ACADEMIC YEAR

MBA- 2021-2023

IMPLEMENTATION OF SMART

SUPPLY CHAIN TECHNOLOGY

AT JOHNSON & JOHNSON

Report By: Group 9

Name Enrollment Number

Vidyut Puri 21BSPHH01C1459

Monalisa Mukherjee 21BSPHH01C0693

Richa Agrawal 21BSPHH01C0945

Anushka Agarwal 21BSPHH01C0179

Yashas sree Kollapalli 21BSPHH01C1496

Introduction

There were little over one million people on the planet in 1886, the year Johnson & Johnson
(J&J) was founded. 131 years later, J&J now provides daily services to slightly over a billion
people globally. The corporation manufactures a wide range of goods that are essential to many
people's everyday lives and professional endeavors, including numerous well-known consumer
brands, life-saving medications, and important service delivery components. It is more difficult
than ever to keep up the supply chain that makes sure all of these different products get to where
they need to go.

The philosophy of Johnson & Johnson is centered on one objective: to enhance human health. Its
yearly Health for Humanity reports throws intriguing light on the ways in which its activities are
focused to the core of CSR and sustainability. This big aim comprises its customers, staff,
communities, and the environment.

J&J converted its supply chain into an engine that promotes innovation across the enterprise in
order to fulfill the demands of its expanding client base. This is not a simple undertaking given
the size and scope of J&J. With more than 60,000 employees and 350 distribution locations
across the world, J&J fulfills more than 100,000 orders daily, providing goods and services to
millions of homes, shops, pharmacies, and operating rooms in hospitals.

The supply chain team at J&J frequently consults with its network of partners to identify
problems, investigate potential new markets for demand, and get suggestions. The supply chain
team starts working once those concepts are narrowed down to a few crucial strands that fit with
J&J's company. Ideas are researched, developed, and then tested. Agile sprints are used to test
ideas over a period of three to six months in a specific region.

To prioritise and concentrate on the transformation, supply chain team at J&J created three North
Stars and seven pillars of support. The core pillars ensure that we are constantly improving our
performance to match the increasing demands in value generation, while the North Stars create
the ability to digest trends and disruptions in an ordered fashion.

The new normal involves maintaining a supply chain that is flexible enough to serve billions of
people every day. J&J's supply chain team is assisting J&J in designing a new way of working
and inventing for a digital world by adhering to their Strategic North Stars, bringing in new
technology partners, and experimenting with new ideas for a digital world.

About the Company

Johnson & Johnson (popularly known as J&J), an American multinational was founded in 1986.
The company mainly focuses on developing medical devices, pharmaceuticals and consumer
packaged goods.

The company is headquartered in New Jersey. The company has around 250 subsidiaries with
operations in 60 countries and products are being sold in around 175 countries. As of 2021, the
company is having worldwide sales of $93.3 billion.

The Band-Aid Brand line of bandages, Tylenol medications, Johnson's Baby products,
Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses are
some well-known consumer products.

In 2021, the company decided to split into two companies i.e, one would be focusing upon
consumer products and the other on pharmaceutical and medical technologies.

For more than 135 years, the company has aimed to keep the people well at every age and every
stage of life. They have always been addressing some of the world's toughest health challenges.
The company has always strived to improve access and affordability and create healthier
communities.
J&J has been ranked as a Top 50 All-Star on its World’s Most Admired Companies list for the
20th consecutive years. In 2022, the company has ranked no. 1 on the Pharmaceutical lists for
the 9th year in a row and in the top 20 on the overall Top 50 All-Stars list. In 2021, the
company’s COVID-19 vaccine received Emergency Use Authorization from the U.S. Food &
Drug Administration. As per the release by J&J, the company was able to meet 17 sustainability
goals by 2020. The company has also signed a power purchase agreement i.e., all of its sites in
the US, Europe and Canada will be powered with 100% renewable electricity by 2023.

Supply chain structure of J&J

It's difficult to satisfy the wants of about a billion consumers every day. Johnson & Johnson has
made significant investments in supply chain management because of this. Johnson & Johnson
has over 250 operating companies worldwide.

Although the company's management strategy is decentralized, it has significant ties to supply
chain management to save costs and effectively serve the enormous number of customers for its
products.

With its suppliers, Johnson & Johnson has developed a productive, cooperative, and solid
working relationship. It heavily depends on suppliers to provide the commodities, services, and
raw materials needed to create products. The business has kept track of small, diversified
suppliers who continue to contribute value and help it accomplish its long-term expansion goals.

First, by focusing on certainty and speed of response to the market while maximizing added
value, supply chain management has assisted Johnson & Johnson in lowering its operating
expenses. The tool has helped it compete efficiently in the local arena as well as on the global
stage.

Johnson & Johnson continues to rely on foreign business experts to market/advertise its baby
products at incredibly low costs. It has been able to focus on producing infant items, an area in
which it excels, thanks to supply chain management, while continuing to outsource duties and
processes that are less crucial to the company's goals. Johnson & Johnson has been able to do so
even when other businesses are failing.

Supply chain management has also helped Johnson & Johnson choose the right partners,
manpower, and resources.Supply chain management has also helped Johnson & Johnson add
value to its products. This has helped the company with more innovations.

Supply chain management has also allowed Johnson & Johnson to achieve a quicker growth rate
through operational flexibility.

By using contract manufacturing and outsourcing, Johnson & Johnson has been able to retain
more than one billion daily users of its goods through contract manufacturing and outsourcing.

Introducing and implementing a thorough strategic network optimization program. A total of 245
businesses, as well as several facilities and distribution hubs, are connected to Johnson &
Johnson globally.

With its customers, suppliers, and distributors, it has formed strategic alliances that are helping
the company in the long run. It has efficient channels for communication that are utilized to
transmit important information and enhance operations.

To ensure that the newest and existing products are always optimally included in the supply
chain, it uses product design coordination.

To maintain supply chain operations, Johnson & Johnson has made significant investments in
information and communication technologies.

The business engages in scheduling, planning, and contracting procedures to ensure that it only
deals with its core competencies—creating beauty and health products—leaving the rest to its
partners and suppliers.
It has created an efficient transport strategy plan that takes into account contracting, routes, and
the frequency of shipping its products.

It intends to take care of all supply chain nodes as well as its own daily product creation and
distribution.

The business has kept up a robust supply chain because it understands that its suppliers are its
most important resource.

Problems faced during setting up the Supply management

When setting up the distribution networks, several growing pains were encountered. The
management wasn't sure how many and whereabouts of the businesses they wished to network
with. Since then, this has been resolved.

Another issue with the distribution strategy was the debate over whether to use a centralized,
decentralized or shared operating control structure. The decentralized management approach was
chosen by the company, and it has been a great success.

The sharing of the company’s information with other companies also proved to be a drawback.
As the business tried to coordinate the payment terms and conditions among various supply
chain participants, it also ran into cash flow issues.

Innovations in supply chain

Drones Are Being Used to Deliver Lifesaving HIV Drugs to Remote Areas of the World:

In Uganda, medication is transported by boat—a sluggish, difficult operation. But now a new
Johnson & Johnson-supported program is using drones that can serve 20 landing sites across
five islands, reaching more than 3,700 people in a single day. The COVID-19 pandemic has
put extreme pressure on Uganda's healthcare systems, as it does in many other countries,
 further disrupting continuity of care for existing illnesses like HIV. This is in addition to the
considerable distances that medical personnel must travel between those facilities to visit
patients.

High-tech troubleshooting:

Drones outperform boats in many ways as in a single day, they can make several journeys,
serving 20 landing spots on five islands and more than 3,700 people, about a third of whom are
HIV/AIDS positive. Islanders are better able to receive what they need at a health centre that is
most convenient for them because the drone deliveries assist ensure that each landing location is
well stocked with medication.

The medical drones presently providing care to the Kalangala District have a capability to carry
five times as much medication as the pilot drone seen below, which has a carrying capacity of up
to 2 pounds.

Sustainable Approach:

With the drones delivering HIV medications directly to local staff, local healthcare workers will
no longer need to travel around the islands delivering medication, freeing them up to perform
crucial services like routine healthcare and COVID-19 testing and treatment. The initiative also
aims to lessen the burden placed on frontline health workers.

The Future of Drug Delivery:

The Kalangala District Medical Drones Project, a year-long research into the advantages of the
technology for HIV patients living on the island and how it can be scaled to address other
healthcare access issues, will be completed by Johnson & Johnson and its partners in April 2022.

Drones may soon be used to deliver vital medical supplies and act promptly in the event of an
emergency or disaster, for example. Drones can be used for a variety of purposes, including the
delivery of vaccines and other medical supplies. This pilot project is a special illustration of how
we might overcome regional boundaries using intelligent supply chain technologies. It is
astounding and fascinating.

J&J top AI innovator in three months ending January

In the most recent quarter, Johnson & Johnson was the leading artificial intelligence (AI)
innovator in the clinical trial operations market. In the three months ending in January, the
corporation submitted 48 patents pertaining to AI. That increased from 42 during the same time
period the previous year.

Roche, with 42 AI patent applications, Thermo Fisher Scientific (12 applications), and Bayer
were the next in line (10 applications).

Johnson & Johnson recently increased AI R&D spending. In the three months that ended in
January, it witnessed an increase in related patent applications of 12.5% as compared to the same
period in 2020. This company experienced the biggest percentage growth of all those tracked
with more than 10 clinical trial operations sector quarterly patents.
Technological tools used at J&J

The experts at Johnson & Johnson remained confident in their ability to manage or avoid
disruptions and allow hospitals, pharmacies, and people around the world to continue to access
critical medications, medical devices, and other healthcare products., While many other
consumers were receiving a crash course in supply and demand from the COVID-19 pandemic.

"One of the things I've learned after working on the supply chain for many years is that we need
to expect the unexpected," says Lada Kecman, Vice President of Supply Chain Systems and
Solutions, Johnson & Johnson."The COVID-19 epidemic has served as a reminder of how
supply chain market trends can be impacted by external events—but the most recent
technological advancements enable us to be more responsive to those events."

Adapting to sudden increases in product demand

Tylenol® demand from both retail and wholesale customers practically doubled, according to
Johnson & Johnson. In the face of this surge, the company's supply chain made every effort to
maximise product availability. It ran its plants around-the-clock and made concessions in other
areas, such as lowering the production of more complex formulations, in order to concentrate on
producing the highest volumes of the medications people were currently in the most urgent need
of.

The corporation would ensure the customer or nation that there will be enough product made
available to them in the future to meet their demands if the higher demand was simply the result
of hoarding. The corporation also uses sophisticated algorithms to track usual order patterns and
identify significant deviations from the standard to avoid excessive hoarding. With the use of
cutting-edge technology, Johnson & Johnson can automatically track hundreds of thousands of
orders submitted by significant clients like hospitals and governments. As a result, when an
algorithm notices an unexpected pattern, it notifies supply chain experts so they may look into it.

Preparing in advance for medical crisis like Covid

Johnson & Johnson used fully automated scenario risk simulation technology, which forecasts
potential worst-case scenarios based on real-time data regarding workforce levels and usual
production levels. The use of risk simulation technology has also improved the company's ability
to track its raw materials requirements, eliminating the need to either purchase too much or too
little, both of which could have expensive repercussions.

Ensuring goods deliver as promised and on time

Goods from Johnson & Johnson frequently travel thousands of kilometers before arriving at their
final destination. Between the time a package leaves a production facility and when it reaches its
destination, a lot can happen. 

With the use of track-and-trace sensors, a shipment can now have "end-to-end visibility,"
meaning it can be continuously tracked from the moment it leaves its starting place until it
reaches its destination. The sensor uses GPS technology, making it simple to track a shipment's
location at all times. Additionally, it detects temperature so that consumers may determine
whether changes in temperature have affected the product's quality.
It is essential to always know where your product is in the supply chain, realizing that a current
crucial delivery recently missed its connection at an airport in Germany while en route from the
Netherlands to the United States. Because when track-and-trace sensors enabled end-to-end
visibility, the corporate was able to track the consignment in real time and quickly load it onto
the following plane.

The usage of intelligent automation paired with track-and-trace technology which operates as an
alert or trigger that utilizes data to automatically initiate subsequent actions.  So, for instance, if a
plane took off without a crucial box on board, smart automation might immediately send an
email to the person in charge of tracking that shipment.

Virtually controlling manufacturing

With the help of smart glass technologies like Google Glass, a person in another location can
visually see the same thing that a worker in front of a machine is seeing. It means that someone
need not be physically there to view or access information that was previously exclusively
available to someone in the same room, and employees frequently refer to it as "you see what I
see." 

An expert at a distant location who has been granted heightened security clearance can actually
tap into the equipment, retrieve data from it, and modify its settings when combined with
"privileged remote access," taking things a step further.

The business was able to utilize technology to build additional research and development
facilities and run them round-the-clock while maintaining manufacturing for its consumer goods
and medical devices.

Other Technological Advancements

Technology advancements herald the start of the so-called Fourth Industrial Revolution, which
will transform how we live and work. While the Third Industrial Revolution gave billions of
people access to digital technology, the Fourth Industrial Revolution is distinguished by a variety
of cutting-edge technology solutions that have an impact on all economies and industries and
provide new career opportunities for those in the fields of manufacturing, design, and science,
technology, engineering, and mathematics.

In order to hasten a more thorough and broad use of these technologies in manufacturing, the
World Economic Forum and McKinsey & Co. developed the Global Lighthouse Network in
2018. The World Economic Forum has selected the Lighthouse honorees as global leaders who
have embraced and integrated innovations to pave the way for others. Lighthouses have been
used to aid navigation for thousands of years.

Two new Lighthouse designations have just been given to Johnson & Johnson, one for its
orthopaedics business' commitment to end-to-end client connectivity and the other for its
London-based Vision Care order-fulfillment processes. The company now has seven Lighthouse
designations overall, more than any other company, in the fields of pharmaceuticals, medical
devices, and consumer health.

Bridgewater, New Jersey-based Johnson & Johnson DePuy Synthes Advance Case
Management received the Lighthouse certification for putting in place a fully digital platform
that guarantees orthopedic surgeons get the appropriate combination of equipment and gadgets
for each patient, reducing waste, and speeding up operating room setup time.

Lack of personnel, broken supply chains, and access restrictions all hindered effective case
coordination. This led to a perfect storm of circumstances in the company's joint-reconstruction
business, making it more difficult to have the appropriate product arrive at the right time for the
right patient.

However, the Supply Chain Customer Solutions team at Johnson & Johnson is attempting to find
resolution to these case coordination issues. For primary joint replacement procedures, our
Advance Case Management (ACM) software predicts the most likely product range needed for
surgeons using a combination of image-based and artificial intelligence algorithms.
Order-Fulfillment Operations for Johnson & Johnson Vision Care in London received the
Lighthouse designation for streamlining order control and changing the customer experience.
People now demand a customized experience from businesses as well as a quicker response time.
these conditions necessitated for a dynamic virtual call center that makes use of cutting-edge
technology like auto response and intelligence-based call routing. The score of Johnson &
Johnson's Customer Satisfaction Survey increased 6.4% as a result of the better customer
experience, rising from 85.5% in 2017 to 91.9% in 2020, second only to Amazon.

Another innovative technique makes sure that returning customers never receive a "sold out"
notification when placing an order for contact lenses online. This is made possible by technology
that predicts when they will place another order and reserves lenses specifically for them. These
are only a few of the upgrades that contributed to the London factory receiving the Lighthouse
certification, an accomplishment that gives the supply chain for Johnson & Johnson Vision Care
"a considerable sense of pride.
Impact of innovations on supply chain

An organization needs to continually be relevant and provide high quality products that
consumers use for their entire lives if it wants to be in operation for more than a century and
reach almost every home in the world. J&J has had to come up with effective tactics to adapt as a
result of the enormous changes in healthcare caused by a developing market, shifting client
preferences, new technologies, and a shift to pay for outcomes models. By regularly updating its
portfolio of brands and future-proofing the company, the corporation has been able to adapt.

From intelligent robots to self-driving cars, more and more technologies are emerging these
days. This signals the Fourth Industrial Revolution, which will change the way we work and live.

Identifying and implementing new technologies, innovations have the potential to affect every
aspect of business, from manufacturing, distribution and operations to customer experience. 90
manufacturers from a variety of industries have received Lighthouse designations for the use of
Fourth Revolution technology, to increase efficiency and productivity.

J&J have received two new lighthouse designations - end-to-end customer connectivity in its
orthopedics business & Vision Care order-fulfillment operations in London.

1. For implementing a fully digital platform to ensure that orthopedic surgeons receive the
right mix of applicable devices and tools for each patient, which would minimize waste
and expedite set-up time in the operating room

2. Transforming the customer experience by creating a one-stop shop for order

management. A highly efficient system significantly reduced the company’s carbon
footprint, while maintaining its service levels.
The strategy J&J will follow for the next 100 years is to find partners who can help develop
capability. Companies like J&J will need to comprehend their customer base on an almost
individual level as consumerism and health care grow more and more individualized. The new
normal involves maintaining a supply chain that is flexible enough to serve billions of people
every day. The supply chain team at J&J is assisting the company in designing a new way of
working and inventing for the digital world, bringing in new technology partners, and quickly
experimenting with new ideas.

Awards and Recognition

· J&J is named First-Ever Fortune Most Powerful Women Global Partner.

· Johnson & Johnson won the 2014 award for best IR practice in the Pharmaceutical
sector from IR Magazine. The awards are based on a rigorous, open-ended survey of the
investment community. This was the second year in a row that the team was recognized by
the magazine for their outstanding work.

· Johnson & Johnson received the 2012 Corporate Health Achievement Award from the
American College of Occupational and Environmental Medicine in recognition of its long
history of commitment to the safety and health of its workers.

· Johnson & Johnson was recognized by LATINA Style Magazine as one of the Top 50
Companies for Latinas to work for in the United States.

Road Ahead:
References

 https://www.jnj.com/latest-news/johnson-johnson-2022-fortune-worlds-
most-admired-company
 https://www.jnj.com/innovation/how-johnson-johnsons-innovative-supply-
chain-technology-is-helping-transform-how-we-work-and-live
 https://supplychaindigital.com/digital-supply-chain/johnson-and-johnson-
top-10-most-sustainable-supply-chains
 https://lnwprogram.org/content/transforming-supply-chain-johnson-johnson
 https://en.wikipedia.org/wiki/Johnson_%26_Johnson

 https://www.jnj.com/innovation/johnson-johnson-supply-chain-technology-
during-coronavirus
 https://www.jnj.com/innovation/how-johnson-johnsons-innovative-supply-
chain-technology-is-helping-transform-how-we-work-and-live
 https://news.microsoft.com/transform/johnson-johnson-advances-global-
health-and-avoids-supply-chain-disruptions/