clin Implant Dent Relat Res Sep 4. NobelSpeedy 975 NS 97.9% NS NobelProcera titanium framework 352 TiFDP 99.7% TiFDP fixed dental prosthesis (TiFDP) Branemark System Balshi TJ, Wolfinger GJ, et al. Up to 5 years % implants J Prosthodont Jul 25. Various screw retained fixed dental 99.0% FDP prosthesis (FDP) (milled Titanium, all-acrylic resin) Nobel Biocare s R&D effort has created a stream of innovative products, solutions and treatment concepts that improve patient quality of life and allow dental professionals to perform superior implant and tooth-based treatments more safely and effectively. For this we have established collaborations with a global network of scientists, universities, and industry partners. As technologies and treatment solutions advance rapidly, these collaborations with academic institutions and other leading companies allow us to share risk and gain access to new knowledge and advanced technologies. We are also involved in numerous clinical research collaborations with hospitals, private clinics and physicians. We are driving our R&D strategy with the goal of delivering the next generation of products, solutions and treatment concepts that will support our customers in treating patients more predictably and efficiently with dental implants. We manage a pipeline of innovations: short- and long-term development projects designed to meet the future needs of patients and customers, and to provide growth opportunities for the business. We protect the results of our R&D with patents. As we substantially invest in R&D, we also devote the necessary resources to protect our innovations and ultimately our investors. We manage a portfolio of several hundred patent families and are continuously filing new patents and weeding out non-productive ones. Our intellectual property portfolio comprises patents, designs, copyrights and trademarks. We vigorously defend them against infringements by third parties.
4 Nobel Biocare Annual Report 2013 Sustainability 23 We produce products responsibly, and the safety and efficacy of our products is paramount. We are committed to research at every level: basic, pre-clinical and clinical. We also apply high clinical and regulatory standards to all new products, which means that before we launch a new product, we conduct high-quality clinical trials and in-vitro testing to monitor its performance and safety. A significant emphasis is on technical testing based on the ISO standards applied in the industry. In basic research, we evaluate new materials for implants and prosthetics, biomechanical functionality of tooth and implant borne restorations, new surface technologies, soft and hard tissue characteristics and new surgical treatment procedures. To document the longevity, safety and efficacy of our products and solutions, we conduct comprehensive long-term clinical research studies. Wherever and whenever we conduct them, we do so in accordance with the highest ethical and patient safety standards that are independently reviewed and approved. Complementary to our comprehensive pre-clinical studies plus clinical research, we perform long-term post-market surveillance. Clinical trials are at the heart of our R&D effort. Our studies run for several years with results published in international peer-reviewed scientific journal or as extended abstracts or posters at major international scientific congresses. Most of our studies are conducted using demanding treatment protocols to measure how our products perform under the most rigorous conditions. Operations - NobelQuality 3, a concerted approach to quality excellence Our aim is to deliver operational excellence and quality, to ensure a positive customer experience from order to delivery. This is only possible if we implement smooth processes along the entire operations value chain. Operations are geared to supporting customers in their practices through quality, efficiency and reliability. When customers are prescribing and planning a treatment, they want products of the highest quality delivered to the right place at the right time, every time. That calls for efficient manufacturing and logistics from the moment the customer places their order to the moment we deliver it to their lab or dental practice. We are committed to producing our products to the highest standards, in compliance with applicable regulations, and to ensuring that they are available when needed. Over the last couple of years, Nobel Biocare has been steadily focusing on advancing and optimizing its high precision production technology and its state of the art Supply Chain network. In all this, becoming an even more reliable partner in creating value for our customer was always the guiding objective. In the first quarter of 2013, the NobelQuality 3 program was constituted. Tying to a solid history of operational excellence, we believe that this program will take us to the next level in terms of customer orientation and best-in-industry product quality. This is a unique quality excellence program which has been custom-designed within our organization to achieve maximum impact in terms of awareness, employee involvement and value generation. We see the program as a well-directed investment in our organization which will result in a competitive edge and a solid foundation for sustainable growth. It is of importance to us not to roll-out an instant recipe for short-term performance improvements, but instead to design a program compatible with our needs and with our staff in the driving seat. We have chosen to work with the proven process improvement methodology Lean Six Sigma as an underlying concept for our three program cubes : people quality, process quality and product quality. The first cube people quality is of fundamental importance in the program. Key ingredients are a strong and positive leadership style, an intensified learning and collaboration experience and a broad level of program involvement that will ultimately drive customer-centered quality thinking. With the second cube process quality we tackle non-value adding activities and output variability in processes throughout our entire Supply Chain. The combination of Lean and Six Sigma is a powerful vehicle that addresses the key dimensions of customers expectations: Predictable and reliable delivery service and superior product quality. At the same time the elimination of non value-adding activities and the increase in the capability of our processes deliver significant efficiency gains. The third cube product quality is a consequential result of successful implementation of the two previous elements. With a workforce being passionately committed to creating value for the customer and processes which are being rigorously measured and updated against quality critical parameters, the program will be fulfilling its paramount objective: superior product quality. Initial results: Throughout our entire supply chain we have identified the processes that are most critical for reliable delivery against customer requirements. To those prioritized areas we have dedicated employees trained in professional, data-driven problem solving and lean manufacturing. Initial results include service performance improvements such as reduction of process throughput times. Other achievements include substantial improvements in our supply chain planning processes and continuous advancement of our quality system that will sustain our high-quality operations in the long term.
5 24 Nobel Biocare Annual Report 2013 Sustainability Next steps: One of the key themes in 2014 will be the global roll-out of improvements and best-practices that have been developed during the first year of the program. With the mutual exchange of achievements we will see a multiplication of the benefits realized to date and our processes will be harmonized on a new level of performance. With a tailored change management approach we will continue to equip our leaders with skills and techniques to gain broad acceptance and participation for this important program. Fulfilling regulatory standards As a healthcare company, we operate in a regulated industry. We cooperate with regulators in making certain that our products are manufactured to the highest standards. We not only meet, but also constantly aim at exceeding regulatory standards. We continually invest in upgrading and improving our manufacturing facilities and business processes. We comply with the requirements of all relevant authorities and regulatory bodies, such as the Food and Drug Administration (FDA) in the US, or the BSI (British Standards Institute). In 2013, like in previous years, our facilities went through successful audits and inspections from the BSI and the FDA. Quality Policy When Professor P-I Brånemark treated his first edentulous patient in 1965, our commitment to the highest possible quality standards became a cornerstone and guiding principle for all of Nobel Biocare s efforts. At Nobel Biocare quality is all-encompassing and we are on a continual quality improvement journey: Continually improving the quality of life of patients treated with our superior products and solutions. Continually improving the quality of our products and solutions through our Designing for Life innovations. Continually improving the quality of customer experience through our Partnering for Life activities. Continually improving the knowledge and skills of our customers through our Learning for Life efforts. Continually improving our employees skills, knowledge, teamwork and productivity. Continually improving the efficiency and effectiveness of our organization to ensure a total quality customer experience. Our Quality Management System allows us to review the progress of our quality journey on a regular basis to assess its effectiveness and suitability. The system ensures that we not only fully comply with regulatory requirements, more importantly, that we attain the highest standard of quality in the industry to the benefit of our customers and their patients. We have been committed to quality since It has been the foundation of our success in the past, is our focus at improving quality is something we will remain committed to in future. A focus on patient well-being and being a responsible corporate citizen go hand-in-hand with conducting business ethically. We strive to work in the best possible way to produce products of the highest possible quality. We have a long-standing commitment to conducting our business in compliance with applicable laws and regulations and in accordance with the highest ethical principles. We closely monitor our actions to ensure compliance. And we foster a culture of ethical behavior in everything we do. We believe in fair treatment of everyone that comes in contact with our business employees, customers, patients, suppliers, all other stakeholders and society at large. As a company, we foster openness, honesty, tolerance, fairness and responsibility in all matters. We do not discriminate, we do not tolerate any form of harassment, we do not engage in any form of forced or child labor. Our Code of Conduct is one of many tools we provide employees to assist them in meeting our legal and ethical obligations all must abide by the Code. In 2013, we can report that no major complaints were lodged in any audits or reviews. We consider lack of access to treatment and lack of awareness about the consequences of untreated tooth loss as key challenges for the global community. We have an important role to play in addressing these challenges. As a responsible corporate citizen, we also believe we should give back to our communities and to people in need. We are proud to be part of various community engagement activities. We see it as part of our responsibility to support philanthropic projects, some globally, some locally. Our donation programs aim to give back to communities in areas where we can provide expertise in addition to financial support. We support the P-I Brånemark Institute in Bauru, Brazil, a non-profit organization that treats patients with missing teeth and often severe maxillofacial defects, in most cases free of charge. The institute was founded by Professor Per-Ingvar Brånemark, the Swedish orthopedic surgeon whose pioneering work on osseointegration laid the scientific roots for Nobel Biocare. Through our financial backing, the institute is able to restore quality of life for several hundred people a year a substantial contribution to the 1,800 procedures the institute currently carries out annually. In November 2010,
6 Nobel Biocare Annual Report 2013 Sustainability 25 Nobel Biocare announced a new five-year agreement, worth about 2.5 million euros, that will enable continued clinical treatment, follow-up teaching and training. We support leading dental societies in their efforts to promote dental education, re-inforce professional and business best practices and encourage involvement in science and innovation. We partner with dental universities worldwide by sharing product knowledge and treatment expertise. We also cultivate an active dialog with dental organizations and other dental stakeholders and support them where appropriate. And in some cases, where patients suffer from an exceptional problem and cannot afford treatment, we support pro bono treatments by providing products free of cost. As a globally operating company, we respect the resources we need to conduct business. Although we have a relatively modest environmental footprint in our manufacturing, we commit to being responsible in how we bring our products and services to market, how we use natural resources, and how we conserve energy and eliminate waste. We work with a global network of transportation partners that have a strong environmental focus and provide more eco-friendly transport options. Because we have manufacturing plants on three continents, we keep product shipping distances to a minimum. Furthermore, we are implementing a new packaging and logistics program where order bundling will minimize the total number of packages sent.
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