Supply Chain Management Scenario

Background

Efficient and effective Supply Chain Management (SCM) is integral to business success. SCM encompasses the end-to-end business processes necessary for a company to produce goods for delivery to the end consumer. Integration between the processes and collaboration among the entities involved in the processes is critical. Although there is no single solution to implementing SCM, most companies have a strategy or approach for managing the various components of SCM.

Perhaps the most important and challenging aspect of SCM is choosing and developing working relationships with suppliers of parts and materials needed to produce a final product. Organizations must carefully choose and manage their suppliers to avoid any number of risks associated with failure to deliver by a supplier. One way to mitigate these risks is for an organization to engage and incentivize supply chain partners through Supplier Relationship Management (SRM) practices. SRM guides the expectations and relationships among the parties and provides benefits for both sides.

Today’s complex, global business environment requires more than just agreements with suppliers. The sources of parts and materials are no longer always procured locally. Supplier sourcing is more likely to be conducted globally, with the potential to impact people, communities, and cultures in ways that must be considered and addressed responsibly, legally, and ethically.

Scenario

Johnson & Johnson (J&J) is a large, multi-national company with more than 125,000 employees worldwide. In its Credo, J&J professes responsible and ethical treatment of all its stakeholders. To that end, J&J commits to the following: forming strong relationships with suppliers; including suppliers as stakeholders in innovation; supporting diversity among suppliers; and providing suppliers the opportunity to make a fair profit. In exchange, suppliers must comply with J&J’s Code of Conduct and Responsibility Standards for Suppliers.

You serve as Chief Procurement Manager for the Medical Devices Products at J&J, a position that pays $189,000 annually. You have been with the company for 11 years, and your team works closely with several functions in the organization, including Finance, Marketing, IT, and R&D. One key aspect of your job is to identify reputable supply chain partners that can move product to healthcare providers around the world. In your leadership role, you find it important to follow the J&J Credo, especially the part stating the following: “Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit.”

Allied Distributors, Inc. (AD) has approached your office about becoming a worldwide distributor for medical devices. These products are delivered to healthcare professionals in fields like orthopedics, neurology, cardiology, minimally invasive surgery, wound management, and women’s health. The timing of this proposal is right because the J&J leadership team has implemented a strategic plan to improve patient outcomes and expand market share by introducing innovative products. Your job is to engage the procurement process to introduce a new supplier for medical devices.

Introducing a new supplier into the supply chain at J&J requires a good understanding of its supply chain practices and approach to SRM. The resources below provide more detail information in these areas.

Company Profile

Prepare a company profile. The profile should include the items listed below. (1 page)

General Business Information

Business Name

Primary Business Location (e.g., Headquarters Location)

Company Overview

Business Purpose (e.g., Business Function/Mission Statement)

Size/Market Reach (e.g., Small, Medium, Large/Local, National, Global)

Business Details

Principal Customers for Medical Devices

Major Competitors for Medical Devices

Supply Chain Management Philosophy

Supply Chain Management (SCM) encompasses managing and integrating essential business processes across an organization. Efficient and effective SCM affords companies an advantage over their competitors. While most organizations adhere to industry standards and best practices in SCM (e.g., ISO 9000), they may also incorporate unique aspects that differentiate them from the competition. These unique aspects are typically aligned with the company’s culture, mission, and philosophy on social responsibility and accountability.

Evaluate Johnson & Johnson’s (J&J) SCM philosophy (2-3 pages)

Describe J&J’s philosophy on SCM

Explain how J&J’s philosophy on SCM supports its mission statement

Explain how J&J’s three key focus areas (People, Places, and Practices) apply to its relationships with supply chain partners.