Additive manufacturing will drive significant value within the supply chain of Johnson & Johnson’s (J&J) medical device business. Medical device companies need to offer a diverse set of products because humans are diverse – different sizes, different materials, and different constructions drive a large SKU portfolio . The larger the portfolio the more difficult it becomes to accurately measure and plan for demand. There is also uncertainty related to the actual product required for a specific patient. For instance, the surgeon may not know which implant or implant size is required until the surgery is underway. This requires companies to send many different options for a single surgery driving substantial inefficiencies. Finally, due to the nature of certain surgeries, such as trauma, products need to be available to hospitals with short lead times to ensure surgeries aren’t delayed.
To maintain service levels on these large product portfolios companies such as J&J hold large days of inventory within their supply chain to guarantee a high level of customer service. In fact, the average days of inventory for a medical device company is around 150 days compared to ~50 days within the Consumer Industry .
Additive manufacturing will allow J&J to combat this inefficiency by manufacturing localized patient specific products improving the supply chain’s agility and ability to adapt to changes in customer demand. Though additive manufacturing presents a promising opportunity, it is also a major risk to the company, as competition, both current and new, attempt to achieve breakthroughs in the field. 
J&J is taking a leading role in developing and deploying this technology in the industry. They’ve established the Johnson & Johnson’s 3-D Printing Center of Excellence  “which is working to change the landscape of healthcare through 3-D printing innovations.” This group is focused on developing customized patient solutions and the ability to print devices more quickly and at a lower total cost than current methods. J&J has also established a partnership with AMBER, a material science institute focused on the bioprinting, broadening their area of focus beyond metals and polymers for this technology .
Longer term J&J appears to be taking a strategy where they’re not solely focused on the manufacturing of medical devices but rather on the comprehensive product and service combinations related to a surgery. J&J has formed a partnership with Guys and St. Thomas’ NHS Foundation Trust to create an Orthopedic center of excellence where J&J takes on a more active role in the end-to-end activity related to a surgery . They have also recently acquired a German software company that specializes in standardization and digitalization of surgical workflows in the operating room . The changes hint at a strategic maneuver toward embedding themselves within the surgical process placing J&J in a strong position to be directly involved in the industry’s potential transition to localized manufacturing made possible by additive technology .
In terms of other steps, I recommend the organization takes, in the short-term I believe their focus should be on three areas. First, they should aim to progress the technology to augment their current products and processes. For example, they should improve their supply chain by achieving the inventory benefits that come with reduced production lead time. Next, they should understand the changes to the regulatory pathway driven by additive manufacturing. The FDA has published Technical Considerations for Additive Manufactured Medical Devices  that J&J should ensure are efficiently designed within their processes. Finally, they should keep abreast of the use of this technology by competitors. Stryker has recently invested 400 million to progress the use of additive manufacturing in their products  and has launched new products using 3D Printing .
In the medium term, I would recommend the company take a more aggressive approach to working directly with hospitals on localized manufacturing. The more experiments in this area the company operates the more likely they’ll stay ahead of the changes this technology will drive in the medical device supply chain. Additionally, I would recommend that J&J’s leadership meets on a regular basis with internal and external experts in the field to stay abreast of latest applications of the technology to ensure their strategy is continuously adjusted to account for developments as they occur.
The key question J&J needs to answer in the future is how their role in the medical device value chain changes as barriers to entry to the industry are significantly reduced by additive manufacturing enabling faster and cheaper design and production. Do they move closer to the hospital and patient and focus on embedding themselves in the operating room? Do they attempt to maintain their competitive advantage in device innovation and design when it becomes easier for smaller players to launch a product?
 Xu, Xiaofan, and Maria Rey. “Understanding Demand: Are You Keeping the Right Amount of Inventory?” Recently Filed RSS, 21 Nov. 2017, www.scmr.com/article/understanding_demand_are_you_keeping_the_right_amount_of_inventory.
 Tribe, Bill, et al. “What’s Next for Medical Device Supply Chains.” ATKearny.de, AT Kearny, 2017, https://www.atkearney.de/documents/856314/13942554/What%27s+Next+for+Medical+Device+Supply+Chains.pdf/a03da9f3-66c0-4394-a912-eb54ee78b963.
 Scott, Clare. “The Impact of 3D Printing on the Medical Device Industry.” OrthoFeed, 27 July 2018, https://orthofeed.com/2018/07/27/the-impact-of-3d-printing-on-the-medical-device-industry/.
 Brewster, Signe. “The Power of 3-D Printing: How This Technology Is Blazing New Medical Frontiers.” JNJ.com, Johnson & Johnson, 27 Mar. 2017, www.jnj.com/innovation/how-3d-printing-is-blazing-new-medical-frontiers.
 Saunders, Sarah. “AMBER and Johnson & Johnson to Establish Collaborative 3D Bioprinting Laboratory.” 3DPrint.Com | The Voice of 3D Printing / Additive Manufacturing, 21 Feb. 2018, www.3dprint.com/204533/amber-johnson-johnson/.
 Sharda, Angela. “London Trust Agrees Partnership for New Orthopaedic Theatres.” Healthcare Leader, 23 Nov. 2017, www.healthcareleadernews.com/london-trust-agrees-partnership-for-new-orthopaedic-theatres/.
 “Johnson & Johnson Medical GmbH to Acquire Surgical Process Institute.” JNJ.com, Johnson & Johnson, 19 Oct. 2017, www.jnj.com/media-center/press-releases/johnson-johnson-medical-gmbh-to-acquire-surgical-process-institute.
 “Medical Additive Manufacturing/ 3D Printing 2018 Annual Report.” SME.org, SME, 2018, www.sme.org/uploadedFiles/Medical_Additive_Manufacturing/2018-SME-Medical-AM3DP-Annual-Report.pdf.
 Center for Devices and Radiological Health. “Science and Research (Medical Devices) – Additive Manufacturing of Medical Products.” U S Food and Drug Administration Home Page, Center for Drug Evaluation and Research, www.fda.gov/MedicalDevices/ScienceandResearch/ucm477366.htm.
 Brown, Alan S. “Chain Reaction: Why Additive Manufacturing Is About To Transform The Supply Chain.” Mechanical Engineering, Oct. 2018, pp. 30–35.
 “Stryker’s Spine Division Receives FDA Clearance for 3D-Printed Tritanium TL Curved Posterior Lumbar Cage.” About | Stryker, www.stryker.com/us/en/about/news/2018/stryker_s-spine-division-receives-fda-clearance-for-3d-printed-t.html.