Johnson & Johnson Overview

• Incorporated in 1887: Listed on NYSE in 1944 symbol JNJ

• 250 operating companies, 117K employees in 57 countries

• Three business segments totaling $65B in WW sales 2008

– Consumer Health Care

– Medical Devices & Diagnostics

– Pharmaceuticals

• Business decisions guided by tenets of the Johnson & Johnson CREDO

• Dozens of pharma manufacturing & distribution centers

• Thousands of intermediaries, 3PL’s and ship to locations

Johnson & Johnson Sampling of Products

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Consumer Health Care

Medical/Surgical Devices

Prescription & OTC Medicines

Supply Chain Disruptions & Risk Mitigation

• Addressed operationally with governance/supporting expertise from… – BCP site teams and operating group champions

– Brand protection & supply chain integrity organization

– Corporate & local security personnel

• Disruptions come in many flavors & sizes (ASIS groupings)– National (natural) disasters

– Environmental accidents

– Technology mishaps

– Man-made crises

• Also….business-related disruptions and crises– Supply/supplier risk (shift from contract suppliers to well-profiled supply partners)

– Counterfeits, diversion, thefts, tampering, trademark & IP violations

• Corporate BCP culture is based upon maintaining a core of expertise, widespread training, conducting exercises & continuous improvement

• Conventional wisdom of redundant capacity and duplicity of capabilities is financially and operationally impractical in today’s dynamic environment

• Focus on supply chain risk awareness & mitigation, preventive measures, disaster recovery planning, exercises and collaboration with 3rd parties.

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Sampling of Disruptions & Responses

Challenges1. H1N1 virus affecting workers

at Mexico border facilities

2. Explosion at API Manufacturing Facility

3. Work stoppage – European sites

4. Counterfeit goods reported in marketplace

BCP Response Protect the employees, redirect

supply, reprioritize orders Assess all inventory, ration API,

redirect new production and rebuild Temporarily outsource operations

while negotiations are conducted Report, investigate, escalate,

communicate, enforce, recover

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Apply the 4 R’s• Recover• Redirect• Reprioritize• Rebuild

Best Practices to Pharma Supply Chain Disruptions

1. Business continuity/ supply chain integrity is a matter of corporate culture (CREDO-based) focused upon prevention

2. Alignment of accountability and practices up and down supply chain from raw material sourcing through end customer.

3. Planning & exercises are vital to crisis management. Plans & policies must be documented, tested, modified and accessible

4. Collaboration with external organizations and experts is critical to any business enterprise (emergency response teams, civic leaders, gov’t. agencies, regulators, etc)

5. Extreme due diligence on your sources of supply and their suppliers (incl. D&B); create end-to-end visibility of product flow

6. Auditing/sampling is less effective than real time visibility & control

7. Never compromise your principles of safety and compliance

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Challenges & Research Agenda

1. Lack of visibility in the supply chain for regulated/high-risk prescription medicines – need for track & trace technology

2. Lack of aggregate views of supply chain inventory across product categories- need for shared, secured data base

3. Vulnerabilities exist in normal supply chain to gray market & counterfeits – need for authenticating processes and new “on the ground” security measures

4. The Internet has become the “world’s dispensary” – few regulatory controls or verification of source of supply – need for international controls

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