JOHNSON & JOHNSON SUPPLY CHAIN Pathway to Patients T  here’s a pride and also a big sense of  responsibility in what we do,” says Ray Hanley, Operations Development  Coordinator, DePuy (Ireland). “Some  600 knees leave here every day to be implanted in patients  around the world.” drugs and combination products. “By standardizing processes in our  quality systems and by providing greater  oversight in this area, we can reduce  complexity and risk in the area of quality,” says Kathy Wengel, Chief Quality Officer, JJSC. Johnson & Johnson Supply Chain (JJSC)  helps coordinate the path that our health  care products take to reach people— doctors, nurses and patients, mothers,  fathers and other caregivers— and meet  their needs. “Processing orders, myself and others I work with genuinely feel how important it is to get high-quality product to where it ought to be,” says Elaine Eager,  International Supply Group Team Leader,  DePuy (Ireland), who once personally  transported a knee implant to a hospital due  to an urgent patient need. “It’s not simply  about moving product from one place to  another—it’s about transforming lives.” Worldwide, JJSC includes a network of manufacturing sites, external  manufacturers, distribution centers and approximately  50,000  associates.  “Our supply chain organization is a large  part of who we are as a company and plays a  vital role in our ability to meet the needs of  our customers,” says Ajit Shetty, Ph.D.,  Corporate Vice President responsible for  JJSC. “We have deployed a new supply chain  operating model that will enable growth,  drive quality and compliance, and help us run more efficiently so we can more effectively  serve patients and consumers worldwide.”  The formation of an enterprise supply chain operating model was announced in  January  2010 . Objectives of the new  organization are to enable growth, drive  quality and compliance, improve costs and provide professional development for our people. Created by business leaders in all three sectors, the model will coordinate  essential supply chain functions—like  procurement, customer and logistics  services, and asset allocation—while  maintaining critical decentralization of  sector operating companies, one of the  proven strategies of Johnson & Johnson. “Ultimately, this new approach to the  supply chain will improve the experience  our customers have when doing business  with Johnson & Johnson companies while  generating incremental value for our  businesses,” says Shetty.  The organizational design for JJSC  includes a new operating model for Quality  & Compliance (Q&C) and a new structure  for Supply Chain Strategy and Project  Management. Cross-sector collaboration  that the new enterprise model helps  facilitate is already playing out in recovery  plans related to manufacturing issues  experienced at McNeil Consumer  Healthcare. “The McNeil situation has all of us  rethinking business continuity planning  and how we utilize our plants and partner  suppliers,” says Robert Salerno, Vice  President, Supply Chain Strategy and  Project Management, JJSC. “Rather than  plan around one operating unit, we can  approach manufacturing from a  Johnson & Johnson vantage point. With  the new supply chain model, we’re more  able to leverage assets, best practices,  systems and technologies while offering  supply chain leaders professional  development opportunities across our  companies.” The new operating model will also  create a single framework for Q&C across  companies, inclusive of common quality  standards by product types such as devices,  In addition to improving quality and  compliance, the new model is designed to enable growth and improve efficiency and effectiveness. Again, cross-sector  collaboration—key to bringing forth health care technologies that draw on  expertise from more than one business  segment—will flourish as manufacturing  and quality experts from various business units have opportunities to  combine their talents. “Campus Ireland” is one example. There are six manufacturing facilities in  Ireland across our Medical Devices and  Diagnostics and Pharmaceutical businesses. The close proximity of these  facilities enables the companies to work collaboratively on a range of projects while facilitating the transfer of employees between sites for specific  projects, career development and  promotion opportunities. Campus leaders in Ireland are also working toward  creation of a shared state-of-the-art  manufacturing facility for convergent  medical technology products.  “Our journey to coordinate our supply chain organizations is under way,”  Shetty says. “The operating model has the  potential to benefit those we serve by  driving quality, efficiency and effectiveness  in all we do and touching—and  transforming—lives for years to come.” “Close collaboration with colleagues  throughout the supply chain allows me to  gain a holistic appreciation of the steps  between my activities and each patient,”  says Ray Hanley in Cork, Ireland. When  such insights are used in decision-making,  “It’s how we put patients first.”  JOHNSON & JOHNSON 2010 ANNUAL REPORT 20 A NEW HOLISTIC MODEL PUTTING PATIENTS FIRST  ENABLING PERFORMANCE TODAY  NURTURING GROWTH TOMORROW 