Supply Chain Management and McNeil Consumer Healthcare

Organization Name: McNeil Consumer Healthcare,
The subsidiary of Johnson & Johnson, Family of Companies

Ranking #11 on the Top 50 World’s Most Admired Companies 2015 by Fortune, with over $72 billion in sales, Johnson & Johnson, through its family of companies, operates three business segments: Consumer, Pharmaceutical (McNeil Consumer Healthcare) and Medical Devices & Diagnostics, with more than 275 operating companies and 144 manufacturing facilities across the world, making them the world’s most comprehensive manufacturer of health care products.

Industry: Pharmaceuticals and Consumer Goods

Name of contact if available: Denice Torres, President, McNeil Consumer Healthcare

Web references: McNeil Consumer Healthcare Johnson & Johnson

About McNeil Consumer Healthcare:

Founded in 1879 by Robert McNeil, as a local pharmacy supplying medications to Philadelphia hospitals and doctors. Robert McNeil was a graduate of the Philadelphia College of Pharmacy and Science (University of the Sciences in Philadelphia).

In 1959, Johnson & Johnson acquired McNeil Laboratories and a year later the company was able to sell Tylenol for the first time ever, without a prescription. In 1961 the company moved into Fort Washington, Pennsylvania.

In 1977, two companies were created: McNeil medicals products and McNeil Consumer Products Company or McNeil Consumer Healthcare. In 1993, McNeil medicals products merged with the Ortho medicals products Corporation to form Ortho-McNeil medicals products.

In 2001, McNeil Consumer Healthcare changed its name to McNeil Consumer & Specialty medicals products. It is now known as McNeil Consumer Healthcare.

McNeil markets a broad range of well-known and trusted over-the-counter (OTC) and prescription products for adults and children, most widely recognized for the complete lines of TYLENOL® (acetaminophen) and Motrin IB (ibuprofen) products for relief of pain and fever, cold, flu and allergy symptoms, digestive health and sleeplessness, and arthritis.

So, what exactly is Supply Chain Management (SCM)? If you are anything like me….it sounds intimidating, right? For a little comic humour (as seen in the video below), “I spent most of my childhood dreaming of taking a Supply Chain Management course”…. NOT!! However, now in my forties it is quite interesting, yet still somewhat confusing.

I love this video for its breakdown in simple terms:

How Supply Chain Management works at a company like
McNeil Consumer Healthcare and Johnson & Johnson:

As illustrated below, Supply Chain operations leverage technologies, transportation and distribution modes to optimize a company’s ability to deliver products to its markets and consumers. The efficient flow of goods and services in Supply Chain Management (SCM), requires collaboration with both clients and suppliers. Supply chain managers are in charge of identifying risks that could potentially disrupt any part of the supply chain logistics:

Supply Chain Management and Social Media:

Social media offers substantial opportunities in the supply chain field; enabling greater collaboration and information sharing within and between organizations. Business performance is increased when organizations manage their supply chains more effectively with social media.

Social networking is another medium for people to communicate and collaborate with each other – and, in many cases, is more productive than back and forth emails, endless conference calls and other communication methods.

However, when supply chain executives hear “social media”, they immediately think Facebook, LinkedIn, and Twitter. Because these publicly available sites lack any supply chain and logistics context, they can’t see how these social networks will help them manage their transportation and warehousing operations.

The reality however, is that social networking is not about socializing, but about facilitating people-to-people communication and collaboration, which is at the heart of the supply chain processes. Social networking goes well beyond Facebook, LinkedIn, and Twitter.

These tools include discussion forums (LinkedIn groups), document sharing (Dropbox), video conferencing (Skype), texting (Twitter), video and photo sharing (YouTube and Instagram), blogs (WordPress), and wikis (Wikipedia). They don’t necessarily replace emails, phone calls, or face-to-face meetings, but they are arguably more effective in situations where many people, across multiple groups and companies, and across different time zones and geographies, need to communicate and collaborate.

When implemented and used correctly, social networking will result in less work, not more for business professionals.

Benefits of Social Media and Supply Chain Management:

Social media benefits the supply chain industry in many ways. Companies can enhance communication with customers, generate demand, reduce operating costs, mitigate risk, increase productivity, and enhance marketplace intelligence. If companies aren’t participating in social media, they could be at a disadvantage because most of their customers, suppliers, and competitors are.

Social media can help companies generate better ideas for improving supply chain processes; the sharing of real-time information on inventory, better coordination of the flow of information and materials, and solving existing problems by tapping into the collective insights through the supply chain.

“Social media can – and should – play a central role in supply chain management. After all, social networking is not really about socializing, but about facilitating people-to-people communication and collaboration.”
~ Adrian Gonzalez,  founder and president of Adelante SCM

Examples of how McNeil Consumer Healthcare and Johnson & Johnson might use Social Media in the Supply Chain:

• Send social media posts to indicate the arrival and departure of a shipment from a particular distribution center or warehouse
• Information about accidents and road closures can be issued that affect delivery times and can be used to re-route deliveries
• Search for the need for shipments of a particular type
• Search for carriers which address a certain territory/area using a certain mode
• Report weather conditions that might affect shipments
• Coordinate supply chain shipments — if you have room on your truck for more shipments, broadcast this info out through the social media to find additional loads
• Facilitate responses to supply chain disruptions via social media
• Post performance information, such as whether a carrier picked up and/or delivered an order on-time
• Gain knowledge by discovering influencers and thought leaders
• Analyze trends, such as number of shipments lost or best day for expediting a shipment
• Monitor your suppliers and vendors reputation
• Gain information about different vendors/suppliers, such as the advantages and disadvantages of each
• Capture and communicate best practices
• Share supply chain risk identification to uncover vulnerabilities and to mitigate risks in the supply chain
• Share global regulations and compliance factors to avoid non-compliance
• Collect and prioritize continuous improvement ideas and initiatives
• Research and find new suppliers, business partners, vendors, carriers, and customers

Feedback received:

I was in touch with Lisa Brodhaecker, Production Scheduling Leader – QPIC
(McNeil Consumer Healthcare, 890 Woodlawn Rd West Guelph, ON  N1K 1A5), who put me in touch with Natalie Biela, Supply Planner with Johnson & Johnson, Markham, ON to answer my following questions, which can be heard in my audio recording below of our conversation:

1. Delayed shipments of products, supply shortages, unexpected demand spikes are the norm in Supply Chain Management. How does McNeil Consumer Healthcare use Social Networking to help identify and resolve these types of issues?
2. Back and forth emails and endless conference calls are inefficient, so how does McNeil Consumer Healthcare collaborate and communicate with people/consumers?
3. How does McNeil Consumer Healthcare and/or Johnson & Johnson manage risks (ie. Product Tampering) in Supply Chain Management via Social Media?
4. How does McNeil Consumer Healthcare and/or Johnson & Johnson use Social Networking for Product Development and sharing of Best Practices?

Product Recalls and Supply Chain Management:

It goes without saying that product recalls contribute to supply chain disruptions that cause the shortage. In April 2010, McNeil Consumer Healthcare recalled 43 over-the-counter children’s medicines. Tylenol, Motrin, Zyrtec and Benadryl products were affected.

Bonnie Jacobs, a McNeil spokeswoman, says the company is committed to restoring McNeil’s reputation as a world-class manufacturer of over-the-counter medicines.

“We will invest the necessary resources and make whatever changes are needed to do so, and we will take the time to do it right.”

The response of J.& J.’s chief executive, William C. Weldon, has been to allocate more than $100 million to upgrade McNeil’s plants and equipment, appoint new manufacturing executives, hire a third-party consulting firm to improve procedures and systems at McNeil and shore up quality control company wide.

When I asked my husband, a valued employee of the McNeil plant in Guelph, ON
of 22 years, about product recall from his first hand experience, he had this to say:

“A lot of thought and consideration go into the decisions made prior to a recall. The main consideration is the safety of the consumer. If there is any risk to the consumer then a recall is put in motion. The credibility of the company is put in the spot light and their reputation is questioned. It is how the company handles the recall that keeps the trust levels high with the consumers.”

McNeil says that it has been working diligently to ensure that its manufacturing operations meet F.D.A. standards.

Product Recalls and Social Media:

Johnson & Johnson has turned to social media, needing to communicate about their recall of Tylenol and other medications.

McNeil Consumer Healthcare, created @McNeilRecall on Twitter. The bio explains that the account is by Lori Dolginoff, Communications, McNeil Consumer Healthcare and additional spokespeople, during business hours.

“As long as the company is honest and transparent on TV and in print and social media it will come out ahead of the game. As other companies have learned moms are very keen to play on social media, especially when it comes to issues that impact their children and their health.” ~ Peter Pitts, former FDA associate commissioner and global head of regulatory and public policy for Omnicom Group’s Porter Novelli

Lessons Learned:

Companies can and should, use Social Media platforms to inform, teach and advise while customers can use them to offer ideas, opinions and honest feedback.

It is possible to successfully link social media and supply chain management providing continuous improvement that can be beneficial to both company and customer, particularly in the case of product recalls.

“We don’t really use social media for supply chain management. We have large accounts like Walmart and Walgreens and have teams that work directly with them.However, we use social media a lot when communicating with consumers. We want to reach them when and were they get their information or are seeking help/support. We also have
a consumer call center.”

From my personal observation in doing this case study blog post, is that, both Johnson & Johnson and McNeil Consumer Healthcare have very in depth websites with detailed product information, however their social media use in terms of Supply Chain Management seem to be for internal use at this point.

I feel they could capitalize more on social media by effectively implementing a forum, similar to MyStarbucksIdea, for customer opinions, ideas and feedback. Perhaps moving them up in their ranking as most trusted and admired companies in the world, giving Starbucks a run for their money.

Other Resources:

• Social Media Supply Chain
• Product recall
• Social Media and Product Recall

Submitted By: Tina Geisel, SMBP Student, University of Waterloo

To contact the author of this entry please email at: tgeisel@sympatico.ca

If you have concerns as to the accuracy of anything posted on this site please send your concerns to Peter Carr, Programme Director, Social Media for Business Performance.