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Johnson & Johnson advances global health and avoids supply chain disruptions

The company expands its Microsoft collaboration and leverages cloud and AI for smart manufacturing

As the largest and most broadly based health care company in the world, Johnson & Johnson manufactures consumer health products, pharmaceuticals and medical devices in state-of-the-art manufacturing facilities. Keeping those facilities running efficiently requires a supply chain capable of turning raw materials into everything from the familiar adhesive bandage to joint replacement devices that improve quality of life – and the pharmaceuticals that sustain it – and efficiently getting them to people who depend on them.

Through a continued collaboration with Microsoft, Johnson & Johnson is working to make processes increasingly efficient, as part of its digital manufacturing transformation with tools like Azure, AI, IoT, MES and Microsoft Cloud for Manufacturing capabilities. Since 2018, Microsoft has supported Johnson & Johnson as the health care leader aims to leverage cloud technology and other digital capabilities to enable business innovation, improve agility, reduce cost of ownership and improve disaster recovery.

Johnson & Johnson Senior Vice President and Group CIO of Global Supply Chain, Steve Wrenn, sat down with Transform to share his perspective on the ways Johnson & Johnson uses the capabilities of the Microsoft Cloud to help ensure that the company’s products are sourced, manufactured and delivered as efficiently as possible.

Steve Wrenn, Johnson & Johnson senior vice president and group CIO of Global Supply Chain
Steve Wrenn, Johnson & Johnson senior vice president and group CIO of Global Supply Chain.

TRANSFORM: Johnson & Johnson has stated that their employees across the world are working to blend heart, science and ingenuity to profoundly change the trajectory of health for humanity. How does smart manufacturing enable Johnson & Johnson’s mission?

WRENN: When I think about enabling our mission from a supply chain perspective, our primary focus has been shifting a lot of our manufacturing capability from the old push supply chain to a pull supply chain. Getting products to people right when they’re needed.

Smart manufacturing gives us instantaneous access to data that allows us to produce things in a much more focused way, so, we don’t really start to build things until consumption data signals that it’s time.

The other part is that it allows us to become an even better manufacturer. With smart manufacturing, we’ve automated a lot of manual, repetitive steps to eliminate any chance for error. Now, we pick data off the stack on an ongoing basis to make automatic adjustments to how we do things.

TRANSFORM: Across the globe, companies continue to struggle with supply chain disruptions that can leave store shelves empty and consumers without necessities. How has cloud technology helped Johnson & Johnson become more agile and resilient to mitigate these challenges and deliver health products and life-saving medicines to people who need them?

WRENN: If we have 10 vendors that supply us with raw materials, and data coming down from the cloud tells us that two of them are having some kind of supply chain interruption or  issue – maybe they’re going to be late delivering more materials, for example – artificial intelligence knows who the other vendors are and can instantly make the selection and place an order without a human needing to take the time to generate a report and make that decision.

Then, at the other end of the supply chain, we’ve added novel capabilities like track-and-trace to address issues like theft and counterfeiting. Artificial intelligence plus instantaneous data allows us to track and trace capabilities to the next level.

We have advanced tracking capabilities, which we usually use to track boxes of units. Then we scan those boxes, put them on pallets, wrap the pallets, and put devices on the pallets so we know exactly where they are at any time.

TRANSFORM: Johnson & Johnson and Microsoft have been partnering together on the company’s digital manufacturing transformation and smart manufacturing. What were the critical capabilities you were looking for in a collaboration partner? 

WRENN: With smart manufacturing, you need partners that—first of all – can scale. Johnson & Johnson is a large company, so a lot of times we see real cutting-edge technologies from vendors very early on. But then the vendor can’t scale to the size of a Johnson & Johnson, where we have greater than 80 manufacturing plants globally. So that’s when you need a partner that can scale.

You also need partners that are involved in a lot of different technologies and understand edge devices, IoT, machine learning and artificial intelligence – you need them to hit all these things. What I’m looking for in a partner is somebody who has knowledge in all those different areas.

It’s daunting if you try to work with a number of smaller companies and have to go to each one individually rather than a large partner who we can align with multiple needs pretty easily.

TRANSFORM: For Johnson & Johnson, visibility into data and insights is important for your manufacturing business. How are AI and machine learning capabilities coming into play in your manufacturing facilities?

WRENN: Machine learning has been running for a while, starting with self-adjusting machines. The thing about machine learning now – because of IoT devices and networking – you have more accurate, more responsive machine learning in place.

The real key is the artificial intelligence. Before a machine wears down, artificial intelligence can take all the data points around a product’s variation on the line and see when products are starting to vary but are still in tolerance, and from past experience, can tell us which part of the machine we should do maintenance on right now.

The greatest thing is the way artificial intelligence can take in all these things and then add reasoning. We can look at thousands and thousands of data points per second and make decisions where people in the past would wait until something happened. Now, we can say this is going to happen. That is key in manufacturing.

TRANSFORM: Johnson and Johnson is using Microsoft manufacturing cloud capabilities such as Azure, AI, IoT, Edge and Manufacturing Execution Systems (MES). What is the impact for the management of Johnson & Johnson’s pull-based supply chain?

WRENN: The biggest impact is from the Azure digital stack. We use that to deposit all these millions and millions of data points we take in, and to pull off millions of pieces of data. Azure allows us to pull out pieces from the factory, from social networks, from the industry, from other plants, from our partners in a way that when you use things like blockchain, you can just pull off all the time and then make decisions on that. So, it’s the speed and the accuracy.

You know, some people will tell you they’ve got IoT devices and sensors, and I’ll think, “That’s great.” But an IoT device is going to produce a lot of data points. What are they going to do with that data? They can get all that data, but what you don’t see is executing with creativity to do something with it. And that’s where good partners help out.

Partners can really contribute valuable thought leadership. I like to say that we are experts in the health care industry and manufacturing health care products, but we mostly focus on what we are doing day-to-day. Without giving away any trade secrets, they can bring best practice technology to the table.

Whether you’re transforming a piece of metal into a car part, a hip or a knee, the manufacturing processes are, a lot of times, the same – different products, but the processes are similar. A partner that sees across or works with different people in different industries can bring some of that knowledge.

A Johnson & Johnson frontline worker in Brazil
Johnson & Johnson’s employees work to blend heart, science and ingenuity to profoundly change the trajectory of health for humanity.

TRANSFORM: Can you talk a bit about the business outcomes of your digital transformation? Are you seeing any reduction in time or money, and any improvement in sustainability?

WRENN: We’re seeing some great things. We’ve got an increase in the quality output. We’ve had a reduction in what we call “field actions,” which is a measure of quality in the field for health care products. Our field actions have significantly reduced in the past few years. We’re recognized in the industry for it, with Global Lighthouse Network recognition for five of our manufacturing plants for being leaders in the industry – more than anybody – including at our vision care facility and our hips and knees facility.

In five years, we’ve gone from number 28 in the Gartner Magic Quadrant for Supply Chain Leaders to number three globally, and number one in health care. That recognition is mainly driven by all the ways we’ve applied technology to get results that impact customers.

In our Johnson & Johnson Credo, our patients and customers are number one, and in health care, they have to be. So when I think about someone saying, “I saved five percent of manufacturing costs,” that’s not as powerful as saying that “I had exactly no defects this year, so there’s not a single patient that didn’t get exactly what they need in health care.” That’s the important measure.

TRANSFORM: With cloud technology, Johnson & Johnson can receive data and insights from the shop floor to the top floor. How can this change the way leaders and executives make decisions? 

WRENN: One of the biggest things is visibility. We call it smart manufacturing, but smart manufacturing starts with visibility into what’s going on. People think they can jump into smart manufacturing, going from a couple of computer screens into all smart manufacturing where data is doing everything. But you really need to take an intermediate step. That intermediate step for us was something we call “visible manufacturing.” We gathered data on all of our processes – from raw materials coming in, through what we call product-and-process, to the outcome. That’s what’s important to watch.

The insight into that data is important as you move forward. And not just the processes. When you make those insights visible to the shop person who used to do a task by hand, it allows them to understand what’s improved, and it enables them to make better human decisions because they’re not standing there doing a repetitive manual task. That visibility allowed us to create what we like to call our supply chain control tower. Now, everything is more visible and connected.

Data can let us know when a Target or a Walmart is selling more BAND-AID® Brand Bandages or NEUTROGENA® than usual, so the plant manufacturing manager gets a jump on retooling the facility.

For medical devices like hips, knees, contact lenses and even sutures, you really want to find out as early as possible where the demand is going to be, so patients get what they need, and we don’t end up with very specialized, very expensive products sitting in a warehouse, in an area or region of the world where they aren’t needed at that time.

TRANSFORM: What are the benefits for frontline workers when cloud technologies are implemented in factories?

WRENN: What all of this artificial intelligence and the application of technology does is free the worker up to be more of a contributor to the outcomes using applied knowledge. Using reasoning, using their capacity to make decisions rather than just doing the same thing again and again and again.

What happens is the worker becomes a higher-level part of the process. They’re learning more about everything going on and making decisions.

An important side benefit of technology is that we see more creative thinking. People start to call out processes that can be improved or done differently. You have people now thinking on a different level. Of course, getting there takes training so we’ve created a big initiative around digital training.

Years ago, the attitude was IT was in charge of anything digital, so that’s their problem. The new paradigm is: no, digital is everybody’s problem. And really, it’s not everybody’s problem, it’s everybody’s opportunity.

TRANSFORM: How has Johnson & Johnson’s experience in meeting the challenges of the pandemic affected its decision to further invest in digital manufacturing?

WRENN: We always knew that if we had better data quicker, we could make better decisions faster. But when the pandemic first hit, we found out that a lot of our data was in places where you had to be in one of our offices to access it. That experience accelerated our move to the cloud in some areas.

Learn more about the collaboration between Microsoft and Johnson & Johnson at two Ignite 2021 sessions:

Tuesday, Nov. 2, 3:30-4 p.m. PT: Manufacturing a Resilient Future with Microsoft Cloud for Manufacturing, featuring Microsoft’s Caglayan Arkan, VP of manufacturing and supply chain and Satish Thomas, VP of industry clouds and solutions, and Johnson & Johnson’s Arun Kumar Bhaskara-baba, VP, Global Manufacturing Technology and Zikar Dawood, VP, Research, Design, Engineering & Data Science.

Wednesday, Nov. 3, 12:15-1 p.m. PT: Microsoft Into Focus: Data & AI, featuring Microsoft’s Eric Boyd, CVP AI platform and Q&A from Johnson & Johnson’s Ketul Patel, senior director of digital transformation office.

Top photo: Smart manufacturing gives Johnson & Johnson instantaneous access to data, transforming its supply chain from “push” to “pull.” (Photos courtesy of Johnson & Johnson)