Research Paper on "Supply Chain Management Strategies"

Research Paper 5 pages (1956 words) Sources: 10

[EXCERPT] . . . .

Supply Chain Management Strategies

Supply Chain Management -

There are several reasons that explain Johnson & Johnson's children's medicines recall. However, the primary causes that led to these product recall campaigns are represented by concerns regarding health and safety of consumers.

Some of the causes that led to product recall at Johnson & Johnson are traced in the manufacturing process. A series of errors that occurred during the manufacturing process determined several deficiencies to emerge and affect the quality of the products. The medicines in case presented poor quality in comparison with the quality standards they should have reached, and they reported problems regarding their purity and potency.

Consumers that purchased these products reported that they had unusual consistency and smell. But the problems with these products did not stop there. Other items in Johnson & Johnson's children's medicine range seem to have been contaminated with certain types of bacteria. Consumers that used the contaminated products reported several problems that were brought to publicity, therefore affecting the company.

2. When product recall occurs, specialists in the field usually point to supply chain management as a trigger for the phenomenon. This is mainly because supply chain management strategies are not suitable for the company in case, and this further leads to manufacturing deficiencies and obviously to product recall.

However, this is not necessarily the case. Even if a company has developed the most suitable supply chain management strategy for its field of activity, this does not mean that the strategy will be implemented and properly applied in all its details in accordance with the established plan. A series of errors can occur that lead to the inability to apply the strategy in case entirely in accordance with the plan.

Even so, it does not mean that it is not the company's responsibility to deal with these issues and to find ways to counteract and to foresee them. In order to minimize the emergence of product recall and its implications for both the company and its customers, it is recommended that safety problems are detected earlier. In addition to this, companies must improve targeting interventions (Ackerman, 2008).

Specialists in the field refer to two aspects that can impact the phenomenon of product recall. One of them is represented by supply chain traceability systems that are evolving and that are designed in order to help with this problem, but that do not suffice at the moment. The other aspect is represented by the manufacturing system.

In other words, the most important aspect that can be addressed in relation with the manufacturing system consists in introducing agreements with the manufacturers used by the company in case. These agreements should focus on guaranteeing the transparency of information regarding the origin of materials used in the process, the development of the process, and quality testing data.

In order to achieve this, it is necessary to make significant investments. Suppliers are usually forced to make these investments. As a consequence, the cost of goods will increase. However, not all companies appreciate this. But suppliers that make such investments will be able to provide useful information for their customers.

But not all suppliers can afford to make such investments that would improve their products and their relationship with customers. As a consequence, partner companies that they supply should support them into making these investments. This way, all stakeholders involved in this relationship would benefit from such a situation.

Another aspect that should be taken into consideration when dealing with product recall is represented by enterprise resource planning systems. Such a quality system would help improve traceability in such cases.

But this does not represent a solution either. If not applied properly, an ERP system would also lead to gaps in the entire process that would further lead to product recall campaigns. For example, if the ERP system in case is not properly integrated with the manufacturing system or the warehouse system, other parts involved in the process would not be able to function properly, leading to manufacturing deficiencies, and then to product recall.

If such a situation would occur, the supply chain management strategy should ensure that the problem can be solved with minimum resources.

3. Johnson & Johnson took into consideration the possibility that some of their products might be affected by manufacturing deficiencies and a product recall would be necessary. Therefore, the company developed a standby contingency plan that would deal with such a problem if the situation required it.

The company's supply chain structure for product recall in the case of children's medication followed standard procedures.

The company's supply chain structure in the case of Tylenol recall is the following:

Chart 1 -- Tylenol Recall Supply Chain Structure

4. As mentioned above, Johnson & Johnson is one of the numerous companies that dealt with product recall. The measures taken by the company during the children's medicines product recall were appreciated by specialists in the field.

The most important aspect is the speed with which the company activated at withdrawing the products in case from the market. In this company's case, the product recall procedures involved several departments, including stores, pharmacies, distributors, the production department, and customers.

The company's product recall plan was developed by the specialists in the field of quality management and was approved by the top management. The implementation of the plan was handled by executive departments.

As in the case of other companies, Johnson & Johnson's product recall process followed a series of steps.

The company started by analyzing how serious are the problems reported by consumers or by company members that detected the product deficiencies in case. This is because the company must be aware of how serious the problem is in order to be able to take appropriate actions. For example, the actions taken in the case of packaging problems are different from the actions taken in the case of health concerns.

The next step that any company should take in such a situation consists in notifying the regulatory agency that deals with the product that must be recalled. In Johnson & Johnson's case, it was the Federal Drug Association that demanded the company to withdraw the products in case from the market.

Furthermore, the company started to involve all the required personnel in the process of product recall. This is performed on internal level.

On external level, the company collaborated with distributors and sellers in order to acquaint them with the situation and with the procedures that must be followed in order to recall the affected items from the market (ZSC, 2007).

Another category of stakeholders included in the standard product recall procedures is represented by customers, because they are directly affected by the products in case. Communication is very important in such cases. Many companies that must deal with product recall are more affected by the situation than they should be because they do not communicate properly with the public.

They consider it is more useful to not give details to the public about the reasons behind the product recall. As a consequence, customers start building distrust in the company in case, which significantly affects the company on medium term and on long-term.

But Johnson & Johnson communicated very well with the public on the matter of product recall. The company was very prompt into explaining the customers the reasons that determined the company to withdraw several items from the market.

The company was very clear about these details and did not try to orient the public's attention towards other subjects. It seems that customers appreciated the company's transparency on this issue.

Customers considered that the company was concerned for their health and well-being when being so transparent about the deficiencies of the recalled products, rather than for its own image on the market. This helped the company reduce the costs of product recall.

5. Johnson & Johnson obviously took the correct actions. In my opinion, the company's product recall process was a success. The success of the product recall process in the case of Johnson & Johnson is revealed by customers' reaction to the situation.

As mentioned above, the success of the company's product recall can be attributed to the communication and transparency with which the company handled the situation.

Of course, customers were not satisfied with the fact that they purchased products with certain deficiencies, especially when it comes to children's medicines. However, they felt that the company handled the situation rapidly, correctly, and in the customers' favor.

In addition to this, the company's product recall plan followed standard procedures. Specialists in the field exemplify a successful product recall using the Johnson & Johnson situation.

6. There are several types of pressure that emerge during the product recall process. The most important pressure that affects companies in such situations is represented by the fact that costs must be reduced.

One of the consequences of product recall consists in costs increases. This creates further problems for the company. Therefore, the company is forced to take action in… READ MORE

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