Johnson & Johnson

        CASE STUDY

ON

JOHNSON & JOHNSON

(MGMT-5007)

Submitted To:                                  Submitted By:

Amy Vuong                                      Rajinder Singh

                                                           4234775

                                                           SCM(2nd sem.)

Q.1) What factors help to explain why j&j historically had as many as 12 distribution centers in Europe.

Ans. The two major factors for J&Js policy of 12 distribution centers are customer service level and transportation cost.

The distribution centers were geographically located to help meet the specific needs and service expectations of their European customers. Company wanted to maintain a high service level to its customers specially services such as one-day services and two-day services. More number of distribution centers help reduced the time taken between order and delivery to the customer. It increased overall speed of supply chain.

Second major factor is the low transportation cost. Because the customers were located near to distribution centers there was low distance between customer and the distribution centers. It automatically reduced the transportation cost.

Besides these mentioned factors, the expense of long-term lease may also be a considerable factor.

Q.2) What steps in the logistics and supply chain network design process discussed in this chapter would have been most relevant to the task faced by J&J in Europe.

Ans. Following 4 steps are most important for designing a supply chain network process:

1. Business assessment and data gathering- defining project scope and objectives, what resources are required, how these resources are allocated, defining team and team members, assessment of data availability and accuracy etc.
2. Model baseline scenario as is- transportation in and out simulation, construct and simulate business scenario, build econometric financial model, develop infrastructure assumption and constraints.
3. Strategy formulation- defining main scenario to evaluate, simulating inventory assets by scenario, defining operating expenses, capital expenses and one time expense, develop financial model by scenario, address IT, tax, incentives, legal , infrastructure issues.
4. Transition planning and implementation- develop transition and implementation rad map plan, identify timeline, resources, funds, structure, constraints, partners, stakeholders, communication strategy.

Q.3) Are there other factors the network optimization study should have considered.

Ans. Followings are some of the factors that could be considered:-

• Tax law.
• Cost structure.
• Materials and skills availability.
• New market entry.
• Inventory optimization.
• Alignment of functional objectives with overall goals.

Q.4) This case study focuses on the shipments from distribution centers to customer locations. What factors on the supply side, or inbound-to-DC side would be relevant to the analysis that was conducted.