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I N NOVATION

Proven Supply Chain Optimization


Strategies Help Spectrum Health Share

Reduce Logistical Costs and Stock


Outs
Johnson & Johnson Medical Devices Companies Offer a Tailored Approach to
Help Hospitals and Health Systems Improve Supply Chain Efficiency

SOMERVILLE, NJ August 23, 2017 Spectrum Health realized considerable improvements


across its twelve-hospital system with help from CareAdvantage from the Johnson & Johnson
Medical Devices Companies and its Supply Chain Optimization capability*. Leveraging this
approach, the Johnson & Johnson Medical Devices Companies (JJMDC)** have helped
Spectrum Health cut the weekly number of out-of-stock devices by half, nearly eliminated
expedited shipping fees, and reduced the average number of days that products are out of
stock.[i]

For many hospitals and health systems making the transition to value-based care, the supply
chain continues to be a strategic area of focus to identify opportunities for managing costs
while improving the quality of care. For instance, nearly one-fifth of clinician time is spent on
supply chain and inventory management, and reducing supply chain inefficiencies can help
increase clinician time to be spent with patients, on research and education, or even training
new staff.[ii] Additionally, up to 45 percent of a providers operating budget can be attributed to
total supply chain costs, which could have been reinvested into improving patient care.[iii]
CareAdvantage (www.careadvantagejjmdc.com) offers a tailored approach to help improve
supply chain efficiency, decrease complexity, and reduce waste through best-in-class order
performance, inventory management, and logistics strategies for JJMDC products.

We engaged JJMDC to help us improve efficiencies and standardize processes within our
distribution center for their products. Our efforts thus far have resulted in significant
improvements for Spectrum Health, our clinical teams, and the patients we serve, and we now
consider the work weve done together as a new standard for continuous improvement moving
forward," said Kurt Knoth, Vice President, System Supply Chain at Spectrum Health.

Together with the Spectrum Health team, experts from JJMDC analyzed data from across the
Spectrum Health and JJMDC supply chain, identified the critical interdependencies between
Spectrum Health and JJMDC supply chain, identified the critical interdependencies between
performance metrics and ordering behaviors, and provided insights on supply chain
performance compared against a benchmark of similarly sized health systems. Once gaps
were clearly identified, JJMDC and Spectrum Health worked closely together to set clear
performance goals, support the use of data across the health system, and improve processes
that make JJMDC medical devices more readily available at the point of care.

We are dedicated to listening to the needs of our customers and helping them solve their
supply chain challenges by utilizing our unique combination of clinical expertise for our devices
and supply chain insights. Our approach focuses on not only creating efficiencies and reducing
costs, but also driving a more patient-focused supply chain between JJMDC and our health
system customers that helps reduce delays and disruptions in patient care, said Melinda
Thiel, Vice President, Customer Marketing & Solutions at JJMDC. Our Supply Chain
Optimization capability helps put the right supplies where theyre needed and when theyre
needed, putting clinicians back where they are needed most: caring for patients.

Spectrum Health achieved considerable improvements across all targeted goals. Compared to
baseline measures, Spectrum Health reduced weekly product codes out of stock by 49
percent, reduced expedited order fees by 96 percent, and average days out of stock by 18
percent. [i]

CareAdvantage was launched earlier this year to help hospitals and health systems realize
operational efficiency and drive better care and outcomes through a holistic, tailored approach.
For discussions on a variety of topics in value-based care, visit Voices for Value on LinkedIn.

About the Johnson & Johnson Medical Devices Companies

The Johnson & Johnson Medical Devices Companies purpose is to reach more patients and
restore more lives. Having advanced patient care for more than a century, these companies
represent an unparalleled breadth of products, services, programs and research and
development capabilities in surgical technology, orthopaedics, cardiovascular and specialty
solutions with an offering directed at delivering clinical and economic value to health care
systems worldwide.

About Johnson & Johnson Health Care Systems Inc.

Johnson & Johnson Health Care Systems Inc. (JJHCS) provides contracting, supply chain,
business services, and strategic solutions to customers and commercial intermediaries of
U.S.-based Johnson & Johnson companies, including hospital systems, health plans,
distributors, wholesalers, purchasing organizations, government payer programs, and
government healthcare institutions in the U.S. JJHCS also engages with customers to provide
streamlined supply chain services for our products that seamlessly integrate with customer
operations, address shared evolving market challenges to value-based care, and develop
innovative solutions that improve patient care and access.

*CareAdvantage from the Johnson & Johnson Medical Devices Companies is offered through
*CareAdvantage from the Johnson & Johnson Medical Devices Companies is offered through
Johnson & Johnson Health Care Systems Inc. Its Supply Chain Optimization capability is
provided for Johnson & Johnson Medical Devices Companies products.

** The Johnson & Johnson Medical Devices Companies comprise the surgery, orthopaedics,
and cardiovascular businesses within Johnson & Johnsons Medical Devices segment.

###

[i] Data on file. Johnson & Johnson Healthcare Systems Inc. Weekly stocking reviews with Spectrum CSC / J&J Supply Chain. April

2016 April 2017.

[ii] Marzouk S, Nelson S. The biggest untapped resource at your hospital? Your supply chain. Available at:

http://www.cardinalhealth.com/en/essential-insights/the-biggest-untapped-resource-at-your-hospital--your-supply-chai.html.

Updated February 14, 2017.

[iii] Conway, K, Applying Supply Chain Best Practice from Other Industries to Healthcare. Available at

http://www.ghx.com/industry-resources/white-papers/supply-chain-best-practices/.

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