Johnson & Johnson: A Family Company
Johnson & Johnson: A Family Company
By Cierra Baxter and Zhe Liu
Johnson & Johnson is a multinational American company whose products primarily focus on three major segments: pharmaceutical, medical devices, and consumer packaged goods. Established in 1886, Johnson & Johnson’s headquarter is located in New Brunswick, NJ by its three founders; James Wood Johnson, Robert Wood Johnson I, and Edward Mead Johnson. With Johnson & Johnson’s passion being human health and well-being, their products are “conducted by more than 275 operating companies located on 60 countries, including the United States, which sell products in virtually all countries throughout the world.” (according to reuters.com) According to the results of the "Fortune" and "Businessweek" published in 1997, Johnson & Johnson’s market ranked 20th in the world, and among the America’s top ten most admired companies as well. This company is trusted by many physicians, pharmacists, newly mothers, etc. and offers one of the world’s broadest range of health care products.
The unique thing about Johnson & Johnson’s supply chain is they set out plans to boost sustainability and corporate social responsibility activity inside and outside of its business. Johnson & Johnson prefers to purchase products or services that demonstrate the following attributes: use of renewable resources, use of sustainable practices, energy efficiency, packaging efficiency, transport efficiency, products made from recycled materials and/or can be recycled or reused at end of life, and products that do not contain or use in their production materials listed on the Johnson & Johnson Watch List (a compilation of lists of banned and/or restricted materials, according to country and regional legislation).
To meet the growing demand of China and other emerging markets, Johnson & Johnson built its largest supply chain production base in Xi'an, the capital of Shaanxi province. What’s more, this is the world's largest supply chain base as well. Johnson & Johnson built this production base because Xi’an is the primary city of China and it also connects to other countries of Asia. This zone will also provide a good development environment for Johnson & Johnson and provide good services to ensure the project will be completed smoothly. Overall, Johnson & Johnson is gradually focused on the economic and financial hub of different areas to expand and increase their supply chain.
Because manufacturing and processing are more globalized now than before, more potential risks have surfaced. With products coming from new and different markets and converting globally sourced materials into finished goods, it creates vulnerability and a complex supply chain in four areas: cargo theft, illegal diversion, economically motivated adulteration (EMA), and counterfeit product. Competitor’s lowering prices is also another threat to Johnson & Johnson’s supply chain. Due to competition of competing generic drugs, Johnson & Johnson is set to lose patent protection in the next few years. “For instance, its biggest drug Remicade, which accounted for roughly $6.2 billion in revenues in 2012, is expected to lose its Europe patent in 2015.” (trefis.com) As this continues, Johnson & Johnson’s pharmaceutical revenues will begin to suffer considerably due to price pressuring.
Johnson & Johnson provides high quality products and trusted brands to consumers around the world. As a participant in the Carbon Disclosure Project’s (CDP) Supply Chain program, they encourage suppliers to measure their energy use and greenhouse gas emissions. By selecting suppliers who only participate in sustainability, they integrate the company’s core values and are committed to working with small businesses and diverse suppliers that support growth objectives by providing innovative solutions to their commercial and supply chain efforts. Johnson & Johnson’s strong commitments to supplier diversity have enhanced their supplier network and strengthen ties to consumers that have benefited from their products.
Additional information and videos about Johnson & Johnson can be found in the following:
References:
https://www.jnj.com/caring/citizenship-sustainability/strategic-framework/supply-chain-management
Videos:
https://www.youtube.com/user/JNJhealth
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