How Johnson & Johnson Is Securing the Drug Supply (2016) Michael Rose, Johnson & Johnson, Michael Sedlatschek, Johnson & Johnson, Robert Kennedy, DMLogic LLC, and Matthew Deep, DMLogic LLC Executive Summary Summary of the Initiative The Johnson & Johnson Family of Companies J&J) is at the forefront of the effort to ensure the integrity of the drug supply. Through their planning, investment, and commitment, J&J has built and implemented one of the first systems to comply with new federal and global regulations that will protect their drug supply for the patients who use their products. years ahead of the mandated schedule. In the future, every drug that passes through the entirety of the J&J supply chain will be serialized, and will be tracked at each point along the way. Type here to search o The direction that J&J took, by retaining their legacy WMS and using the adaptive software tool, now positions them for DSCSA compliancy years ahead of schedule. And because the solution was designed in a way that minimited large-scale reinvestment, J&J can focus on their plans to move to their next WMS platform independent of the compliancy challenges Innovation Statement Within the J&J distribution centers, their creative and innovative approach relied on the agility of an adaptive software platform making the design and development quicker to implement, much less expensive, and far less risky to their business than traditional alternatives. Their success positions them to initiate improvements beyond the requirements of the mandates. For these reasons, the J&J innovative approach is one from which supply chain companies across industries can benefit Impact Statement J&J's decision to use the adaptive software brings compliancy to their operation with a total investment that amounted to 70 percent less than originally estimated. Further, their innovative solution has put an infrastructure in place that will require minimal changes as they continue their direction to eventually replace the legacy WMS. Applicability As the pharmaceutical industry moves toward serialization in compliance with the federal Drug Supply Chain Security Act, J&J's unique and innovative approach offers companies in any industry an alternative to expensive software Type here to search O 3 Applicability As the pharmaceutical industry moves toward serialization in compliance with the federal Drug Supply Chain Security Act, J&J's unique and innovative approach offers companies in any industry an alternative to expensive software development and customization. Utilizing an adaptive software approach, J&J developed a proven solution to bring their supply chain to compliancy offering a safer and more secure drug supply across the globe. That solution could translate to any industry in need of efficiency, safety, and compliancy, Case Study Drug manufacturers around the globe are preparing for one of the most vital and comprehensive challenges ever faced by the industry. The goal is total security of the world's drug supply, not just at the point of manufacturing but throughout the supply chain and the life cycle of these drugs. In concert with governmental agencies and regulatory bodies, this new challenge involves the pharmaceutical manufacturers as well as wholesalers, distributors, retailers, and suppliers. Additionally, this challenge will require the efforts of software, technology, and equipment suppliers. It will be pervasive. and it will require a major fundamental change in the way the pharmaceutical industry thinks about, manages, and moves inventory For years, the pharmaceutical industry has been dealing with issues of counterfeit and diverted drugs. Despite the considerable investment on the part of the manufacturers and the FDA a number of counterfeit products Page 484 continue to make it into the supply chain. These drugs pass through a complex system of distributors, brokers. Type here to search O I a For years, the pharmaceutical industry has been dealing with issues of counterfeit and diverted drugs. Despite the considerable investment on the part of the manufacturers and the FDA, a number of counterfeit products Page 484 continue to make it into the supply chain. These drugs pass through a complex system of distributors, brokers, and wholesalers making detection not only difficult but complicated. The Johnson & Johnson Family of Companies (J&J) is at the forefront of the effort to ensure the integrity of the drug supply. Through their planning, investment, and commitment, J&J has built and implemented one of the first systems to comply with new federal and global regulations that will protect their drug supply for the patients who use their products, years ahead of the mandated schedule. In the future, every drug that passes through the entirety of the J&J supply chain will be serialized, and will be tracked at each point along the way. Within their distribution centers, their creative and innovative approach relied on the agility of an adaptive software platform making the design and development quicket to implement, much less expensive, and for less risky to their business than traditional alternatives. Their success positions them to initiate improvements beyond the requirements of the mandates. For these reasons, the J&J innovative approach is one from which supply chain companies across industries can benefit Evolving Mandates In 2004 and 2005. Florida and California legislators enacted lows to require drug companies to secure their supply chains The two states called for the serialization of any drugs entering the states to be captured and tracked. The law also called for startine dress that for mannfeturing all the throne to the hanno Type here to search Evolving Mandates In 2004 and 2005. Florida and Californin legislators enacted laws to require drug companies to secure their supply chains The two states called for the serialization of any drugs entering the states to be captured and tracked. The law also called for a system of reporting on drugs as they moved from manufacturing all the way through to the pharmacy or physician. These two states, with their population size, held force in these efforts, California, for instance, fulfills 9 percent of the total prescriptions in the US Recognizing the burden the new laws required first California and then Florida moved the deadlines for compliance to 2009. In those first years, pharmaceutical companies began investigating technologies for labeling and reading serial numbers, and some even went as far as to pilot new systems, In 2013, the US. Congress passed the Drug Supply Chain Security Act (DSCSA). The DSCSA borrowed heavily from the California and Florida mandates, but moved compliancy to the federal level. The DSCSA superseded the state laws in both scope and timing, again pushing the dates for full serialization and complianey into 2023. with milestones in between for phased tracking and recording. At the same time California and Florida were developing mandates, similar initiatives were begun in South America. Asia, and the European Union. In addition to the U.S. there are now at least 40 countries that either have passed serialization complianey laws or have those laws in the legislative process. Some of those countries include China, India, Germany, South Korea, Saudi Arabia, and Turkey. The compliance rules and timelines for each country are different and they continue to change (for example, Brazil just postponed its deadlines). But the direction is clear: Securing the drug supply Type here to search O 4 a At the same time California and Florida were developing mandates, sinila mitiatives were begun in South America, Asia, and the European Union. In addition to the U.S., there are now at least 40 countries that either have passed serialization compliancy laws or huve those laws in the legislative process. Some of those countries include China, India, Germany South Korea, Saudi Arabia, and Turkey. The compliance rules and timelines for each country are different, and they continue to change (for example, Brazil just postponed its deadlines). But the direction is clear Securing the drug supply has become a global initiative. Defining The Scope After several carly planning sessions, J&J quickly came to recognize the magnitude of what complicement. Mojot changes were needed to systems, processes, equipment and packaging as well as the very culture that defined how inventory was managed. These changes would need to be undertaken by their manufacturing plants and distribution centers, and done in coordination with suppliers and customers. Looking beyond the clear challenges of physically serializing their packages, they also delved into the scope of necessary changes they would need to make to their systems for track and trace, not just to the warehouse management system (WMS), but to the warehouse control systems (WCS). Further, J&J understood that they would need to build a Page 45 serial number repository database for the exchange of serial information. Beyond these factors, an even greater step involved building the integration layer for reporting product serial numbers for their entire supply chain community Type here to search Looking beyond the clear challenges of physically serializing their packages, they also delved into the scope of necessary changes they would need to make to their systems for track and trace, not just to the warehouse management system (WMS), but to the warehouse control systems (WCS). Further, J&J understood that they would need to build Pape ABS serial number repository database for the exchange of serial information. Beyond these factors, an even greater step involved building the integration layer for reporting product serial numbers for their entire supply chain commumity. Within the distribution centers, J&J investigated whether to build the solution onto their existing WMS, or whether to replace the legacy WMS with a new system. They decided on the former, but challenged the team to build the solution in a way that would be complementary to their eventual move to a new WMS platform. At the same time, J&J decided to move forward with barcoding technology for labeling with a vision to use RFID in the future. In the U.S. J&J operates two distribution centers, one in New Jersey and one in Kentucky. Both facilities used the same WMS with an integrated WCS that manages the plysical flow of containers. However, the operations were running on different versions of the WMS software. The J&J WMS system was first installed in 1996, but has had may perades and technology refreshes. The decision to retain the WMS necessitated a full technology upgrade to both the WMS and WCS, in order that both of the distribution centers would have these systems on exact versions so that the eventual solution would work with both Recognizing the increased volume of data that serial number tracking would entail. J&J also decided to purchase a new suite of servers for the systems. With these decisions, the design process for how serialized data would be passed within the J&J systems took shape. J&T recognized that they would need to build a new integration layer to pass serial number information between systems. This included the ability to transmit serial numbers to and from SAP All, but also to exchange information between the WCS and WMS. Type here to search :: 4 II! Apps Me In the U.S.J&J operates two distribution centers, one in New Jersey and one in Kentucky. Both facilities tied the same WMS with an integrated WCS that manages the physical flow of containers. However, the operations were running on different versions of the WMS software. The J&J WMS system was first installed in 1996, but has had many upgrades and technolory refreshes. The decision to retain the WMS necessitated a full technology upgrade to both the WMS and WCS in order that both of the distribution centers would have these systems on exact versions so that the eventual solution would work with both. Recognizing the increased volume of data that serial number tracking would entail. J&J also decided to purchase a new suite of servers for the systems. With these decisions, the design process for how serialized data would be passed within the J&J systems took shape. J&J recognized that they would need to build a new integration layer to pass serial number information between systems. This included the ability to transmit serial numbers to and from SAP All, but also to exchange information between the WCS and WMS. J&J built a team of experienced resources to develop a new process design. Having no precedent for a serialization solution, the design team not only had to consider the standard process, but also had to anticipate exceptions and unanticipated events involving damaged goods, goods with labeling issues, inventory discrepancies, returns, and issues involving data transmission errors. This exercise cerscores the reality that the solution would need to be even more comprehensive than originally defined. Important to the entire initiativ, J&J adopted a philosophy of using the serialization initiative to fulfill their compliancy mquirements bur, further, to bring incremental improvements to their operations and to their customers. This approach permated every design decision undertaken. J&J needed to determine the extent to which serial numbers would need to be tracked in the distribution operation. The Type here to search det O 1. Explain the concept of Supply Chain Management. 1.1. From the description in the case study, describe what do you thing is J&J's Supply Chain Model (network) including suppliers, channel partners, distribution centers, customers. (You can draw their SCM diagram to include with the description).